Master’s Degree in International and European Law
European Commission’s Inspection Powers in Competition Law Cases: What Limits does the Right to Privacy Impose on the Commission’s Powers?
Final
By
Alexandra Roussa Student ID: 11315431
Master’s Thesis Amsterdam Law School
Master’s Programme International and European Law: European Competition Law and Regulation
Supervisor: mw. dr. M. (Maria) Weimer 22 June 2017
TABLE OF CONTENTS
1.INTRODUCTION...p.2 2. THE COMMISSION’S POWERS OF INVESTIGATION …...…...p.5 2.1 REQUEST FOR INFORMATION………...p.5 2.2 INSPECTIONS IN BUSINESS PREMISES –ARTICLE 20 OF REGULATION 1/2003...p.6 2.4 INSPECTIONS IN POTHER PREMISES-ARTICLE 21 OF REGULATION 1/2003...p.9
-Reasonable Suspicion………...……...p.10 -Individuals Targeted…………...p11 -Prior Judicial Authorization-The Role of National Courts………..…………p.11 3.RIGHT TO PRIVACY...………...………...…...p.12 3.1 RIGHT TO PRIVACY IN BUSINESS PREMISES...………...p.13
-The Concept of ‘Home’...………...p.13 3.2 THE ECTHR APPROACH...……...p.14
-Niemietz -Extension of Right to Inviolability of Home to Some Business Premises.…...p.14 -One Step Further-Société Colas Est...………...p.15 3.3 THE CJEU APPROACH...………...p.18 -The Hoechst Judgment-The first attempt...………...p.18 -A Step Towards Consistency?-Roquette Freres...………...p.19 -Recent Developments in the case-law………...p.20 4. LEVEL OF PROTECTION UNDER ARTICLE 21...……...p.22 4.1 ARE THE SAFEGUARDS OF ARTICLE 21 ENOUGH TO PREVENT ARBITRARINESS?p.23 4.2 EFFECTIVE JUDICIAL REVIEW...……...…...p.24 5.DIFFERENT INTERPRETATION BY THE CJEU AND ECtHR………...………...…...…….p.27
-Why Aren’t Corresponding Rights Interpreted in the Same Way?...p.27 - Can the Member States Afford Higher Level of Protection Pursuant to Art. 53 Charter?...p.30 6. CONCLUSION...p.31 SOURCES………...…p.35
1. INTRODUCTION
The purpose of this paper is to ascertain how the European Commission’s (hereinafter Commission) wide discretionary powers during its investigations in competition law cases can impose a threat to the right to privacy as enshrined in the European Convention of Human Rights and Fundamental Freedoms1 (hereinafter ECHR) and the Charter of Fundamental Rights of the European Union2 (herein-after Charter). In other words, what limits does this right impose on the ample investigative powers of the Commission, and how have the General Court, the Court of Justice of the European Union (herein-after CJEU) and European Court of Human Rights (herein(herein-after ECtHR) defined it through their re-spective case law?
Competition law enforcement procedures are initiated by the Commission in four ways3: by a com-plaint; by the opening of an own–initiative investigation; by the leniency application procedure from one of the participants in a cartel; and by a newly introduced tool, the "whistle-blower"4, where in-formation relevant to a cartel can be reported by individuals. The Commission and the National Com-petition Authorities (hereinafter NCA), which together form the European ComCom-petition Network (here-inafter ECN), operate under Regulation 1/2003, replacing Regulation 17/62 5 that was in force for over 40 years. Regulation 1/2003, which came into force on 1st May 2004, was the outcome of the so-called modernization process6, which was an attempt by the Commission to reform its competition law en-forcement process to make it a more efficient, less time consuming and less costly procedure7. As inter-estingly described by Eric Gippini, “One of the main objectives –if not the central one– of Regulation
1/2003 consisted in enabling the Commission to concentrate its scarce resources in effective enforce-ment –prosecute and punish– rather than in ex ante pre-screening of notified agreeenforce-ments. The Regula-tion was intended to enable the Commission to direct its resources away from work that had no real im-pact on market conditions.”8 Among other radical changes, like the decentralization of Competition
1Council of Europe, European Convention for the Protection of Human Rights and Fundamental Freedoms,[1950] as amended by Protocols Nos. 11 and 14.
2 Charter of Fundamental Rights of the European Union [2000] OJ C364/1.
3Europa.eu, 'Procedures in anticompetitive agreements (Article 101 TFEU cases)’ (European Commission, 15 March 2017) <http://ec.europa.eu/competition/antitrust/procedures_101_en.html> accessed 22 June 2017.
4Europa.eu,’ Anonymous Whistleblower Tool’ (European Commission, 15 March 2017) <http://ec.europa.eu/competition/cartels/whistleblower/index.html> accessed 22 June 2017.
5Council Regulation No 17 (EEC): First Regulation implementing Articles 85 and 86 of the Treaty [1962], OJ 013/204 6Céline Gauer and others, ‘Regulation 1/2003 And The Modernisation Package Fully Applicable Since 1 May 2004’ (2004) 2 Competition Policy Newsletter 1-6.
7Andre Fiebig,’ Modernization Of European Competition Law As A Form Of Convergence’ (2005) 19 Temple International and comparative law journal 63.
law, by giving powers to the NCAs and their close cooperation with the Commission, the Commis-sion’s powers during investigations were enhanced. The necessity is explained in the Preamble of Reg-ulation 1/2003: “The detection of infringements of the competition rules is growing ever more difficult,
and, in order to protect competition effectively, the Commission's powers of investigation need to be supplemented”.9 The previous legal framework had provided fewer investigative powers to the Com-mission, namely, the power to request information as laid down in Article 11, and the power to carry out investigations in Article 14. Under the new regime of Regulation 1/2003, the Commission’s inspec-tion powers have extended.
The first difference lies in its power to request information.10 Under the previous system, the Commission had to follow a two-stage procedure11—ask for the relevant information via a simple request, and, if the undertaking did not provide it, issue a decision—whilst under Article 18 of Regulation 1/2003 the Commission can ask immediately for the information to be provided either by a request or a decision. The second tool that the Commission used to have at its disposal was Article 14 of Regulation 16/62, in which the specific inspection powers were laid down. With Regulation 1/2003, the provision was replaced by Article 20, which allows the Commission, inter alia, to take statements12, and to seal any business premises, books or records for the period and to the extent necessary for the inspection13. One of the most important supplements to the Commission’s armoury was undoubtedly the power to investigate private premises.14 This extension of the surprise inspections, known as “dawn raids”, which the Commission conducts in private premises, along with the very broad scope of the said provision, not only came as a surprise but has also given rise to debates.15
Fundamental rights have a special position in the EU's legal order, and as the General Court maintained: “It is clear from settled case-law that respect for fundamental rights is a condition of the
lawfulness of EU acts and that measures incompatible with respect for fundamental rights are not acceptable in the European Union”16 Notwithstanding their importance, the intrusive character of the
(Report to FIDE Congress 2008)’ (2008) 2 FIDE CONGRESS 1 – 135.
9Council Regulation (EC) No 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty[2004]OJ L 1/1, Rec 25.
10Ibid. Art 18.
11Reg.17/62 Art 11. 12Reg. 1/2003 Art 19 13Ibid. Art 20 (d).
