Toshiba and ne bis in idem (EU Competition Law) PDF

e-Competitions Antitrust Case Laws e-Bulletin February 2012 The EU Court of Justice rules on parallel enforcement under Regulation 1/2003 while declining to redefine ne bis in idem within the ECN (Toshiba) PRO CEDU RES , CARTEL , ENERGY, U TIL ITIES , CO MPETENCE, EU RO PEAN U NIO N, CO NS TRU CTI...

e-Competitions Antitrust Case Laws e-Bulletin February 2012 The EU Court of Justice rules on parallel enforcement under Regulation 1/2003 while declining to redefine ne bis in idem within the ECN (Toshiba) PRO CEDU RES , CARTEL , ENERGY, U TIL ITIES , CO MPETENCE, EU RO PEAN U NIO N, CO NS TRU CTIO N, NE BIS IN IDEM, EU RO PEAN CO MPETITIO N NETWO RK, CO NCU RRENT JU RIS DICTIO NS EU Court of Justice, Toshiba, Case C-17/10, 14 February 2012 Anton Dinev | Paris Dauphine University e-C o m p etitio n s N ews Issu e F eb ru a ry 2 0 1 2 I. Introduction 1. Against most expectations, the particularly awaited judgment of the EU Court of Justice (ECJ) in Toshiba, delivered in Grand Chamber on 14 February 2012 [1 ], did not provide a landmark ruling on the scope of the ne bis in idem principle (the European double jeopardy clause) in antitrust cases dealt within the European Competition Network of public enforcement authorities (ECN).Despite the ever growing concern with this fundamental procedural safeguard following the reform introduced by Regulation 1/2003 [2 ], evidenced inter alia by the signi cant number of observations submitted in the case, and in contrast to the novel solution that AG Kokott advanced in her Opinion [3 ], the Court preferred a fairly casuistic approach to the issues brought before it. As a result, its answers may in turn raise even more questions about the proper functioning of the system set up by the Regulation. 2. This Toshiba ruling took place upon a preliminary reference from the Brno Regional Court seeking guidance on the interplay between parallel proceedings of both the Czech NCA and the EU Commission against the gas- insulated switchgear cartel [4 ]. II. Background 3. A leniency application by the Swiss-based ABB Ltd., led with the European Commission on 3 March 2004,enabled the Commission to uncover an international cartel that included Toshiba and other major European and Japanese companies active in the electrical engineering sector. It was a continuous and complex agreement in agrant breach of Article 81 EC (now Article 101 TFEU) that lasted from 15 April 1988 to 11 May 2004 and involved, inter alia, exchange of sensitive market information, allocation of quotas, market sharing, price xing and non-cooperation with outsiders mainly in Europe and Japan. Given the gravity of the infringement, the Commission, in a decision of 24 January 2007, imposed several fines amounting to a total of more than EUR 750 million [5 ]. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 1 Anton Dinev | Concurrences | N°49475 4. Meanwhile, some three months after the Commission case was o cially opened, the Czech NCA, upon leniency application again by ABB Ltd [6 ], commenced its own proceedings on 2 August 2006. These proceedings were only under the respective national antitrust prohibition but concerned the same undertakings already under investigation at the EU level. The Czech competition authority, however, charged them with a cartel infringement for the period prior to the country’s EU membership. Thus, its nal decision of 26 April 2007, which also imposed considerable penalties on the cartel members, established that the prohibited agreement lasted until 3 March 2004 [7 ]. That decision was later annulled by the Brno Regional Court, which, relying on the Commission’s decision of 24 January 2007, agreed with the claimants that the cartel duration was misrepresented and that its end was intentionally shifted back in time in order to avoid the EU Commission’s exclusive jurisdiction resulting from Article 11(6) of Regulation 1/2003 [8 ]. 5. An appeal on points of law to the Czech Supreme Administrative Court, however, resulted in reversing the Regional Court’s judgment [9 ]. The higher court disagreed that Regulation 1/2003, in force since 1 May 2004, governed the procedure applicable to the entire duration of the infringement. In fact, according to the Supreme Court, that date also marked the Czech Republic’s accession into the EU and, hence, constituted a break in the course of events. Formally, it was not until after 1 May 2004 that a violation of Article 81 EC occurred within Czech territory. Therefore, that moment divided the cartel into separate infringements, each falling under the respective jurisdiction of the Czech NCA and the EU Commission, the latter taking precedence by virtue of Article 11(6) for the post-accession period. That interpretation also rendered unnecessary any discussion on whether or not the de facto parallel national proceedings were in breach of the ne bis in idem principle. 6. Remanded for further hearing before the lower court, the case still appeared unclear as to the applicable law and its procedural implications, possibly leading to accumulate proceedings against the same set of material facts. It seems that the Regional Court reconsidered the matter in light of its earlier ne bis in idem concerns. Indeed, in its previous, annulment judgment, it took the view that since the Commission had already initiated proceedings and imposed penalties against the same cartel, any further proceedings, albeit solely under Czech law, would infringe th e ne bis in idem principle, at present rea rmed in Article 50 of the EU Charter of Fundamental Rights. Furthermore, in its view, concurrent application of national law would run against the idea of uniformity pursued by Regulation 1/2003, even though, as it also noted, the Czech cartel prohibition resulting from the approximation of national laws during pre-accession was substantially the same as its EU counterpart contained in Article 81 EC [10 ]. Assuming its duty as a judicial authority responsible for ensuring the effectiveness of EU law and notwithstanding the binding authority of the higher court’s legal opinion, the Brno Regional Court referred the issues to the ECJ. III. Judgment 7. Two preliminary questions posed by the referring court led the European judges, following a two-step analysis,to address the well-known problems of existence and exercise. First, the interplay between substance and procedure had to determine the very existence of competence to apply Article 81 EC, shared in parallel by the Commission and the NCAs (A ). Then, the exercise of that competence by the Commission had to determine the interplay between parallel proceedings at the EU and national levels, duly taking into account the ne bis in idemprinciple(B ). A. Existence of shared competence: the interplay between substance and procedure This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 2 Anton Dinev | Concurrences | N°49475 8. Submitted regarding the ratione temporis applicability of Article 81 EC to a single and continuous infringement that hindered competition within a country both before and after its EU membership, the rst question actually sought to clarify the exact scope of the Czech NCA’s duties under Regulation 1/2003. Should the cartel at issue be governed by the Treaty, then the NCA and the Commission would share, at least nominally or potentially, the competence to apply its prohibition rules on Czech territory, without this meaning ’deconcentration’ instead of ’decentralisation’ of EU antitrust enforcement [11 ]. Hence, when the Commission made use of its competence, pursuant to Article 11(6) of the Regulation, the NCAs would in turn be deprived of theirs. That seems to be the reasoning behind the arguments of the applicants in the main proceedings and the view of the referring court that the Commission retained exclusive jurisdiction over the entire duration of the infringement at issue. Such an analysis, however, implied that Article 81 EC were to apply retroactively in the Czech Republic despite its quasi- criminal law nature, as noted by AG Kokott in her Opinion [12 ].However, it was precisely in light of the same consideration that the court in Brno applied by analogy the concept of ’continuous offence’ under Czech criminal law, meaning that a criminal act is deemed committed under the law applicable to the last constituent element of the continuous offence [13 ]. Moreover, the sanctioned undertakings submitted that, mutatis mutandis, under Dow Chemical Ibérica [14 ],Article 3(1) of the Regulation could not be limited to the post-accession duration of the infringement; hence, Article 11(6) thereof would also cover the pre-accession period. In that case, the ECJ did hold that, even though Regulation 17/62 was directly applicable in Spain from the moment it joined the EU, subsequent Commission investigations could concern pre- and post-accession conduct equally. Furthermore, EU case-law arguably supported that existing situations had to be assessed immediately under the newly applicable Treaty provisions. In addition, some applicants in the main proceedings stressed the analogy between cartel prohibitions under both Czech and EU law that predated the country’s accession as a result of the respective Europe Agreement. A last argument in favour of the retroactive application of Article 81 EC in the case drew from the lex mitius principle, common to the constitutional traditions of the Member States and recognized by the ECJ in criminal matters. 9. The ECJ addressed each point made by the applicants in the main proceedings, sharing in substance the Czech Supreme Administrative Court’s view that 1 May 2004 formed a divide for the application of Czech and EU law respectively before and after that date. Thus, it avoided discussing the temporal applicability of substantive laws to alleged continuous infringements, which is different in principle from that in the case of completed (instantaneous) infringements [15 ]. To begin with, the Court endorsed AG Kokott’s proposition that Regulation 1/2003 contains not only procedural but also substantive rules such as, Article 3(1) thereof, which, like Article 81 EC, arguably «govern[s]the substantive assessment by the competition authorities of agreements« under EU law [16 ]. Such substantive rules may not, as a matter of principle, apply retroactively, whether or not such application might be favourable to the undertakings concerned, held the ECJ (rather contrary to lex mitius in criminal law) [17 ]. In order to ensure legal certainty and protection of legitimate expectations, any exception to non- retroactive application is admissible only when it can be inferred clearly from the terms, objectives and general scheme of provisions in question. The Court, however, found no clear indication that Articles 81 EC and 3(1) of the Regulation should apply ex tunc to the pre-accession duration of the cartel on Czech territory. According to the Court, this nding was not in contradiction with Dow Chemical Ibérica. The issue in that case was purely procedural whereas, in view of the ECJ, Article 3(1) of Regulation 1/2003 contained a substantive rule which, for the reasons above, could not extend tobefore the accession date [18 ].This limitation also excluded an existing situation that should have been immediately governed by EU law. Moreover, the Czech NCA applied national law to the cartel duration up until the accession date and did not arguably consider its future effects. In that regard, the Court found it irrelevant that the local authority could already apply prohibitions of national competition law and the Europe Agreement, similar to that in Article 81 EC. Furthermore, Regulation 1/2003 entered into force on 1 May 2004,the date of the Czech accession into the EU. Finally, the ECJ brie y rejected the lex mitius arguments as questioning, in reality, the NCA’s power to impose nes, an issue related to the interplay between NCA and Commission proceedings in parallel. