Judicial review

 

Author Definition

 

Definition

In the EU, it is possible to bring an action before the General Court (the Judge of first instance) and ultimately, on points of law, before the Court of Justice, against a decision adopted by the European Commission (Commission) in competition matters. In the US, although the decision about whether or not to take enforcement action is committed to agency discretion, the Antitrust Division of the US Department of Justice (DOJ) is a law enforcement agency that has no adjudicative power of its own. Thus, in order to enforce the federal antitrust statutes under its purview the DOJ, like a State or private enforcer, must file an action in a federal district court. In addition, courts review cases that the Federal Trade Commission (FTC) decides through its internal adjudicative process.

 

Commentary

The anticompetitive conduct is ascertained by the Commission, which can order the parties to end the infraction and impose penalties and remedies, while the European courts review the legality of the administrative decision. Under Article 265 TFUE, it is possible to bring an action against the Commission where, in infringement of the Treaty, it has failed to act. Under Article 263 TFUE, it is possible to bring an action to have various acts of the Commission annulled. Apart from Member States and the Council, Article 263(4) TFEU provides that any undertaking may challenge a decision addressed to it or to another person if it is of “direct and individual concern to it”. The Commission’s decision may be challenged on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application, or misuse of powers. The review of legality is supplemented by the “unlimited jurisdiction” which Article 31 of Regulation 1/2003 vests in the EU Courts in accordance with Article 261 TFUE. “Unlimited jurisdiction” empowers the Courts, in addition to carrying out a mere review of lawfulness of the penalty, to substitute their own appraisal for that of the Commission and consequently to cancel, reduce or increase the fine or penalty payment imposed.

It is useful to distinguish the “standard of proof” and the “standard of judicial review”. The standard of proof determines the degree of likelihood that must be established in relation to factual findings when the primary decision-maker makes its initial decision. It has to be distinguished from the standard of judicial review, which is the standard that courts must apply in deciding whether the primary decision-maker has met the standard of proof required. It is the latter that tells us how far the reviewing court should reassess findings of fact made by the primary decision-maker to decide whether the standard of proof for the initial decision has been attained or not. The case law on judicial review of fact reveals low-, high- and medium-intensity review.

In the US system, the court is the arbiter of whether the law has been violated and, if so, it orders appropriate remedies. Regardless of whether a case is initiated by one of the federal enforcers, a state enforcer, or a private citizen, the process is adversarial: the parties submit their evidence and arguments regarding the relevant facts to a judge (or a jury in criminal cases). Based on the parties’ submissions, the judge determines the ultimate facts and the court decides the case in accordance with the controlling law and precedent. Due process protection is provided to the defendant before liability can be imposed. In presence of a FTC Administrative process, the final decision of the FTC is directly appealable to any federal circuit court in whose jurisdictional region the defendant does business. The case then proceeds from that point along the same path as cases originally filed in the district courts. The appellate court reviews questions of law de novo, but generally will not alter the factual determinations found by the FTC that are supported by substantial evidence.

In the context of competition, the approach initially followed by the Court of Justice was very careful as regards the scope and the intensity of its own review of the Commission’s decisions, as shown in the leading case Consten and Grundig. This jurisprudential line has been progressively replaced by a more intense scrutiny in competition cases (such as in the Intel case). Three main factors influenced this evolution. The first one was the jurisprudence of the European Court of Human Rights concerning Article 6 of the Convention, that provides the guarantee of fair trial, which encompasses the provision of “full jurisdiction”, in presence of an infringement of criminal nature. In the seminal ruling Engel, the Court of Human Rights stated that the criminal nature of the infringement is affirmed if the sanction is severe and has deterrence as function. This is the case of the sanction provided by competition law, as affirmed in another landmark decision, in the Menarini case. As a consequence, the judicial review of competition decisions should be extended to all the questions of facts and laws concerning the administrative decision. The second factor was the Charter of Fundamental Rights of the European Union which, after the Treaty of Lisbon (2009), has the same legal value of the Treaties. Competition decisions should comply with the Charter and, in particular, with the presumption of innocence, the right to fair proceedings and the right to effective judicial remedy. Finally, there was the adoption of a “more economic approach” by the Commission in the 2000s, that involved a shift from a formal qualification of the conduct of undertakings to a more comprehensive analysis of the economic and legal context of the behaviour in question. As a consequence of all these factors, the judicial review in competition matters has become high-intensive.

It is for the Commission to set out its reasoning in a clear and unequivocal fashion, to enable the persons concerned to ascertain the grounds for the measure and the competent court to exercise its power of review. It is for the applicant to identify the impugned elements of the contested decision, to formulate grounds of challenge in that regard and to adduce corresponding evidence showing that the reasons relied on by the Commission do not support to the requisite legal standard the conclusion endorsed in the contested act. The EU judicature not only establishes whether the evidence put forward by the Commission “is factually accurate, reliable and consistent, but must also determine whether that evidence contains all the relevant data that must be taken into consideration in appraising a complex situation and whether it is capable of substantiating the conclusions drawn from it” (Chalkor v. Commission). As concerns the appeal before the Court of Justice, it is limited to points of law (Article 256 TFUE and Article 58 of its Statute). Assessment of the facts does not constitute a question of law submitted as such for review by the Court of Justice save where there has been a distortion of the facts or evidence.

The models of antitrust enforcement are quite different in the EU and in the US, but in both systems the role of courts is very relevant, due process is observed and the rights of private undertakings safeguarded. It is noteworthy that many competition cases decided by the EU Courts concern the respect of fundamental rights, including the right to privacy, the right to be heard, the duty to state reasons, the right to good administration and the duty of impartiality.

The text expresses the personal opinion of the Author and in no way commits the institution to which he belongs.

 

Bibliography

P. CRAIG., EU Administrative Law, third Edition, Oxford University Press, 2018.

J. LUIS DA CRUZ VILAÇA, The intensity of judicial review in complex economic matters – recent competition law judgements of the Court of Justice of the EU, in Journal of Antitrust Enforcement, 2018, 6, 173 ss.

J. JOURDAN, Competition Law and Fundamental Rights, in Journal of European Competition Law and Practice, 2018, 9, 666 ss.

G. GRYLLOS, Discretion and judicial review in EU competition law: A technical analysis on sources of discretion, judicial review and implications for the litigants.

OECD, The standard of review by courts in competition cases – Note by the United States, 4 June 2019.

This article is being reviewed by the Editors of the Dictionary.

Author

Quotation

Giovanni Pitruzzella, Judicial review, Global Dictionary of Competition Law, Concurrences, Art. N° 89092

Visites 1104

Publisher Concurrences

Date 1 January 1900

Number of pages 500

 

Institution Definition

All decisions and procedural conduct of the Commission are subject to review by the General Court and ultimately by the ECJ. © European Commission

 
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