14Ibid. Art 21.
15Philip Louis Landolt, Modernised EC Competition Law In International Arbitration (Wolters Kluwer Law & Business 2006) 297.
investigative powers of the Commission has raised concerns regarding their alleged tendency to infringe human rights. This paper will focus on how the right to privacy circumscribes the said powers. The right to a private and family life is provided for in Article 8 of the ECHR and Article 7 of the Charter. The two rights are correspondent within the meaning of Article 52(3) of the Charter, thus should be protected to the same level. Nonetheless, the CJEU and the ECtHR seem to have a prima facie disagreement on what this right encompasses and to what extent it is protected under the two regimes. This is especially problematic regarding inspections conducted in business and private premises. Is the right to respect someone’s home extended to business premises? Are the individuals adequately protected during inspections in their private homes? Is a warrant always necessary and is the (ex ante or ex post) judicial review effective? These are only some of the questions that can raise concerns in the course of the Commission’s inspections. All these matters will be assessed in this paper, starting in the first chapter with the definition and the scope of the inspection powers, thus the information the Commission may request, what the subject matter is and how broadly or narrowly it is defined, what documents can be seized during dawn raids, and what the requirements of the inspections in private premises are. In the second chapter, the different approaches of the right to privacy in business premises will be assessed. First, the said right will be approached from the ECtHR point of view. Its scope will be defined, and how it evolved over time will be considered. Next, the definition of the CJEU will be analysed and the similarities and differences between the two will be demonstrated. In the third chapter, the procedural rights and guarantees provided under Article 21 will be analysed, to see if they are adequate and in conformity with the ECtHR case law, and if the ex post judicial review is as effective as the ex-ante. In the fourth chapter, the reasons for the different interpretations will be demonstrated, and the degree of latitude allowed to the Member States to provide higher standards of protection will be looked at. Finally, in the conclusion, the limits to the Commission's powers during inspections are determined, and there is a consideration of when these powers can lead to violations of the fundamental right to privacy.
2. THE COMMISSION’S POWERS OF INVESTIGATION
After the modernization process, the Commission has acquired multiple tools that can detect and effectively terminate cartels. The two most important powers are undoubtedly the ones enshrined in
Article 20 and Article 21 of Regulation 1/2003. Apart from those, the Commission also has the power to request information, as laid down in Article 18, and the power to take statements, as stated in Article 19.
2.1 REQUEST FOR INFORMATION
Pursuant to Article 18, the Commission can request information by a simple request or a decision. The information must be relevant to the subject matter and within the limit imposed to it in SEP v Commission17 “ A mere relationship between a document and the alleged infringement is not sufficient
to justify a request for disclosure of the document; the relationship must be such that the Commission could reasonable suppose, at the time for the request, that the document would help it to determine whether the alleged infringement has taken place”.18 The CJEU recently annulled one of the Commission's decisions because the statement of reasons for the decision was “excessively succinct,
vague and generic — and in some respects, ambiguous.19 The Commission must inform the
undertaking concerned about its suspicions, although it is not required to provide the entity with all the information at its disposal.20 If the information is required pursuant to a simple request, the undertaking is not obliged to answer, whereas when a decision is issued, the company has to answer, or the sanctions enshrined in Articles 23 and 24 will be imposed.21 In this stage the Commission must respect certain procedural rights and guarantees22, such as the privilege against self-incrimination, which is the essence of a fair criminal procedure and emphasizes the principle that anyone is innocent until proven guilty.23 In the Orkem judgment24, the CJEU extended the privilege to undertakings, holding that: “...
the Commission may not compel an undertaking to provide it with answers which might involve an admission on its part of the existence of an infringement which it is incumbent upon the Commission to prove.”25 Therefore, it recognized a limited26 privilege against self-incrimination to undertakings, allowing them to refuse to answer questions but not refuse to hand over documents27. The same
17 Case C-36/92 P, SEP v Commission [1993] ECR I -01911.
18 Case C-36/92 P, SEP v Commission [1993] ECR I -01911, Opinion of Advocate General Jacobs, para. 21. 19 Case C 247/14 P HeidelbergCement AG v Commission [2016] ECLI:EU:C:2016:149, para. 39.
20Ibid. para 21, Case C-37/13 P Nexans and Nexans France v Commission[2014] EU:C:2014:2030, para. 35.
21Reg.1/2003 Art 18(3).
22Wouters P. J. Wils, Efficiency And Justice In European Antitrust Enforcement (1st edn, Hart Publishing 2008) 12. 23 Michael Ramsden, 'EC Dawn Raids: A Human Rights Violation?' [2008] 5(1) The Competition Law Review 61-87. 24Case C-374/87, Orkem v Commission [1989] ECR- 03283.
25Ibid. para 33 ,Wils (n22) 13.
26Richard Whish and David Bailey, Competition Law (8th edn, Oxford University Press 2015) 284.
protection is, additionally, afforded under Recital 2328, where it is provided that the Commission may not oblige anyone to admit that they have committed an infringement.
The other procedural guarantee that the Commission must comply with is the Legal Profession Privilege (hereinafter LPP). The LPP was dealt with in the AM&S29 case, where the CJEU held that certain documents are covered by the LPP provided that the communication is connected to the client’s right of defence and secondly that they emanate from an independent lawyer30; hence the communication between an in-house lawyer and a company is not covered by the LPP. This opinion was reaffirmed subsequently in the Akzo case31 , where the CJEU remained in line with its previous case law and did not provide a more extensive protection pursuant to the ECtHR rulings.32 Regarding the power to take statements enshrined in Article 19, its voluntary nature prevents it from being listed as an inspection power per se.
2.2 INSPECTIONS IN BUSINESS PREMISES –ARTICLE 20 OF REGULATION 1/2003
“There is no safe haven for cartels and all sectors could be the subject of a Commission intervention.”33
Dawn raids are undoubtedly the most vigorous weapon that the Commission has in its armoury to detect and effectively terminate cartels. As envisaged in Regulation 1/2003, “In order to carry out the
duties assigned to it by this Regulation, the Commission may conduct all necessary inspections of undertakings and associations of undertakings.”34 The said inspections can be carried out either by an authorization35 or by a decision36. When the Commission undergoes an investigation pursuant to an 28Reg.1/2003 Rec 23
29 Case 155/79, AM&S Europe Limited v Commission [1982] ECR -1575 30Ibid. para. 21.
31Case C-550/07 P , Akzo Nobel Chemicals Ltd v Commission [2010] ECR II-08301
32 Bartosz Turno and Agata Zawłocka-Turno, 'Legal Professional Privilege And The Privilege Against Self-Incrimination In EU Competition Law After The Lisbon Treaty – Is It Time For A Substantial Change?' [2008] 5 (6) Yearbook of Antitrust and Regulatory Studies 197.
33 European Commission (DG Competition) 'Strategic Plan 2016-2020 – Competition', [2017] 17; also available at <https://ec.europa.eu/info/publications/strategic-plan-2016-2020-competition_en>.