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 3 Anton Dinev | Concurrences | N°49475 B. Exercise of shared competence: the interplay between proceedings in parallel 10. Onceit was established that only the post-accession duration of the cartel could be covered by shared competence to apply Article 81 EC, its exercise by the Commission was not without consequences for the Czech NCA’s powers under national law. Indeed, complying with the general duty of sincere cooperation would require national courts and authorities to stay their own domestic proceedings against a possible infringement of Member State laws when the same conduct is being investigated under the Treaty antitrust rules by the Commission [19 ]. Otherwise, they risk compromising the effet utile of Article 16 of Regulation 1/2003 in conjunction with Article 3(2) thereof. One would have thought the judgment in Masterfoodsequally applicable to NCAs so their powers under national law would not be affected, as such, only their effective use pursuant to domestic procedure would be restrained by an appropriate decision until the Commission decided upon the same facts in application of Articles 101 and 102 TFEU. Nevertheless, the applicants in the main proceedings submitted that the Czech NCA not only lacked powers under EU law, but also could not proceed to apply the national antitrust prohibitions. The argument might have appeared at rst as pointing to a purely procedural violation: not only did the NCA not stay its own proceedings, but it actually conducted them entirely in parallel to the Commission’s investigation. Yet, the sanctioned undertakings as well as the referring court shared the view that the national proceedings were precluded by virtue of the ne bis in idemprinciple. The EFTA Surveillance Authority and AG Kokott, on the other hand, considered that NCAs lose their powers under both EU and national law as a result of the combined effect of Articles 11(6) and 3(1) Regulation 1/2003.This loss of domestic powers, however, could only be temporary, until a decision was made at the EU level, noted AG Kokott [20 ]. More radically, her Opinion to the Court proposed to redefine ne bis in idem in EU antitrust law by removing the ’legal interest’ criterion dating back to Walt Wilhelm [21 ], a solution well beyond the specific issues in Toshiba. The suggested approach, therefore, concerned only the idem condition, which was to take the form of purely factual (independent upon legal quali cation) identity of anti- competitive effects on a given territory [22 ]. Thus, building somewhat upon the reasoning of the Czech NCA [23 ],the cartel at issue was deemed to have had substantially different effects in the Czech Republic, prior to its accession to the EU, from those sanctioned by the Commission within the then-Union. 11. In reply, the ECJ once again pointed out that according to the order for reference, the Czech NCA’s proceedings and decision dealt exclusively with the anti-competitive effects of the infringement at issue that occurred prior to 1 May 2004.Given that Article 11(6) of Regulation 1/2003 laid down a procedural rule applicable ex nunc only from that date, the Court held that national law could not a priori be precluded from applying to the pre-accession cartel duration [24 ]. Against that background, it would have appeared rather super uous to discuss further the second question (in its two parts) referred by the court a quo. However, the ECJ made the most of the reference in order to clarify the effects of Article 11(6). It agreed with AG Kokott that Articles 11(6) and 3(1) of the Regulation are closely related in terms of their content. Consequently, together they block national enforcement of EU law as well as those parts of domestic law that fall within the scope of the convergence in Article 3(2) of the Regulation [25 ]. The Court also shared AG Kokott’s view that such loss of powers cannot be permanent or de nitive, and is restored once the Commission concludes its own proceedings. This interpretation was justi ed by the fact that, contrary to the initial proposal, Regulation 1/2003 maintained the system of parallel application already de ned in Walt Wilhelm [26 ]. Moreover, in view of the ECJ, where pursuant to Article 16(2) of the Regulation NCAs « remain authorised to apply EU law after the Commission has taken a decision, they must a fortiori be permitted to apply their national law, provided they comply with the requirements of EU law, in application of Article 3 of Regulation 1/2003« [27 ]. Besides, according to the Court the general wording of Article 16(2) implied that it covers all conceivable Commission decisions and is by no means limited to those under Article 10 of the Regulation [28 ]. Finally, the ECJ considered that case re-allocation, as explicited in recital 18 in the preamble to Regulation 1/2003, did not mean that NCAs were deprived of their powers to apply national competition law once the Commission has itself adopted a decision. In fact, Article 13 of the Regulation extends NCA discretion by providing «the possibility – This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 4 Anton Dinev | Concurrences | N°49475 but not […] any obligation – to suspend[a] proceeding […] or reject a complaint« [29 ] where the case has already been dealt with by another NCA. With regard to the ne bis in idemargument, the ECJ maintained its traditional jurisprudence, which requires a threefold identity of fact, offender and legal interest protected, thus disregarding AG Kokott’s proposition. However, it was not entirely indifferent to the ’effect-based’ approach since it held that a given conduct’s anti-competitive consequences « cannot be assessed in the abstract, but must be examined with reference to the territory, within the Union or outside it, in which the conduct in question had such an object or effect, and to the period during which the conduct in question had such an object or effect« [30 ].In spite of the important implications this holding might have, it seems that it only served the Court’s conclusion that, in specie, there was no identity of fact since both Commission and NCA infringement decisions sanctioned anti-competitive effects on different territories within different periods. IV. Comment 12. At rst sight, this Toshiba judgment appears a missed opportunity for the ECJ to de ne clearly the scope of ne bis in idem under Regulation 1/2003, even if that would mean overruling Walt Wilhelm. Needless to insist how helpful such clari cation would have been, inasmuch as this procedural safeguard might call into question the functioning of the current enforcement system under Articles 101 and 102 TFEU, as often submitted since the reform took place. The EU judicature also has not apparently been aware of all possible implications, and major rulings left considerable room for debate. Thus, in Tele2 Polska , a somewhat enigmatic holding that non- infringement decisions by the NCAs could prevent a subsequent nding of infringement by the Commission [31 ] was read in light of the ne bis in idem principle, even though – in marked contrast to AG Mazak’s Opinion [32 ] – the ECJ itself did not mentioned it at all [33 ]. It is true that almost all competition cases in which the Court considered the ne bis in idem argument concerned Commission proceedings. That limited their reach, since rules applicable to the Commission cannot be automatically transposed to NCAs. On the other hand, case-law in other areas of EU law, such as judicial cooperation in criminal matters, cannot a priori t into the vertical cooperation between NCAs and Commission. It is also true that ECHR jurisprudence has not been much helpful either, as it deals exclusively with purely national cases that do not involve the superposition of domestic and supra-national rules. For all these reasons, the reference for a preliminary ruling in Toshiba provided an exceptional occasion for a thorough discussion of the conditions underlying the ne bis in idem interdiction in EU antitrust law. 13. A more constructive approach to the judgment, however, might reveal that it actually added, in a way, to the better understanding of ne bis in idem within the ECN. This calls for an extended analysis on its own, which would certainly go beyond the scope of the present comment. Instead, it seems more tting to question the premises upon which the ECJ addressed the issues referred by the Brno Regional Court. Perhaps some sort of misunderstanding between the two courts was the reason why the former passably overlooked the underlying concerns of the latter. Let alone the pertinence of the preliminary questions, which is affair of the judges a quo, it was necessary to be more precise in identifying the legal problem(s) that raised them, even if it could have led to consider the legality of the Commission decision, as apparently implied from the proceedings before the referring court [34 ].Unless the court in Brno completely ignored that the case before it dealt exclusively with the application of Czech law, it seems that it sought guidance on whether such national proceedings would be barred by the ne bis in idem prohibition even if the Commission were to retain exclusive jurisdiction under the Treaty for the whole cartel duration, both before and after the Czech Republic joined the EU. Therefore, arguably the questions were intended to clarify when and what constitutes a bis or subsequent antitrust proceeding within the present ECN, an issue Walt Wilhelm could not address more than forty years ago. The European judges, however, considered the matter from idem perspective, which would explain why they insisted so much on that the Commission and the Czech NCA dealt with different anti-competitive effects of the same cartel but in different times and territories, thereby neglecting the issues of parallel enforcement during the 10-day overlap between 1 and 11 May 2004. In addition, This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 5 Anton Dinev | Concurrences | N°49475 the substantive law interpretation of Regulation 1/2003 set forth in AG Kokott’s Opinion and endorsed by the Court resulted in the omission of usefully distinguishing finding an infringement from its subsequent sanctioning. Had these two stages been differentiated as dealing respectively with separate powers that NCAs often make use of altogether, it would have been clearer how disproportionate the ruling might eventually appear. Indeed, the ECJ seems to have unduly extended the scope of EU procedural rules governing parallel enforcement of Articles 101 and 102 TFEU by the NCAs (A ), which in turn would limit the application of national substantive