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COMPETITION SURVEY – Journal of Territorial Survey Directorate – Competition Council - Romania

COMPETITION SURVEY

STUDIES AND RESEARCHES RELATING TO

ECONOMIC COMPETITION

JOURNAL OF TERRITORIAL SURVEY DIRECTORATE

COMPETITION COUNCIL - ROMANIA

Anno II, No. 1 (3), April 2007

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COMPETITION SURVEYStudies and researches relating to economic competitionJournal of Territorial Survey Directorate COMPETITION COUNCIL - ROMANIA

Patronage and sponsorship by the COMPETITION COUNCIL - ROMANIAPiaţa Presei Libere nr. 1, sector 1, 013701, Bucureşti, Româniae-mail: [email protected]

Managing boardAlexe Gavrilă - secretary of state, vice-presidentConstantin Ciutacu - secretary of state, vice-presidentŞtefan Neagoe - under-secretary of state, competition councillor Mihai Giugariu - under-secretary of state, competition councillor Benedict Sârbu - under-secretary of state, competition councillorNandor Nemenyi - under-secretary of state, competition councillorCOMPETITION COUNCIL - ROMANIA

Editorial boardGheorghe Rădulescu – director Daniel Dumitru Stan – senior competition inspectorOvidiu Felecan – senior competition inspectorCOMPETITION COUNCIL - ROMANIA

Ion Stegăroiu – dean, Faculty of Economics Dan Ţop – chief of department, Faculty of Juridical Sciences “VALAHIA” UNIVERSITY TARGOVISTE

Editorial officePiaţa Presei Libere nr. 1, sector 1, 013701, Bucureşti, RomâniaConsiliul Concurenţei Direcţia Monitorizare Teritorialăe-mail: [email protected]

ISSN 1842 – 2705

Copyright©2007Competition Council - Romania

Bibliotheca Edition credentials approuved by National Council of Scientific University Research (CNCSIS) under notification no. 1142/30.06.2003, reviewed 1 mai 2006e-mail: [email protected]

Opinions within the papers are personal appreciations of the authors and do not necessarily represent COMPETITION COUNCIL assessments.

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TABLE OF CONTENTS

1. Call for papers / 5

2. The competition authority – everybody’s friend and amicus curiae (Alexe Gavrilă – Vice-president, Secretary of state, Competition Council - Romania; Daniel Stan – senior inspector – Competition Council - Romania) / 7

3. The role and importance of national judicial authorities regarding the protection of the economic competition – an outlook from Romania (Mihai Giugariu – Under-secretary of state, competition counsellor – Competition Council - Romania; Lucian Stroe – senior inspector – Competition Council - Romania) / 28

4. Smart Ulysses navigating between Scylla and Carybdis or DG Competition between administrative and judicature (Gheorghe Rădulescu – director, Competition Council - Romania; Ovidiu Felecan – senior inspector – Competition Council - Romania) / 53

5. Administrative and judicature in the activity of the Competition Council – the powers of inspection (Gabriel Bălaşa – President judge, Romanian Dambovita Tribunal Commercial and Administrative Litigation Section; Vlad Ionescu – Competition Council - Romania) / 92

6. E.U. principles and institutions – the grounds for extension and reform (part one) (Vasile Şeclăman – General secretary, Competition Council - Romania) / 98

7. Aspects of judicial practice in the matter of antitrust and unfair competition (Univ. conf. dr. Livia Mocanu, “Valahia” University of Targoviste - Romania, Faculty of Juridical, Social and Political Sciences) / 110

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CALL FOR PAPERS

Dear colleagues, fellows, friends, present and future collaboratorsfrom Romania, from other Member States of the European Union

and from all other countries of the world,

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officials and public clerks from competition authorities and from other community and national authorities and institutions, magistrates from community and national courts, academics, attorneys-at-law, publicists, business and professional associations representatives, etc.,

everybody who knows something or wants to know and has something to say about the ample interdisciplinary field of economic competition,

are invited to send papers/articles for publishing within our journal (which is inteded to be a quarterly review).

The selected papers will be published on our expenses; the respective issue will be send to the author by e-mail and also by regular mail (two copies); the journal will be also available on www.competition.ro (Romanian Competition Council site) and on other sites to be communicated.

We apologize for the time being the editorial board is able to process contributed papers only in English and French, in which languages we ask you to be so kind to submit your paper (we will assure a translation in Romanian). The Romanian collaborators are asked to send us also a translation in English or French.

If you are reading this, that means you are reading our journal; if you are reading our journal, that means you are our present or

future collaborator.

We are awaiting for you,

Editorial board

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THE COMPETITION AUTHORITY –EVERYBODY’S FRIEND AND AMICUS CURIAE

Alexe Gavrilă Daniel Stan vice-president, secretary of state Senior inspector Competition Council - Romania Competition Council - Romania

AbstractIt was widely recognized that Regulation 1/2003 EC has introduced some “key

pillars” of european competition enforcement reform. But the successfully achievement of the goals of Regulation 1/2003 (more effective and efficient enforcement and uniform

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application of EC antitrust law, simplified administration, reduced administrative costs and costs for undertakings, etc.) will actually depend on its implementation. Empirically reviewing the above mentioned pillars could result in a closer and closer feeling that national courts of the Member States will nearly act as a most important enforcement characters for the european competition policy. National courts could provide a unique and valuable perspective to competition cases: they are independent, which ensures impartiality; they enforce procedural due process, a vital component to fair and effective implementation of any aspect of economic policy; and they bring their unique ability to apply complicated and sometimes conflicting policy standards to complex fact situations. But the increased power and discretion granted to them clearly raises some questions, e.g. regarding the integrity and coherence of the law as it develops under the supervision of many national courts in different Member States. The paper focus on the amicus curiae mechanism as a very effective and coherent aid to achieve the goals of the EC competition policy.

I. From administrative to judicature – the “juridification” of competition policy

1. Many times it is a very adapted way to engage a professional paper on various matters by making a reference to some “pillars”, or, better, “key pillars”. E.g. the European Community pillars, the European Treaty pillars, the European Civil Code pillars, the Hague Programme pillars, the Private International Law pillars, etc. The truth could be this beginning is, at least, a rapid and easy way to emphasise, ab initio, some parti-pris of the authors, that means some of their mind limitation and/or auto-imposed ambits. To spare some of readers spent time an also a little of redactional space in this issue of the review, we too have adopted this approach for entering our rationale.

2. Council Regulation (EC) No 1/2003 [1] replaces Regulation 17/62 [2] and establishes the new and coherent procedures for the enforcement of the European Community (EC) antitrust law in Articles 81 and 82 in the European Treaty - ECT [3]. The Commission has published in addition various auxiliary guidelines and notices (the Modernization Package) assisting the interpretation and application of the new regulation. The importance of the Regulation 1/2003 was many times emphasized by great and legitimate collocations as: “an ambitious and fundamental overhaul of the antitrust rules implementing Articles 81 and 82 of the Treaty”, “the most comprehensive antitrust reform undertaken since 1962” [4], a “big bang” [5] etc.

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3. It was widely recognized that Regulation 1/2003 has introduced some “key pillars” of European competition enforcement reform:

- decentralization - eliminating the obligation to notify the agreements to the Commission;

- close cooperation between antitrust enforcement agencies (the Commission and the National Competition Authorities - NCAs) - establishing the European Competition Network, continuing to participate in the Advisory Committee on Restrictive Practices and Dominant Positions;

- strengthened and expanded powers of investigation and enforcement - the right to seal premises, the taking of statements, inspecting a broad range of premises;

- uniform application of EC antitrust law - NCAs are required to apply Articles 81 and 82 the same time they apply national competition law, to ensure that their decisions are consistent with the Commission’s decisional practice, etc,;

- close cooperation between antitrust enforcement agencies and the national courts – mainly to ensure the consistency of national courts decisions with the EC Treaty statements and with the Commission’s decisional practice.

4. But the successfully achievement of the goals of Regulation 1/2003 (more effective and efficient enforcement of EC antitrust law, simplified administration, uniform application of EC antitrust law, reduced administrative costs and costs for undertakings etc.) will actually an mainly depend on its implementation empirical actions. It must be underlined that many components of the “new era in competition enforcement” already existed long time before the implementation of Regulation 1/2003, for example:

- broad investigative and enforcement powers to the Commission have been prescribed in Regulation 17/62 [2];

- the principle of close co-operation between the Commission and the NCAs was established in Article 10 of ECT [3] and in [6];

- the principle of close co-operation between the Commission and the national courts was established in Article 10 of ECT [3] and in [7].

In general, the European Community competition regime has rested on a duty of “sincere co-operation” owed by Member States to the Community (and, presumably, each other). The source is found in Article 10 ECT [3], imposing both positive and negative duties on Member States. The Court of Justice of the European Communities (ECJ) invoked on many

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occasions these duties – e.g. see [8] para. 5 where this provision is emphasized as “a general duty for the Member States, the actual tenor of which depends in each individual case on the provisions of the Treaty or on the rules derived from its general scheme.” and also [9] para. 18 where it is stated “this duty of sincere cooperation imposed on Community institutions is of particular importance vis-à-vis the judicial authorities of the member states, who are responsible for ensuring that Community law is applied and respected in the national legal system.”

It must be said that the great and many results of all this are yet pending. That means implementing the above goals is a follow-on, long time, difficult and costly task.

5. Empirically reviewing the above mentioned pillars, duties and goals could result in a closer and closer feeling that national courts of the Member States will nearly act as a most important enforcement characters for the European competition policy. Which policy one can say it is by it self a very important pillar of the European Community – we quote in extenso from the ECT [3]:

“Article 2. The Community shall have as its task, by establishing a common market and an economic and monetary union and by implementing common policies or activities referred to in Articles 3 and 4, to promote throughout the Community a harmonious, balanced and sustainable development of economic activities, a high level of employment and of social protection, equality between men and women, sustainable and non-inflationary growth, a high degree of competitiveness and convergence of economic performance, a high level of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States.

Article 3.1. For the purposes set out in Article 2, the activities of the

Community shall include, as provided in this Treaty and in accordance with the timetable set out therein: (…)

(b) a common commercial policy;(c) an internal market characterized by the abolition, as between

Member States, of obstacles to the free movement of goods, persons, services and capital; (…)

(g) a system ensuring that competition in the internal market is not distorted;

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(h) the approximation of the laws of Member States to the extent required for the functioning of the common market; (…)

(m) the strengthening of the competitiveness of Community industry;

(n) the promotion of research and technological development;(o) encouragement for the establishment and development of trans-

European networks; (…)(t) a contribution to the strengthening of consumer protection; (…)Article 4.1. For the purposes set out in Article 2, the activities of the Member

States and the Community shall include, as provided in this Treaty and in accordance with the timetable set out therein, the adoption of an economic policy which is based on the close coordination of Member States' economic policies, on the internal market and on the definition of common objectives, and conducted in accordance with the principle of an open market economy with free competition. (…)”

And also, as the ECJ observed in [10] para. 36 and repeated in [11] para. 20:

“Article [81] of the Treaty constitutes a fundamental provision which is essential for the accomplishment of the tasks entrusted to the Community and, in particular, for the functioning of the internal market.”

6. Beside all this we will always keep in mind the second important pillar of every competition authority (the first being, for sure, the enforcement of the rules) - from the Directorate-General Competition (European Commission) to every NCAs - which is competition advocacy [12]. And also the fact that a very important goal of the new concern of the DG Comp about damages actions for breach of EC antitrust rules (a new administrative-judiciary borderland) is not basically dedicated to enhance litigation but to enhance advocacy [13]. One could say that the competition authority is everybody’s friend, ever trying to teach and to advise how to conform to competition rules. And, as a matter-of-course, that is to say that competition advocacy could and should be addressed also to judges.

7. Not forgetting that ECJ acts also as a Constitutional Court vis-à-vis the ECT, there are voices that argue that a quick view on the judicial

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review of competition cases by European Community Courts could rise to anyone the prospect of some kind of a moiled jumble [14]. And this is, maybe, because the European system of judicial review is characterized by generalist CFI judges (apart the European Union Civil Service Tribunal - EUCST) - that means by the absence of a formal recognition of the high complexity of competition law litigation. This absence is more and more pointed out by decisional practice of the European Commission and by case-law of the Community Courts in competition matters. For saying no more, the increasing technicality of competition judicial decisions, the major role of industrial economics, and many other objective circumstances provoke current big delays and amasses of pending Court cases which could no longer be compatible with the fast-moving nature of markets, with the imperatives of “the must alive and breathing policy in the European Union”. A reasonable observation which could raise with the same intensity on the relationships between the European Commission, the National Competition Authorities and/or the National Courts.

8. Is it the time and an occasion to remained the concept of the “juridification” of economic sphere, as it was renewed by Professor Wilks [15], and especially to emphasize the “danger” that the law may require competition authorities to act in ways incompatible with some community and national interests and in contradiction with reasonable economic analysis?

The term “juridification” (which, based on principles of Weber [16], gained some popularity by the works of Teubner [17]) was intended to capture the process “whereby areas of social and economic life become subject to systematic control through legislation, the application of legislation by state agencies and the adjudication of outcomes through the judicial process and the courts”. Lately the concept is being used especially by lawyers at the London School of Economics to emphasize the increased legalization of several aspects of economic life including competition policy [18].

Juridification as increased judicial power refers to the increased power of the judicial system and one may distinguish between at least two sources of this power, ambiguity and complexity. The first, interpretive power arise either when it is ambiguous what rule or principle to apply to a certain case or when ambiguity is linked to how a certain rule is to be interpreted. In short, the more ambiguity concerning the application of norms to a specific case, the more power the legal system may be said to

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have. The second source of power derives from increased complexity. Both ambiguity and complexity increases the power of the legal system (and the experts inside or outside the legal system). Thus ambiguity and complexity increases the importance and dependence on legal advice and in court settlement [19]. And both ambiguity and complexity are, usually, fully involved in competition cases.

9. Is there a need, is there a way and is it the big time for us to contemplate an ending for that “constructive ambiguity” [20] on who-does-what (and some times disconnectedly) between the administrative authority and the judicature in competition cases?

For modernization and enforcement of competition policy under the guidance of the Commission to be successful then the law must be applied with greatly increased rigour; a competition culture will begin to dominate, the courts will reinforce and expand the application of the law, and private parties seeking damages will begin to succeed; that could be “the dawn of a new” era of coherence in the refinement, application and effectiveness of the competition law.

10. So, in national courts, judges may be “generalists” – sitting in courts of general jurisdiction, hearing many different types of cases – or “specialists” – having jurisdiction only over some kind of cases (commercial, administrative, competition cases etc.). There are, however, common aspects to all judicial review of such cases. Economics (micro- and macro-) is an important, but often not exclusive, part of the substantive framework for evaluation of competition cases. Major issues in competition cases are usually broad and complex, and may be mixtures of “fact” and “law”. Experts may play an important role in these cases, either as representatives of the parties in an adversarial capacity or as advisors to the court.

11. To give only one example in order to sustain the above statements, let’s say that the four conditions employed in Article 81(3) ECT (such as promoting technical or economic progress or consumers to obtain a fair share of the benefits), are not clearly defined legal concepts and necessitate complex economic appraisal. We agree with other commentators that it was for this reason that the Court of First Instance (CFI) has limited its review “4. (…) of the complex economic appraisals made by the Commission when it makes use of the discretion conferred on it

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by Article 85(3) of the Treaty, with regard to each of the four conditions laid down in that provision, … limited to verifying whether the rules on procedure and on the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has not been any manifest error of appraisal or misuse of powers” [21].

Although the four conditions of Article 81(3) ECT have not been altered, this “complex economic appraisal” are now to be conducted by the national courts, which until recently have not been regarded as competent to do this. In particular the condition that competition may not be eliminated requires an analysis of the product and geographic markets affected by the agreement, of the market structure, and the position of the parties on the market (i.e. whether they have market power). We argue that such analysis can only be done satisfactorily on the basis of detailed data by specialized bodies.

We agree that National Courts could provide a unique and valuable perspective to competition cases: they are independent, which ensures impartiality; they enforce procedural due process, a vital component to fair and effective implementation of any aspect of economic policy; they bring their unique ability to apply complicated and sometimes conflicting policy standards to complex fact situations. But the increased power and discretion granted to them (especially speaking about competition policy), clearly raises questions regarding the integrity and coherence of some specific community laws as they develop under the supervision of national courts in different Member States.

We argue that there exists a real possibility that inconsistent judgments will be handed down especially in competition cases. How could be minimized that effective danger?

II. National judges and competition law

12. Cornerstones of the Community legal system, such as the principles of supremacy, direct effect, conforming interpretation, and the requirement of effective and equivalent remedies, largely rest or fail on the capacity of national judges to uphold them. Each national judge is a Community judge, and needs to understand and be able to fulfill his role as such at the national level.

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13. The task is a difficult and demanding one, said a Finnish judge of a supreme court [22], and this is due to several reasons, many of which arising from the nature of the Community legal system and its relationship with national law. We quote:

- Community law is not easy, but wide-ranging and complex. Its interaction with national law may give rise to difficult issues. Without a good systemic knowledge, it may be an overwhelming task to determine the significance and the impact of Community law in a given situation.

- A superficial knowledge of Community law is no longer enough in order to manage properly the task facing a national judge. Even where the legislator has tried to implement directives or framework decisions in good faith, subsequent interpretations made by the Court of Justice may give rise to situations where a domestic law can no longer be taken at face value.

In the Köbler case [23], it was pointed out that the national judge has to keep a critical eye over his domestic law in order to ensure, before applying it, that it is in conformity with Community law - and such a critical analysis is not possible unless the judge is familiar with Community law.

- Community law is in a constant evolution, and continually expands into new areas. One notable example is the competition area, where numerous new legal instruments have emerged in recent years.

- Many important elements of Community law are based on the case-law of the Court of Justice. In fact, many of the fundamental principles have been established, developed and refined solely through case-law. Especially for judges in Member States where case-law traditionally plays a less important role in the national legal system, a proper understanding of the Community legal system may therefore require a new orientation when it comes to managing sources of law. The judge needs to have an autonomous ability to deal with Community law issues.

- Theory and lectures will not be enough to provide judges with the skills they need. Learning how to properly consider and apply Community law in individual cases requires practical exercise, a training that illustrates the operation of Community law in a concrete manner and the possibility to apply to amicus curiae mechanism in very specialized fields like competition policy.

14. It is true that The Court of Justice (and more recently The Court of First Instance), has been able for long time to conduct effective judicial review of European Commission decisions on competition matters. So, a priori, there is not a reason why national judges should be less able to apply

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national and/or community competition law in various cases.

15. However, there were expressed major concerns, e.g. about the criteria in Art. 81(3) of the Treaty [3] being too imprecise for judicial application ad literam in a situation in which the validity of a given agreement or anticompetitive practice is issued in ordinary civil proceedings. Such proceedings might involve a contractual dispute between the parties to an agreement, a claim for damages by a third party, or a simple claim for an unpaid contractual debt (see Mr. Costa refusal to pay an electricity bill for about 1 Euro [24] or the refusal of Mr. Crehan to pay unfairly high prices for beer and other drinks [25]).

Whatever the nature of the particular case, the problem in this example is that a national judge, who might not have any special experience or familiarity with competition law principles, would be cold on to decide not only whether an agreement was restrictive on competition, but also to make his or her first instance assessment of whether the restrictions could be justified according to what many saw as vague and imprecise criteria that were not designed of effective judicial application [26].

16. From [26] we quote also Mr. Justice Ferris, an English judge with considerable experience in the field of competition law:

“[Judges] cannot make value judgments, except in a very limited field, certainly not in relation to general economic questions (…) the Court should not have any part to play (…) in deciding whether an agreement or course of conduct contributes to improving the production or distribution of goods or promoting technical or economic progress (…) I cannot see any court as we know it making a satisfactory job of that task”.

Similar remarks were made by other experienced judges, lawyers and economists.

17. And there is another important aspect. The ordinary civil judges, unlike the administrative arbitrators, depend on litigants as to the evidence that is presented and on the basis of which they must make their appreciation. As a result, there is a significant risk that the application of competition regulations in ordinary civil law suits is likely to be distorted, particularly if there is no contribution of the Commission or of the competent national competition authority. The result is that such courts are, in the words of Judge Jochem Groning “not completely suited to the application of this rule” [27].

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18. Without any more commentaries on the importance of the competition policy (e.g. by founding many other community polices), and in order to suggest an answer to the very rude question raised at the end of the above para. 11, the authors will focus within the framework of this paper on a particular aspect of the needed close co-operation between antitrust enforcement agencies and the national courts. The judicial revision of competition authorities decisions, the request and exchange of information, the authorization for some inspections and other specific aspects of the matter do not enter the interested field of our argument which is concentrated on the institution of amicus curiae.

III. Amicus curiae – brief history and relevancy

19. The dictionary says that amicus curiae (plural amici curiae) is, in fact (like many other concepts in common law), a legal Latin phrase (in Roman days, it referred to a person who could obtain or grant access to the favor of powerful people like those who belonged to the Roman curia - court), literally translated as "friend of the court", refers to someone, not a party to a case, who volunteers to offer information on a point of law or some other aspect of the case to assist the court in deciding a matter before it. The information may be a legal opinion in the form of a brief, testimony that has not been solicited by any of the parties, or a learned treatise on a matter that bears on the case (in any case, not binding for the court). The decision whether to admit or to ask (to invite) for such information lies with the discretion of the court.

And the decision whether to comply with an application asked by the court lies with the discretion of the potential amicus curiae (within the purpose of this paper, we consider that, for any natural and legal person, this is the antithesis between an amicus curiae presentation and a response to some court’s calls for information according to Regulation 1/2003).

20. So, like many other concepts in common law, amicus curiae has its origin in Roman law, which allows the court to invite third parties to provide legal or factual information on unfamiliar issues. The mechanism was introduced in early English Common Law in the fourteenth century as a “selfless servant of the court” [28].

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In the seventeenth and eighteenth centuries, the participation of amicus curiae was reported in All England Reports, [29] indicating the following features:

- The main functions were to clarify factual issues, explain legal issues and represent certain groups of litigants.

- An amicus curiae, dealing with factual as well as legal issues, did not necessarily have to be lawyer.

- An amicus curiae unrelated to either the plaintiff or the defendant could still have an interest in the case.

- A permission to participate as amicus curiae has always been a matter of grace rather than right; courts have avoided a precise definition of the perimeters and conditions justifying utilization of the mechanism.