34 Reg. 1/2003 Art 20(1). 35 Ibid. Art 20(3). 36 Ibid. Art 20(4).
authorization, the undertaking is not obliged to accept the inspection37, thus no sanctions can be imposed in this situation. However, if the undertaking allows the investigation to proceed, but provides incomplete books or misleading information in oral questions, the fines envisaged in Art. 20(2) can be imposed. The Commission must specify the subject matter and purpose of the inspection as well as the penalties provided for in Article 23 and inform the authority of the Member State in whose territory the inspection will be conducted beforehand.38 The inclusion of the information is crucial to ensure the investigated parties' right of defence is protected.39 Conversely, when the Commission initiates an inspection by a decision, the undertaking has no discretion to determine if the investigation will be carried out. If the undertaking refuses to submit to the inspection, the Commission may impose fines40 or periodic penalty payments.41 This was the case with ERH and others, to which the Commission imposed a fine for not submitting to the inspection.42
The subject matter and the purpose of the inspection as well as the penalties provided for in Articles 23 and 24, and the date when the inspections will begin, must be unambiguously specified.43 If the inspection is conducted pursuant to an authorization, the competent NCA must only be informed44, while when the Commission issues a decision the competent NCA must be consulted.45
The Commission is, specifically empowered to enter any premises, land and means of transport of undertakings and associations of undertakings, to examine the books and other records related to the business, irrespective of the medium on which they are stored, and to take or obtain in any form copies of or extracts from such books or records.46 The Inspectors may search the IT environment (e.g. servers, desktop computers, laptops, tablets and other mobile devices) and all storage media.47 During the inspection, the undertaking has both a positive and a negative obligation. Hence, it must cooperate fully 37 Wouter P. J. Wils, 'EU Antitrust Enforcement Powers And Procedural Rights And Guarantees: The Interplay Between EU Law, National Law, The Charter Of Fundamental Rights Of The EU And The European Convention On Human Rights' [2011] 34(2) World Competition 189, 193.
38 Reg. 1/2003 Art 20.
39 Joined cases 46/87 and 227/88 Hoechst AG v Commission [1989] ECR-02859 para. 29 “In that regard, it should be
noted first that the Commission is required to specify the subject-matter and purpose of the investigation . That obligation is a fundamental requirement not merely in order to show that the investigation to be carried out on the premises of the undertakings concerned is justified but also to enable those undertakings to assess the scope of their duty to cooperate while at the same time safeguarding the rights of the defence .”
40 Reg. 1/2003 Art 23(1c). 41 Ibid. Art 24(1e).
42 ERH and others , (Case COMP/39793) Commission Decision C(2012) 1999 final [2012]. OJ? 43 Reg. 1/2003 Art 20.
44 Ibid. Art 20(3).
45 Ibid. Art 20(4). 46 Ibid. Art 20(2).
and actively during the investigation by providing the Commission with appropriate representatives, who can answer specific questions, and all the while, abstain from any kind of interference with measures taken by the Commission.48 The power to affix seals, which was introduced after the modernization process, has provoked strong defiance from the undertakings. Pursuant to Article 20(2d) the Commission can affix seal on the books and premises of the undertakings for up to 72 hours49 when the inspections cannot be concluded in the first day. Undoubtedly the E.ON Energie AG50 case is one of the most well-known, in which the Commission imposed a fine of €38 million for breaking a seal.51 This was the first time the Commission imposed this high a fee for a procedural violation pursuant to Article 23 of Regulation 1/200352. In the Commission's press release, Neelie Kroes, the Competition Commissioner at the time, highlighted the importance of the seal-fixing procedure and the zero– tolerance attitude that the Commission follows in the event of procedural violation. She explicitly said: “Companies know very well that high fines are at stake in competition cases, and some may consider
illegal measures to avoid a fine. This decision sends a clear message to all companies that it does not pay … to obstruct the Commission's investigations”.53 Lastly, the Commission may ask any
representative or member of staff of the undertaking or association of undertakings for explanations on facts or documents relating to the subject matter and purpose of the inspection and to record the answers.54
During the inspections, the Commission's official may be accompanied by official or authorized people from the Member States concerned , after a request by the Commission or the NCA55. In such cases, these people enjoy the same powers as the Commission's officials during the process.
If the authorized officials experience any kind of resistance from the concerned undertaking, they may, in communication with the Member State, resort to the assistance of the police or an equivalent enforcement authority56, and additionally may request a judicial authorization if required57. Such authorization may also be applied as a precautionary measure.
48 Ibid. para. 11. 49 Reg.1/2003 Rec 25.
50 Case T-141/08, E.ON Energie v Commission [2010] ECR II-05761.
51E.oN Energie (Case COMP/B 1/39.326 ) Commission Decision C (2008) 377 final [2010] OJ 2008 C240/6.
52 A second significant case where fines where imposed although comparatively smaller to the EON Energie case was Suez Environment case <http://europa.eu/rapid/press-release_IP-11-632_en.htm?locale=en> Action brought on 22 June 2010 - Case T-274/10 Suez Environnement and Lyonnaise des eaux France v Commission OJ C 234/43.
53 European Commission, 'Antitrust: Commission Imposes € 38 Million Fine On E.ON For Breach Of A Seal During An Inspection' (2008) <http://europa.eu/rapid/press-release_IP-08-108_en.htm?locale=en> accessed 22 June 2017.
54Reg.2003 Art 20(2e). 55 Ibid. Art 20(5). 56Ibid. Art 20(6).
The national judicial authority has the power to control the decision of the Commission only with respect to its authenticity and proportionality, so it is not arbitrary or excessive in relation to the subject matter58. As the CJEU held in Hoechst:
“On the other hand, it is within the powers of the national body, after satisfying itself that the decision
ordering the investigation is authentic, to consider whether the measures of constraint envisaged are arbitrary or excessive having regard to the subject-matter of the investigation and to ensure that the rules of national law are complied with in the application of those measures”59
The CJEU provides all the criteria necessary to be consistent with EU law interpretation.60
In any case, the national court has no jurisdiction to determine if the Commission’s decision was necessary or demand that it be provided with the information in the Commission's file61. The lawfulness of the Commission's decision shall be subject to review only by the Court of Justice.62
2.3 INSPECTIONS IN OTHER PREMISES-ARTICLE 21 OF REGULATION 1/2003
The power that generates most tension and is regarded as one of the most controversial powers63 of the Commission is the power to conduct inspections in other premises. This is a newly entered provision under Regulation 1/2003 which can be explained by the fact that the deterrence of antitrust infringements ranks high up on the Commission’s agenda64 and its necessity is underlined in the preamble of the present Regulation: ‘Experience has shown that there are cases where business records
are kept in the homes of directors or other people working for an undertaking. In order to safeguard the effectiveness of inspections, therefore, officials and other persons authorised by the Commission should be empowered to enter any premises where business premises may be kept, including private homes.’65 Such an example can be drawn from the SAS Maersk Air case66, where important documents related to the violation were found in the private premises of an employee67. Investigation in private
58 Ibid. Art 20(8).
59 Hoechst (n39) para. 25.
60 Case 94/2000, Roquette Frères SA v Directeur général de la concurrence and Commission [2002] ECR I-09011 para.67. 61 Ibid. para. 62.