laws in such parallel proceedings (B ), thus increasing the risk of inconsistent outcomes at the Member State level (C ). A. Extended scope of EU procedural rules governing parallel enforcement 14. Whilst in the operative part of Toshiba the ECJ ruled strictly with respect to the case at hand, the res interpretata spreading over the key grounds of its judgment [35 ] could lead to undue extension of the mechanism for ensuring consistent enforcement provided in Article 11(6) of Regulation 1/2003. The Court did rule that this provision, in conjunction with Article 3(1) thereof, «does not […] cause the competition authority of the Member State concerned tolose its power, by the application of national competition law , to penalise the anti-competitive effects produced by that cartel in the territory of the said Member Stateduring periods before the accessionof the latter to the European Union« (emphasis added). Nevertheless, it is the way the Court interpreted the relationship between Articles 11(6) and 3(1) that seems problematic and may, in a different setting, call into question the resulting loss of powers the Member States conferred upon their NCAs. In view of the ECJ, to the extent that «Article 3(1) establishes a close link between[… ] Article 81 EC and the corresponding provisions of national competition law«, and «[i]n so far as the national competition authority is not authorized, under the rst sentence of Article 11(6) […], to apply Article 81 EC […] the said national authority also loses the possibility of applying provisions of national law prohibiting cartels« [36 ]. Therefore, the reason underpinning this holding appears to be a sort of reciprocity, by virtue of Article 3(1), between Articles 101 and 102 TFEU and their national counterparts: when the latter are being applied the former must be applied too, and now, conversely, lack of power to apply the former equals (temporary) lack of power to apply the latter. If the Court’s reasoning is understood correctly, the purported reciprocity could lead to rethinking the very foundations of the current antitrust enforcement system in the EU. This alone justifies a cautious analysis of Article 11(6)’s extended reach in Toshiba. 15. First of all, there is a risk that enforcement of EU and national substantive laws would become conditional upon each other, meaning that effective application of Articles 101 and 102 TFEU to a given conduct is a necessary condition for applying domestic rules to that same conduct [37 ], and vice versa, that proceedings under the Treaty cannot take place unless NCAs are already acting in application of national antitrust. Article 3(1) could be construed to that effect insofar as it provides «[w]here [NCAs and domestic courts] apply national competition law«, but it would be rather contrary to the basic rationale of the present enforcement system. As made clear in its very rst recital, Regulation 1/2003 seeks to warrant uniform application of EU law, thereby providing, according to recital 8, a level playing eld for agreements across the Union. Importantly, in this regard, the French case in Expedia [38 ] illustrates that independently on EU law, national antitrust rules alone may be subject to and conditional upon speci c domestic requirements. Such conditions may be procedural, as in Expedia, but also substantive. In fact, it is precisely regarding the latter that Regulation 1/2003 provided a convergence rule in Article 3(2). This provision seems quite plain in its requirement that any con ict between substantive laws be resolved in favour of those of the EU by virtue of their primacy. Thus, con icting national antitrust prohibitions must be left unapplied where necessary, meaning a fortiori that it is immaterial, from the EU standpoint, whether national laws apply in parallel [39 ]. The same holds true, especially in light of the cooperation mechanisms for ensuring consistency, even if domestic procedural rules governing NCAs’ enforcement discretion actually limitor even This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 6 Anton Dinev | Concurrences | N°49475 extend the application of national law in a given case, like in Expedia [40 ]. The contrary would result, in practice, in adding another condition next to the concepts of undertaking and effect on trade that stem from the Treaty, something Regulation 1/2003 could not have done [41 ]. 16. This view is not undermined by the contrast between mutually exclusive and parallel application the ECJ made in support of the discussed reciprocity. Under a system of mutually exclusive jurisdiction, as in merger control, the applicability of EU law (given its primacy) is, in fact, a negative condition for the application of national law, and NCAs are thereby obliged to ascertain at the outset that they are not dealing with a case that falls within EU jurisdiction [42 ]. When such a system was eventually abandoned for the enforcement of Articles 101 and 102 TFEU, Regulation 1/2003 did not shift to the opposite extreme by making the application of national laws a positive condition for EU rules to apply and vice versa, in which case, there would have been full parallelism between these two sets of substantive laws, more or less akin to a jurisdictional ’double barrier’ [43 ]. The current system appears to occupy middle ground – a one-sided parallelism, under which the duty to apply EU law in parallel to national law is only a precaution, a procedural safeguard for verifying EU jurisdiction and duly exercising the resulting competence, but not a condition for proceeding to apply domestic laws [44 ], as that would be according to the reciprocity that justi ed the extended reach of Article 11(6) in Toshiba. To put it differently, that EU law must be applied in parallel, insofar as undertakings affect interstate trade in appreciable manner, does not lead to the reverse situation where national laws must be applied along with Articles 101 and 102 TFEU; the two sets of laws are not conditional upon each other. Therefore, unless otherwise explicitly provided, the (non-) application of one set of laws to a given conduct does not, in itself, affect the other and the very existence of corresponding competence and powers, and different decisions, pursuant to the respective procedural rules, are to re ect the relevant situation [em ], subject to compliance with the convergence rule in Article 3(2) of Regulation 1/2003 and, of course, the duty of sincere cooperation in Article 4(3)(1) and (3) TEU. 17. A more technical perspective on the above reciprocity also does not support the Court’s analysis. If Regulation 1/2003 deprived, even temporarily, NCAs of their powers under national law, what would be the relevant legal basis for eventual staying or dismissal of a case? Such a decision is necessarily posterior to the initiation of Commission proceedings, and since NCAs are already precluded from applying EU law, could they still rely on Article 11(6), especially if the Regulation’s scope and cooperation mechanisms are seen as conditional upon the applicability of Articles 101 and 102 TFEU [45 ]? That would be possible to the extent that applicability of substantive laws is carefully differentiated from the powers to apply them. This distinction takes into account that substantive antitrust laws govern conduct of undertakings and are applicable any time such conduct affects to an appreciable extent intra-EU trade [46 ]. Powers to apply these substantive laws, on the other hand, result from procedural rules addressed to and governing NCAs. Regulation 1/2003 not only empowers, in Article 5, NCAs to apply Articles 101 and 102 TFEU (this could be done by national procedural rules alone) but more importantly imposes, in Article 3(1), a procedural duty upon NCAs to apply the prohibitions in these Treaty provisions as long as a given economic behaviour meets the effect on trade condition. Thus, it is not Article 3(1) that renders Articles 101 and 102 TFEU applicable, but the fact that interstate trade is appreciably affected. Consequently, it seems rather di cult to distinguish any substantive criteria in Article 3(1) of the Regulation that would govern conduct of undertakings; it governs only the assessment of such conduct by the competition authorities, as put by the Court, and thus has to do with their powers and the way they are exercised [47 ]. 18. Since Article 3(1) cannot be viewed as a substantive rule, what would be the effect of losing EU powers by virtue of Article 11(6)? Articles 101 and 102 TFEU remain applicable (even though they are to be applied by the Commission),as well as national antitrust prohibitions, yet the NCAs will lack powers to apply both sets of rules. The effects in question, therefore, are purely procedural and thus related to the exercise, not the very existence of NCA competence, as might be assumed in a literal interpretation of Article 11(6) [48 ]. Still, it is settled-case law This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 7 Anton Dinev | Concurrences | N°49475 that national procedural rules take place only where EU law does not instead provide a speci c rule [49 ]. Article 11(6), as construed in Toshiba, is now precisely such a speci c rule, since, unlike Article 13 [50 ], it leaves no option to the NCAs but to stay/end their own proceedings under national law. However, no speci c decision to that effect has been provided by the Regulation. Indeed, as noted in AG Kokott’s Opinion, the NCAs are relieved of their EU powers the moment an o cial act ( acte d’autorité) formally evidences the Commission’s intention to apply Articles 101 and 102 TFEU [51 ]. That act seems unable to also deprive NCAs of their domestic powers since the Commission could not show an intention to apply national laws. At the same time NCAs cannot adopt a decision pursuant to domestic procedural rules given that the extended reach of Article 11(6) leaves no room for national procedural autonomy. This paradox is in sharp contrast with the NCA decisional powers under Article 5(2) of the Regulation [52 ], especially those dealing with their competence to intervene (non-lieu à intervenir) [53 ]. In summary, where Regulation 1/2003 affects the exercise of NCA competence and regulates in an exhaustive manner their powers there is a corresponding decision provided by EU law. The absence of such a decision is perhaps su cient to indicate that, in light of the general principle of proportionality, the EU legislature did not conceive Article 11(6) as depriving NCAs of their powers under national law beyond those under EU law. Moreover, such an undue procedural extension spreads over domestic decisions on the merits, hence limiting the application of national substantive laws in parallel proceedings. B. Limited application of national substantive laws in parallel proceedings 19. Once again the Court’s ruling that NCAs do not lose their domestic powers «to penalise the anti-competitive effectsproduced by[a]cartel in the territory of [a]Member Stateduring periods before the accessionof the latter to the European Union« (emphasis added) appears to conform with the case record in Toshiba. Its impact, however, seems questionable in other circumstances where no such temporal divide makes possible the delimitation of jurisdiction as clearly as in the present case (should the Court’s view on the applicable law to a single and continuous agreement be retained). Doubtless, lack of jurisdiction/competence means lack of power to apply the substantive laws, but the reverse is not necessarily the case, as seen above, if the crucial distinction between applicability and application is to be observed as it must in the current enforcement system of Articles 101 and 102 TFEU. It is precisely because the Treaty provisions are applicable that they cannot be applied by the NCAs as long as the Commission intends to apply them instead. This is how direct and indirect administration relate within the shared administration of EU antitrust laws [54 ]. In such conditions, what constitutes ’application’ by the Commission determines, following the Court’s analysis of the interplay between Articles 11(6) and 3(1) of the Regulation, the room left for a subsequent application of national law in order «to penalise the anti-competitive effects produced by[a]cartel in the territory of [a]Member State«. 