21. In the United States, it was in the case of Green v. Biddle [45] in the early nineteenth century that the federal courts first allowed the participation of amicus curiae in litigation. In the twentieth century, amici curiae have played a key role in many cases in American legal history. According to [30], amici curiae participated (and participate) in more than 90 percent of the cases before the U.S. Supreme Court (most of cases on competition matters). Rules 37 from the “Rules of the Supreme Courts of the United States - Part VII. Practice and Procedure” [31] affirm that:

“1. An amicus curiae brief that brings to the attention of the Court relevant matter not already brought to its attention by the parties may be of considerable help to the Court. An amicus curiae brief that does not serve this purpose burdens the Court, and its filing is not favored.”

22. In Great Britain and Ireland, the old institution of “assessor”, from the Anglo-Saxon Maritime Law, allow to the court to designate a person with acquaintance and experience in the matter (see Article 35-15 of [32]) to administer assistance in specific appearances of the case.

But we must underline that in Great Britain there exist the Competition Appeal Tribunal (CAT), a specialist judicial body with cross-disciplinary expertise in law, economics, business and accountancy. Under United Kingdom law, the function of the CAT is to hear and decide appeals and other applications or claims involving competition or economic regulatory issues.

In Ireland it was preferred a penal approach of competition matters vis-à-vis the administrative sanctions, and the procedure in civil cases pertaining to competition law was modified; we retain that the “assesor”

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institution was re-enforced [33].

23. In France, la Court de Cassation established the exercise of amicus curiae in some civil matters - e.g. see [34]. And we must underline that Articles L.462-3 and L.470-5 of the Commercial Code [35] especially give to judges the permission of appealing to the Competition Council or to the Minister of Economy (by the services of DGCCRF - Direction Generale de la Concurrence, de la Consommation et de la Repression des Fraudes) as amicus curiae in competition cases and also permit to the above mentioned to lodge written conclusions or to submit oral observations in matters concerning the competition law [36].

A Decree enacted on 30 December 2005 determines which courts in France have authority to enforce competition law - the Civil Trial Courts of General Jurisdiction (Tribunal de Grande Instance) and the Commercial Courts of Marseille, Bordeaux, Lille, Fort de France, Lyon, Nancy, Paris and Rennes are the only competent courts as regards competition law proceedings (Articles L.420-1 to L.420-5 of [35] and Articles 81 and 82 of the ECT [3]). Appeals against rulings of these courts may only be brought before the Court of Appeal in Paris. These do not, however, deal with the issue of damages. Actions for damages will be based on Article 1382 of the Civile Code laying down the general tort liability principle [37]. There is no restriction on the tribunal competent to rule on the application of this article.

24. We still note that another interesting development is the participation of amicus curiae in cases before international dispute settlement tribunals, where are admitted as amici curiae also states and international organizations - see the World Trade Organization Dispute Settlement Mechanism [38].

25. In Romania, The Code of Civil Procedure [39] stipulates:

“Article 49. (1) Every person having an interest could intervene in a pending case between other persons.

(2) The intervening is on the own interest when the intervener invokes one of his proper right.

(3) The intervening is on the interest of one of the parties of the file when it support only this party’s defense.”

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“Article 201(3). In strictly specialized areas, if there are not authorized experts, ex officio or at the parts requests, the judge can appeal for an appreciation to one or more individualities or specialists in the area…”, and

“Article 206(1) (…) and also those appealed to express their view point according to article 201(3) will depose the following swearing: “I swear that (…) So help me God!” (…)”

It is the case of competition within, in Romania, there are not lawfully authorized experts.

Within our area of interest, we argue that these precise stipulations of the Romanian Code could cover the presentation in courts of natural persons as amicus curiae, but do not allow such a presentation for legal persons, especially for public institutions as the competition authority. Besides, there are cases in Romania when some organizations have been rejected by courts from presenting as amicus curiae .

26. No doubt that our present paper do not represent an exhaustive research, but, at our knowledge, the above mentioned situation in Romania is similar also in other Member States.

IV. The Dutch case of amicus curiae mechanism in competition area

27. In Netherlands also, the Dutch Code of Civil Procedure [40] does not provide such an instrument; however, to some extent, the position of the Dutch Public Prosecutor in civil proceedings is comparable.

28. So, thinking there is a need for legally founding the implementation of an effective amicus curiae official mechanism for competition matters, Dutch officials firstly implemented in integrum Article 15 of Regulation 1/2003 in the Dutch Competition Act - section 89h [41]. This particular approach permitted to the Director-General of the Dutch competition authority (NMa) to access (in competition matters) the same

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power granted to the Dutch Public Prosecutor by section 44a of [40], that is the power to submit written observations in proceedings before administrative or civil courts, if he has expressed his wish to do so. The Director-General of NMa is also authorized, with the permission of the court, to make observations orally during the hearing.

29. To clarify all the procedural aspects, an official guideline was consequently legally issued [42], from which we mainly retain:

- if the Director-General of NMa decides to intervene, he will notify the court in writing of his intention to do so;

- one or all of the parties involved in court proceedings, or the court itself, may contact NMa to request an amicus curiae intervention;

- an amicus curiae intervention is a power and not an obligation; the Director-General of NMa will assess whether an amicus curiae intervention is necessary on a case-by-case basis (he will consider whether there is sufficient reason for him to intervene);

- to formulate his observations, the Director-General of NMa requires all the documents necessary to assess the case; he will treat the file compiled by the court as confidential information;

- the Legal Service of NMa is responsible for making amicus curiae interventions.

We consider that the access to the case file in court could be the core of the amicus curiae intervention by a competition authority.

V. The EC main rules allowing (and imposing) the usability of amicus curiae mechanism in competition matters

30. Article 234 of the ECT [3] stipulates that:“The Court of Justice shall have jurisdiction to give preliminary

rulings concerning:(a) the interpretation of this Treaty [so, including Art. 81 and 82];

(...)Where such a question is raised before any court or tribunal of a

Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon. (...)”

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31. The European Court of Justice - ECJ - clarified the general matter as follows [43]:

“1. The preliminary ruling system is a fundamental mechanism of European Union law aimed at enabling national courts to ensure uniform interpretation and application of that law in all the Member States.

2. The Court of Justice of the European Communities has jurisdiction to give preliminary rulings on the interpretation of the law of the European Union and on the validity of acts of secondary legislation. That general jurisdiction is conferred on it by Article 234 of the EC Treaty and, in certain specific cases, by other provisions. (...)

5. Under the preliminary ruling procedure, the Court's role is to give an interpretation of Community law or to rule on its validity, not to apply that law to the factual situation underlying the main proceedings, which is the task of the national court. It is not for the Court to decide issues of fact raised in the main proceedings or to resolve differences of opinion on the interpretation or application of rules of national law. (...)

10. It is not necessary for the parties in the case to raise the question; the national court may do so of its own motion.

11. Any court or tribunal may refer a question to the Court on the interpretation of a rule of Community law if it considers it necessary to do so in order to resolve a dispute brought before it. (...)”

32. In addition to the above, the EC Regulation 1/2003 [1] emphasize the amicus curiae mechanism in competition matters:

“Article 15. Cooperation with national courts.1. In proceedings for the application of Article 81 or article 82 of the

Treaty, courts of the Member States may ask the Commission to transmit to them (…) its opinion on questions concerning the application of the Community competition rules. (…)

3. Competition authorities of the Member States, acting on their own initiative, may submit written observations to the national courts of their Member State on issues relating to the application of Article 81 or Article 82 of the Treaty.

With the permission of the court in question, they may also submit oral observations to the national courts of their Member State.

Where the coherent application of Article 81 or Article 82 of the Treaty so requires, the Commission, acting on its own initiative, may submit written observations to courts of the Member States. With the permission of

21


the court in question, it may also make oral observations. (…)4. This article is without prejudice to wider powers to make

observations before courts conferred on competition authorities of the Member States under the law of their Member State.”

33. We quote, finally, some interesting provisions from the Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC [44]:

“9. The procedural conditions for the enforcement of EC competition rules by national courts and the sanctions they can impose in case of an infringement of those rules, are largely covered by national law. However, to some extent, Community law also determines the conditions in which EC competition rules are enforced. Those Community law provisions may provide for the faculty of national courts to avail themselves of certain instruments, e.g. to ask for the Commission’s opinion on questions concerning the application of EC competition rules or they may create rules that have an obligatory impact on proceedings before them, e.g. allowing the Commission and national competition authorities to submit written observations. These Community law provisions prevail over national rules. (…)

A. The Commission as amicus curiae.17. In order to assist national courts in the application of EC

competition rules, the Commission is committed to help national courts where the latter find such help necessary to be able to decide on a case. Article 15 of the Regulation refers to the most frequent types of such assistance: the transmission of information (points 21 to 26) and the Commission’s opinions (points 27 to 30), both at the request of a national court and the possibility for the Commission to submit observations (points 31 to 35). Since the regulation provides for these types of assistance, it cannot be limited by any Member States’ rule. However, in the absence of the Community procedural rules to this effect and to the extent that they are necessary to facilitate these forms of assistance, Member States must adopt the appropriate procedural rules to allow both the national courts and the Commission to make full use of the possibilities the regulation offers.”

VI. Half-way conclusions

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34. To shortly conclude all the above (the authors intending to call again your attention on the subject in future papers), we will emphasize that mainly (but not only) Article 15(3) of Regulation1/2003 [1] (a prevailing law for all the Member States) introduces and defines an (about) new instrument to ensure consistent application of community competition rules,

For closer supporting our argument, let’s arrange the above ruling definitions of interest in the Regulation 1/2003 (see para. 32 of this paper) under the following rationale:

- courts of the Member States may ask the Commission for an opinion;- the Commission and the competition authorities of the Member

States, acting on their own initiative, may submit written observations to the national courts;

- with the permission of the court, the Commission and the competition authorities of the Member States may also submit oral observations to the national courts.

35. In order to clear up a little these enough abstract provisions (and we think that it was about time), the Commission Notice [44] introduces ad litteram the expression of amicus curiae.

We consider also the following:

35.1. Statements in para 9 of [44]. clear up the obligatorily of national courts to admit the acting as amicus curiae of the European Commission and of the national competition authorities on their own initiative (a mandatory admissibility).

35.2. All the other types of assistance as amicus curiae provided for by the Regulation 1/2003 (which have not a mandatory admissibility) cannot be limited, however, by any Member States’ rule and, in the absence of the Community procedural rules to this effect and to the extent that they are necessary to facilitate these forms of assistance, Member States must adopt the appropriate procedural rules (we consider that refers to national courts asking for opinions to the Commission and the national competition authorities and also to allowing competition authorities to submit to the courts oral observations).

36. To complement these we will also remaind the possibility for national courts to address questions as a preliminary reference procedure to

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the ECJ on the interpretation of Art. 81 and 82 of the ECT (under Art. 234 of the ECT) - a no mandatory provision.

So, ECJ, European Commission and national competition authorities are all three potential amici curiae for the national courts in competition matters.

37. Reviewing the general definition of amicus curiae in para. 19 of our paper, we observe that about all the above will fit, but

added by the mandatory admissibility emphasized in para. 32.1. - which is imposed by an EC regulation -

and also by the statement in Article 15(3), para.2 of the [1] about the possible request of the competition authorities for the access to the court file - to “any documents necessary for the assessment of the case” (we consider this last provision deserve a separate analysis that we will make within another paper).

38. Anyway, the Member States of the European Community have the

obligation to adopt appropriate procedural rules to allow the full use of the possibilities of the mechanism of amicus curiae to enforce competition law.

We rest hear our case, for now, arguing that in Romania and in other Member States there is an imperative need to conformer to the precedent statement.

And for ending, two general personal views:

38.1. The authors consider that, until now, within the European Community, the Dutch solving of amicus curiae mechanism in competition area (see cap. IV above) is the best suited to achieve the goals of the EC competition policy.

And also, by the way, and to complete the above assertion, we think that the French solution on some rational restriction of the number of national courts entrusted to apply Articles 81 and 82 of the ECT (see para. 23 above) could be a very effective solution for a workable enforcement of the competition law in many other Member States. For example, in Romania, we think that from the 235 existing courts, the rationale would be to entrust only the 15 Appeal Courts and the High Court to deal with competition cases.

38.2. There is a fact that national judges do not make much use of

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the possibility to obtain amicus curiae legal opinions from the competition authorities. And that is because judges do not like to be told by an administrative body how the law should be applied. In the case of questions about the interpretation of the law, national judges are more likely to make use of the Article 234 ECT to request the ECJ for a preliminary ruling. However, we underline that obtaining an amicus curiae legal opinion from the competition authorities should be much quicker than a reference to the ECJ which from a response, on average, takes about two years…

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1. Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1/1, 4.1.2003.

2. Council Regulation No 17 (EEC): First Regulation implementing Articles 85 and 86 of the Treaty (at present Articles 81 and 82), OJ No. 013, 21.02.1962, as amended by Council Regulation (EC) No 1216/1999, OJ L 148/5.

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11. Case C-453/99, Courage Ltd. v Bernard Crehan and Bernard Crehan v Courage Ltd and others, 2001, ECR I-06297.

12. Ene, D., Felecan. O., Competition advocacy - an outlook from Romania, (Promovarea culturii concurentei - vedere dinspre Romania), in Concurenta, Studii si cercetari privind protectia concurentei economice, Buletin al DMT, Consiliul Concurentei, Anul I, nr. 2, 2006.

13. Green Paper - Damages actions for breach of the EC antitrust rules, COM(2005) 672, 19.12.2005.

14. Radulescu, Ghe., Felecan, O., Smart Ulysses navigating between Scylla and Carybdis or DG Competition between administration and judiciary, (Istetul Ulysse intre Scyla si Carybda - sau DG Competition intre administrativ si judiciar), in Competition, Studies and researches on the protection of economic competition, Competition Council - DMT Review, Romania, IInd year, no. 1/2007.

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15. Wilks, S., - Prof. at the Univ. of Exeter, Memb. of the British Comp. Comm., - Markets and law: Competition policy and the juridification of the economic sphere, Paper presented at the Society for the Advancement of Socio-Economics (SASE) Conference, George Washington University, Washington DC, 8 July 2004.

16. Weber, M., Economy and Society, Gunther Roth & Claus Wittich eds., University of California Press, 1978.

17. Teubner, G., Generals aspects, in Juridification of Social Spheres : A Comparative Analysis in the Areas of Labor, Corporate, Antitrust & Social Welfare Law, European University Institute, Series A, Vol. 6, Series A--Law, Gunther Teubner edit.

18. Maher, I., Juridification, codification and sanction in UK competition law, The Modern Law Review, 63, 2001.

19. Blichner, L.C., Molander, A., What is juridification?, ARENA Working Paper Series: March 2005, 21.03.2005.

20. Legal, H., Standards of proof and standards of judicial review in EU competition law, Fordham Annual Conference on International Antitrust Law and Policy, 2005.

21. CFI, Cases T-39/92 and T-40/92 [1994] ECR II-49, 51 – Groupement des cartes bancaires (CB)and Europay International S.A. v. Commission.

22. Koskelo, P., Opening address at the General Assembly of the European Judicial Training Network - Helsinki, 21 September 2006.

23. Case C-224/01, Judgment of the Court of 30 September 2003, Gerhard Köbler v Republik Österreich, ECR I-10239.

24. Case 6/64, Judgment of the Court of 15 July 1964, Flaminio Costa v ENEL, ECR 00585.

25. Case C-453/99, Judgment of the Court of 20 September 2001, Courage Ltd v Bernard Crehan and Bernard Crehan v Courage Ltd and Others, ECR I-06297.

26. Forwood, N., (Hon. Judge of the Court of First Instance of the EC), The content and meaning of Article 81 (3) EC, Paper prepared for the conference “The role of the national judge within regulation 1/2003” in Trier on 8 and 9 May 2003.

27. Groning Working Paper on Courts and Judges, Ehlermann and Atanasiv (eds.), European Competition Law Annual 2000: The modernisation of EC Antitrust Policy, Hart (2001).

28. Angell, E., The Amicus Curiae: American Development of English Institutions, International & Comparative Law Quarterly,Vol.16, No 4, Oct. 1967.

29. Krislov, S., The Amicus Curiae: From friendship to advocacy, Yale Law Journal, Vol.72, 1962–1963.

30. Simpson, R.W., The Amicus brief: How to write it and use it effectively, Chicago, American Bar Association,Tort and Insurance Practice Section,1998.

31. Rules of the Supreme Courts of the United States, Adopted March 14, 2005, Effective May 2, 2005.

32. The 42nd Update to the Civil Procedure Rules, October 2006, London.33. Decision of 15 December 2004, Committee of Superior Courts, Ireland; the

Rules of the Superior Courts.34. Cour de Cassation, Cass. Civ. 1ère, 31 mai 1991, and also Ass. Plén. 29 juin 2001, La Semaine Juridique, JCP 2001, p. 1709.35. Code de Commerce, TITRE VI, Du conseil de la concurrence.36. Riffault-Silk, J., (Président de chambre à la Cour d’appel de Paris), in Colloque

“Droit et économie de la concurrence”, Cour de Cassation, 17 octobre 2005, Table ronde: “Le point de vue des magistrats”, Paris.

37. Code Civil, on Legifrance.gouv.fr.38. Marceau, G., Stilwell, M., Practical Suggestions for Amicus Curiae briefs before

WTO Adjudicating Bodies, Journal of International Economic Law, 2001.

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39. Romanian Code od Civil Procedure, (Codul de Procedura Civila din 1965, Brosura 1 din 15 aug. 2002, actualizat).

40. Netherlands - Arbitration Act, 1 December 1986, Code of Civil Procedure, on Lex Mercatoria, International Trade/Commercial Law & e-Commerce Monitor, 1993-2007, hosted by the University of Oslo, Norway.

41. Act of 22 May 1997, providing new rules for economic competition (Competition Act), Version applicable as of 1 August 2004, Nederlandse Mededingingsautoriteit - NMa, on www.nmanet.nl.

42. Amicus curiae guidelines, Nederlandse Mededingingsautoriteit - NMa, Netherlands Government Gazette, The Hague, 13 August 2004.

43. Court of Justice, Information note on references from national courts for a preliminary ruling (2005/C 143/01), OJ C 143/1, 11.6.2005.

44. Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC, (2004/c 101/04), OJ C 101/54, 27.4.2004.

45. The Founders' Constitution, Volume 3, Article 1, Section 10, Clause 3, Document 3, Green v. Biddle, 8 Wheat. 1 1823.

THE ROLE AND IMPORTANCE OF NATIONAL JUDICIAL AUTHORITIES REGARDING THE PROTECTION OF THE

ECONOMIC COMPETITION – AN OUTLOOK FROM ROMANIA

Mihai Giugariu Lucian Stroe Under-secretary of state, competition counselor Senior inspector Competition Council - Romania Competition Council - Romania

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I. The protection of economic competition at national and European level

1. The principles of the European Community Treaty stipulate that the Member States will adopt an economic policy which is based on "close coordination of Member States' economic policies, on the internal market and on the definition of common objectives, and conducted in accordance with the principle of an open market economy with free competition.1”

As a consequence, the preservation policy of a free economic competition, as a guarantee of the establishment, maintenance and development of an open market economy, is one of the most important pillars of the European community.

2. Competition is the fundamental mechanism of the market economy that involves the supply (producers, dealers) and demand (intermediary clients, consumers). The producers offer their goods and services on the market, having in their minds the necessity to satisfy the needs of consumers in terms of quality, diversity, adaptability and price. In order to become efficient, the competition starts from the assumption (and protects this assumption) that on the market only independent producers are present. All the players on the market put under a positive competitive pressure each one of their competitors. In order to assure the fact that all the producers will be able to apply this kind of positive competitive pressure on the market, the competition rules prohibit any forms of agreements or anticompetitive practices which may have as their effect the reduction of this pressure. Finally, this pressure is materialized in the preservation of the buyers' interests, both at national and European level. [1] [2]

3. On the other hand, the competition between suppliers assures the achievement of the highest possible level of efficiency on that market for a given period of time. The competition makes all the suppliers to seek the achievement of an equilibrium between the quality, the manufacturing costs and the final product price, with the final purpose to cover, at a maximum level, the demand on the market.

Moreover, the producers, in order to stay competitive, must increase their productivity and reduce their cost per unit and they must put into practice the latest scientific and technologic achievements, they must 1 "Consolidated version of the Treaty establishing the European Community" - article 4.

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increase the technical and qualitative level of their final products and they must permanently change their flow sheet.

Finally, the existence of an effective competitive environment stimulates the undertakings to invest in research and development, promoting knowledge and to contribute for the creation of new supplementary, more stabile and better paid jobs.

4. The efficient competition is, as a consequence, "the engine" that determines the undertakings operating on a market to promote an optimal repartition of the resources, both at the level of their own businesses and, because of the chain effect, at the level of the entire economy.

Finally, this phenomenon determines the strengthening of the industrial and commercial component of the European Union, which became, as a consequence, competitive in relation with the non-European competitors. The European undertakings become able to assure for themselves a strong position on the global market.

5. The European competition policy relies on the Community legal framework which is based, essentially, on the provisions provided by the Treaty establishing the European Community (mainly Articles 81 and 82).

Additional provisions are foreseen by the secondary legislation, adopted by the European Council and the European Commission, and embrace the form of Regulations and Directives. In this category are included:

Council Regulation (EC) no. 139/2004 of 20 January 2004 on the control of concentrations between undertakings.

Council Regulation (EC) no. 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty.

Regulations and Directives establishing block exemptions in the case of some agreements which are concerning specific situations, like: the transfer of technologies, research and development or the car distribution etc.

Third, a continuous increasing number of Instructions, Notes and Recommendations, which, formally, are not compulsory, offers essential information, meant to give an idea about the meaning of the compulsory rules or about the future position of the Commission in this field. Through these documents, the Commission intends to increase the predictability of its actions. [3].

Additionally, other legal provisions are included in the Decisions of

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the European Court of Justice and in the Decisions issued by the Court of First Instance.

6. Considering these rules, the competitive policies are focused on three main domains:

Avoidance of the express or tacit agreements which have as their object or may have as their effect the restriction, prevention or distortion of competition and also the avoidance of any abuse of a dominant position (e.g. the agreements between competing undertakings with the aim fix prices);

Merger control (in order to avoid the cases when a merger between two major undertakings/groups will lead to the creation of a dominant position and, after that, to an abuse of a dominant position on the market);

Liberalization of the economic sectors where the competition is very weak or is missing at all and we have to deal with a monopolistic situation (e.g. the opening for the competition of the telecommunication sector).

7. The Community law aims to protect the internal market and to stimulate the competition within this large economic area. The Community law is applied just in those situations when trade between the Member States is affected by the respective practices. For example, an agreement that has like objective fixing prices, concluded between baker shops in a city will have no effect on the internal market. As a consequence, the European legislation will be not applicable in such situations. Nevertheless, the legal framework enforced in a country may also cover such situations [3].

The great majority of the Member States have in place their own national legislation that regulates and reduces the anti-competitive phenomenon (restrictive agreements, abuse of dominant positions and mergers).