62 Reg. 1/2003 Art 20(8).
63 Robert Schutze, European Union Law (1st edn, Cambridge University Press 2015) 786. 64 European Commission (DG Competition) ‘Management Plan 2017’, [2017] 7; also available at <http://ec.europa.eu/competition/publications/annual_management_plan/amp_2017_en.pdf>. 65 Reg. 1/2003 Rec 26.
66 SAS Maersk Air(COMP.D.2 37.444 ) Commission Decision 2001/716/EC [2001] OJ L 265/15. 67 Ibid. par 7
premises has been considered a “striking extension”68 and “surprising” compared to the previous framework.69
The above-mentioned premises may include, inter alia, ‘land and means of transport, including the homes of directors, managers and other members of staff of the undertakings and associations of undertakings concerned’.70 As indicated above, both Article 7 of the Charter and Article 8 of the ECHR provide the protection of the right to inviolability of the home. Any restriction to said right must comply with the specific requirements of Article 8(2).
Reasonable Suspicion
Searching a person’s home constitutes an interference with the right to privacy71. The rather intrusive nature of this power that the Commission has at its disposal requires an attentive observance of the safeguards against its misuse. One of the requirements under Article 21 is that the Commission must unequivocally prove the existence of suspicion that evidence is located in the premises that they intend to investigate. “Reasonable suspicion”, according to the ECtHR72 “that a criminal offence has been
committed presupposes the existence of facts or information which would satisfy an objective observer that the person concerned may have committed an offence”73 Although a case-by-case analysis is necessary in order to decide what “reasonableness” constitutes, in essence the authority must have certain information or facts at its disposal that can satisfy an independent, objective observer that a crime has been committed by the person(s) concerned.74 Transposing this into the competition law regime, the Commission’s suspicion must be strong enough and objectively proved in order to proceed. This is a sine qua non condition that should be addressed by the Commission in its decision.
Individuals Targeted
The decision for the inspection could be addressed to the directors, the managers or any other members of the staff. The broadness of the provision can be concerning, given the number of people and private 68 Landolt (n 15) , 297.
69Ramsden (n 23) , 78. 70 Reg. 1/2003 Art 21(1).
71 Chappell v. the United Kingdom, (1990) 12 EHRR 1, para. 51.
72 Ilgar Mammadov v. Azerbaijan App. no. 15172/13, (ECtHR 22 May 2014) , para. 88, Erdagöz v. Turkey, App.
no.25126/94 (ECtHR 9 September 1997) para.51 , Fox, Campbell and Hartley v. the United Kingdom, (1990) 13 EHRR 157 para. 32.
73 Council of Europe, The right to liberty and security of the person: A guide to the implementation of Article 5 of the
European Convention on Human Rights [2004] 5 Human rights handbooks, available at
<
http://www.refworld.org/docid/49f181e12.html> accessed 22 June 2017. 74 Fox, Campbell and Hartley v. the United Kingdom, (n 72).
dwellings that can be investigated. Indisputably, the rationale behind it is the effectiveness of the investigative process, as explained in Recital 2675 and affirmed in the Marine Hoses case, where important evidence was found in the director’s house and helped reveal a cartel that had been active for more than 20 years.76 However, excluding the directors and their leading role in the decision-making process, it is questionable why all the members of staff were included in the said provision. Since secrecy is the hallmark of every successful cartel77, it seems far-reaching to suggest that every employee in a company may have knowledge of antitrust conduct.
As in Articles 18 and 20, the subject matter and the purpose of the inspection must be specified.78 Furthermore, the date on which the inspection is to begin79, the right of the concerned persons to have the decision reviewed by the CJEU80, and the reasons that have led the Commission to conclude that suspicion exists81, should be included in the decision. Prior consultation with the NCA of the Member State concerned is mandatory.82
Prior Judicial Authorization-The Role of National Courts
The last requirement that the Commission must comply with is to obtain prior authorization from the national judicial authority of the Member State concerned83. This is contrary to its optional nature under Article 20, but in line with the ECtHR’s case law demanding prior judicial authorization, to ensure effective protection against abuse or arbitrariness during inspections84. In particular, the national authority can control the authenticity of the Commission’s decision, its compliance with the proportionality principle (‘neither arbitrary nor excessive’), the significance of the evidence sought, ‘the involvement of the undertaking concerned’, and the likelihood that such evidence will be found in the private premises85. Furthermore, the national judicial authority can ask for detailed explanations on the above-mentioned matters to determine if the proportionality principle has been observed86. However, there are two important drawbacks to the margin of discretion of the national judicial 75 Reg. 1/2003, Rec 26
76 Marine Hoses (COMP/39406) Commission Decision OJ C 168/6 77 US v Varelli, 407 F 2d 735, 741 (7th Cir 1969)
78 Hoechst (n39) , Case C 136/79, National Panasonic v Commission [1980] ECR 02033 , paras. 26- 27, Case C 85/87, Dow Benelux v Commission [1989] ECR 3137, para.18
79 Reg. 1/2003 Art. 21(2). 80 Ibid.
81 Ibid.
82Ibid.
83Ibid. Art 21(3).
84 Robathin v. Austria ,App no 30457/06 (ECtHR 3 July 2012), para 44. 85Ibid.
authorities, which is that they can neither demand access to the file of the Commission, nor question the necessity for the inspection.87The same limitations are imposed on the national courts under Article 20, and the Court of Justice has consistently88 reaffirmed these. However, their relevance is more crucial here, because of the intrusive nature of the measures. This relevance will be thoroughly assessed in the third chapter.
All in all, Regulation 1/2003 provides many safeguards for the undertakings and the individuals concerned during investigations, but it is still questionable whether they are enough and correspond to the intrusiveness of the Commission’s powers. In the next chapter, the right to privacy in business premises will be discussed through the case law of the ECtHR and the CJEU. The different interpretations will be assessed as well as the implications that they have for the undertakings concerned.
3.RIGHT TO PRIVACY
The right to privacy is fundamentally important, is acknowledged worldwide89, and is a protected right. It has been included, inter alia, in the Universal Declaration of Human Rights90, the Covenant on Civil and Political Rights91, and as already mentioned the ECHR and the Charter.
After the Treaty of Lisbon, the Charter became legally binding upon the Member States and the Institutions and has equivalent status to the Treaties.92 The Charter provides in Article 7 that: “Everyone
has the right to respect for his or her private and family life, home and communications.” Article 8 of
the ECHR states: “Everyone has the right to respect for his private and family life, his home and his
correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.” Article 7 of the Charter corresponds to Article 8 of the ECHR93, thus the same protection should be afforded to individuals under both regimes. This is explicitly stated within the body of the 87 Reg. 1/2003 Art.21(3).
88 Roquette Freres, (n 60) , para. 39.
89 Oliver Diggelmann and Maria Nicole Cleis, 'How the Right to Privacy Became a Human Right' [2014] 14(3) Human Rights Law Review 441.
90 Universal Declaration of Human Rights (adopted 10 December 1948 UNGA Res 217 A(III) (UDHR) Art 12.
91 International Covenant on Civil and Political Rights (adopted 16 December 1966, entered into force 23 March 1976) 999 UNTS 171 (ICCPR) Art 17.
