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Published online by Cambridge University Press: 27 October 2017
The central problem [with the current system of EC merger control] is that the Commission acts as investigator, prosecutor, judge, jury and executioner, with little meaningful right of appeal or other form of redress from a prohibition decision, since cases take a considerable time to reach the Community Courts, and even if the Courts overturn a prohibition decision, the case is only remitted to the MTF, as only the Commission has the power to clear a Community concentration. By that stage of course, the result is entirely academic, since the proposed deal in question will be long dead.
The above quotation from the Confederation of British Industry’s (CBI) response to the European Commission’s (hereinafter, ‘the Commission’) Green Paper on the reform of the EC Merger Regulation in 2002 still summarises quite aptly the criticism expressed in recent years by members of the business and legal community about what the critics perceive as a serious shortcoming in the current system of EC merger control: the lack of effective, meaningful in practical terms, judicial control over the administration’s decisions in this area.
1 See Response of the Confederation of British Industry (CBI) to the Commission’s Green Paper for the review of the EC Merger Regulation (28 March 2002), available at =http://ec.europa.eu/comm/competition/mergers/review/comments/ref039_cbi.pdf> accessed 19 August 2008 (the ‘CBI Green Paper Response’).
2 Case T-464/04, Independent Music Publishers and Labels Association (Impala) v Commission [2006] ECR II-2289; and Case C-413/06, Appeal brought on 10 October 2006 by AG Bertelsmann, Sony Corporation of America against the judgment of the CFI in Case T-464/04 (hereinafter, ‘Impala’ and ‘Sony v Commission’, respectively; the author will refer to the litigation as a whole as the ‘Sony/BMG litigation’). As of the date of the present chapter (1 May 2008), the ECJ had not yet handed down its long-awaited judgment in Sony v Commission. AG Kokott’s opinion in the case, which was delivered on 13 December 2007 (the ‘Sony v Commission Opinion’), is discussed later in the chapter.
3 The debate was particularly intense during the Commission’s consultation on the reform of the Merger Regulation which was launched in 2002 with the adoption of the Commission’s Green Paper on the Review of Council Regulation (EEC) No 4064/89 COM(2001)745/6 final, 11 December 2001 (the ‘Green Paper’) and culminated in the adoption of Council Regulation (EC) 139/2004 of 20 January 2004 on the control of concentrations between undertakings, [2004] OJ L24/1 (hereinafter, ‘the Merger Regulation’ or ‘ECMR’) and other accompanying reforms in 2004. For a description of the reforms of 2004, see the Special Edition of the EC Competition Policy Newsletter issued in 2004, ‘The EU gets new competition powers for the 21st century’. For the responses to the Green Paper, see Submissions received on the Green Paper on the review of Council Regulation (EEC) 4064/89 available at =http://europa.eu.int/comm/competition/mergers/review/comments.html> accessed 19 August 2008 (‘the Green Paper Responses’).
4 Position paper by the CBI calling for the creation of a specialist competition court (15 June 2006) (hereinafter, ‘the CBI Paper’).
5 Fifteenth Report of the Select Committee on European Union of the House of Lords, available at =http://www.publications.parliament.uk/pa/ld200607/ldselect/ldeucom/75/7510.htm> accessed 19 August 2008 (‘the House of Lords Report’), see paras 200–2 and 211.
6 Which the present chapter does not attempt to address. For a discussion of the role of judicial review in competition cases in general and suggestions for institutional reform-type solutions, including through the creation of a specialist competition court, see 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, Number 2, autumn 2005 Google Scholar.
7 A number normally not exceeding six to seven cases per year.
8 There were 396 final decisions on the compatibility of a merger with the common market under the Merger Regulation in 2007.
9 The chapter does not attempt to be either exhaustive or conclusive. Apart from practical considerations such as the space allotted for the chapter, this is mainly due to the nature of the debate itself, which is very much in a state of constant flux. Instead, the chapter is based on personal reflections of the author on some key aspects of the debate. For the debate regarding wider reforms of the current judicial system, see also J Flynn, ‘Has Europe got the Competition Court it needs? The CFI, the CBI, The House of Lords and Judicial Panels’ 363–76; and Lang, J Temple, ‘Do we need a European Union Competititon Court?’ 343–61 in Baudenbacher, et al (eds), Liber Amicorum en l’honneur de Bo Vesterdorf (Brussels, Bruylant, 2007)Google Scholar; Vesterdorf, above n 6; and the Fifteenth Report of the Select Committee on European Union of the House of Lords.