This is the case for Romania, too. Beginning with 1996, Romania issued and enforced its first legal rules in the field of competition, which embraced the form of the Competition Law no 21/1996, subsequently modified and amended, law that was republished during 2005.

8. In order to enforce the law's provisions it was set up the national competition authority, known actually as the Competition Council, an autonomous administrative authority that has the following major objectives:

Continuing the consolidation and maintenance of its complete

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independence in relation with any structures or pressure groups which could try to influence its objectivity and equidistance;

Assuring the prevalence of the legislation in the field of competition in relation with any kind of legislation issued on the national territory, with the purpose to avoid the appliance of any anti-competitive provisions;

Collaboration with DG COMP and with any other national authorities from other Member States in the field of competition, using also the cooperation mechanism set up by the European Competition Network (ECN);

Real ex-post controlling at national level of enforcement of the legislation and decisions issued by the Competition Council and European Commission;

Collaboration with the national judicial authorities in the field of competition.

In order to achieve these objectives, the Competition Council set up a national legislation in the field of competition, which includes a law [2], regulations and instructions that are compatible and inter-operable with those that are enforced at European level. The Competition Council also created an extended infrastructure which have an important impact at central and local level and trained a competitive personnel, well informed and in permanent contact with the experts from the European Commission and from the Member States' competition authorities.

9. We must not forget the fact that the activity carried out by the Competition Council in the previous period contributed in a decisive manner to the recognition of the functional market economy status of the Romanian economy and, also, to the successful conclusion of the negotiations having as purpose the accession of Romania to the European Union. The Competition Council's role was and actually is to be responsible for the surveillance of the market mechanisms which must maintain and increase the competitiveness of the Romanian economy, both on European and entire global market.

10. The programmatic ambition of the Competition Council, to play a pro-active role on the market using ex-ante interventions rather than the ex-post ones, in order to avoid the serious disturbance of the competitive environment and markets, to stop the anti-competitive practices and to repair the prejudice when this thing is possible, lead to the necessity to continually promote the legal regulations and the national and European practices in the field of competition. This thing is possible to be achieved

31


through a permanent communication with the authorities, the representatives of the business, judicial and academic environment, as well through a permanent communication with the Romanian civil society.

The competition advocacy policy, at all levels of the Romanian society, using all institutional and mass-media instruments available, was one of the main priorities of the Competition Council, during the pre-accession period and still it is now, after the accession of Romania to the European Union. In order to achieve this objective, the competition inspectors from the Territorial Directorate, the department that co-ordinates the current activity of the Competition Council at local level, carried out in the past few years hundreds of competition advocacy activities like seminaries and round tables, gave interviews in the written mass-media and also through radio and TV stations organized at local level and spread informative materials to the undertakings and local public administrative authorities.

For the next period, the Territorial Directorate wants to intensify and diversify these efforts, even through carrying out two external financed programs, respectively “The PHARE Twinning Project – with the participation of foreign experts” and “The Competition Advocacy Program – a component of the competition policy”.

11. The increased level of adaptability of the national competition authority to the European realities allowed the complete compatibilization of the legal provisions in the field of competition with those provided by the Community law long time before the effective accession of the Romania to the European Union. Because of that, the anxiety manifested by the business and judicial environment from Romania concerning the impact of the accession over the competition policy at national level is unjustified. The Competition Council is judging the commercial activity from Romania in accordance with the legal provisions applied in European Union, by many years.

II. The Romanian judicial system and its responsibilities in the field of competition until the accession moment of our country

to the European Union – a short overview

12. In Romania, the judicial system includes the first instance courts, the tribunals, the courts of appeal, and the High Court of Cassation and Justice, the Public Ministry and the Superior Council of the Magistracy. The

32


responsibilities of these institutions are provided by Constitution and individual laws. [4] [5]

II.1. First instance courts

13. The first instance courts, actually in number of 177, operate in every county and in Bucharest, their districts being settled out through Government decision, at the proposal of Ministry of Justice. [6]

The jurisdiction of first instance courts includes the judgment, in trial court, of all process and requests, except those one ascribable to liaison, by effect of law, to other resorts, according to the provisions of Articles 109 – 281 from the Civil Procedure Code and Articles 287 – 360 from the Penal Procedure Code. [7] [8]

14. In the field of competition, the first instance courts jurisdiction, as trial courts, include the judgment of complaints against the minutes drawn up by the competition inspectors, minutes which are observing and sanctioning with fines (maximum 1% of the total turnover registered in the previous fiscal year) the contraventions foreseen by Article 50 letters b) – e) from the Competition Law no 21/1996, republished [2]:

- providing improper or incomplete information pursuant to the application drawn up according to the provisions of Article 5 (3) or to the notification drawn up according to Article 15;

- providing improper or incomplete information or not providing the information and the documents asked according to Article 35;

- providing incomplete information, documents, records and evidences during the inspections carried out in accordance with Article 36;

- denial to comply with an inspection carried out in accordance with Articles 36 and 37.

Furthermore, the first instance courts jurisdiction includes also the judgment of complains against the minutes drawn up by the competition inspectors, minutes which are observing and sanctioning with fines (maximum 10% of the entire turnover registered in the previous fiscal year) the contraventions foreseen by Article 51 letter d) from the Competition Law no 21/1996, republished:

- non-completing of an obligation or condition imposed by a decision issued in accordance with the provisions of the Competition Law no 21/1996, republished.

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II.2. Tribunals

15. According to the legal provisions in the field [6], the tribunals have been founded and are functioning in every capital of the 41 Romanian counties, as well as in Bucharest.

Their structure includes two or more sections [5]. According to the law, civil, criminal, commercial, legal administrative sections, marine and fluvial sections, as well as sections for labour conflicts, labour issues or social insurance issues can be set up. For the tribunals where the number of cases regarding labour or social insurance matters is very low and where is not justified the existence of such special sections, is possible to be set up special court panels. These kinds of court panels can be also constituted to judge cases involving other matters.

The tribunals have also in their jurisdiction, in trial court, the judgment of the cases and requests given them by the law, according to the provision of Article 109 – 281 from the Civil Procedure Code [8] and of Article 287 – 360 Criminal Procedure Code [9].

As appeal resorts, the tribunals judge the appeals against the decisions pronounced by judges in trial courts, according to the procedure rules provided by the Article 282 – 298 from the Civil Procedure Code and Article 361 – 385 from the Criminal Procedure Code.

As recourse resorts, the courts judge the recourses against the decision pronounced by judges, which do not fall under the appeal rules, according to the provisions of Article 299 – 316 from the Civil Procedure Code [8] and Article 3851 – 38519 from the Criminal Procedure Code [9].

16. In the field of competition, Article 38 (1) from the Competition Law no 21/1996, consolidated, provides that the competition inspectors can carry out inspections in any premises (others than those ones which are in direct possession of the undertakings and associations of undertakings under investigation), including the residences, lands or vehicles that belong to the leaders, administrators, managers, and to other employees of the undertakings which are subject to Competition Council’s investigation, “based only on an order issued by the President of the Competition Council and with legal closure authorization issued by the president of the district court having the jurisdiction over the premises to be controlled or by a judge authorized by the latter. When such places are under different jurisdictions and simultaneous investigations must be conducted in

34


each of them, a single ruling may be issued by any of the court presidents having jurisdiction.”

Furthermore, according to the (3), (4) and (6), the judges have the following attributions:

- The inspection and the documents involved are executed under the authority and the control of the authorizing judge.

- The judge may examine the places under investigation and may decide to suspend or to stop the inspection at any moment.

- The inventories and setting the seals are carried out according to the provisions of the Penal Procedure Code; the top copies of the minutes and the inventories are sent to the judge who ordered the inspection, and the acts and documents that are no longer needed in order to establish the truth will be re-turned to the place’s holder.

II.3. Courts of Appeal

17. The Courts of Appeal, in number of 15 [5][6], with headquarters established by effect of the law in some county residences or in Bucharest, exert their jurisdiction in a district with more courts, according to the provisions of the Judicial Organization Law.

Their attributions include the judgment, in first trial, of the cases foreseen by Articles 109 – 281 from the Civil Procedure Code and by Articles 287 – 360 from the Criminal Procedure Code.

As appeal resorts, they have attributions in the judgments of the declared appeals against the decision pronounced in the first trial by tribunals, according to the procedural rules foreseen by the Article 282 – 298 from the Civil Procedure Code and by the Article 361 – 385 from the Criminal Procedure Code.

As recourse resorts, they judge the declared recourses against the courts in appeal, as well as in other cases foreseen by the law, according to the Articles 299 – 316 from the Civil Procedure Code provisions and Article 3851 – 38519 from the Criminal Procedure Code.

18. According to the provisions of the Competition Law [2], the Court of Appeal of Bucharest has jurisdiction also in the field of adopting the necessary measures in order to eliminate the dominant position of an undertaking that abuses of its position. This happens when, even if the Competition Council sanctioned the infringement of the law, according with

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the provisions of the chapters IV – VI from the law, the re-establishment of the situation and the prevention of repeating the abuse is not obtained and the possibility to seriously affect a major public interest still exist.

It is considered a major public interest, the one that justifies the request of the Competition Council to dispose extreme measures: public security, the plurality of the independent undertakings, the welfare of the consumers and the cautious rules. The task to prove the serious disturbance of a major public interest belongs to the Competition Council.

In this case the legal resort “may dispose:- to invalidate some contracts and some contractual clauses through

which the dominant position is abusively exploited;- to invalidate the act or the acts that consolidated a dominant

position through a merger, even when by an act or by these legal acts it would have been created a new legal person;

- to limit or to raise the interdiction for access on the market;- to sell some assets;- to divest the undertaking.”

According to the provisions of Article 7 (4) from the Competition Law no 21/1996, republished, the legal resort “will be able to dispose one or more of the above-mentioned measures only in the cases when any increasing of the prices as a result of applying these measures or any disturbance of the enforcement of the legal obligations of the undertaking towards any other partner can be avoided.”

19. In the field of competition [2], the Court of Appeal of Bucharest has also the following attributions:

- the judgment in administrative legal department of the decisions issued by the Competition Council Plenum, according to the provisions of Articles 45, 46 and 47 (1), and appealed into the justice, following to the procedure foreseen in Articles 20 (6) and 47 (4):

Article 20 (6): “The decisions adopted by the Competition Council Plenum [...] can be appealed into the justice in 30 days from their publication date or from their communication to the concerned parts, in the administrative legal department at the Court of Appeal of Bucharest; the decision will be pronounced without the right to appeal; the recourse against it can be made at the High Court of Causation and Justice.” (the Article makes reference to all the Competition Council decisions adopted by the plenum, including the decisions concerning mergers).

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Art. 47 (4):“The Competition Council decisions [...] can be appealed at the

administrative legal department of the Bucharest Court of Appeal in 30 days from their communication to the concerned parts. The resort can order, at request, the suspension of the enforcement of the appealed decision.” (it concerns those decisions on agreements, abuse of dominant position, individual exemptions for agreements or concerted practices and the interim measure decisions issued Competition Council).

- judgment of complaints against the closures issued by the President of the court which has jurisdiction over the area where the premises (other premises than those that are in direct possession of the undertakings and associations of undertakings under investigation) are located during an inspection or by other judge authorized by the latter, according with the provisions of Article 38 (7);

- judgment in administrative legal department of the decisions issued by the Competition Council that impose sanctions in the case of contraventions foreseen by Articles 50 letter a) and by Article 51 (1) letters c) and d) and comminatory fines in the case of the contraventions foreseen by Article 54 and Article 51 (1) letters a) and b) from the Competition Law no 21/1996, republished;

- judgment of cases in which the central or local public administration bodies carried out actions that had or may have as effect the restriction, the interruption or distortion of competition and if they refuse to comply with Competition Council decisions that demand the stopping of these practices, according to the provisions of Article 9 (3) from the Competition Law no 21/1996, republished;

- judgment in the administrative legal department of the regulations issued by the Competition Council, in accordance with the provisions of Article 28 (2). These ones can be appealed in the administrative legal department at the Court of Appeal of Bucharest, in 30 days from their publication date or from their communication to the concerned parts.

II.4. The High Court of Cassation and Justice (the Upper Bench)

20. The High Court of Cassation and Justice is located in Bucharest and includes one president, one vice-president, 4 presidents of the sections and at most 80 judges.

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http://www.hallo.ro/search.do?query=Bench

http://www.hallo.ro/search.do?query=Upper


The High Court of Cassation and Justice is organized in: 4 sections (civil section, penal section, commercial section, administrative and fiscal law section), the panel of 9 judges and the United Sections, each one having a separate jurisdiction and assuring the unitary interpretation of the law by the other judicial authorities [5].

Moreover, the High Court of Cassation and Justice's sections judge the recourses against the judgments issued by the Courts of Appeal and other judgments, in those specific cases provided by the law.

So, the decisions issued by the Courts of Appeal are appealed for recourse at the High Court of Cassation and Justice, as well as other judgments, according with the legal provisions of Articles 299 - 316 from the Civil Procedure Code and Article 3851 - 38519 from the Criminal Procedure Code.

The High Court of Cassation and Justice judges also the recourses against the judicial judgments and acts, according with the provisions of Article 4142 from the Criminal Procedure Code.

The High Court of Cassation and Justice judges, in first trial the causes foreseen by the Article no 29 (1) from the Criminal Procedure Code.

When there are serious doubts about the conformity of the laws drafts with the constitutional rules, the High Court of Causation and Justice also apprises the Constitutional Court.

21. The High Court of Causation and Justice, according with the Competition Law [2] provisions, has also jurisdiction over the judgment of the recourses appealed by undertakings against the judgments issued by the Court of Appeal of Bucharest in those situations when the last one was previously appealed by the Competition Council, according with the Article 7 (1) provisions:

„If the measures and sanctions applied by the Competition Council (…) to an undertaking abusing its dominant position do not remedy the situation and prevent the abuse from repeating, the Competition Council, for the reason of serious damage to a major public interest, may request the Bucharest Court of Appeal to order adequate measures with the purpose to remove its dominant position from the market (…).”

The decisions of the Bucharest Court of Appeal on the matters referred to in paragraph (1), may be appealed to the High Court of Cassation and Justice by the Competition Council and by the undertakings subject to the measures ordered.

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22. In the same way, in accordance with the Article 20 (6) provisions, the High Court of Cassation and Justice judges the recourses against the judgments issued by the Court of Appeal of Bucharest concerning the decisions of the Competition Council's Plenum.

II.5. Special responsibilities vis-à-vis the infringements of competition rules.

23. The Competition Council may also fine the ones that are responsible for the anti-competitive practices, but it has no possibility to repair the prejudices. So, from the point of view of the economic competition protection, all 235 courts have also the jurisdiction over:

judgment of the cases concerning granting of compensations to the undertakings affected by the infringement of the competition rules, according with the provisions of:

- Article 998 from the Civil Procedure Code, which provides that: "Any act of a man that prejudices someone, obliges the one which causes the prejudice to repair it."

- Article 61 from the Competition Law [2], which provides that: "Independent by the sanctions applied in accordance with the actual law provisions, the possibility of the natural and/or legal persons to act for repairing their prejudice as effect of an anti-competitive practice prohibited by the actual law, is reserved."

judgment of the infringements of the legal provisions enforced by the effect of Articles 5 and 6 of the Competition Law [2], cases arisen from complex commercial cases (in these cases, the courts may also impose the nullity of some contracts or contractual clauses or the payment of penalties).

24. What is very interesting is that the Law no 146/1997 concerning judicial stamp taxes [9], subsequently modified and amended, foresees at Article 6 (1) that, in commercial matters, the requests for the liquidation of a dominant position of an undertaking are assessed, the applicable level of the tax, in 2007, being 39 RON2 [10]. From what we know, the respective provision of the law was never applied.

2 Article 6 (1) was amended last time at 01.01.2007 by Annex no 1- II to the Governmental Decision no 1514/2006.

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III. The accession moment – preliminary conclusion

25. All these competences of the Romanian judicial authorities in the field of competition were enforced, actually, even before the accession moment of Romania to the European Union. After the accession moment, the competences of all the courts from Romania (as well as for all the national courts from the new Member States) in the field of competition were extended and enforced as a consequence of the direct applicability of the Treaty establishing the European Community – consolidated version [1], Council Regulation (EC) no. 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty [11], as well as other acts like: the Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC [12] and the Information Note from the European Court of Justice on references from national courts for a preliminary ruling [13]. These competences are meant to be extended further more in the next period of time, in accordance with the provisions of a study set up by the European Commission through the “Green paper on damages actions for breach of the EC antitrust rules [14]”.

26. Concluding, the national judicial authorities have the possibility to judge a variety of cases in the field of competition that derive from complex commercial causes – as an instance the ascertainment of the invalidity of some contracts3 [15], infringements of the legal provisions set up through Articles 5 and 6 from the Competition Law no 21/1996, competition cases with Community impact, judged in accordance with the provisions of Articles 81 and 82 from EC Treaty, requests for damages and injuries from the injured undertakings as a consequence of decisions issued in the field of competition by the Competition Council and the European Commission.

3 For instance: Sentence no 134/2001 issued by the Appelate Court from Ploieşti and the Decision no 436/2003 issued by the Supreme Courts where the courts decide over a non-existence principle of a possible agreement between the binders participating to a binding procedure as well as the evaluation of the conformance of the procedures with the provisions issued through the Metodological specifications concerning the participation to a binding procedure.

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IV. The main legal sources and the competences of national judicial authorities from the Member States

in the field of competition

IV.1. The Treaty establishing the European Community – consolidated version [1]

27. The Treaty establishing the European Community provides through Article 234, that one of the European Court of Justice’s competences is the interpretation of the legal provisions included in this fundamental Community act:

“Where such a question [linked by the interpretation of a legal provision] is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon”.

IV.2. Information Note from the European Court of Justice on references from national courts for a preliminary ruling [13]

28. The Information Note from the European Court of Justice on references from national courts for a preliminary ruling gives us all the details concerning the mechanism which can be used by the national courts in order to request preliminary rulings from the European Court of Justice:

“1. The preliminary ruling system is a fundamental mechanism of European Union law aimed at enabling national courts to ensure uniform interpretation and application of that law in all the Member States.

2. The Court of Justice of the European Communities has jurisdiction to give preliminary rulings on the interpretation of the law of the European Union and on the validity of acts of secondary legislation. That general jurisdiction is conferred on it by Article 234 of the EC Treaty and, in certain specific cases, by other provisions.

5. Under the preliminary ruling procedure, the Court's role is to give an interpretation of Community law or to rule on its validity, not to apply that law to the factual situation underlying the main proceedings, which

41


is the task of the national court. It is not for the Court to decide issues of fact raised in the main proceedings or to resolve differences of opinion on the interpretation or application of rules of national law.”

IV.3. COUNCIL REGULATION (EC) No 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty [11]

29. Even from the introductory part, EC Regulation no 1/2003 provides that “In order to ensure the effective enforcement of the Community competition rules and the proper functioning of the cooperation mechanisms contained in this Regulation, it is necessary to oblige the competition authorities and courts of the Member States to also apply Articles 81 and 82 of the Treaty where they apply national competition law to agreements and practices which may affect trade between Member States”.

Nevertheless, the regulation’s provisions do not preclude the Member States from adopting and applying on their territory stricter national competition laws.

In Romania, in the pre-accession period, the Competition Council made all the efforts for the purpose to compatibilize the national main and secondary legal regulations in the field of competition with Community rules. Moreover, the Competition Council uses these Community regulations in the field of competition from long time ago.

30. The national courts’ competences in the field of competition are set up in Articles 15, 16 and 21 included in the EC Regulation no 1/2003 [11].

So, article 15 (1) provides that: “In proceedings for the application of Article 81 or Article 82 of the Treaty, courts of the Member States may ask the Commission to transmit to them information in its possession or its opinion on questions concerning the application of the Community competition rules”.

To the contrary, Member States shall forward to the Commission a copy of any written judgment of national courts deciding on the application of Article 81 or Article 82 of the Treaty. Such copy shall be forwarded without delay after the full written judgment is notified to the parties.

31. The national courts, exercising their attribution, may receive written observations from the competition authorities of the Member States

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relating to the application of Article 81 or Article 82 of the Treaty. With the permission of the court in question, the competition authorities of the Member States may also make oral observations. DG COMP has similar rights with the ones applicable to the national courts.

32. Only for the purpose of the preparation of their observations, the competition authorities of the Member States and the Commission may request the relevant court of the Member State to transmit or ensure the transmission to them of any documents necessary for the assessment of the case.

33. EC Regulation no 1/2003 also provides, in Article 15 (4) that: “This Article is without prejudice to wider powers to make observations before courts conferred on competition authorities of the Member States under the law of their Member State”.

34. Because of the necessity to apply uniformly, at European level, the legislation in the field of competition, the national courts do not have at any moment the possibility to decide independently. When national courts rule on agreements, decisions or practices under Article 81 or Article 82 of the Treaty which are already subject to a Commission decision, “they cannot take decisions running counter to the decision adopted by the Commission. They must also avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated. To that effect, the national court may assess whether it is necessary to stay its proceedings.

When competition authorities of the Member States rule on agreements, decisions or practices under Article 81 or Article 82 of the Treaty which are already the subject of a Commission decision, they cannot take decisions which would run counter to the decision adopted by the Commission.”4

35. Considering the investigation powers, the officials from the European Commission are empowered, according with the Article 21 from the EC Regulation no 1/2003 to carry out investigation also in: other premises, land and means of transport than those ones which are in direct possession of the undertakings and associations of undertakings under investigation, including the homes of directors, managers and other members of staff of the undertakings and associations of undertakings 4 Article 16 from EC Regulation no 1/2003.

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concerned.In these situations, in order to avoid abuses, EC Regulation no

1/2003 provides that the inspection team must obtain, previously, the authorization from the national judicial authority of the Member State concerned.

The national judicial authority shall control that the Commission decision is authentic and that the coercive measures envisaged are neither arbitrary nor excessive having regard in particular to the seriousness of the suspected infringement, to the importance of the evidence sought, to the involvement of the undertaking concerned and to the reasonable likelihood that business books and records relating to the subject matter of the inspection are kept in the premises for which the authorization is requested.

The national judicial authority may ask the Commission, directly or through the Member State competition authority, for detailed explanations on those elements which are necessary to allow its control of the proportionality of the coercive measures envisaged.

However, the national judicial authority may not call into question the necessity for the inspection nor demand that it be provided with information in the Commission's file. The lawfulness of the Commission decision shall be subject to review only by the Court of Justice.