92 Consolidated version of the Treaty on European Union [2012]OJ C 326 Art 6(1).
Charter: “In so far as this Charter contains rights which correspond to rights guaranteed by the
Convention for the Protection of Human Rights and Fundamental Freedoms, the meaning and scope of those rights shall be the same as those laid down by the said Convention. This provision shall not prevent Union law providing more extensive protection.”94
In the competition law regime, Recital 37 provides for the respect of fundamental rights: ‘This
Regulation respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. Accordingly, this Regulation should be interpreted and applied with respect to those rights and principles.”95
3.1 THE RIGHT TO PRIVACY IN BUSINESS PREMISES The Concept of ‘Home’
The right to privacy comprises four rights: the right to private life; the right to family life; the right to home; and the right to correspondence. This paper will assess the right to home and its applicability to business premises. The first step in our assessment is to define the scope of the concept of “home”. Although, “home” is a familiar and a universally shared concept, each jurisdiction has its own definition and there is not an internationally accepted one. As O’Mahony and Sweeney interestingly described it, "The idea of home is both present and absent in law”96. In the ECHR context, "home" is where one lives on a settled basis, so if someone lives on a settled basis in multiple places, they all can constitute a home97 within the meaning of Article 8. It is furthermore connected to property rights98. The ECtHR held in Gillow v United Kingdom99 that the house of the applicants continued constituting a home even though they had not lived there for nineteen years, because they had the intention to return.100
3.2 THE ECTHR APPROACH
Niemietz -Extension of the Right to Inviolability of Home to Some Business Premises
94 Charter , Art 52(3) 95 Reg. 1/2003
96 Lorna Fox O'Mahony and James A Sweeney, The Idea Of Home In Law: Displacement and Dispossession (Routledge 2016) 1.
97 Normann Witzleb and others (ed), Emerging Challenges In Privacy Law: Comparative Perspectives (Cambridge University Press 2014) 86.
98 O'Mahony (n 96) , 1.
99 Gillow and Gillow v United Kingdom ((1989) 11 EHRR 335. 100 Ibid. para. 46.
The first judgment of the ECtHR on the matter was in the Niemietz v. Germany101 case. The case
concerned a lawyer who claimed that the search of his office was in violation of his right to private life under Article 8 ECHR.102 The European Commission of Human Rights unanimously decided that there had been a violation of Article 8 ECHR regarding Mr Niemietz.103 In line with the Commission, the ECtHR’s decision provided some clarity on how to assess alleged infringements under Article 8 ECHR, when they are related to business premises. When an assessment under Article 8 is made, a two-step test must be applied: firstly, examine if the person concerned is protected under Article 8(1), and therefore if the situation falls within the right to home as interpreted by the ECtHR; and secondly, if so, if the interference is justified under Article 8(2).
The ECtHR provided four conditions that must be fulfilled during the assessment. First, it defined the concept of ‘private life’104 with regard to the notion of inner circle, wherein individuals lead a life they choose, which also includes ‘the right to establish and develop relationships with other human
beings’.105 In this context the ECtHR found that private life could encompass professional or business activities, as they are a crucial part of the development of said relationships.106 Secondly, the ECtHR held that sometimes those activities are so interrelated that distinguishing between business and private activities is not possible, and thus people who carry out such interrelated activities should be afforded protection under Article 8. Such interpretation though could lead to a violation of the equal treatment principle, against the people who do not carry out the said activities.107 Thirdly, the ECtHR assessed the concept of ‘home’, maintaining that occasionally people carry out business activities in private premises and vice versa, and hence they should also be afforded protection under Article 8.108 Finally, it concluded that “the essential object and purpose of Article 8” is “to protect the individual against
arbitrary interference by the public authorities”109, so the inclusion of certain business premises in the scope of the home concept under Article 8 is compatible with the Article’s rationale. This judgment of
101 Niemietz v. Germany [1992] 16 EHRR 97. 102 Ibid. para. 23.
103 Niemietz v Germany App no 13710/88(Commission Decision, 5 April 1990 ).
104 Costello-Roberts v. the United Kingdom,(1993) 19 EHRR 112 para. 36 “the notion of "private life" is a broad one…. is not susceptible to exhaustive definition”.
105 Niemietz (n 101) para. 29. 106Ibid.
107 Ibid.
108 Ibid. para. 30. 109 Ibid. para. 31.
the ECtHR provides a compass for how to assess allegations of interference in the meaning of Article 8(1) and how they may be justified under Article 8(2). First, the four requirements must be met: 1. Was there an "interference"?
2. Was the interference "in accordance with the law"? 3. Did the interference have “a legitimate aim”?
4. Was the interference "necessary in a democratic society"?
In Mr Niemietz’s case, his private office was considered home, so the first question was affirmatively answered. Therefore the Court had to examine if the interference was justified under Article 8(2). According to the ECtHR, the interference did not satisfy the last requirement, the necessity in a democratic society, because the broad wording of the warrant did not distinguish between documents that could be seized and those that could not.110 This non-compliance with the proportionality principle led to a violation of the right to privacy. This case was ground-breaking, as it provided that it was possible to apply the right to inviolability of home to business premises. Although the ECtHR persists on the idea of the interrelation of the private and business life to award protection to certain professionals, the reference to the concept of “inequality of treatment”, could serve as a stepping stone for its extension to all professionals.
One Step Further-Société Colas Est
The opportunity for further clarifications was provided a few years later in Société Colas Est and Others v. France 111. Here the ECtHR held that the interpretation of the Convention is a dynamic one that, in certain circumstances, allows Article 8 ECHR to be interpreted as encompassing “the right to
respect for a company's registered office, branches or other business premises”112. Citing inter alia the Niemietz113 case and the Chappell114 judgment, the ECtHR found that there was an interference with the right to privacy of the companies. Next, the ECtHR underwent the four-step analysis of Article 8(2) to determine if the interference was justified as such by those requirements. During this examination, the ECtHR provided further clarification of the second requirement, namely the “in accordance with the
law” concept. In particular, the Court of Human Rights held that the term includes an interference that
110Ibid. para. 37.
111 Société Colas Est and Others v. France, App no 37971/97( ECtHR , 16 April 2002). 112 Ibid. para. 41.
113Niemietz (n 101). 114Chappell (n 71).
is based on domestic law, which provides the inspectors with their specific powers to investigate the competition law cases in order to detect potential violations115. It is important to observe that EU law, even though it supersedes domestic regulation, is considered part of it116 according to the ECtHR’s case law117. In the four-step test, the ECtHR found that the first three requirements were satisfied, but during the examination of the fourth requirement, namely “Necessary in a democratic society”118, the ECtHR found that the proportionality test was not satisfied because, as was the case in Niemietz, the safeguards that were offered against potential abuse either in the form of a prior warrant or a senior police officer being present were insufficient119. Even though the ECtHR has repeatedly ruled that the margin of appreciation left to the Contracting States is wider when the concerned parties are legal entities120, this does not preclude the ECtHR from scrutinizing the measures according to the proportionality principle121.