10 The Merger Regulation establishes a mandatory system of merger control whereby concentrations with a Community dimension must be notified to the Commission for prior authorisation before they can be implemented (see Arts 4 and 7 of the Merger Regulation).
11 The need for judicial review is enshrined in Art 6(1) of the European Convention of Human Rights (ECHR), which provides that: ‘In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.’
12 Accompanying measures include: Commission Regulation (EC) 802/2004 of 7 April 2004 implementing Council Regulation (EC) 139/2004 on the control of concentrations between undertakings, [2004] OJ L133/1 (hereinafter, ‘the Implementing Regulation’); Best Practices on the Conduct of EC Merger Control Proceedings (2004) (hereinafter, ‘Best Practices’) available at <http://ec.europa.eu/comm/competition/mergers/legislation/best_ practice.html> accessed 19 August 2008; Commission Notice—Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings, [2004] OJ C31/3 (hereinafter, ‘the Horizontal Guidelines’); Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of concentrations between undertakings (‘the Non-Horizontal Guidelines’); Commission Notice on the rules for access to the Commission file in cases pursuant to Arts 81 and 82 of the EC Treaty, Arts 53, 54 and 57 of the EEA Agreement and Council Regulation (EC) 139/2004, [2005] OJ C32/5/7 (hereinafter, ‘the Access to File Notice’).
13 Meaning a system whereby an administrative body adopts at first instance decisions that affect the rights of private parties without the need to seek prior approval by an independent judicial body. The EC system of merger control and the majority of merger control systems in the EU are administrative systems of control. These can be contrasted with a judicial-based system like that of the United States where competition authorities need a court order in order to prevent a merger from proceeding.
14 In other areas of competition law, under Arts 81 and 82 EC, the Commission also enjoys great investigative and decision-making powers, but shares competence with national competition authorities and courts. See Regulation 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Arts 81 and 82 of the Treaty.
15 Art 21(2) of the Merger Regulation.
16 Arts 11–13 of the Merger Regulation coupled with Arts 14 and 15 of the Merger Regulation on sanctions for failure to respect the Commission’s powers of investigation.
17 Art 18 of the Merger Regulation.
18 Arts 6 and 8 of the Merger Regulation.
19 Arts 14–15 of the Merger Regulation on sanctioning powers.
20 Arts 8(4) and 8(5) of the Merger Regulation.
21 See Green Paper Responses, above n 3; CBI Paper, above n 4; and the House of Lords Report, above n 5. See also the argument of GE in Case T-210/01, General Electric v Commission [2005] ECR II-5575 (hereinafter, ‘GE v Commission’) to the effect that the Commission ‘cannot be considered independent and impartial since it is the legislator, the executive, the plaintiff and the judge in its own cause’ (GE v Commission, para 625).
22 For a more detailed analysis of those due process features, see K Fountoukakos, ‘The CFI’s contribution to a fairer system of merger control’ in Baudenbacher et al, above n 9.
23 The efficiency, short deadlines and legal certainty of the system were identified as popular features by respondents to the Commission’s Green Paper on the reform of the Merger Regulation (see Green Paper Responses, above n 3).
24 Art 18(3) enunciates a general principle of due process by stating explicitly that ‘[t]he rights of the defence shall be fully respected in the proceedings’.
25 Art 18(1) of the Merger Regulation and Art 13 of the Implementing Regulation.
26 Art 13(3) of the Implementing Regulation.
27 Art 14(1) of the Implementing Regulation and Art 16 of the Implementing Regulation.
28 Arts 18(3) of the Merger Regulation and Art 17(1) of the Implementing Regulation. See also Access to File Notice, above n 12.
29 Above n 12.
30 See paras 30–3 of the Best Practices, above n 12.
31 See Commission Decision (2001/462/EC, ECSC) of 23 May 2001 on the terms of reference of hearing officers in certain competition proceedings, [2001] OJ L162/21 (‘the Hearing Officer Mandate’).
32 See the Special Edition of the EC Competition Policy Newsletter issued in 2004, ‘The EU gets new competition powers for the 21st century’, for a detailed description of those organisational features and soft-law measures which were put in place together with the reform of the Merger Regulation in 2004.