EC Regulation no 1/2003’s provisions [11] are completed with those provisions included in Article 38 of the Competition Law no 21/1996, republished [2]. According with these provisions, the president of the district court having jurisdiction over the premises to be controlled or any judge empowered by the president of district court has the jurisdiction to issue the judicial mandate needed to carry out an inspection in other premises, than those ones which are in direct possession of the undertakings and associations of undertakings under investigation.

IV.4. Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC [12]

a. General provisions

36. The national judicial authority is empowered, within the jurisdiction limits concerning a case, with competences regarding the appliance of Articles 81 and 82 from EC Treaty. The appliance of the

44


respective provisions may be done without being necessary the parallel appliance of the national regulations in the field of competition.

37. Nevertheless, when the national judicial authority applies the national competition legislation for any express or tacit agreements, decisions and concerted practices between undertakings or associations of undertakings which may affect trade between Member States in the meaning of Article 81 (1) or for any abusive practices forbidden by the Article 82 from EC Treaty [1], the national judicial authority is obliged to apply also the Community rules in the field of competition applicable for the respective agreements, decisions and practices.

38. Additionally, the European Commission notices that the appliance of the procedural provisions provided by the national legislation must be compatible with the general principle of the Community law. Because of this, the European Commission advises the national judicial authority to find guidance in the case law of the European Court of Justice, according with:

- where there is an infringement of Community law, national law must provide sanctions which are effective, proportionate and dissuasive;

- where the infringement of Community law causes harm to an individual, the latter should under certain conditions be able to ask the national court for damages;

- the rules on procedures and sanctions that the national courts apply to enforce Community law must not make such enforcement excessively difficult or practically impossible (the principle of effectiveness);

- the rules on procedures and sanctions which national courts apply to enforce Community law must not be less favorable than the rules applicable to the enforcement of equivalent national law (the principle of equivalence).

On the basis of the principle of primacy of Community law, a national court may not apply national rules that are incompatible with these principles.

b. Parallel or consecutive application of EC competition rules by the Commission and by national courts

39. A national court may be applying EC competition law to an

45


agreement, decision, concerted practice or unilateral behavior affecting trade between Member States at the same time as the Commission or subsequent to the Commission.

40. In this case, the Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC [12] set up the following principles with a view to ensure the proper appliance of the Community competition law by the national judicial authorities:

where a national court comes to a decision before the Commission, it must avoid adopting a decision that would conflict with a decision contemplated by the Commission. To that effect, the national court may:

- ask the Commission whether it has initiated proceedings regarding the same agreements, decisions or practices and if so, about the progress of proceedings and the likelihood of a decision in that case;

- to stay its proceedings until the Commission has reached a decision;

- where the national court cannot reasonably doubt the Commission's contemplated decision or where the Commission has already decided on a similar case, the national court may decide on the case pending before it in accordance with that contemplated or earlier decision without it being necessary to ask the Commission for the information mentioned above or to wait the Commission's decision.

where the Commission reaches a decision in a particular case before the national court, the latter cannot take a decision running counter to that of the Commission. In this case, the binding effect of the Commission's decision is of course without prejudice to the interpretation of Community law by the Court of Justice. Therefore, if the national court doubts the legality of the Commission's decision, it cannot avoid the binding effects of that decision without a ruling to the contrary by the Court of Justice. Consequently, if a national court intends to take a decision that runs counter to that of the Commission, it must refer a question to the Court of Justice for a preliminary ruling (Article 234 from EC Treaty). [1]. The latter will then decide on the compatibility of the Commission's decision with Community law.

when a national court stays proceedings awaiting the Commission's decision or pending final judgment by the Community courts in an action

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for annulment or in a preliminary ruling procedure, it is incumbent on it to examine whether it is necessary to order interim measures in order to safeguard the interests of the parties.

c. The co-operation between the Commission and the national courts

41. The EC Treaty [1] does not explicitly provide for co-operation between the national courts and the Commission other mechanism than the co-operation mechanism established between the national courts and the Court of Justice under Article 234. However, Article 10 from EC Treaty provides that:

“Member States shall take all appropriate measures, whether general or particular, to ensure fulfillment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community. They shall facilitate the achievement of the Community's tasks”.

42. The Community courts interpretate that this Treaty provision imposes on the European institutions and the Member States mutual duties of loyal co-operation with a view to attaining the objectives of the EC Treaty [1]. As a consequence, Article 10 from EC Treaty provides that the Commission must assist national courts when they apply Community law. Equally, national courts have the obligation to assist the Commission in the fulfillment of its tasks.

43. Practically, the cooperation between the European Commission and the national judicial authorities is focused on:

c.1. The Commission as „amicus curiae”

The „amicus curiae” role of the European Commission in relation with the national judicial authorities regarding the following aspects:

The Commission's duty to transmit information to national courts:

44. In transmitting information to national courts, the Commission has to uphold the guarantees given to natural and legal persons by Article 287 from the EC Treaty [1], concerning the confidentiality of those

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information about undertakings and their commercial relations or about the cost elements, information which, through their nature are considered professional secrecies.

Besides that, the provisions provided by Article 287 from EC Treaty must not be interpretated like an absolute prohibition for the Commission to transmit to the national courts information which is covered by the obligation of professional secrecy.

As we mentioned before, Article 10 from EC Treaty, in its interpretation given by the case law of the European Court of Justice confirms that the duty of loyal co-operation requires the Commission to provide the national court with whatever information the latter asks for, even information covered by professional secrecy.

However, with a view to respect the guarantees laid down in Article 287 from EC Treaty, before transmitting information covered by professional secrecy to a national court, the Commission will ask the court to confirm that it can and will guarantee protection of confidential information and business secrets. When the national court offers a guarantee that it will protect the confidential information and business secrets, the Commission will transmit the information requested, indicating those parts which are covered by professional secrecy and which parts are not and can, therefore, be disclosed. If the national court cannot offer such guarantee, the Commission shall not transmit the information covered by professional secrecy to the national court

request for an opinion on questions concerning the application of EC competition rules:

45. The Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC [12] offers to the national courts the possibility to request a point of view from the European Commission regarding the effective appliance of the Community competition rules.

The national courts may ask the Commission for its opinion on economic, factual and legal matters, without prejudice to the possibility or the obligation for the national courts to ask the European Court of Justice for a preliminary ruling regarding the interpretation or the validity of Community law in accordance with Article 234 from EC Treaty.

When giving its opinion, the European Commission will limit itself to providing the national courts with the factual information or the economic

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or legal clarification asked for, without considering the merits of the case pending before the national court.

The Commission's submission of observations to the national court:

46. The possibility of the European Commission to submit observations to the national courts on issues relating to a case under their jurisdiction is strictly limited to those situations when this thing is necessary in order to assure the coherent application of Articles 81 or 82 from EC Treaty.

In order to achieve this objective, the Commission will limit its observations to an economic and legal analysis of the facts underlying the case pending before the national court.

In order to enable the Commission to submit useful observations, national courts may be asked to transmit or ensure the transmission to the Commission of a copy from all documents that are necessary for the assessment of the case.

c.2. The national courts facilitating the role of the European Commission in the enforcement of EC competition rules

47. The duty of loyal co-operation between the national courts and the European Commission, in the form which was established through the case law of the European Court of Justice, interpreting the Article 10 from EC Treaty, obliges the national courts to:

- Submit the documents necessary for the assessment of a case in which the Commission would like to submit observations5.

- Submit the judgments applying Articles 81 or 82 from EC Treaty issued by the national courts.

According to Article 15 (2) of the EC Regulation no 1/2003 [11]: “Member States shall send to the Commission a copy of any written

judgment of national courts applying Articles 81 or 82 from EC Treaty without delay after the full written judgment is notified to the parties”.

The fulfilling of this obligation enables the European Commission to submit its observations where one of the parties lodges an appeal against the judgment.5 It was previously discussed in this paper.

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- Offer assistance to the European Commission in the context of a Commission inspection6.

V. Conclusion

48. The increment of the economic environment complexity and the unprecedent expansion of the European Union obliged the European Commission and, of course, the DG COMP, to monitor a large number of various and widely spread infringements of the Community legislation in the field of competition.

The restriction of the European Commission’s jurisdiction only to the cases with a significant potential to damage the competitive environment at European level and the commerce between the Member States represented, obviously, a proper solution having like purpose the attainment of a higher level of efficiency in the Commission’s regular activity. The competition authorities from the Member States achieved an essential role in appliance of the Community competition rules, in those situations when the competition and the competitive environment are affected only at regional level.

Moreover, an important role is now played by the national judicial authorities. When cases are judged between legal persons, the national judicial authorities have the role to safeguard the individual rights provided by the Community law, inclusively through the awarding of damages to those which was affected by the infringements of the competition rules. In this respect, the role of the national judicial authorities is complementary to the one played by the competition authorities from the Member States.

The appliance of the rules in the competition field at national level demanded the adoption of a system that is able to guarantee the efficient and uniform appliance of Articles 81 and 82 in all Member States. In order to achieve this, the European Commission started a large process of adapting the Community legislation to the actual realities. The EC Regulation no 1/2003 [11], the Information note on references from national courts for a preliminary ruling [13] or the Commission Notice on the co-operation

6 The elements concerning the support that is granted by the national judicial authorities to the European Commission in order to carry out its inspection tasks on the Member States territories were previously detalied by the provisions of EC Regulation no 1/2003. 50


between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC [12] represented necessary steps for the enforcement of a new framework of cooperation between the European and national institutions. From this point of view, we can notice that the process of extended cooperation and consultation between these two types of institutions will continue to develop itself, at the same time with the diversification and effective appliance of the existent judicial framework in the field of competition.

In this moment, Romania started to apply the European legislation. The Romania’s accession to the European Union at January 1st, 2007 get our country to the beginning of an institutional adjustment process, process that was facilitated by the continuous efforts of the Competition Council to disseminate the specific information and the Community legal framework in the territory, by targeting the judges, the decidents at every level of public central and local administration, the undertakings and the population.

Bibliography

[1] - CONSOLIDATED VERSION OF THE TREATY ESTABLISHING THE EUROPEAN COMMUNITY.

[2] – Competition Law no 21/1996, republished.[3] - Ileana Pascal, Ştefan Deaconu, Vrabie, Nicolae Fabian - (Competion Politics) -

"Politica în domeniul concurenţei", Campanie de informare a funcţionarilor publici privind acquis-ul comunitar, CRJ, 2002.

[4] – Romanian Constitution.[5] - Romanian Law no 304/2004 concerning judicial organization.[6] – Romanian Governmental Decision no 1125/2005 concerning the modifying

and completing the Governmental Decision no 83/2005 concerning the organization and activity of the Ministry of Justice.

[7] - Romanian Civil Procedural Code.[8] – Romanian Criminal Procedural Code.[9] - Romanian Law no 146/1997 concerning judicial stamp taxes.[10] - Romanian Governmental Decision no 1514/2006 concerning the values of

assessable values, the direct and local taxes and other taxes assimilated to them, as well as the fines applicable in 2007.

[11] - Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, published in the Official Journal series L no 1, from January 4th 2003.

[12] - Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC, published in the Official Journal series C no 101, from January 27th 2004.

[13] - Information note on references from national courts for a preliminary ruling, published in the Official Journal series C no 143, from June 11th 2005.

[14] - GREEN PAPER - Damages actions for breach of the EC antitrust rules -

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http://eur-lex.europa.eu/LexUriServ/ site/ en/com/2005/com2005_0672en01.pdf . The Annex can be found at the following Internet address:

http://ec.europa.eu/comm/competition/antitrust/actionsdamages/sp_en.pdf[15] - Romania - Sentence no 134/2001 issued by the Court of Appeal from Ploieşti

and the Decision no 436/2003 issued by the Supreme Court.

SMART ULYSSES NAVIGATING BETWEEN SCYLLA AND CARYBDIS

OR DG COMPETITION BETWEEN ADMINISTRATIVE AND JUDICATURE

Gheorghe Rădulescu Ovidiu Felecan Director Senior inspector Competition Council - Romania Competition Council - Romania

AbstractAlthough the European Commission’s decisions could be subject to judicial review

by the European Community Courts, the Commission can shape and direct the outline of European competition policy (it could be regarded as the „designer of EC competition

52

http://ec.europa.eu/comm/competition/antitrust/actionsdamages/sp_en.pdf


policy”). The European Commission's Directorate-General for Competition (DG Competition) is the first European „advocate of competition”; adding other important Community tasks, it is investigating and proposing measures, it is drafting the decisions of the European Commission on competition matters and orchestrates the implementation of free competition within the other Community policies. The decisions of the European Commission on competition matters have to be founded and drafted in such a way to ensure they to meet the administrative and political requirements of the Commission and also to meet a reasonable credibility to pass the potential judicial review of the Community Courts. To fulfill both administrative and judiciary high level requirements under a harsh socio-political environment and on difficult socio-economic matters is not an easy job; this paper intend to highlight some excerpts about how much must to be the address DG Comp have to manage its way and to carry out its communitary duties.

Besides, we are quite sure that every National Competition Authority (and also the Romanian one) could learn how to shape its activity and to envisage the future by contemplating the never ending saga of DG Comp fight for competition policy’s enforcement and advocacy. We also hope that National Courts which are entitled for judicial reviewing of National Competition Authorities administrative decisions and also those which could be involved in private enforcement of competition law will find in there some interesting remarks. And least but not last, we think that the bibliography connoted will help other researchers in the same field.

A. FRONTISPIECE

1. Originally being appreciated as “a sleepy, ineffectual backwater of Community administration” [1], having only “a hand of high officials” [2] and “very little prestige” [3], the European Commission's Directorate-General for Competition (DG Comp - formerly DG IV) has acquired over time substantial powers in the name of competition and antitrust and a very good community fame. DG Comp is today in a nearly unique position in the European Community system, because in the area of competition policy the Commission can apply direct enforcement power that is not dependent on national governments of the Member States. And that is because the competition policy is more and more widely recognized as a hard core of the European Treaty, as an outwork of democracy, cohesion and advancement. So, the competition policy achieved in the EU a quasi-constitutional status, distinctively based on the direct application of law to economic actors rather than on administrative exercise of policy discretion or on political or interest-group bargaining. By 1990s DG Comp was widely recognized as a particularly effective agency in the EU systems (meaning enforcement and advocacy) [4].

Although the European Commission’s decisions could be subject to judicial review by the European Community Courts (ECJ and CFI), the Commission can shape and direct the outline of European competition

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policy (it could be regarded as the „designer of EC competition policy”) [5].

2. In this context, as a professional directorate, The European Commission's Directorate-General for Competition (DG Comp) is the first European „advocate of competition”; adding other important Community tasks, it is investigating and proposing measures, it is drafting the new regulations and notices on competition policy, it is drafting the decisions of the European Commission on competition matters and orchestrates the implementation of free competition within the other Community policies.

The decisions of the European Commission on competition matters have to be founded and drafted in such a way to ensure they to meet the administrative and political requirements of the Commission and also a reasonable credibility to pass the any when potential judicial review of the Community Courts. To meet both administrative and judiciary high level requirements under a harsh socio-political environment and on difficult socio-economic matters is not an easy job and, over all other directorates in the European Commission, DG Comp has to be actually and firstly a laboratory of advanced and intrepid interdisciplinary studies and discoveries.

3. Why that? Let’s see the matter from an interesting and original angle.

It is well known that articles 65 and 66 of the ECSC (European Coal and Steel Community) Treaty became articles 85 and 86 in the Rome Treaty (EC). In the words of Jean Monnet [6], quoted in [7], those articles, “drafted with great care by Robert Bowie, represented a fundamental innovation in Europe”, and “the essential antitrust legislation reigning over the common market today ha[d] its origins in those few sentences (…)”. As Monet noted, Robert Bowie, the drafter of the Treaty competition provisions, was a “young Harvard professor (…) who was said to be the leading expert on US anti-trust legislation, which the Americans applied as rigorously as morality itself.” (Bowie’s American text was “reworked” into “European idiom” by Maurice Lagrange). So, the competition provisions of the EC Treaty (closely following the ECSC Treaty) bear the substantive imprint of the Sherman Act derived from their American ancestry.

On the other hand, it is also well-known that, in the early days of European integration, when the Treaty provisions organizing the ECJ (European Court of Justice), including its Statute, were negotiated and when its initial Rules of Procedure – from which the today ones are still very closely inspired – were drafted, one of the main inspiring sources was the

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French administrative law and in particular the “recours pour excès de pouvoir” established in the 19th Century by the French Conseil d’Etat and described in 1887 by Edouard Laferrière [8]. Maurice Lagrange, one of the first two Advocates General of the ECJ and considered to be one of the founding fathers of EU judicial procedure, and at any rate “the one who held the pen” (as Judge Legal appreciated [9]), had learnt all he had to learn about the review of administrative decisions in the Litigation Section of the Conseil d’Etat.

So, administrative ruling following an American ancestry and judicial review of these rules claiming some French judiciary roots? One could say the job was started, from the beginning, on a very interesting, fertile and constructive ambiguity.

At the first sight, all this does not contribute to clear up, for instance, the margin of discretion the European Commission holds, not only in its appraisal of particular situations, but as a policy-making organ, based on the EC Treaty, on applicable regulation and on jurisprudence - what is sometimes called the “constructive ambiguity” of the case law on who-does-what between the Commission and the two degrees of the EU judicature [9].

4. This paper intend to highlight some excerpts about how much must to be the address DG Comp have to manage its way and to fulfill its communitarian duties. Besides, we are quite sure that every National Competition Authority (and also the Romanian one) could learn how to shape its activity and to envisage the future by contemplating the never ending saga of DG Comp fight for competition policy’s enforcement and advocacy. We also hope that National Courts which are entitled for judicial reviewing National Competition Authorities administrative decisions and also those which could be involved in private enforcement of competition law will find in there some interesting remarks. And least but not last, we think that the bibliography connoted will help other researchers in the same field.

B. PART ONE – JUDICIAL REVIEW OF COMPETITION CASES BY EUROPEAN COMMUNITY COURTS

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I. Introduction

5. There are two European Community Courts:- The Court of Justice of the European Communities, usually called

the European Court of Justice (ECJ), operating since 1957, which ensures community law enforcement against Member States, decides disputes between the Community and the Member States (and between Community institutions) and ensures uniform interpretation of Community law by deciding questions referred to it by National Courts. Among other things, the ECJ handles all appeals from the CFI.

- Court of First Instance of the European Community (CFI), established in 1989. The CFI has jurisdiction over all direct actions brought by natural and legal persons against the Community institutions. According to Judge Bellamy [10], the CFI was set up to discharge the ECJ of cases involving detailed review (including, notably, competition cases).

(We do not study therein the European Union Civil Service Tribunal).

6. According to Article 230 ECT (the Consolidated version of the Treaty [11]), the Community Courts are competent to review the legality of EC acts (i.e., to engage, only, in marginal review). We quote part of this basic article:

“The Court of Justice shall review the legality of acts adopted jointly by the European Parliament and the Council, of acts of the Council, of the Commission and of the ECB [European Central Bank], other than recommendations and opinions, and of acts of the European Parliament intended to produce legal effects vis-à-vis third parties (…)

Any natural or legal person may, under the same conditions, institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former.

The proceedings provided for in this article shall be instituted within two months of the publication of the measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be.” [11]

7. A properly defined judicial role in competition matters will provide solid foundation for supporting, defining and giving shape and integrity to the European Community competition policy. The judiciary has

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two important roles in implementing the competition policy: to ensure the procedural due process is observed and to apply the substantive principles of the competition law in a correct and consistent manner. The possibility of a substantive appeal to the Courts brings the Community’s competition enforcement system into compliance with the European Convention of Human Rights (ECHR).

The judicial review of European Commission decisions for competition cases exhibited significant changes in the recent years. For instance, speaking about procedures, European Community courts have expanded the rights of third parties to challenge Commission decisions; substantively speaking, the European Courts have strongly exposed that they will not simply stamp Commission decisions, but are willing to scrutinize the economic evidence to ensure that they have sufficient and adequate evidentiary support. Regarding the ever-increasing trend of fines in competition cases, these changes rise the appeal of Commission decisions as a very attractive convenience for undertakings.

8. As a general statement, it is very difficult, (rather impossible?) to predict perfectly (ex ante) how the law will be applied by the Courts (ex post). The process of legal clarification may concern both rules and standards because uncertainty may refer to both of them. In this view, one can distinguish between type I uncertainty (referring to standards, which are ex ante incomplete by definition) and type II uncertainty (referring to rules, witch are ex post incomplete by definition) [12].

It was also argued that the relationship between uncertainty and litigation is direct and bilateral: more uncertainty yields more litigation (parties will tend to dispute more often) and more litigation leads lo less uncertainty (courts have an opportunity to remove some ambiguities of the law). We quote here Judge Posner:

„If [legal uncertainty] is great, there will be much litigation (...) But since litigation (...) generates precedents, the surge in litigation will lead to a reduction in legal uncertainty, causing the amount of litigation to fall in the next period. Eventually, with few new precedents being created, legal uncertainty will rise, as the old precedents depreciate (because they are less informative in a changed environment), and this uncertainty will evoke a new burst of litigation and hence an increased output of precedents” [13].

We must mark that the number of litigations (and of pending cases) based on competition matters afore Community Courts exceeds

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from far away all other kinds of litigation.

9. We are marking also that competition law is the one area of EU law in which the relevance of the traditional both administrative and judiciary methods is constantly subjected to a great-considerable questioning in theory and in practice. Why? There are many possible answers, but within this Part one of our paper, we prefer to quickly emphasise some opinions of CFI Judge Legal [9]:

- competition law is public law (the author of the measure judicially reviewed is a public body acting in the general interest); most of those specializing in this area are people trained in business law and, maybe, in corporate law;

- penalties are having a quasi-penal nature, which has the effect of reinforcing the rights of the sanctioned entities and correlatively raising the obligations resting on the public body;

- the importance of the interests at stake entail a considerable degree of visibility of the trial and a high degree of intellectual investment (which facilitate a continuous fresh, non-routine, apprehension of the specifics of each case);

- the vast experience of competition law in the United-States yields considerable influence over EU competition law (including its procedural rules); e.g. there is in French no one word for “standards”, which will, in “standards of proof”, be rendered as “exigences de preuve” and, in “standards of reviews”, be translated by “degré de contrôle” (the notion of standard, evoking a model of reference, belongs to an intellectual pattern based on precedent in decision-making which does not constitute a common European heritage);

- “the specificity of economics as a scientific domain is such that it cannot be regarded as any other area of expertise since their concepts and methods superpose themselves and sometimes substitute themselves to legal reasoning, in terms of substance and sometimes of procedure”; it means that the increased emphasis on the use of economic analysis following successive reforms of the rules pertaining to horizontal and vertical agreements and merger control has transformed competition law into a technically complex subject matter whereby economists are stealing a lead over lawyers.

We would add that competition policy is the must alive and breathing policy in the European Union.

One of the results of all these is the very special situation

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competition currently holds in EU litigation.