If the Niemietz case had allowed for some uncertainty and confusion with respect to who can be afforded protection to their business premises within the context of Article 8 ECHR, the Société judgment confirmed that the right to privacy is extended to business premises under certain conditions not because of the specific status of the professional concerned (Mr Niemietz was a lawyer and his activities were interrelated) but due to the fact that protection from governmental arbitrariness122 lies at the very core of the Article. It is apparent from the judgments of the ECtHR that the proportionality or ‘Necessary in a democratic society’ test is crucial in deciding if a violation of Article 8 ECHR has occurred. The idea was reaffirmed later in the Canal Plus case123 where, even though the Court did not find a violation of Article 8 ECHR, it held that “the notion of necessity implies that the interference [is]
to a pressing social need and proportionate to the legitimate aim”.124 In this case, the guarantees (prior judicial authorization, appointment and control of judicial police officers) were strong enough and did not allow for a different interpretation. In one of its recent cases125, the ECtHR shed more light on this. 115 Société Colas Est,(n 111) para. 43.
116 Ramsden (n 23) , 76.
117 Ibid. , Bosphorus Airways v Ireland [2005] 45 EHRR 1, para.145]. , 118 Société Colas Est (n 111) paras. 44-50.
119 Ibid. paras. 48-49.
120 Bernh Larsen Holding AS and others v. Norway App no 24117/08 (ECtHR 14 March 2013) , para.159. 121Smirnov v. Russia , App no 71362/01 (ECtHR 7 June 2007), para. 44.
122 Winfried H.A.M. van den Muijsenbergh & Sam Rezai, ‘Corporations and the European Convention on Human Rights’ [2012] 25 (1) Global Business & Development Law Journal 43 – 68.
123 Case Société Canal Plus and Others v France, App no 29408/08, (ECtHR 21 January 2011). 124 Ibid. para. 54.
Even though the case concerned the LPP and ‘the right to correspondence’ within Article 8, the ECtHR provided further guidance ruling that the seizures must not be “widespread and indiscriminate”’126 and
that the judge has the discretion to decide what will happen to documents obtained during dawn raids that are irrelevant to the investigation or covered by the LPP.127
As is apparent from the aforementioned, the ECtHR first established that inspections automatically amount to an interference, and extended the scope of the protection to business premises128under certain circumstances. Furthermore, the conditions and requirements for the application of Article 8 (2) under which such interference can be justified, such as the concept of “in accordance with law”129 and
“necessary in a democratic society”130, and what constitutes ‘adequate and effective safeguards against
any abuse and arbitrariness’131 were clarified. The ECtHR held that when examining if the safeguards are adequate, elements that can assist are the existence a warrant by a judge, if the warrant's scope is properly defined and limited, proof of reasonable suspicion, and reassurance that documents covered by the LPP will not be seized through the presence of an independent observer.132 In cases where the inspection is conducted without a warrant, the Court holds that they should be vigilant133 and that such interference may be counterbalanced by the availability of an ex post factum judicial review134. Although a little hesitantly in the beginning, it is apparent that the ECtHR opts in favour of a wider interpretation of the scope of Article 8.135
3.3 THE CJEU APPROACH
The Hoechst Judgment-The First Attempt
In the European competition law context, investigated companies invoke the right to inviolability of home with respect to their business premises. However, no case law was available until the CJEU rendered the first decision136 on the issue in its famous Hoechst case137. In Hoechst, the Commission 126 Ibid. para. 25.
127 Ibid. para. 79.
128 Société Colas Est (n 111). 129 Ibid.
130 Ibid.
131 Ibid. para. 48 , Robathin (n 84).
132 Ibid.
133 Delta Pekarny a.s. v. the Czech Republic, App no 97/11 (ECtHR 2 October 2014) para. 82 134 Smirnov (n 121) para. 45.
135 Heino v Finland app no 56716/09, (ECtHR 15 February 2011) para. 45, Smirnov (n 121) , para. 45, Delta Perkany (n 133) para. 83.
136 Ramsden,(n 23) ,74. 137 Hoechst (n 39) para. 17.
suspected that producers and suppliers of PVC had been fixing prices and delivery quotas through agreements or concerted practices138. Against this background, the Commission issued a decision to investigate the business premises of the company, which Hoechst opposed because the Commission did not have a warrant139. After the opposition, the Commission obtained a warrant from the Amtsgericht Frankfurt am Main after the mediation of the Bundeskartellamt (Federal Cartel Office)140 and Hoechst applied for the annulment of the decision ordering the investigation, claiming, inter alia, that the Commission exceeded its powers of investigation and violated the undertaking's right to inviolability of home in private premises.141 Against this claim, the CJEU stressed the significance of the fundamental rights, which form “an integral part of the general principles of law”142, and after pointing out the
relevance of the ECHR to this matter143, made a clear distinction between rights of defence that should be protected from a preliminary inquiry stage and rights that do not enjoy the same protection144. According to the CJEU, the first category includes rights of defence such as the right to legal representation and the LPP145, which can be severely damaged during investigations and can have a determining influence in deciding if unlawful conduct has taken place146. In a strict approach, the CJEU concluded that the right to privacy is linked to the private premises of natural persons, not business premises of the undertakings147, thus the second step to the test was not necessary because according to the CJEU the business premises are not protected as such under Article 8 ECHR. At the time, the CJEU held that it was driven towards this interpretation since there was no case law on the subject by the ECtHR.148
In a strict line pursuant to its Hoechst dogma, the CJEU ruled in Dow Benelux149 and Dow Chemical Ibérica150, which also concerned investigations conducted by the Commission in business premises, that the right to inviolability of home does not extend to such premises.151
138 Ibid. para. 2. 139 Ibid. para. 3. 140 Ibid. para. 6. 141 Ibid. para. 17. 142 Ibid. para. 13. 143 Ibid. 144 Ibid. para. 15. 145 Ibid. para.16. 146 Ibid. para. 15. 147Ibid. para 17. 148 Ibid. para. 18. 149 Dow Benelux (n 78)
150Joined Cases 97/87 to 99/87 Dow Chemical Ibérica and Others v Commission [1989] ECR 3165 151 Dow Benelux (n 78) para. 28, Dow Chemical Iberica para. 2.
Roquette Freres- A step towards consistency?
After the Niemietz judgment and the CJEU’s indication that no relevant case law was provided by the Court of Human Rights on the interpretation of the right to privacy on business premises, it would be expected that the CJEU would be more eager to adopt a less strict approach in its following cases. The opportunity was provided with the Roquette Freres case.152 Here, the CJEU provided a thorough analysis of how the Commission conducts its investigations and what the safeguards153 against potential threats to human rights are, and also addressed in detail the margin154 of discretion allowed to the national courts when they scrutinize the Commission’s decision. This case is of particular significance because the CJEU not only repeatedly refers to the case law155 of the ECtHR when it interprets certain concepts, but also for the first time156 the CJEU implies that the right to privacy could extend to business premises. Specifically, in paragraph 29 of the judgment the CJEU held that, in order to determine how the right is applied to business premises, the case law of the ECtHR, subsequent to the Hoechst case, must be taken into account. Then citing the landmark case, Société Colas Est157, the CJEU mentions the two considerations of the ECtHR, that firstly under certain circumstances the protection might extend to business premises, and secondly that even if it does, the interference allowed will still be more far-reaching than it would be under other circumstances (meaning in the case of individuals, private premises). Naturally, this statement drew some attention, as it is the first time that the CJEU seems susceptible to the idea that such protection can be afforded to business premises. Nevertheless, the CJEU, except for citing the case law of the ECtHR, did not provide any further analysis of the requirements that should be fulfilled to extend this protection to certain business premises in the EU legal order. The CJEU is not as reluctant as it was in the past (Hoechst), and holds that the case law of the ECtHR must be taken into account, acknowledging its importance, but nonetheless it is very careful in its wording not to explicitly reaffirm that such extension is awarded under EU law. The CJEU, without further analyzing this statement, focused on the protection that should be provided against arbitrary and disproportionate measures during investigations.158
The judgment is however very significant due to a second issue that it addresses. The question of the Cour de cassation concerned the scope of latitude of the national courts to review the Commission’s 152 Roquette Freres (n 60).