33 The Merger Regulation contains a general principle of transparency in its recital 42, which provides that the Commission’s decisions ought to be made widely accessible. This is subject to necessary confidentiality considerations, eg deletion of business secrets from the public version of a decision.
34 See Green Paper Responses, above n 3.
35 The internal due process features of the administrative procedure can be improved further and a number of suggestions (such as a split between case teams in the two phases of the procedure or strengthening of the Hearing Officer’s powers) have been put forward by commentators over the years. The present chapter does not deal with such improvements to the administrative procedure, but only with judicial review once the administrative procedure has ended. It is highly likely, however, that such issues will continue to be raised for as long as there is a lack of effective separation of powers during the administrative procedure.
36 The CFI and the ECJ (together referred to as ‘the Community Courts’ or simply ‘the courts’).
37 As the House of Lords noted in its Report (above n 5, para 16), ‘parties may need to adopt a regulatory strategy that takes account of the Commission’s strong position. A satisfactory and speedy appellate process is … important in ensuring accountability and controls to maintain appropriate standards, and in maintaining fairness and encouraging confidence in the system’.
38 See 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 Google Scholar.
39 The present chapter focuses on the role of the CFI as the court hearing actions at first instance. The ECJ has a more limited role of hearing appeals on points of law only and the chapter refers to it only where relevant appeals are discussed.
40 During the new examination, Art 10(5) of the Merger Regulation stipulates that the Commission must take into account the current market conditions. The Commission is also obliged to draw the necessary consequences from the court’s judgment pursuant to Art 233 EC.
41 See Case T-342/00, Petrolessence and SG2R v Commission [2003] ECR II-1161, para 101.
42 See paras 223–4 of the Kali und Salz judgment (Case C-64/98), where the court held that the Merger Regulation’s provisions ‘confer on the Commission a certain discretion, especially with respect to assessments of an economic nature’ and that consequently ‘review by the Community judicature of the exercise of that discretion, which is essential for defining the rules on concentrations, must take account of the discretionary margin implicit in the provisions of an economic nature which form part of the rules on concentrations’. This test was reaffirmed by the ECJ in Case C-12/03 P, Tetra Laval v Commission [2002] ECR II-4381, para 38. The ECJ’s language suggests, however, a tightening of this standard as will be explained further below.
43 See Opinion in Case C-12/03 P, Commission v Tetra Laval [2002] ECR II-4381, para 89, where AG Tizzano stressed this point by stating that ‘[t]he rules on the division of powers between the Commission and the Community judicature, which are fundamental to the Community institutional system, do not however allow the judicature to go further, and particularly … to enter into the merits of the Commission’s complex economic assessments or to substitute its own point of view for that of the institution’.
44 Case T-342/99, Airtours Plc v Commission [2002] ECR II-2585; Case T-310/01, Schneider Electric v Commission [2002] ECR II-4071; Case T-5/02, Tetra Laval v Commission [2002] ECR II-4381; and Case T-464/04, Impala v Commission of the European Communities, above n 2.
45 See J Temple Lang, ‘Do we need a European Union Competition Court?’ in Baudenbacher et al, above n 9.
46 Case T-177/04, easyJet v Commission [2006] ECR II-1931, paras 30–42.
47 We note that, despite the relatively open approach of the CFI with regard to admissibility in the competition and merger field, limitations still exist both rationae personae and rationae materiae. For example, it is not clear that all categories of trading parties have standing to appeal against the clearance of a merger (see Case T-350/03, Wirtschaftskammer Kärnten v Commission, Order of 18 September 2006; inadmissibility of an intermediary company to appeal; but cf Case T-282/06, Sun Chemical v Commission, judgment of 9 July 2008; implicit admissibility of customers to appeal); parties cannot attack a Commission decision opening proceedings under Art 6(1)(c) of the Merger Regulation (See Case T-48/03, Schneider Electric v Commission, order of 31 January 2006); it is also not clear that procedural decisions, for example decisions requesting information under Art 11 of the Merger Regulation, are open to challenge (see pending Case T-145/06, Omya v Commission).
48 Schneider Electric v Commission, above n 44.
49 Tetra Laval v Commission, above n 44.
50 For a more detailed look at the CFI’s contribution to ensuring respects for the rights of defence during the administrative procedure, see K Fountoukakos, ‘The CFI’s contribution to a fairer system of merger control’ in Baudenbacher et al, above n 9.