10. For instance, requests for annulment and for compensation with, among others, their rules of admissibility and their effects are historically based on the theory of the “recours pour excès de pouvoir”. In this type of action, sometimes described as a “trial against an act”, the role of the judge is to decide the objective legality of the referred decision. This decision may be annulled, wholly or partly, for violation of rules of competence and procedure (“external legality”), including the duty to state reasons when it is required, or for violation of a substantial rule of law (“internal legality”) if this rule occupies a higher position in the hierarchy of norms (see para. 41 bellow).

11. Quoting again Judge Legal [9], in competition cases, “the essential distinction is between law, fact and appraisal” (law and facts are subjected to a full and unqualified test of legality or accuracy; complex appraisal is subjected to a test limited in principle to the manifest error of assessment). In practice, CFI more habitually addresses the thoroughness, relevance and consistency of the reasoning of the Commission.

12. Community judges verify the conformity of the European Commission decisions to the law and quash a decision or reject an appeal. But they are not empowered to hand down a new decision.

In principle, Community Courts verification is less sharp on decisions comprising complex economic arguments. They do not sanction any error, but those that are „manifest error”. But this does not mean that judges feel they are not capable of dealing with economically complex issues. The point is the complex economic assessment reflects a choice of economic policy that belongs to the Commission, which defines and implements the objectives of competition law. Judges verify ex post that these objectives are compatible with Community law. Both manipulate economic concepts, but for the Commission these concepts are management tools whereas for judges they are object of the verification [14].

So, Community Courts are bound to review the „legality” of European Commission decisions (that is they do not have full jurisdiction on the merits of cases). Judges ought not to give an independent appraisal of the facts, but rather „to go on a quest, guided by the plaintiff, for errors committed”. The judge can annul a decision only if the Commission committed an error; furthermore, a decision beeing quashed, it is always for the Commission to issue a second, more appropriate decision, if warranted.

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13. While formally adhering to this narrow legality control, within

many judgments in competition law cases, the ECJ and especially the CFI, in fact, have engaged in intense high standard review in competition law matters [15]. As a result, in the 1975 Sugar Cartel case, the ECJ produced a 200 page judgment (nearly 500 pages in CMLR - Common Market Law Report) to examine claims about individual markets and the interaction of competition and agricultural policies; and the full judgment of the CFI in the 2000 Cement cartel cases runs to nearly 1200 pages [16].

14. In [17], for instance (also literally quoted in a recent judgment [18]), the Court considered that:

“39. Whilst the Court recognizes that the Commission has a margin of discretion with regard to economic matters, that does not mean that the Community Courts must refrain from reviewing the Commission’s interpretation of information of an economic nature. Not only must the Community Courts, inter alia, establish whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it. Such a review is all the more necessary in the case of a prospective analysis required when examining a planned merger with conglomerate effect.”

15. It was many times underlined that CFI could and should look closely at the Commission’s assessments on information of an economic nature, particularly in the light of the increasing use of sophisticated economic theories in competition law [19]. The limit to the intensity of review on assessments carried out at EC level is that Community (the Community Courts) cannot substitute its own economic assessment for that of the Commission. Finally, the ECJ held that the need for effective judicial review is pressing where prospective analyses are concerned [20]. It was also stated that this should be taken to mean that there is always a need for effective judicial review of competition law based analyses. One could find interesting CFI statements in [21]:

“60. It must be observed first that the Commission has a margin of assessment with regard to economic matters (…) It follows that the Community [the Community Courts’] judicature’s power of review is

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restricted to verifying that the facts relied on are accurate and that there has been no manifest error of assessment (Joined Cases C-68/94 and C-30/95 France and Others v Commission (Kali & Salz) [1998] ECR I-1375, paragraphs 223 and 224, and Case C-12/03 P Commission v. Tetra Laval [2005] ECR I-987, paragraph 38) (…)

62. As to the nature of the Community judicature’s power of review, it is necessary to draw attention to the essential difference between factual matters and findings, on the one hand, which may be found to be inaccurate by the Court in the light of the arguments and evidence before it, and, on the other hand, appraisals of an economic nature.”

That seemed to mean that CFI affirms that it have to apply only a marginal standard of review to a Commission decision, but, in fact, it is very clear in CFI judgments that verification of factual findings and the assessment of facts are interwoven and that the Court hardly scrutinized the economic and legal assessment of the Commission, up to the point of balancing which economic experts it believed to be more convincing (see paras. 455, 456 in [21]). In its „Wood Pulp judgment”, for instance, ECJ relied on reports of its appointed experts to overturn the Commission’s findings and conclusions [22].

16. The scope and intensity of judicial review by Community Courts of Commission decisions in the field of competition drawn high academic attention especially since the annulment by CFI of three merger decisions in 2002. And after the judgment of ECJ of 15 February 2005 on the Commission appeal in the Tetra Laval case [17] one can reasonably conclude that the revision standards set by the CFI:

- in terms of proof by the Commission of its economic findings, and - in terms of review by the judicial authority of its economic

assessments,have been endorsed by the higher judge [9].

17. The reforms introduced by the “modernization package” of the implementation of EC competition rules [24] have generated a proliferation of new acts whose legal character (and, by implication, the possibility to challenge them before the European Courts) is not necessarily clear. See, for ex., the many soft law instruments (notices, guidelines, etc.) witch the Commission adopted with a view to clarify its decisional practice, the new binding acts envisaged by Regulation 1/2003 (findings of inapplicability,

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decisions to remove a case from a National Competition Authority) etc.

II. Overview of direct judicial review.

18. There are four types of direct judicial review actions:a. Actions for annulment. These seek a judgment quashing a

Commission decision and is founding on the very important Article 230, of the ECT[11].

b. Actions for failure to act. These seek a judgment stating that the Commission has failed to adopt a specific act and is founding on the Article 232. of the ECT, which we quote part of it:

“Should the European Parliament, the Council or the Commission, in infringement of this Treaty, fail to act, the Member States and the other institutions of the Community may bring an action before the Court of Justice to have the infringement established.

The action shall be admissible only if the institution concerned has first been called upon to act. If, within two months of being so called upon, the institution concerned has not defined its position, the action may be brought within a further period of two months.

Any natural or legal person may, under the conditions laid down in the preceding paragraphs, complain to the Court of Justice that an institution of the Community has failed to address to that person any act other than a recommendation or an opinion…” [11].

c. Actions for reform of fines. These seek a judgment to review Commission’s decisions imposing fines or periodic penalty payments and is founding on the Article 229 of the ECT:

“Regulations adopted jointly by the European Parliament and the Council, and by the Council, pursuant to the provisions of this Treaty, may give the Court of Justice unlimited jurisdiction with regard to the penalties provided for in such regulations” [11]; see also [25].

It must be noted that (e.g. with respect to collusion under Art. 81 ECT) we are tempted to associate extreme decisions with high fines and status quo with moderate fines. So, it is interesting to note that Community Courts almost invariably reduces the fines imposed by the Commission (which could be accused for extremism due to its inquisitorial procedures) - but see also para 76 bellow and [26].

d. Actions for damages. These seek an award of damages on the

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basis of the Commission's non-contractual liability founding on Article 235, we quote:

“The Court of Justice shall have jurisdiction in disputes relating to compensation for damage provided for in the second paragraph of Article 288” [11]

and on Article 288(2) of the ECT, we quote: “In the case of non-contractual liability, the Community shall, in

accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties (…)” [11].

III. Admissibility of annulment actions

19. In the area of Community competition law, actions for annulment are the most common type of judicial review action and are mainly treated within this paper (the authors do not deal herein, for instance, with the possibility of challenging Commission competition decisions indirectly before National Courts and related references to the ECJ under Article 234 of the EC Treaty).

Most studies carried out in relation to annulment actions do not specifically focus on competition law. The authors did find out, however, some references which they recommend as devoting substantial analysis to this matter (see., e.g. [27], [28], [29]).

20. An action for annulment can be brought against any Commission decision (Article 230, ECT). A Commission measure qualifies as a decision within the meaning of Article 230 if it is intended to produce legal effects and brings about a distinct change in the legal position of the claimants (“bringing about a distinct change in [their] legal position” - see [30]).

A Commission decision in an infringement matter, to terminate a violation or to pay a fine, is binding. The parties can bring an action in the CFI to annul it, on grounds of fact or law. Filing the Court action does not itself suspend the application of the decision (the parties can request that the CFI suspend it). Usually the Commission agrees to suspend fines pending appeal, on condition of providing a bank guarantee for the fine plus

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interest.

21. For an act to be the subject of an annulment action, first it must have been adopted by a Community institution [31]. Viewing the modernization package, this condition allows for a distinction to be made between those acts adopted by the Commission which do fall within the scope of Art. 230 ECT, and those decisions and judgments of National Competition Authorities and Courts which do not; further, those acts adopted by either the Consultative Committee (composed of Member State representatives) or the Network of Competition Authorities fall outside the scope of a possible annulment action [32].

22. Secondly, only acts producing legal effects on a person (affecting it in an adverse manner) can be challenged on the basis of Art. 230 ECT [33]. Origins of this statement can be found in the ERTA (European Road Transport Agreement) judgment, whereby an annulment action is permitted against “all acts adopted by the institutions, whatever their nature or form, which are intended to have legal effects” [34]. We must also keep in mind a statement in [35], about that those acts “intended to have legal effects vis-à-vis third parties” can be challenged on the basis of Art. 230 ECT. Commission decisions regarding the implementation of competition law produce such an effect, but not only.

23. Third, the relevant act must be of definitive nature (a preparatory act which constitute one step towards a final decision cannot be challenged), a principle established in the judgement IBM v. Commission [30], from which we quote the ECJ held that:

“… it is clear from the case-law that in principle an act is open to review only if it is a measure definitively laying down the position of the Commission or the Council on the conclusion of that procedure, and not a provisional measure intended to pave the way for the final decision.” (with some exceptions - see a very documented discussion in [32]).

24. In practice, it is generally obvious that the challenged act produces legal effects. However, questions can arise if, in complex cases involving several stages in the procedure, the claimant wants to challenge an act other than the final Commission decision. As stated above, and as a general rule, only acts that definitively lay down the Commission's position are open to challenge.

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For example, any act by which the Commission terminates an investigation constitutes a decision that can be challenged in an annulment action. In cases involving restrictive agreements or abuses of dominant positions, procedural measures that constitute decisions include those:

- Establishing the existence of an infringement.- Imposing fines.- Requesting termination of certain conduct.- Imposing remedies or commitments.- Declaring that no infringement has been committed.In merger cases, measures that constitute decisions include those:- Declaring a merger compatible with the common market.- Prohibiting a proposed merger.- Authorizing a merger under certain conditions.- Referring a case to a national competition authority.- Revoking an earlier decision.In contrast, decisions that are only preliminary steps toward a final

decision are not decisions within the meaning of Article 230 of the ECT and cannot be appealed. For example, an undertaking cannot challenge a Commission decision to send it a statement of objections, as this is only considered to be a preparatory step in the proceedings, even though the receipt of the statement of objection may have significant consequences for the addressee, as it is stated in [36]:

“Summary.1. In order to ascertain whether measures are acts within the

meaning of article 173 it is necessary to look to their substance, as the form in which they are cast is, in principle, immaterial in this respect .

Measures producing binding legal effects of such a kind as to affect the applicant ' s interests by clearly altering his legal position constitute acts or decisions open to challenge by an application for a declaration that they are void.

Measures of a purely preparatory character may not themselves be the subject of an application for a declaration that they are void (…)”

25. Anyway, during the administrative procedure, the Commission is required to take investigative and organizational acts which could affect the legal position of the undertakings concerned. In the Cement judgment [37] for instance, a letter was challenged through witch the Commission withdrew the benefit of immunity from fines. The ECJ held that the appeal

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was admissible since the letter was “a measure which produces legal effects touching the interests of the undertaking concerned and which is binding on them. It thus constitute not a mere opinion but a decision.”

In other cases, the rejection of a complaint [38], a letter detailing the reasons for which the Commission will not follow up on a complaint [39], the grant or refusal to grant third party access to the file (see the Lombard Cartel) [40], the refusal to hear interested third parties and even a Commission notice which formally interpreted a directive (but introduced new legal obligations [41]) were considered as challengeable acts within the mining of Art. 230 ECT that could be the subject of an annulment action.

26. The form of the measure is irrelevant. For example, in Air France v. Commission [42], the CFI examined the question of whether an oral statement made by the Competition Commissioner's spokesman constituted a decision (the spokesman had declared that the proposed acquisition of Dan Air by British Airways did not need to be notified under the EC merger rules). We quote:

“Summary.1. In order to ascertain whether measures are acts within the

meaning of Article 173 [new 230] of the Treaty, it is necessary to look to their substance. Any measure the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position is an act or decision which may be the subject of an action for annulment (…)

2. Given that the choice of the form taken by an act of an institution cannot alter that act, and that the form which it takes is of no consequence as regards the possibility of contesting it by an action for annulment, the fact that an act takes an unusual form, inasmuch as there exists no written document other than a transcription made by a third party, and that it has not been notified in the regular manner, does not preclude the bringing of an action for annulment where the act has certainly produced legal effects with regard to third parties. That is the case where a statement made on behalf of a Commissioner is reported by a press agency (…)”

So, CFI held that the oral statement produced legal effects and that the action was therefore admissible.

27. Although preparatory acts, as a general rule, are not subject to

judicial review, however it must be emphasized that some decisions taken

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during the investigation phase can also be challenged. For example, see [43]:

“Summary1. A decision adopted in connection with a procedure for the

application of the rules on competition in which the commission considered that documents furnished by an undertaking did not qualify for the confidential treatment guaranteed by community law and could therefore be communicated to a third party who had made a complaint is definitive in nature and independent of the decision on the question whether there has been an infringement. Since it has legal effect in relation to the undertaking in question and is of such a nature as to bring about a clear alteration in that undertaking ' s legal position and to affect its interests, such a decision may be challenged by the said undertaking by way of an action for annulment under article 173 [new 230] (…)”

These acts include also decisions:- Ordering undertakings to produce information.- Denying access to the case file.- Requiring the disclosure of documents with respect to which

confidentiality is claimed.

28. Decisions ordering or refusing interim measures can also be challenged. We support this allegation by Court statements in [44]:

“Summary (…) 3. It is in accordance with the key principles of the community that

any interim measures which prove to be necessary should be taken by the community institution which is given the task of receiving complaints by governments or individuals, of making inquiries and of taking decisions in regard to infringements which are found to exist, whilst the role of the court of justice consists in undertaking the legal review of the action taken by the commission in these matters. In this regard, the rights of those concerned are safeguarded by the fact that if interim measures decided upon by the commission adversely affect the legitimate interests of any party, the person concerned may always obtain the revision of the decision made, by the appropriate judicial recourse, applying if necessary for emergency measures under article 185 [new 242] or article 186 [new 243] of the EEC Treaty.”

29. Addressees of Commission decisions in competition investigations and merger control proceedings always have standing to bring

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an annulment action.It is also obvious that complainants have standing before the

Community Courts to challenge a Commission decision to close a case or to partially reject a complaint [36; 54].

30. Often, competitors of the undertakings under investigation want to challenge a Commission decision, especially if it clears a merger or states that no infringement of the competition rules has occurred.

In addition to complainants, competitors that have actively participated in the administrative proceedings have standing (Air France v Commission [42]). In merger cases, competitors of the merging parties can challenge decisions clearing the merger if they have participated in the investigation - see, for instance, [18] and [51].

31. Third parties have standing if they can show that the decision is of direct and individual concern to them. While it is fairly straightforward to show direct concern (it is sufficient to show that no implementing measures are required for the decision to produce legal effects) it can be difficult to demonstrate individual concern.

Individual applicants wishing to bring an annulment action against a decision that is not addressed to them must prove that they are both directly and individually concerned by it. The “directly concerned” condition requires proof that the act produces immediate effects on the legal situation of the individual without the need for later intervention of National or Community Authorities [45].

The “individually concerned” condition requires applicants to prove that the decision affects them by reason of certain attributes which are peculiar to them or “by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors distinguishes them individually just as in the case of the person addressed” [46]. For competition cases this requirement is assessed with flexibility (and is often arguable). The active participation of third parties in administrative procedures generally allows for a presumption of beeing directly and individually concerned. However, sometimes, ECJ did not require the applicant should have effectively participated in the procedure (e.g. [47]) - it suffices that the administrative procedure foresees the possibility for the applicant to intervene as a complainant or to be heard for making comments.

32. So, strictly interpreting the notion of individual concern, the ECJ

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many times required the applicant to show that it has specific attributes or that there are specific circumstances that distinguish it individually in the same way as the addressee of the decision [48]. We quote in extenso:

“36. However, a measure of general application such as a regulation can, in certain circumstances, be of individual concern to certain natural or legal persons and is thus in the nature of a decision in their regard (see, in particular, Case C-358/89 Extramet Industrie v Council [1991] ECR I-2501, paragraph 13; Case C-309/89 Codorniu v Council [1994] ECR I-1853, paragraph 19, and Case C-41/99 P Sadam Zuccherifici and Others v Council [2001] ECR I-4239, paragraph 27). That is so where the measure in question affects specific natural or legal persons by reason of certain attributes peculiar to them, or by reason of a factual situation which differentiates them from all other persons and distinguishes them individually in the same way as the addressee (see, in particular, Case 25/62 Plaumann v Commission [1963] ECR 95, 107, and Case C-452/98 Nederlandse Antillen v Council [2001] ECR I-8973, paragraph 60).”

To conclude, not beeing sufficient for an applicant to show that its business activities are affected by the decision, he must demonstrate that there are attributes that distinguish it from other undertakings active in the same sector and the most important distinguishing factor that the Community Courts have accepted is the applicant's participation in the investigation that led to the Commission decision. Therefore, it is important for any third party to exercise its procedural rights during a Commission investigation to preserve its right to challenge an unfavorable Commission decision before the Community Courts at a later date. Indeed, any third party that did not participate in the Commission investigation faces a strong battle to have its case admitted - for example, see [49]. As it was stated:

“Summary.A decision granting exemption to a selective distribution system

cannot be regarded as being of individual concern, within the meaning of the fourth paragraph of Article 173 [new 230] of the Treaty, to an undertaking in competition with the authorized distributors which has not participated in the administrative procedure or applied to the supplier for admission to the selective distribution network, since it is in a situation which cannot be distinguished from that of numerous other economic operators on the parallel market (…)

Nor is it necessary, in order for the position of interested

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undertakings for the purpose of Article 19(3) of Regulation No 17 to be judicially protected, that those undertakings be regarded as individually concerned by a decision where they have not exercised their right to make their views known to the Commission.”

33. We have to note that in [52] the CFI extended this right to a third

party that was not active in the markets affected by the merger. The CFI took into account the facts that:

- The applicant had actively participated in the merger control proceedings.

- The applicant's comments had influenced both the course of the proceedings and the final decision.

- Some evidence existed that the market in which the applicant was active and the affected market covered by the decision might converge.

And also, in [53] the CFI admitted an action for annulment against a Commission decision to refer the assessment of a merger to the Spanish authorities, which was brought by a competitor that had participated in the administrative procedure. The CFI reasoned that the referral decision deprived the applicant of the opportunity to have the Commission review the merger, as well as its right to have the Commission's decision reviewed by the CFI.

34. It must be emphasized that the number of potential applicants could be extremely high. We quote there Art. 27(3) of Regulation 1/2003 [69]:

“If the Commission considers it necessary, it may also hear other natural or legal persons. Applications to be heard on the part of such persons shall, where they shaw a sufficient interest, be granted (…)”.

Vis-à-vis this kind of statement, the case-law provides many illustrations such as the admission of annulment actions by suppliers, consumers and consumer associations [54], inter-professional associations of undertakings [55; 18], client and user associations [56], workers’ representatives through their works council [57; 58], consultative Commissions of the different bars within the EU [59], actual or potential competitors [42] or even non-competitors operating on neighboring markets [60].

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IV. The appeal in annulment actions

IV. a. Time limits

35. Article 230(5) from ECT states that: “The proceedings provided for in this article shall be instituted

within two months of the publication of the measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be”.

36. An annulment action must be brought within two months (plus a ten-day extension of this time-limit according to the distance - see Article 102(2) in [66]).

When this period runs from depends on who is making an appeal:- Addressees of the decision. The time limit runs from when the

addressee is notified of the decision (or, if it is not notified, the time that the addressee becomes aware of the decision - e.g. by publication).

- Third parties. If a decision is not published in the Official Journal of the European Union (OJ), the time limit runs from when the third party acquires actual knowledge of the decision. If a decision is published in the Official Journal, case law suggests that the time limit runs from the date of publication, even if the third party obtains a copy of the decision before it is published - see [61]:

“Summary.1. According to the very wording of the fifth paragraph of Article

173 [new 230] ECT, the criterion of the day on which the contested decision came to the knowledge of the applicant as the start of the period for instituting proceedings for annulment is subsidiary to the criteria of publication or notification. Since the contested decision, not notified to the applicant, was published, it is the date of publication that is the start of the period for the applicant to institute proceedings, and not the date on which it might have learned of the decision (…)”

and [62]:

“Summary.1. According to the actual wording of the fifth paragraph of Article

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173 of the EC Treaty (now, after amendment, Article 230 ECT), the criterion of the day on which a measure came to the knowledge of an applicant, as the starting point for the period prescribed for instituting proceedings, is subsidiary to the criteria of publication or notification of the measure (…)”

37. This is particularly relevant if a third party wants to challenge a decision clearing a merger in Phase II, as these decisions are available on the internet well before they are published in the Official Journal. However, as no case has yet confirmed that this rule applies to merger control cases, third parties in merger cases are advised to consider the time limit to run from when they acquire actual knowledge of the decision.

38. Under Art. 230(5) ECT, additional time limits could be granted to those applicants who are geographically far away.

The appeal may be brought in any official language of the Community. Applicants must be represented by lawyers able to practice within the jurisdiction of a Member State or EEA State (see [63] Art. 19).

The Community Courts apply the time limits strictly. Missing the time limit has serious consequences for any potential applicant as they become unable to make any direct or indirect challenge.

Bringing an annulment action does not engender suspensive effects, but the ECT allows the Community Courts to order a stay of execution (which does not necessarily cover the whole of the challenged act) or interim measures [64] - see Art. 242 ECT - “Actions brought before the Court of Justice shall not have suspensory effect. The Court of Justice may, however, if it considers that circumstances so require, order that application of the contested act be suspended”.

IV. b. Content and ground

39. The action in annulment have to invoke all law and facts the applicant whishes to invoke. The appeal “binds the litigation” so it is no longer possible to raise new arguments while legal proceedings are pending, unless new points appear during the written procedure (see Art. 42(2) of [65] and Art. 48(2) of [66]).