153Ibid. paras 43-49.
154 Ibid. para 99.
155 Ibid. paras 29, 52.
156 Van Bael Ivo, Due Process in EU Competition Proceedings (Kluwer Law International 2011) 110. 157Société Colas Est (n 111)
decision when it requires an authorization, and under what grounds they can refuse to provide it.159 The CJEU provides a thorough analysis on what a national court should do in case it has reservations regarding the reasonable suspicion requirement when a warrant must be issued. The CJEU held that if the national judicial authority is not satisfied with the explanations provided by the Commission, it should communicate its concerns to the Commission or the NCA, and only after further explanations are provided or there is no answer at all to the matter can the national judge refuse to grant the warrant160. This is a very important clarification by the CJEU, because in the present case the competent judicial authority claimed that no information justifying the investigation was provided to it, so: “it was impossible for him to verify whether, in the specific circumstances, the application before
him was justified.”161
Recent Developments in the Case Law
Further information on the Court’s stance came with the Deutsche Bahn case162. This case concerned three decisions adopted by the Commission to conduct investigations in the business premises of Deutsche Bahn. The General Court held that there was no infringement, and the undertaking appealed to the CJEU, suggesting that the lack of prior judicial authorization for the inspections violated their right to inviolability of private premises as enshrined in Articles 7 and 8 of the Charter and the ECHR respectively. The CJEU first held that the right of inviolability of the home is a general principle of the EU citing, inter alia, the Hoechst, Dow Benelux, and Dow Chemical Iberica cases163. With respect to the ECtHR case law, the CJEU maintained its Roquette Fréres opinion that the interference in investigations in business premises can be more far-reaching that private ones164. Then, considering the claims that the lack of warrant violates Article 8, the CJEU held that the existence of prior judicial authorization is only one of the safeguards against arbitrariness. The ECtHR has held that the lack of it can “be counterbalanced by a post-inspection review covering both questions of fact and questions of
law”165 and since such a review is available under EU law the argument was considered unfounded.
The CJEU maintains consistency with the Roquette Fréres judgment approach, thus cites the case law of the ECtHR and holds that the right to inviolability of home is a general principle of EU law. At the 159 Ibid. para. 21.
160Ιbid para. 99. 161 Ibid. para. 17.
162 C-583/13 P Deutsche Bahn v Commission [2015], ECLI:EU:C:2015:404. 163 Ibid. para. 19.
164 Ibid. para. 20.
same time, it abstains from applying the protection to the same degree as the ECtHR, by focusing more on the “exceptions” to the rule, such as the far-reaching scope of the interference and the possibility to remedy the lack of a warrant with an ex post judicial review. In this way it can avoid dealing with the hurdle of finding that the Commission’s decision has violated the right to privacy.
This decision is of fundamental importance because it is one of the limited cases where the CJEU annulled a Commission’s decision because it could violate the rights of defence of the undertaking concerned. The CJEU ruled that the second and third inspections in Deutsche Bahn’s premises were conducted pursuant to information obtained during the first inspection, which did not “fall within the
subject-matter of the first inspection decision”166, contrary to the provisions of Regulation 1/2003, and leading to potential violations of the rights of defence of the undertaking. The CJEU here outlines the boundaries of the Commission’s discretion during the investigative proceedings. The opinion167 of the Advocate General was enlightening. He discouraged the Commission from going on “fishing
expeditions”, and using ongoing investigations as a pretext to unveil another breach of competition
law168. He furthermore reiterated that the Commission can only search for evidence related to the subject matter of the decision.169
Although the CJEU’s approach with respect to the right to privacy remains in line with previous case law, this case proves that the CJEU does not approve the idea that the purpose sanctifies the means. It could therefore mean we expect a stricter approach towards the Commission and how it uses its powers, especially when they could violate the rights of defence.
From the aforementioned, it is clear that the ECtHR opts for a wide protection under Article 8. The CJEU, on the other hand, is more restrained in its rulings. Even though it has departed from its view since the Hoechst judgment, it could still be more generous regarding business premises170. Undoubtedly the CJEU has continuously cited the case law of the ECtHR, but it has abstained from explicitly accepting the extension or reaffirming it with its rulings. There is no case where the CJEU or the General Court has annulled a decision of the Commission because it infringed the right to privacy of a company. It has only implied it, holding that in any event, even if the company’s office can be considered ‘home’, the interference can be more far-reaching. Furthermore, to the allegations that the lack of a warrant could lead to a violation of the right to privacy, the CJEU answered pursuant to 166 Deutsche Bahn, (n 162) para. 67.
167 Ibid. Opinion of Advocate General Wahl. 168Ibid para. 64.
169 Ibid.
170Allan Rosas, Nils Wahl and Pascal Cardonnel, Constitutionalising The EU Judicial System: Essays in Honour of
ECtHR case law that it can be remedied by an ex post facto judicial review, which is possible under Regulation 1/2003171. However, not only are the European Courts reluctant to criticize the Commission’s decisions172, but also this review does not take place during the investigations. Instead, it takes place somewhat later, and only when an undertaking opposes the inspections or files for an annulment. As such, an undertaking might have to undergo a dawn raid, face fines for non-cooperation and suffer irremediable reputational damage, and subsequently be found not to be in breach of competition law rules.173 Although the probability of such a case is relevantly low, any possible allegations of such a violation could be eliminated if the Commission obtained a warrant as a precautionary measure.174
4. LEVEL OF PROTECTION UNDER ARTICLE 21
As already indicated, the Commission has to obtain prior judicial authorization from a national court before it can carry out inspections in private premises. However, the fact that a national court has no access to the documents the Commission has at its disposal, nor can it question the necessity for the investigation, raises questions with regard to how effective this judicial review is, and if the individuals concerned are provided with enough safeguards against abuse by the Commission.
4.1 ARE THE SAFEGUARDS OF ARTICLE 21 ENOUGH TO PREVENT ARBITRARINESS? The ECtHR provided some guidance on the matter in the Funke175 case. The case concerned a house search about alleged tax invasion claims176. Here the ECtHR held that the exceptions of Article 8(2) are to be interpreted narrowly177 and that investigations in private premises can be justified when necessary evidence that proves an offence is sought while concurrently it is ensured that there are “adequate and effective safeguards against abuse”.178 The decision was subsequently reaffirmed in the Crémieux179 and Miailhe180 cases.
171 Reg.1/2003 Rec 33. 172Allan Rosas (n 170)
173 Katalin Ligeti, Toward a Prosecutor for the European Union Volume 1: A Comparative Analysis (Hart Publishing 2012) 848.