20. In light of Article 16 of the Regulation, it is submitted that application by the Commission takes the form ofa nal decision on the merits: an Article 7 or Article 10 decision. Any other Commission decision is neither nal nor contains anex post nding of infringement or states exantenon-application, and, contrary to the Court’s analysis, Article 16(2) could not «cover all conceivable decisions that the Commission may have adopted on the basis of Regulation No 1/2003«. Not least, such a holding seems to run against recital 13 of the Regulation whereby «[c]ommitment decisions should nd that there are no longer grounds for action by the Commission without concluding whether or not there has been or still is an infringement. Commitment decisions arewithout prejudice to the powers of competition authorities and courts of the Member States to make such a nding and decide uponthe case« (emphasis added).Moreover, recital 22 thereof is clear that «[c] ommitment decisions adopted by the Commissiondo not affect the powerof the courts and the competition authorities of the Member Statesto apply Articles 81 and 82of the Treaty« (emphasis added). Therefore, as long as the Commission does not make a nding on the merits, that is, in commitment decisions as well as in those dismissing a complaint or closing a case, NCAs can re-establish their powers (and duties) to apply Articles 101 and 102 TFEU by nding whether or not they have This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 8 Anton Dinev | Concurrences | N°49475 been breached and taking an appropriate decision to that effect. Only in such conditions could a parallel loss of powers under national laws be temporary, simply because the loss of EU powers is temporary as well. Conversely, where the Commission decides on the merits in application of Articles 101 and 102 TFEU, it seems impossible for the reasons provided below that NCAs may still apply the Treaty provisions, and the corresponding inability to apply national law foreseen by the Court will actually last inde nitely and permanently, contrary to what has been held in Toshiba. 21. In this regard, it is noteworthy that the rule in Article 16(2) stems from Masterfoods, a judgment upon preliminary reference that dealt essentially with the need to ensure consistency of the outcomes of parallel proceedings under EU law before the Irish courts and the Commission. Such concurrent proceedings, however, differ from those in the decentralized public enforcement of Articles 101 and 102 TFEU. At any moment, a national court does not lose its powers to apply national antitrust laws nor the Treaty prohibitions (given their direct effect). By contrast, Article 11(6) explicitly deprives NCAs of their EU powers in cases already under Commission scrutiny, and it would appear quite natural that a Commission decision on the merits in icting penalties bars subsequent application of the same prohibitions to the same facts. Nevertheless, the ECJ shared AG Kokott’s view in holding that Article 16(2) «establishes that the national authoritiesmay intervene afterthe Commission, but prohibits them fromcontradicting a previous decisionof the Commission« [55 ].This is true, but only in so far as the application of national laws is concerned, and the Court seems to have overlooked it by reversing the a fortiori argument, evidencing once again how mechanical the substitution of mutually exclusive system with such of parallel enforcement was in the nal version of Regulation 1/2003 [56 ]. In the case of Articles 101 and 102 TFEU, on the other hand, such follow-on intervention seems possible in two situations depending on whether a Commission decision deals with the same facts as those before the competent national authority. If the Court followed AG Kokott, who suggested abandoning any literal interpretation of Article 16(2) and reading it as «a prohibition of divergence« for ensuring the primacy of EU law «only in a very general fashion, without reference to the subject- matter of th[e] Commission decisions or the persons to whom they are addressed« [57 ], then the solution would concern NCAs and national courts equally, as it does not require full identity between the cases before the Commission and at the national level. But that also eliminates any consideration of the ne bis in idem principle (as it would have been according to the initial Commission proposal), which was nonetheless the underlying reason for seeking authoritative interpretation on this point from the ECJ in Toshiba. Alternatively, should there be complete identity of fact and unity of offender, only private enforcement of Articles 101 and 102 TFEU could take place on a follow-on basis, since ne bis in idem would most likely preclude subsequent public enforcement of these provisions at the Member State level against the same anticompetitive conduct, even if its territorial effects are seen as an element of the infringement and not only related to the applicability of the prohibitions, as might have appeared in AG Kokott’s Opinion [58 ]. 22. The Court did, nevertheless, refer in the operative part of its judgment only to the NCA power «to penalise« and that under the respective national law. One might think that the Court differentiated sanctioning from nding an infringement, just like AG Kokott considered, respectively, the powers « to prosecute/apply« [59 ], when discussing the effects of Article 11(6), and the power «to penalise/sanction« [60 ], when analysing the nebis in idem principle. It is true that certain legal systems, such as German law, clearly distinguish purely administrative proceedings from those leading to penalties. However, the same distinction seems not quite tting to the vertical relations between a supra-national authority such as the Commission and national authorities and courts, especially if the ne bis in idem is to receive the same interpretation as under the ECHR. Should the application of this principle in the ECN be limited to subsequent sanctioning, it would be virtually impossible to consider a situation in which subsequent national proceedings under Articles 101 and 102 are barred as such, irrespective of any possible outcome, following a Commission ’acquittal’ in the same case. In fact, unlike the NCAs, the Commission enjoys broad discretion of enforcement, excluding nding of non-infringement in individual cases as would be the case with NCAs that are obliged to address a complaint even if their nal decisions state no grounds for action. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 9 Anton Dinev | Concurrences | N°49475 Commission decisions pursuant to Article 10, on the other hand, could be assimilated to an ’acquittal’ for non bis in idem purposes, only in so far as Article 16(2) would receive a strict interpretation as requiring full identity of fact and offenders, which the Court in Toshiba seems to have abandoned, preferring instead the broad interpretation suggested by AG Kokott. Even in such a case, however, the NCAs must observe the previous Commission findings. 23. The question, then, is whether such observance, or even restating the Commission ndings in case of full identity of fact and offender, constitutes a bis or subsequent application of Articles 101 and 102 by the NCAs.If the answer is yes, then NCAs would be barred from applying not only EU law but also national law, since the latter application has been made conditional upon the former by the extended scope of Article 11(6). This, however, would contradict the Court’s holding that NCAs may still intervene after a Commission decision [61 ]. Alternatively, a negative answer to the above question would lead to consider that an ’acquittal’ within the meaning of both ECHR and CFR does not trigger the ne bis in idem prohibition within the ECN. The same applies a fortiori to administrative NCAs’ non-infringement and substantiated no-grounds-for-action decisions, which, unlike Article 10 decisions, are purely declaratory under the current legal exception system. Transposed to cases where the Commission has already adopted an infringement decision sanctioning a given conduct, this analysis would clarify that it is not the finding of infringement that fulfills ne bis in idem, but the penalty already inflicted by the Commission. In light of the ECHR jurisprudence this is the breaking point after which any application of the same rules to the same conduct, no matter the end-result, would constitute a subsequent proceeding, forbidden by the ne bis in idem principle [62 ]. Thus, a penalty in a previous Commission decision makes it impossible that NCAs confine themselves to the same nding of infringement as the Commission; hence, unable to make such an application of Articles 101 and 102 TFEU, they could not reciprocally apply national law, as already seen. This might in turn increase the risk of inconsistent outcomes at the Member State level, of which Toshiba provides a revealing illustration. C. Increased risk of inconsistent outcomes at the Member State level 24. It may seem that insisting on the application of national antitrust laws within the enforcement system of Regulation 1/2003 lacks particular interest, especially regarding agreements, as long as Article 3(2) thereof provides for convergence. But the convergence rule governs, both substantively and procedurally [63 ], parallel application by the NCAs alone. Where antitrust enforcement in a single case takes the form of separate Commission and (subsequent) NCA proceedings, consistency is alsoensured by Article 16(2) of the Regulation. However, as noted above, this provision seems deprived of its original purpose in the current parallel enforcement system, since loss of both EU and national powers following the extended scope of Article 11(6) becomes permanent by virtue of the nebis in idem prohibition where the Commission imposes penalties. Thus, the inability to apply national law, stemming reciprocally from the inability to apply EU law to the same sets of facts, which is corroborated by the broad interpretation of Article 16(2) in Toshiba, excludes a priori any con ict with a previous Commission decision. Nonetheless, at least in theory, some room for such a con ict, which is indeed the underlying reason for having Article 3(2), is necessary and inherent to the concept of parallel application of national law. In fact, no application at all of national substantive rules seems no better option than conform and consistent application of these rules. 