40. Litigants can invoke several grounds of review in support of

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their appeal.There are four “grounds for review” (see Art. 230(2) ECT): lack of

competence, infringement of an essential procedural requirement, infringement of the Treaty (ECT) or of any rule of law relating to its application and misuse of powers. For instance, an insufficient reasoning of a Commission decision could constitute both an infringement of a procedural requirement and an infringement of the ECT (because Art. 253 ECT requires the Commission to reason its decisions - “Regulations, directives and decisions adopted jointly by the European Parliament and the Council, and such acts adopted by the Council or the Commission, shall state the reasons on which they are based and shall refer to any proposals or opinions which were required to be obtained pursuant to this Treaty.”).

41. There is a distinction between grounds for annulment related to

“external legality” (which Community Courts can raise on their own motion - even if the parties have not done so in their appeal) and those related to “internal legality” (which cannot be raised in this way).

Grounds of external legality are:- lack of competence (which annuls an act because the institution

that adopted it did not have the legal power to do so), in two types of circumstances in competition law: (1) ratione personae - e.g. in AKZO the undertakings challenged the possibility for the Competition Commissioner to take decisions ordering checks in accordance with an authorization granted to him by the College of Commissioners [67], and (2) ratione loci - e.g. in Gencor the parties challenged the Commission’s power to rule on merger operations between undertakings essentially active outside the European Community [68];

- infringement of an essential procedural requirement (resulting from misappreciation of the rules governing both the procedure and the form for each act); the Community courts are competent to determine if a procedural requirement is essential (e.g. an infringement of a duty to consult [70]; an infringement of the rights of the defense, especially the duty to allow the parties concerned by a decision to make observations, as envisaged in Art. 27 of Regulation 1/2003; insufficient reasoning of a decision could also constitutes such an infringement [71], etc.).

In order to avoid most radical consequences, annulment ensues only if, in the absence of irregularity, the administrative procedure would have ended in a different result [72].

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Grounds of internal legality are:- in competition law, infringements by the Commission of the

ECT competition rules, secondary legislation or general principles of Community law (proportionality, etc.) (see [73]); this ground is invoked when the Commission commits errors of law or it erroneously assess the facts to which applies the law (there are many examples in the case law);

- misuse of powers by which the public authority exercises a power to achieve an end that is foreign to what the said power aims at [74]; as long as we know, viewing the Commission extensive powers to implement the competition policy, this ground has never been successfully invoked.

V. Substantive standard of review

42. There are two key substantive areas of judicial review that have changed significantly in recent years:

- The scope of judicial review.- Remedies.

V. a. Scope of judicial review

43. The Community Courts have always emphasized that they respect the division of powers between the administration and the judiciary. As a result, they limit themselves to reviewing the legality of Commission decisions. They refuse to reconsider decisions by starting an assessment from the beginning and give the Commission wide discretion, particularly for complex economic assessments.

As we already underlined, the EC model of judicial review draws mainly from the French model of “recours pour exces de pouvoir”, which emphasizes a rigid division of powers between the administration and the judiciary, and revolves around the cornerstone of “error”. According to some well-known case law (e.g. Aalborg Portland [75] and Kali und Salz, [77]), competition law confers on the Commission a margin of discretion, particularly with respect to assessments of an economic nature, which the Community Courts “are only to curb, not to usurp” [77].

44. But, in fact, the term “error” allows the Community Courts to alter the Commission’s characterization of a case. It means that the

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effectiveness of the system depends very much upon the degree of self-restraint exercised by judges in hunting the errors.

The Commission’s margin of discretion lies mostly in the appraisal of facts when it involves complex economic assessments. However, even in this case, judicial review may be exercised to ensure that Commission’s reasoning is logical, coherent and proportionate. This leaves room enough for intervention of Community Courts in correcting mistakes.

45. We feel the need to remind here the quotation in para. 14 above (from [17] and [18]) about the margins of powers and to underline again the opinion of Judge Legal that Recital 39 in particular is drafted in a general way which makes it applicable not only to merger cases but to all decisions involving interpretation of information of an economic nature [9].

46. Yet, in judgment of the Tetra Laval appeal, the ECJ confirms the Commission’ margin of discretion with regard to economic matters - not in the gathering of information, nor in the rigorous following of a scientific method of demonstration, but rather in the choice of the approach best suited to the analysis of a given situation or phenomenon. It can be a choice of economic methodology, all theory being admissible as it provides useful tools to a convincing result. Commission discretion appears also in the global determination reached on the basis of this methodology (in the definition of the products or services, or of the markets concerned in a given case etc.), as long as these fundamental determinations:

- are consistently adhered to throughout the decision;- are not contradicted by the facts, and - are not obviously contrary to accepted methods of economic

reasoning (see [78] and [79].

47. It appears from this approach that standards of proof and standards of review are not two separate notions but two aspects of a single control system because whatever the Commission has to prove is what the CFI is empowered to verify. In the Commission appeal in the Tetra Laval case, ECJ accepted that the two notions only made sense together.

48. But the two notions are also different if we envisage the standard

of proof through its consequences in terms of the duty to state reasons (why one comes to a given conclusion), and that is an entirely different issue

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since this duty is a procedural requirement whereas the existence of sufficient proof concerns the merits. An annulment based on a violation of this procedural duty doesn’t oblige the Commission to reconsider its findings, but only to provide adequate reasons which may exist (although they were not spelt out in the text of the decision). The very detailed mode of redaction used both by the Commission and by the CFI is an incentive to raise the standards of proof and of review because exposing the implications and the possible weaknesses and inconsistencies of the administration’s documentation and reasoning. A further incentive is to be found in the Commission’s publication of guidelines; as long as these guidelines have not been judged illegal, they confer on all parties concerned (through the principle of legitimate expectations), a right to be treated in the manner the Commission has described in its guidelines [9].

49. On all this basis, an applicant is therefore required to demonstrate that the decision at issue is invalid because of legal errors. It is not sufficient to show that another decision would have been more appropriate.

An applicant still will not be successful if it simply disagrees with the Commission's conclusions; it must show that the Commission's evidence and reasoning are inconclusive and contradictory, or that the Commission ignored evidence on the record. While recent judgments show that the Community Courts will not tolerate poor decision-making parading in the guise of discretion, they are unlikely to accept vague appeals by applicants that have no basis in the evidence submitted to the Commission during the investigation.

50. In practice, the Community Courts focus on the following good demands:

- the decision is based on a correct interpretation of the law?- the facts were correctly established?- the Commission committed a manifest error of appraisal?- the decision was properly reasoned?- the procedural rights were observed? The scope of judicial review and, therefore, the degree of discretion

enjoyed by the Commission, differs for each of these actual grounds of review.

51. Until recently, the Community Courts showed a reluctance to carry out an in-depth review of the Commission's assessment of the facts.

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As a result, the Commission was often successful in preventing its decisions from being overturned on appeal by invoking its wide discretion in the assessment of complex economic matters.

However, the Community Courts overturned the Commission's merger control decisions/upholdings in some key cases:

- Airtours [79], Schneider [78], Tetra Laval [17] and MCI [23], invalidating a merger interdiction;

- SEB/Moulinex [50], partially invalidating a merger approval;- Honeywell [21], supporting the merger approval but invalidating

some Commission appreciations;- IMPALA [18], invalidating a merger approval. These cases announced a new trend where the Community Courts

will play a more activist role. In all these cases, the CFI thoroughly analyzed the reasoning of, and evidence relied on by the Commission and found that they did not meet the required legal standard for supporting the Commission's conclusions (see a discussion in [51]).

Speking the truth, as far the interpretation of the law is concerned, the Community Courts generally do not hesitate any more to carry out a full assessment of the Commission's decisions and to substitute their own interpretation of the law for the Commission's.

52. So, ECJ made it clear that, although the Commission enjoys

wide discretion in assessing complex economic matters, the Community Courts can still review the Commission's interpretation of economic evidence. In particular, the ECJ held that it is the role of the Community courts to determine whether the evidence relied on by the Commission is reliable and consistent, contains all the information that must be taken into account to assess the case and, most importantly, is capable of supporting the conclusions drawn from it. However, there is no reason why judicial review should be stricter in merger control than in other areas, and the rationale underlying the ECJ's judgment would apply with equal force in other areas of competition law. Therefore, while the point remains open, it is likely that merger cases set the standard of review for competition cases in general.

53. Finally, it should be noticed that the Commission’s margin of discretion is continuously narrowed bay case law and rules that the Commission imposes on itself through notices, guidelines and precedents.

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54. Farthermore, in an effort to counter-balance the wide discretion granted to the Commission on substantive matters, the Community Courts have always been very strict when reviewing cases based on procedural rights, including:

- The right to be heard, see [60], from which we quote: “Summary (…)2. It is clear, however, both from the nature and objective of the

procedure for hearings, and from articles 5, 6 and 7 of regulation no. 99/63, that this regulation, notwithstanding the cases specifically dealt with in articles 2 and 4, applies the general rule that persons whose interests are perceptibly affected by a decision taken by a public authority must be given the opportunity to make their point of view known (…)”, and also [56];

- and, The right of access to the file, see [80], from which we quote: “Summary (…)7. A corollary of the principle of respect for the rights of the defense,

the right of access to the file means that in an administrative procedure in application of the competition rules the Commission must give the undertaking concerned the opportunity to examine all the documents in the investigation file which may be relevant for its defense. Those documents include both incriminating evidence and exculpatory evidence, save where the business secrets of other undertakings, the internal documents of the Commission or other confidential information are involved.

None the less, the failure to communicate a document constitutes a breach of the rights of the defense only if the undertaking concerned shows, first, that the Commission relied on that document to support its objection concerning the existence of an infringement and, second, that the objection could be proved only by reference to that document. In particular, it is for the undertakings concerned to show that the result at which the Commission arrived in its decision would have been different if a document which was not communicated to that undertaking and on which the Commission relied to make a finding of infringement against it had to be disallowed as evidence. On the other hand, where an exculpatory document has not been communicated, the undertaking concerned must only establish that its non-disclosure was able to influence, to its disadvantage, the course of the proceedings and the content of the decision of the Commission, in so far as it would have been able to put forward evidence which did not agree with the findings made by the Commission (…)”

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However, to succeed with the argument that a decision should be overturned because, for example, the Commission failed to make available certain documents on the file, it is not sufficient to show that the Commission was obliged to disclose the documents. The applicant must also show that the non-disclosure affected the applicant's ability to effectively defend its interests and that having access to the documents could have affected the outcome of the case.

55. We reaffirm that it is more and more obvious that the Community

Courts have become more willing to carry out an in-depth review of the Commission's decisions, particularly the evidence relied on by the Commission to support it allegations and conclusions. However, they have shown an increasing impatience with applicants that raise vague and unsubstantiated arguments or purely technical procedural arguments with no real bearing on the applicants' rights of defense [56].

V. b. Remedies

56. The only remedy that an Community Court can order in an annulment action is to declare void, either partially or fully, the challenged act. The Community Court has no power to adopt a new act or to modify the challenged act. Therefore, if an applicant challenges a decision prohibiting a merger, the Community Court can annul that decision but cannot clear the merger. Likewise, if a third party challenges a decision to end an Article 82 investigation, finding that no abuse has occurred, the Community Court cannot adopt a decision establishing an abuse. However, the Commission must adopt the necessary measures to give effect to the judgment - see Article 233(1) of EC Treaty:

“The institution or institutions whose act has been declared void or whose failure to act has been declared contrary to this Treaty shall be required to take the necessary measures to comply with the judgment of the Court of Justice.” [11].

In cases where the Community Court annuls a Commission decision on procedural grounds only (for example, because the Commission provided insufficient reasoning or failed to respect the rights of defense) the result may be that the Commission simply adopts a new decision that confirms it previous decision, but which corrects the procedural errors.

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There is one important exception to the limitations placed on the scope of the Community Courts' review. As we already noticed, the Community Courts have unlimited jurisdiction to review decisions imposing fines or periodic penalty payments. In appeals of these cases, a Community Court can replace the Commission's assessment with its own and adopt a new decision, either confirming, increasing or, most commonly, reducing or annulling the fine (see, for instance, [81]). With respect to fines, Community Courts may change the Commission’s decisions simply because they have a different view. That is a stricter standard of judicial review which seems justified to ensure a higher protection of the rights of the parties, in matters that may lead to imposition of administrative sanctions.

VI. Procedural issues

VI. a. Written and oral procedure

57. Before the CFI, cases are normally heard by a three- or five-judge chamber, with one of the judges designated as the reporting judge.

58. Review proceedings have both a written phase and an oral hearing, with the written phase being the most important. A case starts by lodging an appeal against the Commission decision, followed by the Commission filing its defense. This first round of pleadings is followed by a second round if the applicant chooses to respond to the Commission's defense.

An applicant must set out in its appeal all pleas in law and identify all available evidence. The applicant can only raise new pleas in law or introduce fresh evidence at a later stage, if this is based on events that were unknown to it at the time it lodged the appeal.

59. An appeal can be lodged in any of the Community's official languages. The language chosen will be the language of the case on appeal and all further submissions, including oral pleadings, must be in that language. However, since the internal working language of the Community Courts is French, all written pleadings lodged in another language will be translated by the Community Court into French. To reduce

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the risk of translation errors, applicants should draft their pleadings in a clear and straightforward style. The Community Courts have adopted practice guidelines setting out instructions on the form in which pleadings must be submitted and suggesting page limits.

60. Evidence consists largely of documents introduced during the written procedure. It is possible to rely on expert statements and, in recent years, as it is already argued above, economic evidence has become increasingly important as a result of the greater weight placed on economic analysis in competition proceedings. The Community Courts assess the legality of the Commission's decision by reference to the evidence that was available at the time the decision was adopted. Therefore, documents that were not submitted to the Commission during the investigation and that the Commission could not have taken into account, cannot be relied on. In contrast, new expert studies showing that the Commission's assessment of the evidence on the record was defective are admissible.

61. After the written procedure has been closed, the reporting judge drafts a preliminary report, which is presented to the other judges hearing the case. The Community court often sends questions to the parties before the oral hearing, which must be answered in writing.

62. The oral hearing gives the parties an opportunity to highlight the main aspects of their case in opening statements. The more important part of the hearing is the question and answer session where the judges ask questions of the parties. Hearings seldom take more than a day or two.

VI. b. The fast-track procedure

63. Appeals in competition cases regularly take more than two years and, in many cases, considerably longer. This delay is one of the main obstacles to effective judicial review. For example, Airtours (which became MyTravel) had to wait for almost three years before the CFI struck down the Commission's decision prohibiting its proposed merger with First Choice. Given the lapse of time, Airtours decided not to submit the merger for a reassessment, but instead sued the Commission for damages [82].

According to Judge Vesterdorf, “the main problem with our current system of judicial review is not its effectiveness in terms of how closely the

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Courts scrutinize the Commission’s decision, but in terms of the speed of that review (…)” [83].

64. In 2001, a fast-track procedure was created in an attempt to address the problem of delays - see Article 76a, CFI Rules of Procedure [66] and Article 62a, ECJ Rules of Procedure [65].

The fast-track procedure:- allows the Community Courts to give priority to specific cases. - usually has only one round of written pleadings and a more

extensive oral hearing in an attempt to compensate for the abbreviated written proceedings.

In Tetra Laval (CFI) and Schneider, which were reviewed under the fast-track procedure, the CFI issued its judgment in about one year (about one year and a half in IMPALA judgment).

65. There are two main problems with the fast-track procedure:- Cases on the fast track tie up the Community Court's resources,

which means that there is room for only a few fast-track cases and that other cases are delayed.

- The fast-track procedure is only available in cases that are urgent and do not involve complex issues (in Ineos Phenol v Commission [84], removed from register, the CFI denied fast track because the issues at stake were too complicated). Competition cases rarely meet this last requirement, although an applicant applying for the fast-track procedure can indicate that it is prepared to limit its appeal to the most important grounds if the Community Court decides to accept the case under the fast-track procedure.

A request for the fast-track procedure must be submitted to the Community Court at the same time as lodging the appeal itself.

VI. c. Costs

66. There are no Court fees for appeals to either the CFI or the ECJ. Normally, the successful party is awarded costs. If an applicant is successful, it can recover costs from the Commission; but if it is unsuccessful, it must pay its own costs as well as the Commission's costs. The Commission's costs are generally not very high because the Commission rarely uses outside counsel and the Commission cannot recover the costs for representation by its legal service. If the parties disagree on the

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amount of recoverable costs (which occurs often in practice), the successful party can ask the Community Court to fix the amount.

VII. Special procedures

67. Several special procedures are available in judicial review proceedings:

- Third party interventions.- Interim measures.- Actions for damages.

VII. a. Third party interventions

68. As we already said, any individual or undertaking can intervene as a third party in a case pending before the Community Courts if it can establish an interest in the result of the case. The only exception to this rule is that member states and EC institutions can always intervene whether or not they have an interest in the result. In determining whether such an interest exists, the Community Courts apply a stricter standard to individuals and individual undertakings than they do to trade associations. In both cases, however, the third party intervening must support the position of one of the parties.

69. Individuals and individual undertakings must have a direct and existing interest in the result of the case. This interest must relate to the Community Court's final order rather than the arguments put forward (see paras. 53 and 57 in [85]). Therefore, e.g., if the merging parties challenge a decision prohibiting a merger, competitors can normally intervene, and if a competitor challenges a decision clearing a merger, the merging parties can intervene, because they have an interest in a final judgment declaring whether the Commission's decision should be upheld. The rules for trade associations are more liberal and it is not essential that the association's interest (or its members' interests) be direct and existing or relate to the operative part of the final judgment [86].

70. If an intervening party intends to submit a written statement,

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interventions must be filed within six weeks following the publication of an appeal for annulment in the Official Journal. Third parties that intervene after this period can only make statements at the oral hearing.

VII. b. Interim measures

71. Actions for annulment do not automatically suspend the contested decision. However, an applicant can ask the Community Court to adopt interim measures, including the suspension of the challenged decision. A request for interim measures can be lodged at any time after an annulment action has been filed.

72. Applications for interim measures are normally heard by the President of the CFI. To succeed, the applicant must show that each of the following three elements is satisfied:

- Prima facie case (a case at first view; on the first appearance; true, valid, or adequate at first sight; as it seems at first sight; ostensible). The applicant must have a prima facie case. The CFI assesses whether, at first glance, the main action lacks merit.

- Urgency. The applicant must show that it would suffer serious and irreparable harm if the challenged decision were not suspended.

- Balance of interests. The applicant's interests must outweigh other interests involved. The CFI must assess whether the applicant's risk of harm outweighs any harm that would result from the suspension of the decision.

73. The most difficult test to meet is urgency. Although the Community Courts accept both immaterial and material harm, they require that the alleged harm be solidly substantiated. Financial damages are not normally considered irreversible, unless the financial damages are so severe that the applicant risks becoming insolvent. The argument invoked by the Community Courts to justify this restrictive approach is that, if the applicant succeeds with its main action, it can subsequently claim damages from the Community institutions under Article 288(2) of the ECT (see below, Actions for damages). The problem is that the thresholds for a successful damage action are higher than for an annulment action so an applicant succeeding with its annulment action may subsequently fail with its action for damages.

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74. We must say that interim measures are seldom granted and it is a difficult case to prove. Interim measures are most likely to be granted when they are required to suspend divestiture orders or controversial remedies whose suspension is not likely to give rise to significant competitive harm.

For all this above we hardly recommend the most interesting IMS (Intercontinental Marketing Services) case C-418/01 [87] (and all the subsequent case law), from which we quote:

“Finding a “real and tangible risk” that the interim order could cause “serious and irreparable harm” to IMS, the President went on to find no need for interim relief under a “balance of interests” analysis”.

So, the CFI suspended also a Commission’s interim order obliging

IMS to grant licenses to third parties for use of IMS’s copyright-protected brick structure.

VII. c. Actions for damages

75. An applicant can claim damages from EC institutions for non-contractual liability; see Article 288(2) ECT:

“In the case of non-contractual liability, the Community shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties” [11].

On the other side, the contractual liability of the Community shall be

governed by the law applicable to the contract in question.

76. To succeed with a damage action, the applicant must show all of the following:

- The Commission acted unlawfully.- The applicant suffered damages.- A causal link exists between the Commission's conduct and the

damage suffered.

77. The limitation period for damage actions is five years from the time when the conditions set out in Article 288 of the ECT are met (including the occurrence of damage).

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78. To show that the Commission acted unlawfully, the applicant must demonstrate that the Commission violated a legal provision intended to protect the applicant (for example, that it prohibited a merger even though the conditions for prohibition were not met). The relevant standard for determining whether the breach of a legal provision will give rise to liability varies according to the degree of discretion enjoyed by the Commission: the wider the discretion, the more serious the violation must be.

79. The authors did find out two very interesting pending cases in which applicants was seeking damages from the Commission:

- My Travel v. Commission - the amount of sum beeing confidential [82];

- Schneider Electric, which was seeking some EUR1.66 billion in damages from the Commission after the CFI annulled the Commission's decisions to prohibit Schneider Electric's merger with Legrand and to close the new investigation after Schneider had implemented the Commission's order to divest Legrand [88].

Finally, these cases may well clarify the conditions under which unlawful competition, notably wrong decisions prohibiting mergers, can give rise to damage claims from the EC.

80. To finish that Part one of our paper, we underline here that because the holding of annulment leads directly to the nullity of the challenged act (in accordance with Art. 231 ECT) but the Court cannot substitute its decision to that of the Commission, in competition law litigation the actions for annulment could become less the only goal of applicants. Which litigants could increasingly have an interest to obtain, in parallel, a revision of the sanction imposed on them through lodging an appeal where the Community courts have full jurisdiction (the revision of fines, as we mentioned above ) - see also the Graphite Electrodes case [26] (and all the subsequent case law), from which we quote:

“165 (…) the Court none the less has (…) unlimited jurisdiction within the meaning of Art. 229 EC in actions brought against the decisions whereby the Commission has fixed a fine and may therefore cancel, reduce or increase the fine imposed”.

Moreover, the applicants may attempt more and more to hold the Community responsible for damages and obtain compensatory

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damages from the Community Courts.

VIII. Half way conclusion

81. Don’t forgetting that ECJ act also as a Constitutional Court vis-à-vis the ECT, we recorded that there are voices that argue that a quick view on the judicial review of competition cases by European Community Courts could rise to anyone the prospect of some kind of a moiled jumble. After all the our above judicial journey we are very inclinable to think the same. And this is, maybe, because the European Community system of judicial review is characterized by generalist CFI judges (apart the European Union Civil Service Tribunal) - that means by the absence of a formal recognition of the high complexity of competition law litigation. This absence is more and more pointed out by decisional practice of the European Commission and by case-law of the Community Courts. For saying no more, the increasing technicality of decisions, the major role of industrial economics, current delays and amasses of pending Court cases could no longer be compatible with the fast-moving nature of markets, with the imperatives of “the must alive and breathing policy in the European Union”. Is there a need, is there a way and is it the big time for us to contemplate an ending for that “constructive ambiguity” on who-does-what between the Commission and the two current degrees of the EU judicature in competition cases?