51 When it comes to facts, the CFI’s review is particularly rigorous. In treating and analysing the evidence before it, the CFI demands that the Commission has got the primary facts underpinning its decision right. There is no discretion left to the Commission in this respect and the CFI has shown that it will perform a very rigorous review when checking the accuracy of facts. This is one of the main tasks of the CFI and one of the main reasons why the CFI was created. President Vesterdorf, acting as Advocate General in an early cartel case, has emphasised this aspect of the CFI’s role: ‘it is clear from the preamble of the Council’s decision of 4 October 1988 [setting up the CFI] that the very creation of the CFI, as a court of both first and last instance for the examination of facts in cases before it, is an invitation to undertake an intensive review in order to ascertain whether the evidence on which the Commission relies in adopting a contested decision is sound’ (Case T-7/89, Hercules v Commission, [1991] ECR II1711). See also the Opinion of AG Tizzano in Tetra Laval, where he noted that: ‘With regard to the findings of fact, the review is clearly more intense, in that the issue is to verify objectively and materially the accuracy of certain fact’ (Case C-12/03 P, above n 43).
52 Judgment of the ECJ in Case C-12/03 P, Commission v Tetra Laval BV [2005] ECR I-987.
53 See the discussion in Botteman, Y, ‘Standard of Proof and Economic Evidence’ (2006) 2 Journal of Competition Law and Economics 71, 87CrossRefGoogle Scholar.
54 GE v Commission, above n 21; and Case T-87/05, EDP v Commission [2005] ECR II-3745.
55 easyJet v Commission, above n 46; Case T-464/04, Impala v Commission, above n 2; and Case T-282/02, Cementbouw v Commission, [2006] ECR II-319 (on appeal Case C-202/06 P).
56 This may be due to a variety of factors, including the fact that issues such as the standard of review have only recently come to the fore following the Tetra Laval litigation, but may also be due to the specific circumstances of each case reviewed by the court, and whether or not in essence the court is convinced by the Commission’s case. The fact that different judges in different chambers review cases adds to the diversity of application of a standard of review in merger cases.
57 easyJet v Commission, above n 46, para 44.
58 EDP v Commission, above n 54, para 152.
59 Case T-282/02, Cementbouw v Commission, above n 55, para 197.
60 GE v Commission, above n 21.
61 Case T-464/04, Impala v Commission, above n 2.
62 See also Sun Chemical v Commission, above n 47, where in para 61 the court refers to GE v Commission, above n 21.
63 GE v Commission, above n 21, para 64.
64 Ibid, para 69.
65 The CFI was highly critical of the Commission’s (lack of) reasoning and assessment of the evidence. In the CFI’s view the evidence and reasoning were clearly inadequate to support a finding of absence of collective dominance before the merger and the absence of creation of dominance after the merger. In addition, the CFI thought that the Commission’s assessment of the evidence did not support the conclusion of absence of pre-existing collective dominance or creation of collective dominance that the Commission had reached.
66 Sun Chemical v Commission, above n 47.
67 Ibid, para 61.
68 AG Kokott also finds that in a very limited number of cases, where it is impossible to lean one way or the other under the required standard of balance of probabilities, a tilt towards authorisation will be necessary to resolve an impasse. See Opinion of AG Kokott delivered on 13 December 2007 in Case C-413/06 P, Sony v Commission, paras 221–4.
69 EDP v Commission, above n 54, para 152.
70 Case T-464/04, above n 2, para 458.
71 Economic evidence is provided and presentations by economists are made at CFI hearings. As explained below, in section IV, it is not always clear as to whether this is done legally on an ‘expert testimony’ basis in the strict sense of the term or merely provision of argumentation on behalf of the parties in a similar way as legal argumentation.
72 This is in contrast to trials of merger cases before US courts where the courts hear direct testimony and delve more deeply in the economic assessment of the case. For a useful description of how US courts dealt with economic evidence in two recent merger decisions, FTC v Arch Coal and US v Oracle, see Botteman, above n 53, 89 et seq.
73 The Commission’s file can include a diverse, and possibly conflicting, range of evidence, including the Commission’s market investigation through questionnaires to market participants, economic studies, raw data provided by the parties and third parties, and independent studies.
