The decision of a competition authority stands between economic regulation of the marketplace and punishment for infringing the competition rules. Judicial control of the adequacy of the decision is an essential element of its democratic legitimacy. Without effective judicial oversight, public enforcement would risk appearing (or being) arbitrary, discriminatory, unfair, or illegitimate. Thus, the principle of effective judicial oversight as quality control and as a democratic necessity cannot be doubted. However, the nature and intensity of appropriate judicial review in competition cases have been much debated. Administrative law inevitably involves according a margin of discretion to the public authority.
The European approach to the review judicially of competition decisions, has fluctuated over the years. The Treaty of Rome established two bases of jurisdiction for the Court: review of legality (Arts 263 TFEU, ex 230 TEC, ex 169 Treaty of Rome) according to enumerated criteria (formal propriety rather than merits) and full jurisdiction (Art 261 TFEU, ex 229 TEC, ex 172, Treaty of Rome) where penalties were imposed. While that approach was neither surprising nor controversial where the European institutions were regulating the agricultural market or organizing production levels of coal and steel, it came under strain in cases where the manufacturer was being accused of cartel activity to the prejudice of consumers, or of hindering cross boarder trade to the prejudice of the internal market. During the 1980s there was a degree of dissatisfaction with the intensity of judicial review concerning anti-dumping measures and, to a degree, competition decisions. The creation in 1989 of the Court of First Instance, the future General Court of the European Union, was a response to the concerns of industry and of practitioners, (not close enough scrutiny, not enough review of complex facts), balanced against the ever-growing case load of the Court of Justice (too many cases, perfection means delay). The reconciliation of the need for quality control, the independence of the competition authority, reasonable speed, and procedural transparency is a perpetual judicial challenge.
In the classic competition case of Grundig/Consten in 1966 and as repeated in Remia/Nutricia in 1984, the European Court said that the Court must limit its review to verifying whether the relevant procedural rules have been complied with, whether the reasoning is adequate, and whether there has been any manifest error of appreciation. While this approach was understandable and appropriate in a regulatory context, it appeared less convincing in the context of the imposition of a severe penalty pursuant to an administrative procedure.
During the 1990s, the intensity of the judicial review of Commission decision – making in competition matters sharply intensified but softened somewhat from the enlargement of the EU in 2004. The familiar language of “light judicial review” was used frequently, even in cases where large penalties had been imposed. The highwatermark of this tendency was arguably Microsoft, where the General Court ascribed deference to Commission findings on technical matters as well as complex economic ones.
The long-running debate about what judicial review of competition decisions must mean is completely understandable. How far should courts trust the specialised agency to make a fair appraisal and a sound conclusion? Even today the courts are somewhat inconsistent in their description of their task when examining the decision of a competition law authority. For example, how sure should the authority be when finding that its intervention was necessary? Thus, in June 2022 in the case of Tussencoop T584/19, the test was “plausible likelihood of harm”, whereas in CK Telecoms T399/16, May 2020, the test in a merger case was “particularly high likelihood of harm”, and the latest iteration in that case suggests a different approach, more respectful to the assessment of the competition authority.
The obligations of the courts confronting the need to make judicial review of a competition authority’s decision have been clarified, maybe codified, in the ECtHR case of Menarini and the CJEU case of Halcor/Chalkor. In essence, the action of the authority must be subject to not merely a review of legality but to a thorough review of facts and law, in principle complete. That does not completely clarify the duty of the Court in all circumstances. Sometimes, there will be a simple argument as to whether Mr. Dupont was present in the Hilton hotel at a meeting on the 13th January. That is a factual controversy, to be settled by examining tickets, receipts and other evidence. There is no room for deference to the authority’s conclusion. Does the evidence say yes or no? By contrast, there may be areas where for example the duration of a non-compete clause may be viewed as intrinsically involving the prudent assessment by an expert agency of how long the seller of a business must stay out of the market after the sale. There is no single obviously correct answer. Likewise, an anti-competitive practice which is justified by the needs of health and safety involves a degree of assessment: it could involve reviewing whether internal documents confirm that the reason for the prohibition on attaching products from rivals was due to public policy or a wish to exclude the rivals. Once again, the conclusions of the authority should be examined carefully, without deference, in light of the evidence.
An even more delicate question would be whether the settlement of a patent litigation with a licence for a limited territory is to be regarded as the welcome ending of a costly dispute or the objectionable dividing of the marketplace along national lines. When an online search engine gives prominence to its own advertisers as opposed to neutrally presenting all candidates, is this to be condemned as a gross infringement or is the authority making a normative choice as to how the market ought to work?
The intensity of the judicial review should be more severe in the case of heavy penalties or sanctions. Where the underlying administrative procedures in the authority are rigorous and “contradictoire”, greater credibility should be attached to the decision. In short therefore, the question of judicial review is to be approached with an eye to the issue of whether the condemnation under appeal was an act of fact finding or an act of discretionary regulation. Courts ought not to assume that the authority was correct without establishing confidently that the facts underlying the decision were soundly established and that the administrative process was fairly handled.
Judicial protection is thus most obviously necessary as a check upon administrative authority in the case of decisions by public authorities. But it is supplemented and reinforced when judges decide civil cases, so-called private enforcement, in which novel (or well-established) principles are under debate.
Nevertheless, there will remain situations where the crucial issue is arguably a choice between rival policies or norms. Should the authority favour intellectual property or consumer choice? Lower prices for generic pharmaceuticals or higher prices which favour research? There is no single consistent answer as to what line the courts should follow in these circumstances: the best approach (though not dispositive) is a thorough review of acts and law, in principle complete.
