Out-Law News 2 min. read
28 Jun 2012, 3:42 pm
In an opinion on a case before the European Court of Justice (ECJ), Advocate General Cruz Villalón said that the underlying principles of EU law do not prevent the Commission from taking legal action before national courts to claim damages in such circumstances.
The European Commission is responsible for investigating agreements that restrict competition and have an effect on trade between EU Member States. It can fine firms that act in breach of competition laws, such as through forming anti-competitive agreements, and its decisions cannot be challenged in national courts.
The Advocate General said that the Commission is entitled to seek a remedy before national courts in the EU in cases where the EU's rights as a customer have been affected. That entitlement is permitted under the EU Charter of Fundamental Rights.
Cruz Villalón said that the Commission's right to take action where the claim is based on its own competition law infringement decision does not prejudice the rights of the defendant to a fair trial before an impartial tribunal as a result of the national courts' inability to question the validity of the Commission's findings in competition cases. This is because those defendants can challenge the Commission's findings before the EU's General Court and, as a last resort, the ECJ, instead, he said.
"The action for annulment before [the General Court and ECJ] is therefore a procedure which allows there to be a comprehensive judicial review of the Commission's decision and which safeguards the effective judicial protection of the person concerned," Cruz Villalón said, according to a statement issued by the ECJ.
The Advocate General said it was up to national courts to "declare and quantify the damage suffered by the EU as the result of anti-competitive conduct established by a Commission decision" and that judges in those courts could defer judgment on those matters until the General Court or ECJ confirms the validity of the Commission's anti-competitive findings.
The principle that parties to legal proceedings should have 'equality of arms' is not affected by the Commission's right to claim compensation before national courts in competition cases where it itself has "conducted an infringement procedure" resulting in a decision on which its compensation claims are based, the legal advisor said.
"The Advocate General recalls that the purpose of the principle of equality of arms is to ensure a balance between the parties to the proceedings, thus guaranteeing that any document submitted to the court may be examined and challenged by any party to the proceedings," the statement by the ECJ said. "Hence, there is inequality when the court has information which favours one party to the detriment of the other, without the latter having any effective means of challenging it."
"Thus, in the Advocate General's view, the Commission – simply because it has obtained certain information during an earlier investigation which it has not made available to the court – is not necessarily in an advantageous situation that infringes the principle of equality of arms," it said.
Cruz Villalón's opinion was issued in a case referred to the ECJ by a court in Belgium. The Brussels Commercial Court asked whether the European Commission is permitted under EU law to claim compensation against companies involved in the operation of a cartel in the elevators and escalators market in Belgium, Germany, Luxembourg and the Netherlands.
The Commission previously fined four firms nearly €1 billion for their participation in the cartel, although they have challenged the Commission's decision in the European courts.
Separately though, the Commission has taken its own legal action against the firms on behalf of the EU. It is claiming more than €7m in damages from the companies on the basis of its claims that the EU "sustained financial loss in Belgium and Luxembourg as a result of the cartel." It claims it paid higher than market price for the installation, maintenance and renewal of elevators and escalators within EU office buildings as a result of the cartel.