74 In Rhône-Poulenc v Commission, Vesterdorf J, acting as Advocate General, stressed that Community law is based on an overriding principle that the evaluation of evidence should be ‘unfettered’. This is now an established principle. (See Case T-1/89, Rhône-Poulenc v Commission [1991] ECR II-867, paras 869 and 954.) The Commission in its decision can produce any type of evidence supporting the conclusions it reaches and the CFI will comprehen sively review this evidence to decide whether it is sufficient to support the conclusions reached. The absence of evidence of a particular type, such as the use of an economic model, is not in itself decisive (see on this latter point, see GE v Commission, above n 21, para 297).
75 We refer to a number of suggested improvements in the treatment of evidence in the section on suggested solutions below.
76 Pursuant to Art 10(5) of the Merger Regulation.
77 See Opinion of AG Kokott delivered on 13 December 2007 in Case C-413/06 P, Sony v Commission, where AG Kokott (para 82) acknowledges that final resolution of the matter is key for the parties and that even a second clearance by the Commission may not provide full certainty while litigation over the first decision is still pending.
78 See Tetra Laval/Sidel II (Commission Decision of 13 January 2003 in case M.2416) where the Commission cleared the merger in Phase I, with remedies, following the CFI’s annulment of Tetra/Sidel I (Commission Decision of 30 October 2001 in case M.2416).
79 Case No COMP/M.3333 Sony/BMG Commission Decision of 3 October 2007.
80 For a full description of the Schneider/Legrand saga, see Schneider Electric v Commission, above n 44; Case T-48/03; and Case T-351/03. In the latter case, Schneider successfully claimed damages for the loss it allegedly suffered due to the Commission’s first unlawful prohibition of its merger with Legrand. The case is currently pending on appeal before the ECJ (Case C-440/07 P).
81 As noted earlier, Art 230 EC grants jurisdiction to the CFI to review the ‘legality’ of acts adopted by the institutions. Art 229 of the EC Treaty allows for the grant of unlimited jurisdiction to the CFI only in the area of fines. Such unlimited jurisdiction has indeed been granted to the CFI in the mergers field pursuant to Art 16 of the Merger Regulation. It is not clear, legally, whether the CFI could be granted unlimited jurisdiction to decide on the merits of a merger case via amendments to the Merger Regulation alone or whether Treaty amendments would also be necessary. In principle, the ‘Community judicature [is not] entitled to assume the role assigned to [the Commission]; rather, it is for the institution concerned, under Art 233 EC, to adopt the necessary measures to comply with a judgment given in proceedings for annulment’ (Case T-50/06, Ireland v Commission [2007] ECR II-172 para 43 and case law cited therein).
82 See House of Lords Report, above n 5, paras 158–61. See also J Temple Lang, ‘Do we need a European Union Competititon Court?’ in Baudenbacher et al, above n 9, 353.
83 See submission of Sir Christopher Bellamy, then President of the UK Competition Appeals Tribunal, to the House of Lords (quoted in para 158 of the House of Lords Report, above n 5).
84 For the issues with treatment of evidence, see preceding section of the present chapter.
85 Which would operate in a similar fashion to Art 10(6) of the Merger Regulation, which provides for the automatic clearance of a merger where the Commission fails to adopt a decision within the requisite deadlines.
86 There is a fine line in this suggestion as, according to established case law, the CFI cannot issue ‘directions’ to the Commission under its judicial review role, its role being confi ned to confirming or annulling a Commission decision (See Ireland v Commission, above n 81, para 43 and case law cited therein).
87 A normal Phase I review will take 25 working days, with the possibility of extension by a further 10 working days where remedies are considered. A Phase II investigation will add a further 90 working days (105 where remedies are offered), with a possibility of a further extension of 15 days by agreement (Art 10 of the Merger Regulation).
88 The need for a definitive solution to a merger case in order to bring about certainty for the parties, third parties and the market in general is expressly referred to by AG Kokott in her Opinion in Impala, where she states that: ‘the appellants have an obvious interest in obtaining as quickly as possible not only clearance but also a definitive clearance of their concentration. Only then will the participating undertakings, and indeed the market generally, have legal certainty as to whether the concentration was lawfully effected. … By this means it is also possible to prevent annulment actions raised by third parties from delaying certainty for the undertakings participating in the concentration for any longer than is necessary’ (Opinion, paras 81 and 85, emphasis added).