25. It would be rather inconsistent with the basic rationale of a legal exception system, to which so many Member States have turned following the entry into force of Regulation 1/2003, if complainants are not to receive a reasoned decision assessing the substantive conditions of national antitrust prohibitions at the end of NCA proceedings. This becomes even more important where national law renders nal decisions of the competition authorities binding upon courts in follow-on private actions. Although Article 16(1) would largely compensate by ensuring compliance with the application of EU law made by the Commission, it is to be noted that, unlike NCAs, national courts’ duties under Article 3(1) are subject to an important caveat [64 ]. In addition, national rules on This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 10 Anton Dinev | Concurrences | N°49475 access to case les may differ (favourably) from those in Commission proceedings, which seems acceptable to a certain degree for the ECJ [65 ].More generally, competition rules at EU and Member State levels view restrictions of competition from different angles and their scopes do not necessarily coincide [66 ]. There are good reasons, therefore, why a Commission infringement decision applying Articles 101 and 102 should be followed by a meritorious decision in application of national law alone. This is a valuable tool for developing a consistent body of national antitrust laws, thus ensuring ’positive’ convergence, in addition to the ’negative’ convergence resulting from Articles 3(2) and 16(2), which merely prohibit divergence, as noted by AG Kokott. Of course, subsequent application of national law is to take place within the limits of ne bis in idem, as construed in Walt Wilhelm, which may only bar a second sanction for the same set of facts but not the very nding of an infringement of a different set of substantive rules [67 ]. 26. The importance of carefully differentiating nding from sanctioning an infringement seems to have been eclipsed in Toshiba, not least because of the confusing letter the Commission sent to the Czech NCA on 30 September 2004 [68 ] and the Court’s unquestioning reliance on the case record as summarised by the referring court [69 ]. Although factual assessment is by de nition excluded in proceedings upon preliminary reference, facts are nonetheless essential for the correct analysis of the questions brought before the ECJ. Additional attention to them would have been helpful for identifying the underlying issues in Toshiba, which in turn would have made clear how the Court’s ruling actually encouraged inconsistency by limiting the application of Czech law not only as to the finding of infringement but also, in this particular case, with respect to sanctioning the cartel at issue during the 10- day overlap between 1 May and 11 May 2004. Indeed, the Court considered as common ground that the Czech NCA and the Commission dealt with substantially different effects of the cartel respectively prior to 1 May 2004. However, based on the information in the ECJ judgment and AG Kokott’s Opinion, it seems that the core issue in the case before the Regional Court in Brno was whether the Czech NCA’s nal decision lawfully established the exact duration of the antitrust infringement for which it imposed penalties on the undertakings concerned in application of national law alone. The issue later evolved into whether the NCA had competence with respect to the post-accession duration of the cartel already under Commission investigation. Yet, was there an infringement that ended on 3 March 2004, as contended in the NCA decision? The issue was therefore an evidentiary one, but before that, it involved conflicting legal characterisation. 27. Before the ECJ, the Czech authority explained that its domestic law uses «assessment criteria different from those used by the Commission« for determining the end of a cartel [70 ]. Even so, that would amount to a con ict of classi cations, which, having occurred in 2006, could only be resolved in favour of the EU concept of a single and continuous infringement. Moreover, it has been made clear in T-Mobile Netherlands that concepts of EU apply as such and take precedence over national law, whether or not they contain criteria that may be seen as either substantive or procedural under domestic taxonomy [71 ]. Thus, conform application of national law pursuant to Articles 3(2) and 16(2) of Regulation 1/2003requiresthat NCA avoid contradicting quali cations under EU law already made by the Commission. In reality, it appears that those «assessment criteria« were simply different facts taken into consideration. For the Czech NCA, the end of the cartel occurred on 3 March 2004 when «the last email communication demonstrating the existence of links between the participants in the cartel at issue in the main proceedings had been registered« [72 ]. That email communication is also mentioned in the Commission decision, but only to indicate that ABB, which applied for leniency on the same date, ceased its own participation in the cartel [73 ]. The rest of the cartelists continued to meet until 11 May 2004 when Siemens informed them of the unannounced inspections the Commission carried out on that same day [74 ]. In such circumstances, 3 March 2004 would be the relevant end-date only if the agreement involving the same undertakings had a different tenor, irrespective of its effects lato sensu on a given territory, which determine competence ( Wirkungsstatut) [75 ] and not the very existence of an infringement, that is a restriction of competition. In other words, the agreement would be different if it concerned speci cally allocation of quotas, market-sharing, bid-rigging etc. in the Czech Republic alone [76 ]. The Commission decision does not support such a nding. The cartel agreement covered irrespectively This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 11 Anton Dinev | Concurrences | N°49475 the EU and the Czech Republic, along with other countries in Central and Eastern Europe as they progressively turned to a market economy, until after its accession to the Union [77 ]. 28. This ’time’ perspective on the case shows that the Czech NCA could not but establish the cartel’s end on 11 May 2004, in accordance with the Commission decision [78 ]. Contrary to the view of the Czech Supreme Administrative Court, it is respectfully submitted that the applicability of EU law did not break the agreement at issue into two separate infringements, which would be purely ctional since Articles 81 EC neither replaced the Czech antitrust prohibitions nor affected domestic jurisdiction of the Czech NCA [79 ]. The material facts remained unchanged and the cartel continued to produce effects on Czech territory. Only the application of national law from 1 May 2004 onwards had to be done in light of the new duties upon national enforcers resulting from Regulation 1/2003. In other words, given the factual identity, apparently undisputed before the ECJ, and that the same agreement undoubtedly affected intra-EU trade within the Czech Republic once it became a member of the EU, and also that when it started its own investigation the local authority had to comply with its duties under EU law, the cartel had to be classified as a single and continuous infringement within the meaning in EU case-law as it stood at the time of the NCA proceedings. Therefore, pursuant to Articles 16(2) and 3(2), the Czech NCA was bound to establish the cartel infringement of domestic laws in conformity to the Commission’s nding that it lasted until 11 May 2004, unless and until its lawfulness was censored by the EU courts. The same would also be true even if the Commission were to retain exclusive jurisdiction over the entire duration of the cartel agreement, as suggested in the reference of the Brno Regional Court. Not only did the NCA not make the correct nding under national law, which remained fully applicable, but it could also impose penalties for the 10-day overlap, according to Walt Wilhelm, since the Commission acknowledged that it did not sanction the cartel duration after 1 May 2004, even though in the operative part of its decisions it established that the infringement lasted until 11 May 2004. Allowing such inconsistency, which seems tocall into question the legality of the Czech NCA infringement decision, was nevertheless an inevitable consequence of the way the Court in this Toshiba case construed the respective scopes of Article 11(6), in conjunction with Article 3, and Article 16(2) of Regulation 1/2003. V. Conclusion 29. Intrinsically complex, the multilayer framework for applying Articles 101 and 102 TFEU continues to evolve, shaped over the years by landmark ECJ rulings, typically upon preliminary references. Although Toshiba failed to become a landmark ruling insofar as the ne bis in idem principle is concerned, it will certainly remain a key decision on one of the oldest mechanisms for ensuring consistent public enforcement of antitrust laws across the EU. Since Article 11(6) merely reproduced Article 9(3) of Regulation 17/62, its extended reach fty years later is de nitely a major event that touches upon the core dynamics of the interaction between direct and indirect administration of supranational laws. Toshiba is indeed illustrative that this interaction is neither purely procedural nor solved exclusively by the traditional principles governing the ratione temporis applicability of substantive laws. In fact, it is precisely this subtle proportion of substance and procedure that makes the current system of parallel application easily misunderstood. Perhaps the forthcoming 10th anniversary of the enactment of Regulation 1/2003 on 16 December 2002 would be a timely occasion for a debate on eliminating its unnecessary complexity by reconsidering the initial proposal for a system of mutually exclusive application of national and EU antitrust laws. [1 ] ECJ Judgment (Grand Chamber), 14 February 2012, Case C-17/10, Toshiba et al. ECR I-0000, OJEU 2012 C98, 31 March 2012, p. 3. [2 ] Council Regulation (EC) n° 1/2003, 16 December 2002, on the implementation of the rules This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 12 Anton Dinev | Concurrences | N°49475 [2 ] Council Regulation (EC) n° 1/2003, 16 December 2002, on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJEU 2003 L1, 4 January 2003, p. 1. [3 ] Opinion Kokott, 8 September 2011, Case C-17/10, Toshiba et al. ECR I-0000. [4 ] Brno Regional Court (Krajskýsoud v Brně) Order, 11 December 2009, Case 62 Ca 22/2007- 124, Toshiba et al., OJEU 2010 C100, p. 14. [5 ] European Commission Decision, 24 January 2007, Case COMP/F/38.899 -Gas Insulated Switchgear (GIS), C(2006) 6762 final, OJEU 2008 C5, p. 7. [6 ] Opinion Kokott, Toshiba, op. cit., note 22. This was reportedly one of first (and most notable) applications of the Czech leniency program, see Jan Pøevrátil , The Czech NCA inflicts a record fines of 35 M € in the gas insulated switchgears market in spite of leniency («GIS cartel«), 9 February 2007, e-Competitions, n° 13242. [7 ] Czech Office for the Protection of Competition (Úrad pro