1. due process and EU and ECHR jurisprudence
 European Judicial Training Network
Rome, 8th November 2018
Procedural fairness,
due process and EU and ECHR jurisprudence
Roberto Chieppa
Secretary General
Italian Presidency of the Council of Ministers
President of Section
Italian State Council

2. Overview The growing importance of procedural fairness
The growing importance of procedural fairness
Differences between the European and Italian procedural framework
Effective separation between investigative and decision- making powers
Judicial review
Conclusions

3. The growing importance of procedural fairness
Procedural fairness has a direct impact on the effectiveness and credibility of the investigative process
Public consultation is important in establishing fair rules

4. The growing importance of procedural fairness
Why is it so important?
to ensure that all subjects of competition investigations are treated fairly
to ensure accountability of competition enforcement decisions
to maximize the quality of competition agencies’ analysis and decisions

5. The European vs. the Italian procedural framework
Very similar, especially in the guiding principles
Right to be heard
Right of access to the file
Right to submit documents and evidence

6. The European vs. the Italian procedural framework
But with some notable differences
Absence of a Hearing Officer
Formal decision by the Board for opening investigation
Dawn-raids regime
after a formal opening decision is adopted and
Board’ s decision, subject to judicial review
«other premises»
Final hearing before the board of the Authority
Guidelines on the method of setting fines

7. Main stages of proceedings ITA vs EU
ITALIAN PROCEEDINGS
Main stages of proceedings ITA vs EU 
Start of proceedings
Fact finding phase (dawn raids, request for information, hearings)
Final communication on the outcome of the investigation
Final hearing before the Board
FINAL DECISION
Ex officio evidentiary acquisition
EUROPEAN PROCEEDINGS
20 months (2015); 17 months (2016); 13 months (2017)
Complaints
Average duration
48+ months
- In 2016, from the SO, until the final decision : 20 months (cartel) and 31 months (abuse)
Leniency applicants
Fact finding phase (dawn raids, request for information, hearings)
- Informal investigation -
Statement of Objections
Final hearing before DG Comp
FINAL DECISION

8. Length of competition proceedings (a comparison)
GOOGLE SEARCH (Shopping) case (EU)
Length of competition proceedings (a comparison)
Telecom Italia (KO) case (ITA)
Start of proceedings
30 November 2010
Preliminary assessment (commitments)
13 march 2013
Commitments rejected on 4 September 2014
Statement of objection (1)
15 April 2015
Supplementary SO
14 July 2016 and 28 February 2017
Final hearing before the Board
Google did not request for an oral hearing
FINAL DECISION
27 June 2017
Overall length: 6.8 years
Start of proceedings
23 June 2010
Preliminary assessment (commitments)
4 August 2011
Commitments rejected on
14 March 2012
Statement of objection (1)
11 December 2012
Final hearing before the Board
6 February 2013
FINAL DECISION
9 May 2013
Overall length: 2.9 years

9. The obligation to adjudicate within a reasonable time (art
The obligation to adjudicate within a reasonable time (art. 47 EU Charter Fundamental Rights) is applicable to competition jurisdictional proceedings
«it should be noted that the second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union provides in particular that ‘everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law’.”
“Such a right, the existence of which had been affirmed before the entry into force of the Charter of Fundamental Rights as a general principle of EU law, was held to be applicable in the context of proceedings brought against a Commission decision” (see judgment of 16 July 2009, Der Grüne Punkt — Duales System, C‑385/07 P, § 178; judgment of 10 January 2017, Gascogne, T-577/14 §§77-78 ).
Court proceedings

10. Court proceedings (ii)
When is duration «reasonable»?
In Gascogne (T-577/14) and Guardian (T-673/15), the General Court imposed the EU to pay compensation due to an excessive duration of first-instance proceedings before the General Court
Court proceedings (ii)

11. Court proceedings (iii)
“A period of 15 months between the end of the written part of the procedure and the opening of the oral part of the procedure is, in principle, an appropriate length of time for dealing with cases concerning the application of competition law”
Proceedings lasted 46 (Gascogne) and 41 (Guardian) months, between the end of the written phase and the opening of the oral phase
Factors to be assessed: - degree of complexity of the competition field; - necessity to ensure a parallel treatment of different cases; - conduct of the parties; - supervening procedural matters.
In Gascogne, the GC awards €5000 for non-material harm (arising from the influence of the state of uncertainty on planning decisions) and approx. €45,000 as material harm (recovery for costs of the bank guarantee)

12. Court proceedings (iv)
Reputational damages have to be proved
… and in any event, the finding of an infringement of the obligation to adjudicate within a reasonable time would be sufficient to make good the damage to reputation (T- 673/15, Guardian, §146)

13. Intel case
Inspections Statement of Objection Supplementary SO The Commission decision The GC judgment The ECJ judgment
July 2005
July 2007
July 2008
May 2009
June 2014
Sept 2017

14. Intel case (ii) …what’s next? Effects:
The ECJ referred the case back to the General Court of the European Union
The final judgment is likely to be ten years after the decision
Effects:
Uncertainty for market players during court proceedings
Obsolescence