89 President Vesterdorf has highlighted the importance of speed in this respect in his recent submission of evidence in the context of the House of Lords inquiry into the CBI’s proposal for the creation of a specialist EU competition court. See House of Lords Report, above n 5, para 46.
90 The House of Lord Report notes in this respect (at para 15) that the ‘absence of a speedy review process produces what witnesses have called a chilling or freezing effect: parties will not bother to appeal if a decision from the CFI cannot be achieved in sufficient time to make it useful. Absence of speedy review process may also have a compromise-inducing effect: if parties know that an appeal will take such a long time so as to be relatively useless they may be required pragmatically to arrive at compromises and agree conditions that they would not otherwise agree’.
91 We refer to adjudication in a final manner rather through interim measures. It is of course the case that, pursuant to Arts 242 and 243 EC, the CFI has a broad discretion to suspend the operation of a Commission decision and to ‘prescribe any necessary interim measures’ before the final outcome of a case. This could, conceivably, include authorising a prohibited merger or delaying implementation of an authorised transaction. In practice, the courts are highly unlikely to use these powers in this way due to the strict test applied for interim measures (see recently Case T-411/07, Aer Lingus Group v Commission) and, in any event, this approach is unlikely to mitigate the impact of uncertainty as to the final outcome on the business affairs of the parties involved. The expedited procedure is therefore seen as a more suitable procedure to achieve final adjudication in situations of urgency.
92 The CFI itself acknowledges that speedy procedures are of the essence in merger proceedings as its established case law frequently refers to the ‘necessity for speed’ which characterises the general scheme of the Merger Regulation. See, eg GE v Commission, above n 21, para 701, where the CFI states that the strict timetable of the Merger Regulation ‘has an adverse effect on the conditions under which all the parties to the proceedings must work, but the gain in terms of the speed of the proceedings as a whole was regarded by the legislature as justifying those sacrifices, particularly in order to take account of the commercial interest of the parties to a merger in completing their proposed merger as quickly as possible’.
93 The author uses the six-month period advocated by the business community as a reference target. This period has also been advocated as a desirable target by the Commission (see House of Lords Report, above n 5, para 128). However, the nature of many commercial transactions means that even a period of six months would not be sufficient to ‘save’ a merger in certain situations while longer periods may be adequate in other commercial situations. In clearance situations, a slightly longer period would appear acceptable to avoid detrimental uncertainty over the deal and effects on the market place. The focus on six months is a useful reference target, but, in the author’s view, what is more important, as explained below, is a consistent application of the expedited procedure automatically to merger cases and always achieving short durations of around (rather than always under) six months. Such a target appears achievable (albeit difficult to achieve) under the current system.
94 See Court of Justice Annual Report 2007, available at <http://www.curia.europa.eu> accessed 19 August 2008.
95 A detailed description of the expedited procedure is beyond the scope of the present chapter. Briefly, the expedited procedure involves only one round of written pleadings (application and defence), rather than the standard two rounds under the normal procedure, and those pleadings will be shorter than those in the standard procedure. In accordance with the CFI’s Practice Directions (para 63), the applicant will have the opportunity to ‘square bracket’ some pleas in its application, which will be taken into consideration only if the request to be considered under the expedited procedure is refused (see Art 76a(1) of the Rules of Procedure of the CFI). As a result of the only one round of pleadings, greater emphasis is placed upon the oral hearing and the expedited procedure is generally perceived to be more inquisitorial than the court’s standard procedure. Expedited procedure cases are explicitly given priority within the court’s timetable and the court will also engage in active case management throughout the proceedings, normally arranging informal meetings between the parties as the case progresses.
96 K Fountoukakos, ‘Judicial review and merger control: the CFI’s expedited procedure’, European Commission Competition Policy Newsletter (October 2002) 7, available at <http://ec.europa.eu/comm/competition/publications/cpn/cpn2002_3.pdf> accessed 19 August 2008.
97 Case T-87/05, Endesa v Commission [2005] ECR II-3745.
98 EDP v Commission, above n 54.
99 The House of Lords Report, above n 5, provides some interesting statistical data showing that, out of 84 requests for expedition since February 2001, only 28 had been accepted. In merger cases, out of 21 requests, 17 had been accepted. For a detailed analysis of the factors considered by the Court when deciding whether to agree to a request to use the expedited procedure, see de la Serre, E, ‘Accelerated and Expedited Procedures Before the EC Courts: A Review of the Practice’ (2006) 43 CML Rev 783 Google Scholar.