A reasonable question which raises with the same intensity on the relationship between National Competition Authorities and National Courts.

(to be continued)

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30. Judgment of the Court of 11 November 1981, International Business Machines (IBM) Corporation v. Commission of the European Communities, Case 60/81, (1981) ECR 2639.

31. Simon, D., Le systeme juridique communautaire, 3rd. ed., PUF, 2001.32. Gerardin, D., Petit, N., Judicial remedies under EC competition law: Complex issues

arising from the “Modernisation” process, Fordham Corporate Law, 2005.33. Granger, M.-P., Towards a liberalisation of standing conditions for individuals seeking

judicial review of community acts: Jego-Quere et Cie SA v. Commission and Union de Pequenos Agricultores v. Council, 2003, Modern Law Review , Jan. 2003, vol. 66 (1).

34. Judgement of 31 March 1971, Commission v. Council (European Road Transport Agreement - ERTA), Case C-22/70, (1971) European Court Reports (ECR) I-263.

35. Case C-294/83, Les Verts v. Parliament, (1986) ECR 1339.36. Case 26/76, Metro v Commission [1977] ECR 1875.37. Joined Cases C-8 to 11/66, Societe Anonyme Cimenteries… and others v. Commission,

(1993) ECR 75.38. Case C-39/93, Syndicat Français de l'Express International (SFEI) and others v.

Commission, (1994) ECR I-2681.39. Case T-64/89, Automec I, (1990), ECR II-3671.40. Case T-2/03, Verein fur Konsumenteninformation v. Commission, [2005] ECR II-13 -

“Lombard cartel”.41. Case C-325/91, France v. Commission, (1993) ECR I-3283.42. Case T-3/93, Société Anonyme à Participation Ouvrière Compagnie Nationale Air

France v Commission, [1994] ECR II-1.43. Case 53/85, AKZO Chemie BV and AKZO Chemie UK Ltd v. Commission, [1986] ECR

1965.44. Case 792/79, Camera Care Ltd v Commission, [1980] ECR 119.45. Case C-386/96, Societe Louis Dreyfus & Cie. v. Commission, [1998] ECR I-2309.46. Case C-25/62, Plaumann & Co. v. Commission, [1963] ECR 9547. Joined Cases T-528, 542, 543, 546/93, Metropole Television SA, and others v.

Commission, [1996] ECR 649.48. Case C-50/00P, UPA v Council, [2002] ECR II-6677.49. Case C-70/97, Kruidvat v Commission, [1998] ECR I-7183.50. Case T-119/02, Royal Philips Electronics NV v Commission, [2003] ECR II-01433.51. Radulescu Ghe., Felecan O., Impala’s ambush: A cornerstone in EU merger control?, in

Concurenta, Studii si cercetari privind protectia concurentei economice, Consiliul Concurentei, Anul I, nr. 2, Oct. 2006.

52. Case T-158/00, Arbeitsgemeinschaft der öffentlich-rechtlichen Rundfunkanstalten der Bundesrepublik Deutschland (ARD) v Commission, CFI judgment of 30 September 2003, [2003] ECJ II-03825.

53. Joined Cases T-346/02 and T-347/02, Cableuropa SA and others v Commission, [2003] ECR II-4251.

54. Case T-37/92, Bureau Europeen des Unions des Consommateurs et National Consumer Council v. Commission, [1994] ECR II-285.

55. Case C-2/01P, C-3/01, Bundesverband der Arzneimittel-Importeure v. Commission.56. Joined Cases T-191/98, T-212/98 to T-214/98 Atlantic Container Line AB and Others v

Commission, [2003] ECR II-3275.57. Case T-219/99, British Airways plc. v. Commission, 17 Dec. 2003, [2003] ECR, II-5917.58. Case T-65/98, Van den Bergh Foods Ltd.v. Commission, 23 Oct. 2003.59. Case 155/79, AM&S Europe Limited v. Commission [1982] ECR 1575.60. Case 17/74, Transocean Marine Paint Association v. Commission, [1974] ECR 1063.

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61. Case T-190/00, Regione Siciliana v Commission, Judgment of the CFI of 27 November 2003, [2003], ECR II-05015.

62. Case T-110/97, Kneissl v Commission, [1999] ECR II-2881.63. The Statute of the Court of Justice, Nov. 2005, Protocol on the Statute of the Court of

Justice annexed to the Treaty on European Union, to the Treaty establishing the European Community and to the Treaty establishing the European Atomic Energy Community…

64. Case T-88/94, Societe Commerciale des Potasses et de l’Azote et Entreprise Miniere et Chimique v. Commission, [1994] ECR II-401.

65. Rules of Procedure of the Court of Justice of the European Communities of 19 June 1991 (OJ L 176 of 4.7.1991 and OJ L 383 of 29.12.1992 - corrigenda) with all the amendments.

66. Rules of Procedure of the Court of First Instance of the European Communities of 2 May 1991 (OJ L 136 of 30 May 1991 and OJ L 317 of 19.11.1991 - corrigendum) with all the amendments.

67. Case C-5/85, AKZO Chemie BV and AKZO Chemie UK Ltd. v. Commission, [1986] ECR 2585.

68. Case T-102/96, Gencor Ltd. v. Commission, [1999] ECR II-753.69. Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the

rules on competition laid down in Articles 81 and 82 of the Treaty (“Regulation 1/2003”), OJ L 1, 4.1.2003.

70. Case T-25/95, SA Cimenteries CBR and others v. Commission, [2000] ECR II-491 at 487.

71. Case T-305/94, Elf Atochem SA and others v. Commission, [1999] ECR II-931.72. Case C-30/78, Distillers v. Commission, [1980] ECR 2223.73. Case C-27/76, United Brands Company and United Brands Continental BV v.

Commission, [1978] ECR 207.74. Case C-8/55, Federation Charbonniere de Belgique (Fedechar) v. High Authority of the

European Coal and Steel Community, [1956] EUECJ, ECR 291.75. Joined cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-

219/00 P, Aalborg Portland A/S and others v. Commission, [2004] ECR I-00123.76. Joined cases C-68/94 and C-30/95, French Republic and Société commerciale des

potasses et de l'azote (SCPA) and Entreprise minière et chimique (EMC) v. Commission, [1998] ECR I-01375.

77. Siragusa, M., Judicial review of competition decisions under EC law, Lecture at Competition Commission Biannual Series, London, 21 Sept. 2004.

78. Case T-310/01, Schneider Electric v. Commission, [2002] ECR, II-4071.79. Case T-342/99, Airtours plc v Commission, [2002] ECR II-2585.80. Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-

219/00 P, Aalborg Portland A/S, and others v. Commission [2004] ECR I-123. 81. Case T-48/00, Corus UK Ltd, formerly British Steel plc v. Commission, [2005] 4

C.M.L.R. 3, OJ C 239/12, 25.9.2004.82. Case T-212/03, MyTravel v. Commission (pending), see O.J. C 200/28, 23.08.2003.83. Vesterdorf, B., Judicial review in EC Competition law: Reflections on the role of the

Community Courts in the EC system of competition law enforcement”, Competition Policy International, Vol.1, No.2, Autumn 2005.

84. Case T-103/02, Ineos Phenol v Commission, removeds from the Register, see OJ C 213/44, 06.09.2003.

85. Joined Cases C-151/97P(I) and C-157/97P(I), National Power a.o. v. British Coal and Commission, [1997] ECR I-3491.

86. Case T-201/04R, Microsoft v. Commission, Order of the President of the Court of First Instance of 22 December 2004 in Case T-201/04 R Microsoft Corporation v

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Commission of the European Communities (Proceedings for interim relief — Article 82 EC), in OJ C 69/16, 19.03.2005.

87. Case T-184/01 R, IMS Health Inc. v. Commission, The Order of the President of CFI of 26 October 2001, [2001] E.C.R. II-3193.

88. T-351/93, Schneider v. Commission, , OJ C 7, 10.01.2004.

ADMINISTRATIVE AND JUDICATURE IN THE ACTIVITY OF THE COMPETITION COUNCIL –

THE POWERS OF INSPECTION

Gabriel Bălaşa Vlad Ionescu President judge Inspector Romanian Dambovita Tribunal Competition Council - RomaniaCommercial and administrative litigation section

Abstract By definition and scope in the avant-garde of the community policies and being an

activity at the polyvalent border of economics, administrative and judicature - both at an academic and at an enforcement level – the competition policy became in the past few decenies a real challenge for researchers, economists, jurists, politicians, public agents, mass-media, etc. The judicial revision of the administrative decisions in the competition field, the permanent reconsideration of the legal basis by the administrative and jurisdictional

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instances at the European Community level, or, what we may call the delicate swing between judicature and administrative are factors that generate ideas and pragmatic solutions for the activity of the European and national competition authorities. Based on the legal frame of the Competition Council of Romania, the present study tries to offer arguments to support a point of view regarding the balance between administrative and judicature, in one of the most important empirical fields of activity in competition matters, that is the inspection of premises.

1. Competition is just another name for the social reality and we all try not only to live in community, but also to avoid harming other persons by our behaviour; in the fields of economics, this social corporate rule is called competition.

The importance of competition in our society is underlined by its special status at the European Union level, by the issuing of severe regulations for the violation of competition rules and by the creation of specific legal instruments to ensure an effective enforcement of the competition principles.

2. One of these legal instruments is represented by the powers of on-site inspection of the competition inspectors vis-a-vis the headquarters of corporations and other premises belonging to directors, officers and employees of the corporations under investigation.

3. Concerning the nature of the measures taken in the competition field by the Competition Council, considering that the Competition Council is an autonomous administrative body in the competition field, we think that the measures and the sanctions enforced by the Competition Council have an administrative nature.

The Competition Council’s procedure by which it accomplishes its tasks and which consists mainly in the establishment and the punishment of unfair practices, such as stipulated by law, is similar to the jurisdictional procedures, but without being a jurisdictional one.

4. The circumstance that the practices notified to the Competition Council are investigated in order to establish the truth and their compliance to the competition rules, and that the investigation report is examined by the assembly of the Competition Council, does not mean that the activity of the Competition Council is jurisdictional, because the Competition Council does not terminate a litigation, regarding the existence, the nature or the exercise of individual rights of a person – which are jurisdictional

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attributions – and does not enforce judicial punishments of violations of legal regulations, but it only leads technical and legal operations of analysis, deliberation and decision making that are specific to the issuing of all administrative decisions.

The competition inspectors unfold an administrative activity of analyse and collection of evidence, on the basis of which decisions can be made at an administrative level. The investigation procedure led by the competition inspectors does not turn them into prosecutors. They are just high specialized public agents of an administrative authority whose activities are the analyse and the establishment of violations of competition rules, based on the competition law. The Article 33 of the Romanian Competition law refers to the Article 214 of the Romanian Code of Criminal Procedure, stating that if the offence described at Article 60.1 of the Competition law is committed, the competition inspectors can only lead the operations listed by the Article 214 of the Romanian Code of Criminal Procedure. This does not mean that the competition inspectors accomplish acts of criminal procedure, because they only issue administrative acts which can be used as evidence by the criminal investigation authorities and the courts, according to the Article 214 of the Romanian Code of Criminal Procedure.

5. We state the above mentioned opinions on the basis of the following regulations:

The Romanian Competition law number 21 from 1996, consolidated:

- „Article 33 – (1) The identification and the investigation of the violations to this law are incumbent on the Competition Council, through specialised control staff.

(2) In case of violation of Article 63 (1) of this law, the staff appointed according to par. 1 may only take the measures provided in Article 214 of Criminal Procedure Code ”.

- „Article 60 – (1) When an individual participates with fraudulent intent and in a decisive way to the conceiving, the organization or the realization of any of the practices prohibited under Articles 5 (1) and 6, and which are not exemptions according to Articles 5(2) or 8, shall be considered a criminal offence and shall be convicted to jail from 6 months to 4 years or shall be fined.

(2) The criminal action shall start following the Competition Council’s notification (...)”

The Code of Criminal Procedure:

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„Article 214: The decisions made by some investigation authorities:(1) The following bodies must take statements from the offender and

from the witnesses at the commitment of an offence and must establish minutes relating the circumstances of the commitment of the offence:

a) The bodies of the State inspection, other public bodies and the bodies of the authorities listed at the Article 145 of the Criminal Code, in case of offences by violation of the regulations whose respect is enforced by the concerned bodies;

b) The control bodies and the managing bodies of the public administration, of the bodies listed at the Article 145 of the Criminal Code, for the offences committed in relation with their work by the employees subordinated or controlled by these bodies.

(2) The bodies here above indicated have to right to retain the evidence, to evaluate the damages and to accomplish all other operations, each time the law authorizes them to do this.

(3) The decisions made by these bodies are handed to the prosecutor 3 days at the discovering of the circumstances that characterise the offence, except for the cases in which the law says otherwise.

(4) In case of flagrant delicto in the act, the same bodies must hand the accused to the prosecutor, together with the operations they have accomplished and the evidence they had collected.

(5) The minutes signed by these bodies constitute evidence”. The Criminal Code:

„ Article 145: Public. (1) The concept of „public” means everything related to public authorities, public institutions, institutions and other corporations of public interest, the administration, the use or the exploitation of public goods and of public interest services, as well as any goods that, according to the law, are of public interest”.

6. These regulations reinforce the opinion that the powers of investigation of the competition inspectors are executed under the administrative authority of the Competition Council, and not within a criminal legal frame, as every time a crime is committed, the competition inspectors cannot proceed to an investigation. In such a case, the only powers of the competition inspectors consist in taking statement of the offender and the witnesses at the commitment of the offence and establishing the minutes for these statements, all other acts being excluded. Another argument for this opinion is that the law does not mention the word „perquisition” that is used in the terminology of criminal

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procedure, but the word „investigation”, in order to differentiate this civil-administrative procedure executed by the competition inspectors from the criminal procedure.

7. Except for the beginner inspectors, all the competition inspectors are able to use their powers of inspection to obtain information for the investigation of the situations that are set off as representing violations of the law. The powers of inspection of the competition inspectors regarding all places or means of transportation which are directly related to the activity of economical agents/corporations and of the associations of economical agents whose acts and operations are being investigated are based on the decision that opens an investigation and names the inspectors as rapporteurs in the respective case, no other formality being necessary to authorise them to proceed to investigation. The only legal requirement are the existence of indications that documents or information necessary to the accomplishment of their mission may be found at these premises; the results must be recorded by minutes and inventories.

8. However, the investigation powers of the competition inspectors are broader than that and can be used regarding all other places, including the house, close fields and means of transportation belonging to the directors, officers, managers and other employees of the economical agents/corporations and associations of economical agents under investigation. Concerning the investigations executed at premises that are not directly related to the activity of the economical agents and that are not executed at the business premises, the law requires some supplementary conditions for their authorisation. The law requires an order from the president of the Competition Council and a jurisdictional authorisation issued by the President of the court in the jurisdiction of which are situated the places to be investigated or by a judge designated by the president of the court. This represents a warranty for the inviolability of the home. It is important to notice that such authorisation can only be asked for and granted for a house search, not for a personal (corporal) search.

9. After the issue of a search order from the president of the Competition Council, a judicial authorisation must be requested from the court in the jurisdiction of which the premises to be investigated are situated. This authorisation is issued by the president of the court or by a judge designated by him. When the premises to be investigated are situated

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in the jurisdiction of different courts and the investigation operations have to be conducted simultaneously in each of them, any of the presidents of the competent courts may issue a single authorisation. It must be observed that such authorisation may only be requested after an investigation has been opened, an investigator has been designated and on order has been issued by the president of the Competition Council, and on the condition that these conditions have been accomplished in this order. The respect of this procedure represents a fundamental condition for the issuing of an authorisation by the president of the court.

10. The request for an authorisation does not have to be formal, but it has to comprise all information to justify the investigation by listing the actual indications. The judge must verify if the request is justified.

11. The on-site investigation and the operations that it involves must be executed under the authority and the control of the judge that authorised it. The judge may inspect the premises under investigation and he can decide any time to suspend or to terminate the investigation. This power of the judge underline the administrative nature of the judicial authorisation to proceed to the on-site investigation. The interested person may request the judge to state that the limits or the scope of the on-site investigation have been violated, and the judge may state this ex officio. In such case, the judge may suspend or terminate the on-site investigation.

12. Because such investigation is a special one, as it does not take place at the business premises, the law offers the persons under investigation the possibility to speak to the judge that authorised it, whenever their rights have been violated or whenever the limits of the investigation have been violated, in order to obtain the suspension or the termination of the investigation. Under any circumstances, the investigation cannot start before 8 a.m. and cannot take place after 6 p.m. and it has to take place in the presence of the owner of the premise or of his/her representative and it has to be executed only by the competition inspectors. The owner of the premise or his/her representative has the right to be informed about the documents and the evidence that may be taken as evidence by the competition inspectors. Inventories and seal appositions must be made upon the provisions of Criminal procedure code, that is the objects and the scripts must be firstly acknowledged and marked by the owner and the assistants.

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The original of the minutes and the inventory are sent to the judge that authorised the inspection. The documents that are not useful to establish the truth or the existence of a violation of the competition rules are given back to their owner.

13. The decision by which the judge authorise an on-site investigation can be challenged with an appeal to the Court of Appeal, but the appeal does not suspend the effects of the judge’s authorisation. The Competition Council is immediately informed about the beginning of the investigation and on the operations that are accomplished by the competition inspectors.

The decision of authorisation of an on-site investigation issued by the judge has an administrative nature, as it is issued by the president of the court who, in his quality of president executes an administrative task, or by a judge designated by him. Based on this argument, we believe that this decision cannot be regarded as a criminal jurisdictional act. The decision of authorisation of an on-site inspection issued by the judge is more likely to be regarded as a decision issued by the administrative section of the court, especially since the appeal against it is heard by the administrative section of the Court of Appeal, and not by the criminal section.

EU PRINCIPLES AND INSTITUTIONS –THE GROUNDS FOR EXTENSION AND REFORM

(Part one)

Vasile Şeclăman General Secretary Competition Council - Romania

I. The basic principles of the European Union.

There are, in synthesis, four innovating principles of the first edifice 97


of today European Union which directed evolution of the integration:

1. The essential role of the institutionsThe founding fathers of the European Union have lived on the spot

the horrors of the war and have concluded that international relations must be based on equality, arbitration and conciliation, fundamental principles for any democratic system, and a new European Community must have as a foundation the force of the law and not the law of the force. A new type of relations between West European countries could be shaped only in the spirit of democracy and pacifism, which had to guide politically the first integrationist organization – the European Coal and Steel Community - and to sanction it as a historical realization, unique and unprecedented.

2. The independence of community institutionsFrom the start the community institutions have been thought not only

through the prism of their attributions and functions, but also through the prism of their independent authority. The community institutions benefit also presently by the statute conferred to the High Authority E.C.S.C., which stipulated the nomination of its members (the actual commissaries) through common accord of governments (but they were and are independent personalities promoting community interests and not national representatives acting according to instructions of governments in respective countries); The High Authority (today the Commission) assumes its exclusive responsibility in front of Parliamentary Assembly (today European Parliament).

3. Cooperation between institutionsIf for Jean Monnet the High Authority’s independence could not be

questionable, however he recognized the necessity that Member States defend their interests. He did not desire excessive limitation of Community to objectives of technical order and was forseeing the intervention of communitary authorities in macro economical field, reserved regularly to national authorities. This explains the creation of the Council of Ministers, which in the beginning could give its acceptance only in some cases and needing majority in taking decision, not unanimity. The High Authority had the role of initiator, which, through the prism of actual attributions of the Commission, was essential for promotion of community interests, and the system of the 4 institutions based on the principles of cooperation and not of subordination had a high efficiency in the process of taking decisions.

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4. The equality between Member StatesThe principle of representation in the Council of Ministers

constituted a difficult problem, because some countries had not the potential of France and Germany in matter of coal and steel and therefore they insisted for unanimity rule, while Germany solicited a system of representation directly proportional with the level of production.

The E.C.S.C. Treaty can be considered as an act of trust between France and Germany, a try to surpass the confrontation and tension of the past and to realize a cooperation between equal partners, interested in the common progress and the well-being of their countries.

Five decades of „construction” of EU have marked profoundly the history of European continent, as well as mentalities of its inhabitants, modifying also the equilibriums of power. The Member States governments of any political colour knew that the era of absolute sovereignty has passed, and that economical and social progress is conditioned by the union of efforts and by a vision of „a future from now shared” as Robert Schuman put it in his Statement. Only by this the old nations could continue their economic and social progress and maintain their influence in the world.

The coming into effect and functioning of the treaties signed at Rome, as an objective continuation of that from Paris, led to creation of distinct Communities, ECC being the most important and complex. As a result of evolution in time, this coexistence can not be too long because presenting inconvenients more and more sensitive (most visible, but not gravest, being that of double function in exercising decisional process).

The Bruxelles Treaty, from 8th April 1965 (came into force the 1st July 1967), has realized this necessary and objective unification. The three Councils of Ministers, the two Commissions and CECO High Authority have been replaced by an unique Council and an unique Community, being controlled by an unique Court of Accounts.

The analysis undertaken by specialists in the field point out the fact that the „fathers” of the Community preferred an institutional structure which mirrors the situation in the Member States, that is to have an elected legislative body, an executive to show the equilibrium of forces in the legislative and a juridical institution desined to solve all disputes connected with the application of community law; moreover, all Community institutions had to be independent from the authorities of Member States and had to be situated in the same place on Community territory [1].

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In accordance with all these, the institutional structure of actual European Union had the following characteristics:

- Complex attributions. At least three of basic institutions of the EU (the Commission, the Ministerial Council and the Parliament) had several attributions about which it can not be said that they can be transposed in the „traditional” distinction between the powers: legislative, executive, juridical and consultative;

- Polycentric structure. Although the centre of gravity of EU institutions has been fixed at Bruxelles, these have premises also in Luxemburg and Strasbourg; there are separated premises like nuclear research centres of EUROATOM in Italy or England. This thing has presented a logistical disadvantage in the harmonious functioning of „community construction”.

- Loyalty for many causes. In the ideal case, all EU institutions should be so constituted and conceived that they would be loyal only to the Community, an impossible thing, both in principle and pragmatically. It is appreciated that the Commission is loyal to the European Union. But the Council of Ministers represents the interests of the member states, and the Court of Justice was asked to be totally impartial.