15. Competition proceedings
Court Proceedings
Average length of judicial review in Court proceedings
Source: (1) ECJ Judicial Activity 2017 (p. 215); (2) EU Justice Scoreboard 2017 (p. 12); (3) State Council data-base
Source: (1) ECJ Annual Report 2017 (p. 14); (2) Annual Report by the Italian State Council
Competition proceedings
EU (1)
Italy (2)
First instance
21,6 months
10 months
Second Instance
17,1 months
14 months (*)
All proceedings
EU (1)
Italy (2)
First instance
16,3 months
30 months
Second Instance
16,4 months
7 months

16. Guidelines on the method of setting fines
Describe the method used by the Commission to examine infringements and the criteria that the Commission requires to be taken into account in setting the amount of a fine.
Rules of practice
the administration may not depart in an individual case without giving reasons compatible with the principle of equal treatment, It is therefore for the Commission, when stating the reasons for its decision, in particular, to explain the weighting and assessment of the factors taken into account.
Scope: ensure transparency and increase predictability and objectivity

17. Guidelines on the method of setting fines
EU Commission (2006) and Italian Guidelines (2014)
Deterrence and leniency policy
Specific criteria to calculate the basic amount of fine and to assess gravity and adjustment for mitigating/ aggravating circumstances
Right of defence and judicial review
Fining criteria to be anticipated in the statement of objection ( stimulate right of defence even on the calculation of the fine)

18. ECN Plus
In order to improve effectiveness and uniformity, the 2017 EU Directive proposal aims to:
provide NCAs with appropriate enforcement tools to bring about a genuine common competition enforcement area (strong investigative powers, to collect evidence, effective leniency programmes; appropriate fines).
reinforce legal guarantees of their independence when enforcing EU competition law, to secure public trust;
ensures the protection of the fundamental rights of companies which are subject to competition proceedings
Art. 3: “the exercise of the powers referred to in this Directive by national competition authorities shall be subject to appropriate safeguards, including respect of undertakings̕ rights of defence and the right to an effective remedy before a tribunal, in accordance with general principles of Union law and the Charter of Fundamental Rights of the European Union”

19. Grande Stevens judgement (Consob proceedings)
Effective separation between the investigation and the decision-making powers (1)
ECtHR case law
Grande Stevens judgement (Consob proceedings)
Lack of adversarial procedure (SO, final hearing)
Lack of impartial adjudicators (investigative units and adjudicating body under the same chairman)

20. Effective separation between the investigation and the decision-making powers (2)
AGCM procedural safeguards
The opening of proceedings is taken by the Board
Formal SO adopted by investigative units
Final hearing before the board
Separation between
Sectorial (investigative) units, under the supervision of the Secretary General --- Authority’s board (principle of collegiality)
in some cases, final decision clearing the case
Risk of an instrumental use of procedural rights

21. Effective separation between the investigation and the decision-making powers (3)
Case CNF vs AGCM (2016)
The jurisprudence extends the SO to non-compliance proceedings
The SO as a procedural safeguard, essential to distinguish the fact-finding case from the decision- making phase
It defines the scope of the fining decision
It directs the contents of the parties’ right of defence

22. Economic analysis What role can it play in competition enforcement?
The usefulness of economic analysis varies according to the context:
In all cases, economic analysis can be helpful in identifying the type of infringement: major role in unilateral conduct cases and mergers
In some cases, economic analysis is useful in the assessment of infringements by object where there is no direct evidence of explicit collusion
In some other cases, economic analysis is needed to better understand the companies’ conduct in order to evaluate its anticompetitive effect (for infringements by effect)
In all cases, economic analysis may help to identify the effects and be of relevance for determining the amount of fines

23. The “effect based approach”: two positive spill-over effects
To exert a positive overall impression on the judges, which may help them better evaluate and properly assess the importance of the case
To facilitate private enforcement (follow-on damage claim decisions), thus showing clearly to consumers the advantages of antitrust interventions

24. How to help judges to … Understand economic issues?
- Develop a common language/jargon between judges and economists
Offset the lack of economic expertise?
allow judges to appoint an economic expert (how do we ensure a truly independent economic expert?)
use the adversary system
other solutions (integrate economic experts within the Courts)
above all, develop and improve drafting techniques

25. Right of defense and economic analysis
Case UPS/TNT (2017)
The General Court annulled the Commission’s decision because the final econometric model used by DG Comp office was not discussed with the parties
“Accordingly, the applicant’s rights of defence were infringed, with the result that the contested decision should be annulled, provided that it has been sufficiently demonstrated by the applicant not that, in the absence of that procedural irregularity, the contested decision would have been different in content, but that there was even a slight chance that it would have been better able to defend itself”
As per Solvay (C-109/10, §57)

26. Judicial review Full jurisdictional review
Menarini principle: full jurisdictional review would ensure
compliance with ECtHR principle (art. 6 ECHR)
Review of legality v. full review
Main issue: not to limit the quality of judicial control but to guarantee the quality of such control
Former EU Commissioner Mario Monti: “…the relationship between agencies and courts is dynamic, where agencies test the extension of their powers. Judges will, sometimes, put a limit on the agencies’ power. On other occasions, judges will allow interpretations of the law that extend and reinforce the agencies’ power.”
An effective and high quality judicial control necessary to improve the agencies’ output

27. Conclusions Procedural fairness has now become a fundamental issue
Positive effects towards
Parties (reinforced procedural rights)
Agencies (better quality of enforcement)
Courts (effective judicial review)
Separation between prosecutorial and adjudicating functions is not the real problem
Importance of full judicial review