174 Reg. 1/2003 Art 20(7).
175Funke v France (1993) 16 EHRR 297 , para. 56. 176 Ibid. para. 7.
177 Ibid. para. 55.
178Ibid. para. 56.
179Cremieux v France (1993) 16 EHHR 357. 180 Miailhe v France (1993) 16 EHHR 332.
As is the case with inspections in business premises, when inspections are conducted in private premises they have to be in accordance with Article 8(2), and in compliance with the Niemietz criteria181. Although a case-by-case analysis is mandatory, conclusions can be drawn from the prerequisites of Article 21, analyzed in combination with the four requirements established by the ECtHR. Firstly, it has been concluded by the ECtHR that an investigation in someone’s private dwellings constitutes an interference.182 Secondly, the interference is conducted pursuant to Article 21, which although superior to the national law, nonetheless forms part of the national legislation, so the second criteria is also satisfied.183 Furthermore, the aim pursued is unambiguously legitimate as the investigations focus on detecting and terminating the illegal activity of cartels. Finally, the last criteria, being necessary in a democratic society, is connected to the proportionality principle of the measures: is the interference proportionate to the aims pursued and are there adequate and effective safeguards against any abuse and arbitrariness?184 It has been concluded that during the examination of compliance with the safeguards, elements like the existence of a properly defined warrant and reasonable suspicion, as well as the presence of an independent observer, can function as guarantees.185 During investigations in private premises, the Commission is obliged under Regulation 1/2003 to have a warrant that has been issued by a national judicial authority pursuant to its decision which should be precise, state all the reasons why there is reasonable suspicion, and contain the subject matter and all the information necessary for a judicial authority to examine possible arbitrariness. These guarantees provide a prima facie confirmation that the procedural rights and guarantees provided by the Regulation and the case law are adhered to.
However, two major issues seem to arise. First, the ECtHR has held that in certain cases, for example when the search concerns a lawyer, an independent observer186 has to be present to guarantee that documents related to the LPP are not seized187. Under Article 21 there is no provision for an independent observer such as a police officer to be present188. Having said that, Article 21 refers189 to Article 20, which provides the Commission with the option to be assisted by the police or an equivalent 181 Niemietz (n 101) paras. 27-37.
182 Chappell (n 71).
183 Bosphorus (n 117) para. 145 , Ramsden (n 23) ,76. 184 Robathin (n 84) para. 44.
185 Ibid.
186 Niemietz (n 101) para. 37, Robathin (n 84) para 44.
187 Ibid., Wieser and Bicos Beteiligungen GmbH v. Austria, App no 74336/01,(ECtHR 16 October 2007) para. 57. 188 Ramsden (n 23), 79.
enforcement authority in case of opposition by the person investigated. However, this is not an obligatory measure to be used in every case; it is optional and on the condition that opposition occurs from the investigated person. If there is no opposition, this procedural right could in principle be violated.
EFFECTIVE JUDICIAL REVIEW
More essential and worrying, however, is the second issue, namely the prior judicial authorization. The national court has to issue a warrant so that the Commission can proceed with the inspection. However, the national judge cannot have any access to the Commission’s file and evidence, and cannot call into question the necessity for the inspection. The implications that this situation may give rise to were illustrated in the Roquette Fréres judgment, where the Commission asked the French government to provide assistance through an authorization190 by the competent judicial authority, in case of opposition by the undertaking. The authorization was granted immediately (on the same day as the application)191. This was nonetheless one of the grounds of appeal of Roquette Fréres. The undertaking claimed, inter alia, that the President of the Tribunal did not have all the necessary information to decide if such an authorization should be provided. Indeed, the Cour de cassation held that “no information or evidence
justifying any presumption of the existence of anticompetitive practices was put before the President of the Tribunal de grande instance de Lille, so that it was impossible for him to verify whether, in the specific circumstances, the application before him was justified”.192 The President also maintained that no information was provided in the decision to allow the Court to conduct an examination.193 The CJEU held that if the court of the Member State is not satisfied by the Commission’s explanations, it should make an inquiry to the Commission and abstain from any action in the meantime. Only if the Commission does not reply could the national court then refuse to grant the authorization.194 In any case, even if for example the Commission provides further explanations, the national court cannot demand particular information or access to evidence. This is of crucial importance, because it proves that the margin of discretion allowed to the national judge does not go beyond examining if the measures are coercive or arbitrary and it can only refuse to grant the authorization after it
190 Roquette Freres,(n 60) paras.12-13. 191 Ibid. para. 14.
192 Ibid. para. 17. 193 Ibid.
communicates with the Commission, but even then, it cannot demand further information, only explanations.
A national court’s bond is twofold here. Firstly, it is bound by Regulation 1/2003, which explicitly prohibits review of the Commission’s decision, which as superior to the national legislation is applicable.195 Secondly, it is bound by the duty of sincere cooperation as enshrined in the Treaties196 and defined by the case law197 of the CJEU. This incumbency of the national court deprives it of its right to carry out its genuine function, namely, effectively reviewing the decision before issuing a warrant. Therefore, it has turned into a means to an end, with the Commission practically issuing the warrant, thus compromising the safeguards that should be provided by the Regulation. It would not be extravagant to say that what seems as a prima facie authorization is in practice just a reaffirmation of the Commission's possibility to carry out inspections, with no discretion of questioning it.198
An answer to this could be the ex post facto judicial review which has been introduced by the ECtHR and reaffirmed subsequently by the Court of Justice.199 The ex post facto judicial review can remedy the absence of certain safeguards such as the lack of a prior warrant in an investigation in business premises, and is possible under the present enforcement regime, because all the Commission’s decisions can be scrutinized by the Court of Justice.200 This idea of the ex poste judicial review is embraced by both the ECtHR and the CJEU in business premises, in line with the fact that the interference can be more far-reaching than in private premises, since the scope of the right to inviolability of home is not identical in the two cases. Thus, the question remains: can we apply mutatis mutandis the ex post judicial review in private premises? A clear answer is difficult to find. Significantly, although the provision has been in place for 13 years, the Commission has not made extensive use of it. The first inspection the Commission carried out in private premises dates from May 2007, when it was investigating the Marine Hose cartel.201 While the Commission was investigating the business premises of the undertaking in Italy, France and the UK, a concurrent inspection took place in the director’s house in the UK202. This first attempt is considered a huge success since important 195 C-6/64 Costa v Enel [1964] ECR 585.
196 Treaty of the European Union , Art 4(3).
197 C-344/98 Masterfoods v HB Ice Cream [2000] ECR I-11369, C-199/11 Europese Gemeenschap v Otis NV [2012] ECR I-000
198 Ramsden (n 23) ,79 “In this regard it cannot be said that the national court gives an authentic authorization for the Commission to enter private homes”.
199 Delta Perkany (n 133) para. 83, Smirnov (n 121) para. 45, Heino (n 135) 45 , Deutsche Bahn (n 162) para. 31. 200 Reg 1/2003 Rec 33.
201 Themistoklis K Giannakopoulos, ‘Safeguarding Companies' Rights In Competition And Anti-Dumping/Anti-Subsidies Proceedings’ (2nd edn Kluwer Law International 2011) 91.