- Separation of powers. This principle has been stated by French philosopher Montesquieu still in 18th century, the setting up of French post revolution institutions being inspired by this principle. It specifies that, in exercising their attributions, the legislative, executive, juridical and consultative powers must be independent. The principle is applied also to the EU institutions, though to these it have been conferred, during the time, many attributions which are not conform to this.

It can be said that the European Union is a specific and even particular entity, being a regional entity with international vocation, having many of attributions of nation state. The Union harmonizes the legislations of member countries, being an executive body with several responsibilities in application of legislative measures and with an executive and jurisdictional system in which the firms, nongovernmental organizations, civil society and individual citizens have to found themselves [2]. The Union entertains diplomatic relations with various tertiary entities and becomes signatory of more numerous bi, pluri or multilateral treaties and agreements. However, the European Union is enough far from the attributions of a state entity, because: it has not a government in the true sense of the word; it does not exercise in an electoral manner a series of

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abilities; it administrates only partially the internal affairs, justice and defence, and in the matter of external policy exercises many attributes only on intergovernmental bases.

The calendar of implementation of West-European economic integration objectives has been very charged in the period passed since the creation of the European Union. The differences, difficulties and confrontations of interests on political, economical and social level reverberated negatively on the process of economical and institutional integration and of harmonizations of policies on internal and external level. In the context, it is stated that some objectives of the integration have been touched, and other realized are considered by Member States as being imperfecte [3].

It is significant also the apparition of some serious difficulties in fields in which it is considered that it have been obtained essential realizations for the existence and functioning of European Union, such us common agricultural policy and common commercial policy.

The analysis of these difficulties through the prism of generating causes points out the following things:

- the strong protectionist pressures manifested in community countries under the difficulties of economical nature especially in the periods ulterior to crisis from 1974-1975, 1981-1982 and 1992-1993 have put often in danger the free circulation of goods and services within European Union;

- more and more evident deficiencies in functioning of the common agricultural policy determined that Member States – both the big consumers of agro-alimentary products (Germany and Great Britain) and countries big producers of such products (France and Italy) to solicit reformulations in this field, including its basic principles;

- diversification of external commercial relations of European Union as entity with tertiary countries, along with rigidity of mechanisms of the common commercial policy, made more and more difficult the realization of some solutions of compromise between commercial interests of Member States.

The development of economic integration within the European Union – horizontally, through enlargement of geographical area and vertically, through addition of new fields ruled by community policies and by growth of complexity of existing mechanisms – made the supra national

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institutional structure, built initially, to become increasingly inefficient in administration and management of integration process.

The complex challenges of European extension need new forms of European governing. These institutions have the entire responsibility in the design of implementation and presentation of economic policies. The interaction between national governing and factors of decision of European Union has been much strengthened in the last years. To lead an enlarged European Commission it is need of strong institutions and a collective vision on problems implicated in this process. [4].

The community institutions, together with other community bodies provided by Treaties and with subsidiary bodies created in the limits of Treaties, form what is called „the institutional community system”. The community juridical doctrine appreciated that the presence of the four components in the community institutional system expresses the will of founders of European integration to make out of this combination of attributions „the fundament and motor of community integration” [5]. The express provisions of the Treaties establish the specific attributions which each community institution has in order to bring to the fulfilment the assignments entrusted to the Communities by the member states.

Within this study we will present to a larger extent the European Court of Justice.

II. The European Court of Justice

The Court of Justice is the fourth main institution of European Union, which develops its activity on the basis of articles 165-188 from Rome Treaty and of article „L” in Maastricht Treaty. It was set up in 1952 and has the role to ensure the uniformity of interpretation and application of community law.

The European Court of Justice has competence to solve litigations which implicates Member States, community institutions, companies or physical persons from the space of European Union.

The 27 Judges, members of the European Court of Justice, choose the President of the Court for a three years mandate which can be renewed.

The Court of Justice is a commune institution for the three Communities, which was set up on the basis of the convention signed at Rome and of treaties from 1957. Each constitutive treaty is accompanied by a protocol with the same juridical force regarding the statute of the Court, in which reference is made to its organization and functioning, as well as to

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procedures. The respective statutes have been harmonized through the Convention regarding common community institutions and through the treaty of fusion. The European Court of Justice has been set up as an independent authority, in order to ensure the respecting, interpretation and application of primary and secondary community legislation in an uniform manner, without leaving it at discretion of national juridical instances. The treaties stipulate the prevailing of European Union laws in front of national ones. The jurisdiction covers only specific problems connected with community legislation. Putting in discussion in a national instance of the community laws attracts the preliminary ruling of the Court of Justice.

Since 1989 it was created also the Tribunal of First Instance, formed from 25 (today 27) judges nominated for 6 years, by common agreement with member states governments, out of persons whose independence and qualification are indiscutable. Since December 2005 it has been created the European Civil Service Tribunal.

The Court of Justice is the only body of control of legal nature of the

European Union, which has not only a simple juridical function but also other important responsibilities like:

- clearing up the rights and obligations of European institutions in relations between themselves, as well as legal relations between Member States and European Union;

- verification of compatibility of the secondary legislation adopted by the Council and the Commission, with provisions of treaties and with general legal principles;

- solving actions of physical and juridical persons against European Union, complaints of European officialities connected with employment conditions, investigation of administrative acts of Commission and of national authorities;

- solving the requests for damages;- involvement in free circulation of labour force, social security and

equal opportunities;- exercising the role of arbitration court, when it arbitrates some

specific cases and tries realization of an agreement between parts.The Council, the Commission or the member states can ask the

opinion of the European Court of Justice over the compatibility of any agreement between European Union and tertiary countries or international organizations. In this regard the Court can monitor validity of the international laws and the correspondence with national and community

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legislation.In front of the European Court of Justice can be introduced actions

by European institutions, Member States and by some natural and legal persons for annulment of some compulsory acts issued by European institutions, actions of Commission or of a Member State against other Member State for not respecting obligations being in its incumbent according to European treaties and to secondary legislation adopted by European institutions (as well according to the treaties or agreements concluded by European Union). Likewise actions can be introduced by European institutions or Member States against the Council or the Commission for the failure of some actions imposed by community laws. The Court of Justice is solicited for preliminary decisions, on the basis of article 177 of CEE Treaty, to decide over interpretation and application of community laws in case brought in front of national instances or presented to European Court by respective instances. Such preliminary decisions are compulsory for national courts and form an important tie between European Court of Justice and the courts of national countries and they ensure the uniform application within European Union and contribute to the creation of a consistent jurisprudence.

III. General traits of European Union institutions; extension and reform

The most important particular aspects of institutional structure of European Union are:

- Firstly, the juridical system and the European Court of Justice, very similar to the national ones;

- Secondly, a factor of functional differentiation, which became extremely remarkable: the formulation of European Union Politics in the frame of Member States has lost more and more its character of classical external politics.

- Thirdly, the gradual transition, within the Council, to the qualified majority, the enormous increase of European Parliament importance, which became in time in many fields a partner with equal rights, as well as the fact that through the Treaty of Amsterdam, the third pillar, the last redoubt of national sovereignty principle, started to prove tendencies, it is right still

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timid ones, of super nationalization.

Along with all these, indications are maintained in continuation for interstatal character of European Union, especially regarding the External Politics and Common Security. However, from the analysis over institutional system of European Union it has resulted clearly that this form of cooperations between states markets one of the extreme poles of international politics, a pole which has numerous analogies with politics brought within national political systems.

The community acquis is first of all the result of community method (Monnet method), that is of triangular institutional game (Commission, Council, Parliament), of majority vote, of Commission iniative role, of European law primordiality, of respect face to the role of small countries in this ensemble.

The intergovernmental method was also used in community architecture – example External Politics and Common Security – but its historical contribution to community construction is smaller. This evolution toward intergovernmental method coincides with appearance of some tensions between big countries and small ones almost nonexistent during 40 years of European Union evolution. Within the intergovernmental procedure, the small countries have the sentiment that size and weight represent the determining element.

The defiance of enlargement, which represented the source of specific problems at Nice, put the problem of method; it is not in discussion the choice between community method and intergovernmental method, but to determine their ponderation in the future of European „construction”.

The debate around institutional reform left somehow behind the substance problems of European „construction”. Scholarly institutional architectures were evoqued, there were enunciated syntagms like „gravitation centre”, „avant-garde”, „pioneer groups”, but with few references to content and finality.

In this respect, we call for some themes of reflection regarding the essence of the problem:

- Direction of the European construction (what kind of entity European Union will be?);

- „Civilizational” and geopolitical project which European construction may circumscribe;

- The place of European Union in the world;

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- Relation with USA, Russia, China etc.In any case, the institutional logic must be accompanied by cultural

and historical diversity logic. „Diversity is the real advantage of Europe, its secret weapon.” [6].

The integrated countries in the Centre and East of Europe have almost all crossed the process of transformation of their economies after 50 years of centralized planning. The exigencies of adhering as a Member State with full rights presented a major defiance for countries in transition because they were bound to take over the community acquis, starting from a lower level than of any preceding candidate. In the same time, the European Union did not stay still, became more and more complex, integrating in continuation in different fields (monetary union, cooperation in the field of justice and internal affairs or of external affairs and defence).

Political scientist and writer Timothy Garton Ash drew attention, in an article published in „Le Monde” (August 1999), that the acquis grows faster than the capacity of the countries from the East to assimilate it and proposed, in consequence, derogations, in order to make realistic the possibility of integration in European Union of candidate countries.

The extension toward centre, East and South of European Union has changed fundamentally the Union’s configuration. In spite of some more or less rapid transformations, the entrance of the new members in the European Union has determined a growth of differences regarding the development and prosperity in the interior of the Union. From the beginning, each new member has overcharged the system of redistribution at European level in agriculture and in what regards structural funds. So Europe needs a new contract of solidarity in order to not produce the super solicitation of donors and frustration of beneficiaries.

IV. Scenarios regarding the European Union future The European Union is a living organism, in a continuous evolution

and transformation, reason for which its future makes the subject of numerous studies. The interest for this subject is as bigger as political and economic equilibrium of the entire world depends on it in a significant measure. Peace, security and stability on the continent and in the world are conditioned by the establishing of good relations of cooperation between European partners. In order that these function in good conditions and

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efficiently, the time demonstrated that adoption of urgent measures is imposed, which to lead to simplification of institutional structures and of community legislative frame, and also to the clearing of the competences. A serious problem has in present the European Parliament, the increase of its prerogatives not succeeding to lead to decrease of democratic deficit. The Euro deputies do not compete between themselves for the goodwill of the electorate, do not have electoral circumscriptions and are not representatives for their nations which have sent them in parliament.

The Unity for Prospective Studies from near European Commission has launched at the beginning of 1997, under the coordination of Gilles Bertrand, the project „Scenarios Europe 2010” with the objective to create a set of coherent and stimulating images about the future of the continent. The five themes chosen proposed to encourage the debates in respect to future of European integration and to place in a larger perspective the policies and strategies of European Union, contributing to their perfecting: institutions, social cohesion, economical adaptability, the extension and the international context.

First scenario, „The Triumph of the markets”, is also the most realistic from all these. The Europe evolves toward a free market following the pattern of the United States of America through diminishing the systems of social protection, that is the decay of the „wellfare state”. The European Union axes on economic aspects of integration on the unique market and reduces at maximum the public expenses. According to this scenario, the Union tends to enlarge itself very rapidly, because the national sovereignty is not any more menaced by integration policy, the candidate countries receiving only limited financial aid. The labour force is occupied in a very big percentage, the world commerce registered a spectacular increase, the productivity of work increases due to the new technologies, and the stability of Euro currency leads to the increase of outputs. Although the inequality and exclusion accented , they remain at acceptable levels. The majority of world states embraced the principles of the free exchange, liberating from the burden of social expenses.

Scenario number 2, „A hundred flowers” presents a major crisis of governing which appears in some of the Member States, specially in the big states. Confronted to a society in rapid transformation, the national bureaucracy can not adapt and looses the contact with daily realities. The citizens demonstrate an increasing distrust toward elites from politics and

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administration and turn their attention to local level, contributing so to the economic and political fragmentation of the continent. Because of political crisis, the process of extension must be interrupted. The Europe is incapable to develop an external politics and a coherent security. Being not able to refound its stability, the Union is put in front of new pressures from the side of new menaces, non-military ones, such as: organized crime, environment pollution, illegal immigration and traffic with beings.

In the scenario number 3, „Divided responsibilities”, the European governments decide, under beneficial influence of the third industrial revolution, to reform profoundly the public sector at all levels – local, regional, national and European – according to principles of decentralization, transparency, responsabilization and subsidiarity. In the year 2010 the Union should be extended to a number of 27 states. The European Union is sustained by efficient external politics and security and is able to establish a solid political partnership with its neighbours, based on subjects of common interest – the struggle against organized crime, economic stabilization and environment degradation.

Scenario number 4, „Creative Societies”. After massive demonstrations of public discontent, a new red-green elite takes over the power in Western Europe promoting a radical reform of pension and taxes system and preoccupies on social and environmental standards. This leads to political tensions and to the slowing down of the process of integration. Preoccupation of Union for internal problems led to the subvaluation of problems of external politics, and excessive concentration on short term projects will lead to the failure of the European social-ecologist experiment.

Scenario number 5, „Turbulent Neighbours”, refers to an unstable regional context: the European Union is confronted with military conflict in its immediate neighbourhood and must endow itself rapidly with defence capabilities. The External Politics and Common Security absorbs the biggest political attention, and the Union, dominated by big member states, play an unilateral and dominant role in relation with its neighbours. The severe regional instability leads to a clear line of demarcation between the advanced countries and Central and Eastern countries of Europe members of the Union and other states left out, caught in a negative spiral of socio-economic underdevelopment and of an increased insecurity. By adopting a strictly defensive attitude, the European Union retards internal

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social-economic reforms and fail in remodelling the continent on cooperative bases.

(Part two of our study will try to conclude on the topicality and the prognosis of these scenarios.)

Selected bibliography

1. Cairns, W., An Introduction to European Community Law, Cavendish, 2002.2. Miron, D., Economia integrării europene, Ed. ASE, Bucharest, 2001.3. Albu, C., Uniunea Europeană realitate a anului 1994, studiu I.E.M., Bucureşti,

1994.4. Şeclăman, V., Baza juridică de reglementare a relaţiilor comerciale pe plan intern

şi extern ale României: analiza fenomenului concurenţial din economia naţională – doctoral paper, ASE, June 2002.

5. Lefter, C., Drept comunitar instituţional, Ed. Economică, 2001.6. Moisi, D., Financial Times, 15 January 2001.

ASPECTS OF JUDICIAL PRACTICE IN THE MATTER OF ANTITRUST AND UNFAIR COMPETITION

Univ. lect. dr. Livia Mocanu “Valahia “ University of Targoviste - Romania

Faculty of Juridical, Social and Political Sciences

AbstractA market based on free initiative and competition involves two components:

adopting the relevant legislation and transposing it into practice. Ensuring a normal competitive environment represents an important objective for Romania, especially as a member state of the European Union. When trying to achieve such an objective, the role of the courts is essential and more and more obvious through the solutions given in the different cases in the domain of anticompetitive practices.

This study shows some aspects of the Romanian jurisprudence in this matter with an accent on the judicial practice of the High Court of Cassation and Justice.

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1. IntroductionBy means of successive modifications made to the competition

legislation in the context of Romania’s imperative adhering to the European Union7, a significant extension of the courts competence was made in solving litigations regarding competition, precisely that of the Bucharest Court of Appeal and the High Court of Cassation and Justice, department of administrative and fiscal court. Besides, the content of Law no. 21/1996 reflects the stipulations of art. 81 and 82 of the Treaty of Nice, which ban the practices of damaging the competition on the community market, as well as the stipulations of art. 87-89, referring to the state assistance, and those of art. 86, regarding the state assistance granted to the economic agents of the public sector.

By the normative document, we also established that there is only one autonomous administrative authority in the field of competition, and that is the Council of Competition, thus eliminating the jurisdictional attributions of the President of this institution.8

Underlying the definition of the courts expertise, we must show that by Law no. 21/1996, the dissolving of some illegal concentration operations which damage the economic concentration, as well as the establishing of the other measures stipulated by art. 7 are not of the Council of Competition jurisdiction, but of the justice expertise and precisely of the responsibility of the Bucharest Court of Appeal, which actually decides on this Council’s demands.9

2. Aspects of the Supreme Court judicial practiceThe Supreme Court judged several cases regarding the

anticompetitive practices whose purpose is reducing, impending or distorting the competition.

7 The law for fighting against unfair competition no. 11/1991 was modified by Law no 298 of July 7th 2001, published in the Official Gazette no. 313 of June 12th 2001; the Competition law no. 21/1996 was modified by G.U.O. no. 121/2003, approved and completed by Law no. 184/2004 and was again modified by. Law. No. 538/2004, on the basis of which it was republished in the Official Gazette of Romania no. 742 of August 16th 2005. 8 Rozalia Ana Lazăr, Consideraţii privind rolul instanţelor judecătoreşti din România în domeniul concurenţei din perspectivă europeană şi în contextul reformei judiciare, in Curierul Judiciar magazine no. 6/2005, p. 98.9 E. Mihai, Câteva consideraţii privind art. 7 din Legea nr. 21/1996 a concurenţei, in Curierul Judiciar magazine no. 11- 12/2004, p. 167-170.

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a) A first situation considered the decision of the Ministry of Education and Research which, within the procedure of evaluating school manuals for pre-university education, introduced the price criterion next to the quality criteria, and gave it a percentage of 40% of the 100 total points. Incidents in the case were the dispositions of art. 5, line 1, letter a) of Law no. 21/1996, according to which banned practices are: “the concerted fixation, directly or indirectly, of the sale or purchase prices, tariffs, reductions, increases, as well as any other commercial condition.”

In this case, some publishing houses appreciated that this decision leads to a limitation of the trade, practice that is banned by art. 9 of the Competition Law.

The Council of Competition stated that the competition was not damaged by this criterion, because the premises for one of the publishing houses to acquire a monopole position or at least to have a ruling position on the market were not created.

The Supreme Court10 adopted the arguments of the Council, showing that, if we cannot shaw an agent’s ruling position on the market, we cannot talk about establishing some ruin prices. More over, the court of appeal retained the following argument: “The Council of Competition cannot decide on the legality of introducing the price criterion from the perspective of the public acquisiti on legislation.”

On such grounds, we notice that the court invokes the public acquisition legislation able to avoid the legality control, exercised both by the Council of the Competition and by the court power, the evaluation of school manuals.

In this context, according to the opinions expressed in the doctrine11

we consider that the legislation of the public acquisitions, meant in its turn to ensure the free competition, does not eliminate the application of the stipulations of art, 9, Law no. 21/1996 which forces the Council of the Competition to attack in justice any actions of the public administration authorities, central or local, having as object the reduction, impending or distorting of the competition.

b) Unfair competition by creating the confusion risk also generated

10 Decision no. 4144 of November 25th 2003 published in Curierul Judiciar magazine no. 7-8/2004, p. 83.11For a nuanced opinion see Adriana Man, Narcisa Varo (Cozea), Aspecte actuale ale practicii judiciare în materia concurenţei comerciale, in Curierul Judiciar magazine no. 12/2006, p. 85-86.

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several litigations. Thus, the Supreme Court decided12 retaining that, according to the dispositions of art. 4 and 5/ Law no. 11/1991, “the facts considered as acts of unfair competition are those which aim at creating a confusion, tending to produce, in the consumer’s opinion, the idea that the enterprise, the products or the services comefrom a competitor or that there are close connections among the affers. Therefore, comparative advertisement involving elements of unfairness in the purpose of obtaining some market advantages is illicit if the comparison is inexact and it lacks objectiveness.”

For instance, the publication of some newspaper articles was not considered an unfair practice as long as the statements were coming from people who participated to the exhibition manifestation reflected in the mass-media. The Court retained the inexistence of pejorative statements, the lack of favoring for the aggressive economic agent interests, the simple making of the comparisons among services being insufficient to characterize a denigration action. The letter, which made the object of the unfair competition activity analysis, presents some aspects referring to the two RITS and TNT exhibition events, stating comparatively that one of them is an independent fair that benefits of an international presentation and has tariffs for smaller Romanian exhibitions, while the other is a mixed fair having preferential tariffs for the members of the association. By categorizing this letter as an act of necessary comparison, without aiming at damaging the good name of the competitor, the courts retained that we are not on the presence of an unfair competitor act.

This example allows us to present some aspects related to the notion of confusion, as an act of unfair competition.

In the doctrine and in the jurisprudence we admit that in order to exercise the action of unfair competition a simple risk of confusion is enough, although a proper confusion did not take place in the consumer’s mind13.

The confusion is created by imitating the elements suspected to be able of attracting the costumers, therefore of those elements that exercise a more powerful attraction on the offered products and services recipients.

12 The High Court of Cassation and Justice, comercial section, decision no. 2412 of 18th April 18th 2003, published in Curierul Judiciar magazine no. 7-8/2004, p. 79.13 Yolanda Eminescu, Concurenţa neleală. Drept român şi comparat, Lumina Lex Publishing House, Bucharest, 1993; J.J. Burst, Concurrence deloyale et parasitisme, Dalloz, col. Droit usuel/affaires, Paris, 1993, p.15.

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Starting from this context, we proved that the misleading of the costumers can involve either the identity of the enterprise to which they address or the origin of the acquisitioned products, so that to distinguish, on the one hand, the confusion between the enterprises, and, on the other hand, the confusion between products14.

The risk of confusion is considered according to the concrete contexts of the cases15. We must take into account not the details, but the whole impression, later on emphasizing, generally, the similarity elements and not the differences. If the elements of differentiation are a lot more numerous than the similarity ones, we can no longer refer to a risk of confusion.

Certainly, for the activity of the courts, the concrete analysis of the concept of confusion is not at all an easy approach, relevant in this aspect being a famous litigation between a firm from abroad – PARMALAT ITALIA SPA – and one from Romania – RIENI DRINKS SA – litigation which constituted the object of two decisions of the High Court of Cassation and Justice.

14 Y. Serra, Le droit francais de la concurrence, Dalloz, col. Connaissance du droit, Paris, 1993, p. 38; Ioan Schiau, Alexandru Mihai – Marin, Producerea confuziei prin utilizarea unor elemente incorporale, in the Drept Comercial magazine no.10/2002, p. 126-127; Gabriel Boroi, Dana Boroi, Concurenţa neloială prin crearea riscului de confuzie, in Curierul Judiciar magazine no. 10/2003, p. 94.15 Yolanda Eminescu, op.cit., p. 46-48; A. Singh, Le risque du confusion: un concept a geometrie variable, in „Gazette du Palais“ no. 261 of September18th 2002, p. 26.

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