ochranuhospodárskésoutěže), 26 April 2007, Case R 059-070, 075-078/2007/01-08115/2007/310, GIS Cartel. See Jana Jich ova , The President of the Czech Competition Authority upholds the decision in the gas insulated switchgears cartel case and slightly reduces the € 35 M record fine («GIS cartel«), 26 April 2007, e-Competitions, n° 13982. [8 ] Brno Regional Court (Krajskýsoud v Brně) Judgment, 26 June 2008, Case 62 Ca 22/2007, Toshiba et al. See B arbora Du bans k á, David Emr , The Czech Regional Court in Brno cancels the decision of the President of the Office for the Protection of Competition concerning a well- known, long-running international cartel operating within the sector of gas insulated switchgears on the grounds of breaching the legal principle of ne bis in idem (GIS Cartel), 26 June 2008, e- Competitions, n° 21230 [9 ] Court Supreme Administrative Court of the Czech Republic (Nejvyššísprávnísoud ) Judgment, 10 April 2009, Case n° 2 Afs 93/2008-920, Toshiba et al. [10 ] See Roman B arink a , The Czech Supreme Administrative Court rules that the NCA was entitled to sanction a cartel activity a part of which had already been sanctioned by the European Commission (Toshiba), 10 April 2009, e-Competitions, n° 26225. [11 ] In her Opinion in Toshiba, AG Kokott also referred to «shared competence« (para. 29 in fine), describing the reasoning of the Czech Supreme Administrative Court, but in the remainder of this passage there seems to be a confusing allusion to ’shared powers’ which, conceptually, would imply ’deconcentration’. An argument against such confusion can be drawn from the holding that «the Commission retains the option of initiating proceedings for the adoption of a decision, even where a national authority is already acting in the matter« and that «[it] may in any event take over a case being dealt with by a national authority« (CFI Judgment, 8 March 2007, Case T-339/04, France Télécom ECR II-0521, paras 80 and 84). It is true that only the Commission’s competence is discussed here, but the same parallelism applies to NCA competence under EU law as well. In fact, whilst the Commission is about to deal with a case, NCAs remain potentially competent to apply EU law afterwards, depending on how the Commission ends its proceedings. Thus, whereas different powers have been conferred upon NCAs and the Commission, respectively, they still share the same competence to apply Articles 101 and 102 TFEU where applicable. The difference, therefore, has to do with the scope and exercise of competence, and not with the very This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 13 Anton Dinev | Concurrences | N°49475 nature and existence of such a competence. The concept of competence is broader and comprises that of power, even though they are often seen as interchangeable; yet, precision on this point is important. Only such differentiation could actually explain a holding that the Commission «shares competence to apply Articles 85(1) and 86 of the Treaty with the national courts« (ECJ Judgment, 14 December 2000, Case C-344/98, Masterfoods ECR I-11369, para. 47), although it is clear that they remain entrusted with essentially different tasks and powers. Indeed, in light of this holding and notwithstanding terminological uses in other areas of law, ’competence’ seems to denote, broadly and abstractly, the ability to deal authoritatively with a matter that falls within given ’jurisdiction’ by exercising the relevant ’powers’ and complying with the corresponding ’duties’. [12 ] Opinion Kokott, Toshiba, op. cit, para. 48. [13 ] See David Emr, B arbora Du ban s k á , op. cit. supra note 8 [14 ] ECJ Judgment, 17 October 1989, Joined Cases 97/87 and 99/87, Dow Chemical Iberica ECR 3165, paras 62 and 63. This case-law has been confirmed, after Toshiba, in EUGC Judgment, 22 March 2012, Joined Cases T-458/09 and T-171/10, Slovak Telekom ECR II-0000, para. 47. [15 ] See e.g. in France, B ern ard B ou loc , Droit penal général, 22nd ed., Dalloz, Paris, 2011, p. 218, para. 233. Admittedly, the criminal-law approach needs to be adapted in order to reflect that the temporal applicability of EU law to a continuous infringement involves superposition of legal systems, which albeit closely related remain distinct. That excludes any lex mitius considerations besides the broader problem of retroactivity, but couples it instead with an important territorial dimension. In particular, it is crucial to determine what criterion in Article 101(1) TFEU can best unite simple facts, before and after the prohibition became formally applicable in a future Member State, into «an overall plan intended to distort competition« and, accordingly, form a single and continuous infringement of that prohibition (see ex multis, EUGC Judgment, 27 June 2012, Case T-439/07, Coats Holdings ECR II-0000, paras 141-147). Although the Court in Toshiba did not, a priori, overrule the possibility of applying Article 101(1) TFEU retroactively, such an approach seems unhelpful as it typically implies a completed factual setting in the past, i.e. that all constituent elements have already taken place (in which case old vs. new substantive rules is relevant as applicable law at a later moment, when proceedings are initiated unless time-barred by procedural rules). By contrast, the concept of a single and continuous infringement does not require that each and every constituent element be seen as an infringement of its own. Next, the classic distinction between findings of fact and such of law is not much helpful either, since facts in the past have no separate relevance, only that stemming from and within the legal characterization (qualification) of a single and continuous infringement. Nevertheless, the issue seems fairly overlooked, as the Commission often confines itself to pointing out the date on which the relevant prohibition became effective. That date certainly determines the individual liability of the undertakings concerned, for which they are to be sanctioned respectively (nullapoena sine lege), but at the same time does not say much about the very finding of an infringement attributable to each and every undertaking, especially where some of the offenders are held liable for periods before the date in question or for periods shorter than the cartel duration, like ABB in GIS Cartel. An additional territorial criterion is, therefore, necessary to make the relevant differentiation between finding and sanctioning. Without getting into a detailed (and most certainly possible) debate, it is submitted that that territorial condition, which would stick together past facts with present consequences into a common anti-competitive conduct, both before and after a country joined the EU, should be two-fold: i) direct or indirect, actual or potential effect on intra-EU trade resulting from an agreement covering territories outside the Union (e.g. in ECJ Judgment, 28 April 1998, Case C-306/96, Javico ECR I-1983) and ii) accession into the EU before completion of the infringement. Thus, the appreciable character would also be appraised by reference to affectation’s This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 14 Anton Dinev | Concurrences | N°49475 territorial reach, depending on the existence of current trade between the EU and the non-member country. Where there is no such trade, even an agreement covering the whole of a non-member country, as in Club Lombard (C-125/07P), could by no means affect intra-EU trade, prior to the accession date, since it would be immaterial whether undertaking from the EU could enter that local market. Conversely, existing pattern of trade, as in GIS Cartel, would require an assessment of appreciability by reference to what part of that trade was due to the EU, contrary to the test in Javico, under which it would be virtually impossible to establish appreciable affectation within the EU. [16 ] ECJ Judgment, Toshiba, op cit., para. 49 [17 ] Ibid., para. 50 [18 ] Ibid., paras 56 and 57. [19 ] ECJ Judgment, 14 December 2000, Case C-344/98, Masterfoods ECR I-11369. [20 ] Opinion Kokott, Toshiba, op. cit., para. 79. [21 ] ECJ Judgment, 13 February 1969, Case 14/68, Walt Wilhelm ECR 1. [22 ] Opinion Kokott, Toshiba, op. cit., paras 122 to 124. [23 ] Reportedly, the Chairperson of the Czech NCA, in its decision of 26 April 2007, took the view that «the undertakings participating in the cartel did not commit a single infringement but a number of infringements corresponding to the number of sovereign legal orders«. See Ju raj Neu wirth , Ru d olf Rents ch , The Czech Supreme Administrative Court rules that a continuous offence which lasted after the accession of the Czech Republic to the EU shall be treated as two separate offences (GIS cartel), 10 April 2009, e-Competitions, n° 27565. [24 ] ECJ Judgment, Toshiba, op cit., para. 71. [25 ] Ibid., paras 75 and 76. [26 ] Ibid., paras 81 to 83. [27 ] Ibid., para 86. [28 ] Ibid., para 87. [29 ] Ibid., para 90. [30 ] Ibid.,para. 99. [31 ] ECJ Judgment (Grand Chamber), 3 May 2011, Case C-375/09, Tele2 Polska ECR I-0000. [32 ] Opinion Mazák, 7 December 2010, Case C-375/09, Tele2 Polska ECR I-0000. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 15 Anton Dinev | Concurrences | N°49475 [33 ] The Court’s reluctance to follow AG Mazak’s reasoning seems enough to reject the nebis in idem argument as a possible explanation for denying NCAs the power to adopt non-infringement decisions, which in turn makes it virtually irrelevant to attach greater authority to the operative part than to the grounds of NCA administrative decisions, especially given the quasi-criminal law nature of public antitrust enforcement. It seems much more plausible that the Court in Tele2 Polska considered NCA non-infringement decisions identical to those provided in Article 10 of Regulation 1/2003, and since the latter remain exclusively with the Commission, NCAs are reciprocally deprived of them. Nevertheless, Article 10 decisions differ substantially, in nature and effects, from any NCA decision and cannot be equated as the Court did. On the other hand, ’substantiated’ no- grounds-for-action decisions under Article 5(2) of the Regulation actually amount to non- infringement decisions, which are purely declaratory under the present legal exception system, seeAnton Dinev , The Bulgarian Supreme Administrative Court upholds an NCA decision finding no infringement of Art. 102 TFEU in a case involving concurrent application of competition rules and communications regulation (BTC Cable Ducts), 15 February 2011, e-Competitions, n° 38336. That declaratory nature, meaning such decisions do nothing but reflect a given legal situation under the current state of law, cannot preclude subsequent action, neither by the Commission nor even the same NCA, since administrative decisions have no res judicata. Consequently, it seems impossible to assimilate such decisions to ’acquittals’ for ne bis in idem purposes. It also seems unlikely that they create legitimate expectations with the undertakings concerned since these are under the duty to assess for themselves their conduct on the market and keep it in line with the requirements of Articles 101 and 102 TFEU, as implemented by EU regulations and construed by the EU judicature. Non-infringement decisions by the NCA, like those stating no grounds for action too, cannot