The General Court’s (‘GC’) judgement of February 9th 2022 (T-791/19) deals with, for the first time, the impact of systemic or generalised deficiencies in the rule of law in a Member State for the determination of the authority best placed to examine a competition complaint. This major decision ignited critical discussions on the judicial scrutiny of complaint rejections in EU competition law.
Facts of the case
In 2016, the Polish company Sped-Pro lodged a complaint with the European Commission against PKP Cargo (a company controlled by the Polish State), claiming that the latter had abused its dominant position on the market for rail freight transport services in Poland.
In 2019, the Commission rejected Sped-Pro’s complaint, considering that the Polish NCA was best placed to examine it. However, Sped-Pro had sought to dissuade the Commission from rejecting its complaint on this ground, arguing that both the Polish NCA and national courts lacked independence.
Consequently, Sped-Pro brought an action for annulment of the Commission’s decision before the GC. The latter upheld Sped-Pro’s complaint that the Commission was best placed to examine its complaint, considering widespread and systemic rule-of-law concerns in Poland (Sped-Pro, para. 106). However, it rejected Sped-Pro’s other arguments that the Commission had infringed Sped-Pro’s right to have its case examined within a reasonable time (para. 35) and that the Commission had failed to properly appreciate the EU’s interest in investigating the complaint (para. 69). The contested decision was therefore upheld by the GC.
I – The Commission’s limited discretion to reject complaints
Pursuant to Article 105(1) TFEU, the Commission has discretion on the cases to pursue to ensure the application of Articles 101 and 102 TFEU. Under Article 7 of Regulation 773/2004, the Commission may reject a complaint due to the lack of any EU interest in the matter complained of (Notice on the handling of complaints, pt. 28). In assessing the EU interest raised by a complaint, however, the Commission is obliged to examine carefully the factual and legal elements brought to its attention by the complainant (Automec II, T-24/90, para. 79).
The review of rejection decisions by the CJEU is limited (Koelman v. Commission, T-575/93, paras. 41-43). It is not for the Court to substitute its own assessment of the EU interest for that of the Commission (EFIM v. Commission, C-56/12 P, para. 36).
However, the Sped-Pro ruling sets a critical limit on the Commission’s discretionary power, reinforcing that it must be exercised in a manner consistent with fundamental rights and effective judicial protection.
II – The exception to the principle of mutual trust to strengthen judicial review
The GC draws an analogy to the 2018 LM ruling where it provided an exception to the principle of mutual recognition : a judicial authority must refrain from executing the European Arrest Warrant when there are substantial grounds to believe that there is a real risk in that particular situation of a breach of his fundamental right to a fair trial under Article 47 of the Charter, on account of systemic or generalised deficiencies concerning the independence of the judiciary of the issuing Member State (LM, C-216/18 PPU, paras. 60 and 74). The GC subsequently established a two-step test for assessing judicial independence (paras. 77-81).
Such an analogy may seem surprising given the factual differences of these cases, yet they are both linked by the principle of mutual trust. Indeed, Regulation 1/2003 and the Commission’s Notice on cooperation within the Network of Competition Authoritiesestablish a system of close cooperation between the competent competition authorities based on the principles of mutual recognition, mutual trust and loyal cooperation (Sped-Pro, paras. 83-88).
While NCAs are assumed to operate under conditions of legal certainty and judicial independence, the GC concludes that systemic rule-of-law deficiencies in a Member State must be considered when determining the best-placed authority to handle a competition case (para. 92).
III – The concrete and substantive assessment of the rule of law concerns before the rejection of a complaint
A crucial takeaway from Sped-Pro is that judicial review of complaint rejections must be substantive rather than merely procedural. The GC found the Commission’s reasoning for rejecting Sped-Pro’s complaint to be overly abstract, merely stating that the rule-of-law concerns raised by the complainant were unsubstantiated and without engaging with the detailed evidence presented (para. 104-105).
The GC concluded that the Commission’s approach was insufficient. As a result, the GC upheld Sped-Pro’s complaint that considering widespread and systemic rule-of-law concerns in Poland, the Commission was best placed to examine its complaint rather than the Polish NCA.
Conclusion
The Sped-Pro judgement underscores the growing need to strengthen judicial scrutiny of the Commission’s discretion to reject competition complaints. The Commission must conduct a proper assessment of systemic rule-of-law concerns, as effective competition enforcement cannot be divorced from the protection of fundamental rights and the rule of law.
This case exposes the fragility of mutual trust in decentralized EU competition enforcement, setting a precedent that could be invoked in future cases where complainants allege that rule-of-law concerns threaten the fairness of NCAs’ decisions. If systemic deficiencies in national competition enforcement persist, there may be increased pressure on the Commission to take direct action rather than deferring to potentially compromised NCAs. This could shift the balance of competition law enforcement back toward the Commission, whose accountability is intensified to safeguard competition law’s effectiveness.
Co(E)mpetition Procedure 