100 Such issues were discussed in the preceding section of this chapter. Suggested improvements in that section included a more consistent application of the heightened standard of judicial review; better and clearer standards of treatment of evidence; and the possibility of allowing the CFI a wider jurisdiction on the merits. Better expertise of judges in competition law and economics and additional resources to lead to better examination of economic evidence constitute further self-evident improvements which could be addressed in the future.
101 For example, in case T-103/02, Ineos Phenol v Commission (withdrawn).
102 See Opinion of AG Kokott delivered on 13 December 2007 in Case C-413/06 P, Sony v Commission, paras 81–5.
103 See also to this effect House of Lords Report, above n 5, para 15.
104 On the contrary, it could be said that the application of the normal procedure is more of an incentive for litigation by third parties who may have an interest in delaying adjudication and prolong the uncertainty of the parties over their merger deal.
105 See Fountoukakos, above n 96.
106 On the desirability of a six-month reference target, see n 93 above.
107 The total duration is, however, longer if one adds the, informal but now standard, prenotification period, which can be of a significant length in complex cases. The duration can also be extended further when the Commission requests information by Decision under Art 10(3) of the Merger Regulation.
108 J Flynn, ‘Has Europe got the Competition Court it needs? The CFI, the CBI, The House of Lords and Judicial Panels’ 363–76; and J Temple Lang, ‘Do we need a European Union Competititon Court?’ 343–61 in Baudenbacher et al, above n 9.
109 See para 138 of the House of Lords Report, above n 5.
110 See Temple Lang, above n 108, 350.
111 See Temple Lang, above n 108, for a description of the various case management practices engaged in by the CFI, including written questions, informal meetings and prior organisation of the hearing.
112 See Art 64 of the Rules of Procedure of the CFI.
113 Eg in EDP, the CFI invited the parties to an informal meeting by way of measures of organisation of procedure in order to examine the possibility of the application for an expedited procedure being granted. As a result of the informal meeting, the applicant undertook to lodge its application in an abbreviated form in conformity with the requirements of the CFI’s Practice Directions, and the Commission requested further time to prepare its defence. A provisional timetable for the procedure was produced by the Judge-Rapporteur (see EDP v Commission, above n 54, para 31). Further, in the same case, the CFI, by way of measures of organisation of procedure, invited the intervener to provide in advance a skeleton argument of the presentation it intended to make at the hearing, asked for minutes of meetings between the parties, and put written questions to the main parties and invited them to answer these questions at the hearing (see EDP v Commission, para 34).
114 This sounds counter-intuitive in a suggestion aimed at reducing the length of proceedings, but the hearings before the CFI are normally not longer than one day. Extending the hearings to even three to four days, if necessary, would allow for more debate of the relevant issues with shorter written pleadings and would only add a couple of days to the length of proceedings.
115 In EDP, the applicant provided answers to questions put by the CFI prior to the Hearing in writing on the day before the hearing and at the hearing merely referred to that written document. Although the Commission had an undoubtedly brief period in which to respond to those answers at the hearing, it was thought that this was within the bounds of what is acceptable in the context of the expedited procedure that characterises the present case, during which extremely tight time-limits were imposed on all the parties and also on the Court. The fact that the Commission was given the opportunity to acquaint itself with the essence of the applicant’s answers on the day before the hearing, instead of on the day itself, enhanced the smooth running of the adversarial debate. (See EDP v Commission, above 54, para 43.)
116 For example, in EDP, where the CFI explained that an economic report produced for the hearing and not before the Commission at the time of the administrative procedure was admissible as evidence on the basis that ‘the drawing up of a list of points after the date of adoption of the contested decision with a view to securing a finding by the Court of errors of economic assessment in that decision simply entails the exercise of the rights of defence, and not an attempt to alter the legal and factual framework previously submitted to the Commission for the purposes of the adoption of the decision’ (EDP v Commission, above n 54, para 158).