add to what is already under EU law. Their declaratory nature is next a good reason to believe that because they are not mentioned in Article 11(4) of the Regulation, they constitute no obstacle for the Commission to reconsider the matter after a NCA finds no infringement of EU antitrust laws. Bringing the draft decision to the knowledge of the Commission is of course quite useful for ensuring consistency in a timely fashion, yet administrative non- infringement decisions produce no effect that could prevent subsequent intervention by the European authority, even in light of the nebis in idem prohibition. This view takes into account the fundamental distinction between findings of an administrative authority and administrative measures eventually imposed, such as penalties or binding commitments which, unlike the former, do introduce changes in the legal situation of the undertakings concerned. Such changes are indeed crucial for the effectiveness of EU antitrust enforcement, which makes it indispensable to verify the NCA findings that justify them before they take effect. Conversely, where no binding or constitutive effects result from non-infringement and (substantiated) no-grounds-for-action decisions Commission control on the NCA findings is not a necessary condition, although it can be very helpful. [34 ] See Ju raj Neu wirth , Ru d olf Ren ts ch , op. cit. In this regard, the ECJ may, on its own motion, incidentally examine the validity of EU acts where the preliminary reference sought only their interpretation, see ECJ Judgment, 1 December 1965, Case 16/65, Schwarze ECR 1082, p. 1094; ECJ Judgment, 3 February 1977, Case 62/76, Strehl ECR 211, para. 10; adde Opinion Sharpston, 10 April 2008, Case C-345/06, Heinrich ECR I-1659, para. 51. [35 ] ECJ Judgment, 16 March 1978, Case 135/77 Bosch ECR 855, para. 4. [36 ] ECJ Judgment, Toshiba, op cit., paras 77 and 78. [37 ] A noteworthy comparison can be drawn between the Court’s holding and AG Kokott’s Opinion on the one hand and on the other hand, the following doctrinal submission: «[t]he opening of proceedings by the Commission under Article 11(6) only relieves the Member State Competition authorities of their competence to apply Articles 81 and 82. However, when combined This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 16 Anton Dinev | Concurrences | N°49475 with Article 3, the opening of proceedings will in a great many cases also prevent the Member State competition authorities from acting under national competition law. In combination, Article 3(1) and 3(2) limit the scope for stand-alone application of national competition law. […] In all these cases [covered by the convergence rule] the application of Community law is thus a sine qua non for applying national law. When the Commission opens proceedings under Article 11(6) this condition can no longer be satisfied since the national competition authorities are no longer competent to apply Article 81 and 82 in the case at hand « (Ed d y d e Smijter, Lars Kjølbye , «The Enforcement System under Regulation 1/2003«, in J. Faull, A. Nikpay (eds.), The EC Law of Competition, 2nd ed., OUP, Oxford, 2007, p. 99, para. 2.42). Such an analysis seems, nevertheless, to confuse perilously application (exercise of competence) with consistency (outcome of application). See also infra note 44. [38 ] French Supreme Court (Cour de cassation), 10 May 2011, Judgment n° 466 FS-D, Case n° H 10-14.881, Expedia, OJEU C211, 16.7.2011, p.17. [39 ] This has been made clear regarding national courts in para. 5 of the Notice on cooperation with courts of the Member States (OJ C101, 27 April 2004, p. 54-64). [40 ] In this regard, it is important to note how the Paris Court of Appeal reached the conclusion that the French Competition Authority could apply de minimis thresholds different from those in the Commission Notice. The Court first observed that Article L.464-6-1 C.com had been formulated in a permissive manner, thus providing a discretionary procedural rule under which the FCA may or may not initiate proceedings against an agreement that falls below the de minimis thresholds. The Court then pointed out that, even if the Commission bound itself not to initiate proceedings against agreements below the thresholds, its Notice lacked binding authority upon national courts and authorities. The conclusion was that the FCA could apply Article 81 to the agreement at issue without following the assessment criteria in the De Minimis Notice (Paris Court of Appeal, 23 February 2010, Judgment n°19, Case n°2009/05544, Expedia). It is true that, unlike the requirement to establish appreciable restriction of competition that results from settled case-law, the methodology for such an assessment set out in the Commission Notice is not formally binding upon NCAs. However, had the Court of Appeal started its analysis from the fact that, regardless of national law, the applicability of EU law also had important procedural implications for the FCA, it would have given due consideration to whether extending NCA discretion beyond that of the Commission would undermine the cooperation mechanisms for ensuring consistent public enforcement set out in Articles 11(4) and 11(6) of Regulation 1/2003. Even if such extension of discretion were to be admitted, subject to requiring NCAs to state proper reasons for departing from the Commission’s criteria, there would still be reasonable concerns about the leading role the Commission has in defining EU antitrust policy and controlling its implementation (see Article 105 TFEU and para. 43 in fine of the ECN Notice). Indeed, when NCAs apply EU law to conduct that the Commission already bound itself not to investigate or adjudicate, then the European authority could choose either not to intervene or to do so by stating the same reasons as those of the NCA that brought the case. In any event, it would be hard to say that in such a situation the Commission is still the one that outlines EU antitrust policy, and the guidance in its ’soft law’ would be variable and, ultimately, dependent upon national preferences in individual cases. That the Commission may depart from its own rules of conduct by stating good reasons does not mean NCAs could do so; otherwise, the former would need to follow the latter. Clearly, such a scenario reduces the effet utile of EU law, and national procedural autonomy governing NCA discretion, like in Article L.464-6-1 C.com, reaches the limits set by the principle of effectiveness. [41 ] ECJ Judgment, Walt Wilhelm, op.cit.,para. 6: «[t]he binding force of the Treaty and of measures taken in application of it must not differ from one state to another as a result of internal measures«. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 17 Anton Dinev | Concurrences | N°49475 [42 ] For a discussion, seeAnton Dinev , The Bulgarian Supreme Administrative Court approves of the NCA’s qualifying, with reference to Art. 3(5)(c) of Reg. 139/2004, a national-dimension acquisition of control as a concentration notifiable under the Competition Act but quashes the fine for non-notification (Allianz Leasing Bulgaria), 7 July 2010, e-Competitions, n° 33203. [43 ] In the early years of Regulation 17/62, a substantive ’double barrier’ was often advanced in German legal writings in particular. According to that theory, «agreements are only lawful if they meet the requirements laid down both by national law and Community law and that it is also possible for the consequences of the prohibitions to be applied concurrently« (Opinion Roemer, 19 December 1968, Case 14/68, Walt Wilhelm ECR 17, p. 20). Such a theory clearly limited the scope of European antitrust rules by making them conditional upon their national counterparts, if any. Naturally, the ECJ in Walt Wilhelm rejected any idea of substantive ’double barrier’ regarding the prohibitions in Articles 85(1) and 86 EC [101(1) and 102 TFEU]. Nevertheless, the concept of ’double barrier’ remained, designating instead, somewhat misleadingly, the fact that a given economic conduct may fall within the respective jurisdiction under both national and EU law. Such jurisdictional parallelism, however, may or may not occur and is certainly not a necessary, although acceptable, result from EU standpoint: once an NCA establishes appreciable affectation of interstate trade, hence its jurisdiction pursuant to Article 3(1) of Regulation 1/2003, it is no longer of EU concern whether this NCA also applies its national law, provided such an application complies with Article 3(2) of the Regulation. The contrary would be a veritable jurisdictional ’double barrier’ whereby the effect on trade condition is not sufficient, and NCAs also need be competent to and apply national antitrust law. As a result, the scope of Article 3(1) would vary among the Member States depending on purely national preferences, yet it is solely for the EU legislature to define that scope. Was this not the reason why the Commission reacted so firmly to Czech and Slovak legislations that excluded some regulated industries from the competence of the local competition authorities, without however designating as NCAs the respective sectoral regulators? See Commission Press Releases IP/07/400 of 23 March 2007, IP/07/956 of 28 June 2007 (Czech Republic) and IP/09/200 of 2 February 2009, IP/09/1182 of 23 July 2009 (Slovakia).Adde Commission, 29 April 2009, Staff Working Paper accompanying the Report on the functioning of Regulation 1/2003, SEC(2009) 574 final, para. 195. [44 ] It is to be noted that ’application’ and ’prohibition’ should not be confused, as ’prohibition’ is merely a possible outcome of a given ’application’. Thus, Article 3(2) of the Regulation provides that the ’application’ of national competition law may not lead to the ’prohibition’ of agreements. Moreover, paragraph 6 of the ECN Notice clarifies that the parallel ’application’ of national law to agreements may not lead to a ’different outcome’ from that under EU law. [em ] See already ECJ Judgment, Walt Wilhelm, op. cit., paras 7-9: «it is for the [national authorities] to take the appropriate measures […] so long a regulation adopted pursuant to Article 87(2)(e) of the Treaty has not provided otherwise«. This is one of the earliest jurisprudential consecrations of the so-called principle of indirect administration, now explicitly recognized in Article 291(1) TFEU and Article 4(3)(2) TEU. [45 ] See Ingrid B reit, Jeroen C apiau , Doroth e Dalh eimer, Vita Ju k nevi či ūt ė, Petra Krenz , Evelyne Rik k ers , Ails a Sinclair , Developments in and around the European Competition Network and cooperation in competition enforcement in the EU : An update, Concurrences N° 3-2012, pp. 78-87. [46 ] ECJ Judgment, Walt Wilhelm, op. cit., para. 5: «Article 85 of the EEC Treaty applies to all the undertakings in the Community whose conduct it governs either by prohibitions or by means of exemptions«. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 18 Anton Dinev | Concurrences | N°49475 [47 ] For a similar approach, see Ed d y d e Smijter, Lars Kjølbye , op cit., p. 167, para. 2.242, note 241: «it is clear that the obligation on NCAs and national courts to apply Arts 81 and 82 in cases falling within the substantive scope of application of those provisions is of a procedural nature. Indeed, Art 3(1) of Regulation 1/2003 does not impose any new substantive rule upon undertakings […] it only regulates the way in which the substantive rules are being enforced «. [48 ] There seems to be a linguistic confusion among the different versions of the Regulation. In the English one, Article 5(1) reads that NCAs «shall have the power to apply« and Article 11(6) – «shall relieve [them] of their competence to apply«, while in the French version these two provisions use quite similar wording – «sont compétents pour appliquer« and «dessaisit[…] de leur compétence pour appliquer«. Perhaps that in French ’pouvoir(s)’ and ’compétence(s)’ are often used interchangeably explains why the English version of Article 11(6) likewise uses ’competence to apply’ instead of ’power to apply’. However, these two must not be confused. As it is also apparent inBlack’s Law Dictionary, ’competence’ has a broader meaning and includes all ’powers’ and ’duties’ necessary for its exercise (see supra note 11). Conversely, the existence or lack of a given power has to do with the exercise of the (general) competence and not its very existence. Thus, Article 11(6) deprives NCAs only of their power under Article 5(1) but not of their competence to apply Articles 101 and 102, which stems from the jurisdictional ’effect on trade’ criterion and determines the (initial) scope of the duty to exercise it in Article 3(1) of the Regulation (see paragraph 8 of the Commission Guidelines on the effect on trade concept, OJEU C 101, 27.4.2004, p. 81). Unfortunately, the ECJ have not apparently paid much attention to this important distinction, and several language versions of Toshiba refer to quite different effects of Article 11(6): «dessaisissement« (French) as opposed to «loss of jurisdiction« (English) and «perdita di competenza« (Italian), on the one hand, and «privación de atribuciones« (Spanish) and «освобождаванеотправомощия« (Bulgarian), on the other hand (ECJ Judgment, Toshiba, op. cit., para 90). [49 ] See ex multis, ECJ Judgment, 16 December 1976, Case 33/76, Rewe ECR 1989, para. 5. Comp. with Walt Wilhelm cited supra note 43. [50 ] AG Kokott opined likewise: «[Article 13] does make itpossiblefor each competition authority within the ECN to suspend the proceedings before it or to reject a complaint lodged with it where another authority in the ECN is dealing with the same case. However, the authorities concerned are by no meansobliged to proceed this way« (para 89, emphasis in the original). Both the Court and AG Kokott, however, seem to have considered Article 13 strictly from the perspective of EU law, which was in fact the only possible view under the originally proposed system of mutually exclusive jurisdiction. This EU perspective can be both horizontal, concerning the NCAs alone, and vertical, between NCAs and the Commission. It can also be simultaneous (Art. 13(1)) or subsequent (Art. 13(2)). A second perspective, this time national, has nonetheless been introduced with the system of parallel application, a change that Article 13 does not appear to have integrated. Could an NCA stay/end its proceedings under EU law or refuse ab initio to commence them where the same facts have already been investigated by another NCA or the Commission and still proceed in application of national law alone? Would that not jeopardise the effet utile of Article 3(2) of the Regulation? This scenario offers another example of the procedural implications the so-called convergence rule might have in the current enforcement system of Articles 101 and 102 TFEU. Moreover, it suggests that Article 13 not only harmonises NCA discretionary powers, as intended initially in the Commission’s proposal, but also interferes with the scope of Article 3(1) and thereby with the NCA competence to apply EU law. In a system of mutually exclusive jurisdiction, conflicts between EU and national laws are avoided at the stage of applicability when the very existence of competence to apply is established; hence, its exercise afterwards cannot by any means lead to inconsistent outcomes. By contrast, in a system of parallel enforcement, NCAs remain nominally or potentially competent to apply two sets of substantive laws until a case is closed, and the exercise of the respective competence may be a source of conflict, which is governed by the convergence rule. Since This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 19 Anton Dinev | Concurrences | N°49475 Article 3(2) deals with the exercise of competence, both EU and national, what would be the relevant object of the procedural duty in Article 3(1)? Unless jurisdiction under EU law, i.e. the existence of competence, is made conditional upon existence and/or effective exercise of competence under national law, Article 3(1) can only be seen as regulating the exercise of competence that already results from the fact that a given conduct appreciably affects trade. Nevertheless, the scope of the duty to apply EU law may vary, depending on the exercise of corresponding powers, and thus limit the exercise of competence under Articles 101 and 102 TFEU, without undermining its very existence. In other words, Article 3(1) provides that in principle NCAs must exercise in full their competence to apply the Treaty prohibitions as determined by the jurisdictional criterion of effect on trade therein, which means in practice that they must not only verify and establish the existence of that competence where Articles 101 and 102 TFEU are applicable but also assess whether or not they have been breached. There are of course exceptions to this principle of full exercise, and Article 13 is one of them. It provides a discretionary power that limits the scope of the duty in Article 3(1) and, hence, reduces the exercise of competence to apply EU law. However, EU jurisdiction remains as long as interstate trade is affected and the convergence rule applies. Consequently, the optional character of staying/ending proceedings under EU results in an obligation to stay/end domestic proceedings in the exercise of national competence, as argued unsuccessfully in Toshiba. It is noteworthy that in this scenario, the procedural implications of the convergence rule would concern equally proceedings against agreements and unilateral conduct since Article 13 makes it unnecessary to assess the substantive conditions of the Treaty prohibitions. However, as already seen, the duty in Article 3(1) requires NCAs to ascertain there is no infringement of Article 102 TFEU before moving to apply stricter national laws, according to Article 3(2) of the Regulation. In any event, even an obligation to parallel discretion under Article 13 in exercise of national competence is to be given effect by an appropriate decision pursuant to domestic procedure (see paragraph 25 of the ECN Notice). [51 ] Opinion Kokott, Toshiba, op. cit., para. 74, citing ECJ Judgment, 6 February 1973, Case 48/72, Haecht II ECR 77, para 16. [52 ] Compared to the wording of Article 13, that of Article 5(2) appears even more clearly permissive, hence allowing national procedural autonomy, contrary to what was held in Tele2 Polska. There is indeed a major difference between these two provisions of Regulation 1/2003. As already seen, insofar as the (horizontal) enforcement of EU law is concerned, Article 13 extends the NCAs’ discretion to decide whether or not to stay/end their proceedings. On the other hand, ending proceedings is not optional (eventually they must end), and Article 5(2) merely provides a type of decision to that effect. In other words, whereas discretion under Article 13 deals with what can be done, ’may’ in Article 5(2) refers to how it can be done. This means, in practice, where an administrative NCA choses to close proceedings by stating no grounds for (further) action under EU law, its decision must be that provided in Article 5(2) since the Regulation leaves no room for procedural autonomy on this point; alternatively, it ’may’ chose to adopt a final decision provided by national law, complying of course with the principles of equivalence and effectiveness. In the specific context of public antitrust enforcement, the former would require absolute equivalence in nature – exactly the same type of decision is to end proceedings indistinctively under Articles 101 and 102 as well as under their national counterparts. The latter principle, on the other hand, would require a minimum equivalence in degree – a final decision under national law must be at least as effective as a no-grounds-for-action decision under Article 5(2). Against this background, the Bulgarian Supreme Administrative Court held, in BTC Cable Ducts, that no grounds for action under Articles 101 and 102 TFEU actually amounted to finding no infringement of these provisions. Such a view seems corroborated by the very wording of Article 5(2), which refers to assessing the (substantive) «conditions for prohibition« of the Treaty prohibitions, by the duty to apply these prohibitions imposed in Article 3(1) of the Regulation, and lastly by the absence of conflict with other procedural rules governing the ECN. The Bulgarian court, therefore, had sound reasons to uphold This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 20 Anton Dinev | Concurrences | N°49475 the NCA’s power to adopt non-infringement decisions provided by national law also in application of EU law, unlike the ECJ which denied that power a couple of month later in its controversial Tele2 Polska ruling. [53 ] As seen above, unlike the system of mutually exclusive jurisdiction according to the Commission’s initial proposal, in the current system of parallel enforcement Article 3(1) of Regulation 1/2003 deals with application (exercise of competence to apply) and not jurisdiction or applicability (existence of competence to apply). It therefore requires that in principle NCAs exercise in full their competence under EU law, unless otherwise provided by the Regulation itself, i.e. where it expressly leaves no room for such exercise in which case their competence exists only nominally. This means that, as a rule, NCAs terminate their EU proceedings upon assessment on the merits by adopting ’substantiated’ no-grounds-for-action decisions pursuant to Article 5(2), in essence quite similar to non-infringement decisions, which should be equally acceptable, whereas the exception is that they may (need to) also adopt purely procedural no-grounds-for-action decisions, again pursuant to Article 5(2), this time dealing with their competence to intervene in application of EU law (non-lieu à intervenir). Indeed, there are provisions in Regulation 1/2003 that affect the scope of the duty in Article 3(1), thus excluding a priori any substantive assessment of the «conditions for prohibition« according to the proviso of Article 5(2). Consequently, the no-grounds-for-action decisions it provides remain strictly procedural, as they merely reflect that there is no room for NCA to intervene it the matter and thus apply Articles 101 and 102 TFEU. Such no-grounds-for- action (non-lieu à intervenir) decisions may result from the discretionary power under Article 13(2). They also seem the appropriate means for ending NCA proceedings under EU law where the Commission makes use of its exclusive power in Article 11(6). Finally, this is the type of decision that must be taken by NCAs in Member