117 In this regard, President Vesterdorf has advocated in a private capacity for a comparison with and, perhaps inspiration, from the so-called Daubert criteria applied by the US courts. See Vesterdorf, B, ‘Economics in Court: reflections on the role of judges in assessing economic theories and evidence in the modernised competition regime’ in Johansson, M, Wahl, N and Bernitz, U, Liber amicorum in honour of Sven Norberg: A European for all Seasons (Brussels, Bruylant, 2006) 511 Google Scholar.
118 Art 76(a)(1) of the Rules of Procedure. See also EDP v Commission, above n 54, para 31.
119 Art 76(a)(4) of the Rules of Procedure.
120 CFI Practice Directions to parties, [2007] OJ L232/7 (‘the Practice Note’). See point 61 of the Practice Note.
121 See EDP v Commission, above n 54, para 39, where the CFI noted that ‘owing to the constraints of the expedited procedure … in principle only the substance of the arguments of the party which is unsuccessful on the ground under consideration will be set out in this judgment, and then only to the extent necessary. … [T]he Court’s reasoning will be limited to what is necessary to provide full and complete support for the operative part of the present ruling’.
122 It may indeed be the case that the obligation to curtail pleas partly explains why the expedited procedure has not been as popular as originally envisaged in merger cases. According to statistics provided as evidence to the House of Lords inquiry between 1 February 2001 and 31 December 2006, 42 merger cases were introduced and in only one-half of those (21) was there a request for an expedited procedure, with 17 cases finally being dealt with under the expedited procedure (see Supplementary letter from Vesterdorf J (then) President of the CFI, to the Rt Hon the Lord Brown of Eaton-under-Heywood, Chairman of Sub-Committee E (Law and Institutions), House of Lords Report, above n 5, 103).
123 See Art 35(1) of the Rules of Procedure, which specifies that applications can be lodged in the following languages: Bulgarian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish or Swedish.
124 See Art 35(3) of the Rules of Procedure.
125 The overwhelming majority of merger notifi cations before the Commission and the largest number of applications of merger cases before the Community Courts are made in English. For some interesting statistics, see fn 36 to para 57 of the House of Lords Report, above n 5, which states that: ‘Since the CFI was established in 1989, 49.3 per cent of merger cases were introduced in English, 22.5 per cent in French and about 10 per cent each in German and Spanish.’
126 The extent of the delay due to translation is not known (see paras 39–41 of the House of Lords Report, above n 5). It would be useful if the CFI could monitor and publish in its annual report the delays due to translation, including in each of the cases dealt with under the expedited procedure. This would enable both the Court and also the legal and business community which criticises its methods to gain a precise knowledge of the extent of the problem and make more accurate comparisons with courts in other jurisdictions, such as the CAT, operating under monolingual regimes.
127 Temple Lang, above n 108, 351.
128 There are indeed technical problems (which should not, however, be insurmountable) with a shift to another working language which the Court itself is best placed to deal with, namely that the translation services have been recruited and operated for years under the current arrangements; these problems were presented as evidence to the House of Lords Committee. See House of Lords Report, above n 5, paras 59–64.
129 A criticism against proposals singling out a particular category of cases, such as merger cases, is that inevitably other cases would suffer even more delays if the CFI were to focus its resources on merger cases. Nonetheless, merger cases appear to be a very good candidate for such preferential ‘pilot scheme’ treatment. This is an area where the CFI has received frequent criticism; merger cases form an easily identifiable lot; and their number is sufficiently small to enable the CFI to deal with them under its current resources.
130 The Commission operates under such a regime under the Merger Regulation, allocating cases to case teams with the requisite linguistic capabilities and working directly in the language of the case.
131 See Art 43(2) of the Rules of Procedure.
132 In the author’s view, this would be a less controversial proposal than a proposal to render only the operative part of the judgment first with the reasoning following later. For this proposal and the reasons why it would be unlikely to be accepted by the CFI, see House of Lords Report, above n 5, para 152.
133 An amendment of Art 35(3) would be necessary. The stricter procedure for amending the Statute of the Court of Justice would therefore be applicable pursuant to Art 64 of the Statute, ie decision of the Council, acting unanimously at the request of the Court of Justice and after consulting the European Parliament and the Commission.
134 House of Lords Report, above n 5, para 15.
135 In particular, the reform of the Merger Regulation and accompanying reforms of the administrative procedures in 2004 (see n 3 above) and the CFI’s introduction of the expedited procedure and increasingly close scrutiny of merger decisions since 2002.
