“Ask a lawyer to name the most basic procedural right, he/she will likely reply: the right of defense” raised Eric Barbier de la Serre and Claire Lavin[1]. However, the contours of this right have often been debated in Court.
Then, how can businesses properly defend themselves if they do not fully understand the scope or purpose of the investigation? This is where the requirement for a statement of reasons in requests for information (RFIs) plays a major role.
An RFI is essentially a tool used by the Commission to gather evidence during a competition investigation. Under Article 18 of Regulation 1/2003, there are two ways in which the Commission may request information. A simple request is informal and does not compel the company to respond. Adversely, a binding decision is a formal and mandatory request.
Article 18(3) of Regulation 1/2003 requires the Commission to justify binding decisions, specifying the legal basis, purpose, suspicions of infringement, and the time limit for providing the information. Therefore, the statement of reason limits the European Commission’s freedom to request “all necessary information” alongside proportionality, legal professional privilege, privilege against self-incrimination and necessity. This provision gives companies the opportunity to respond properly and allows for judicial review by the European Courts.
The Cement case (C-247/14 P) has clarified an important point. When the European Commission issues a request for information, it must clearly explain why the information is needed and what its purpose is. In this case, the Commission’s requests to cement manufacturers were vague and issued years after inspections had already taken place. The reasoning lacked detail on the alleged infringements and was too general. The Commission did not specify the products or the geographical scope of the alleged infringement. However, requests for information must be properly reasoned, as Article 296 TFEU requires. The Court rightly followed the opinion of Advocate General Wahl, who considered that the Commission’s request was excessively broad, since it covered transactions carried out over a period of ten years in twelve Member States. As Francesco Carloni and Gabriela Da Costa explained, vague requests for information can lead to “fishing expeditions”, as companies are obliged to provide large amounts of information without knowing whether it is really necessary for the investigation[2].
The Cement Case especially highlighted the relevant distinction between the early and later stages of an investigation. Consequently, the statement of reasons for a decision must be considered in context. Initially, the Commission may issue broader RFIs. However, as the investigation advances and more evidence are gathered, the justification for the RFI should be more specific. In this case, the investigation was already two years old, and the Commission had enough information to clearly identify the potential infringements.
As a result, this case set a relevant precedent for future competition investigations. It raised the need for the Commission to be clearer and more specific in its information requests but also demonstrates the relevance of judicial review to ensure fairness for businesses. More generally, the case linked information requests and inspections by stressing the need for clear reasons, as in the inspection decisions. Yet, for Katri Havu, “the CJEU does not appear to try to draw a strong formal distinction between inspection decisions and information request decisions, but to highlight the difference between fact-finding at the very initial stages of an investigation and gathering information significantly later on in an investigation”[3].
The Court’s reasoning on the minimal clarity required for the statement of reason is welcome. Clarity is essential to assess whether the information was necessary. Besides, the ruling’s implications go beyond this case, as it underlines the limits of the Commission’s power to request information, and the balance required in this field.
In the Qualcomm case handed down on 9 April 2019 (T-371/17), the General Court reaffirmed the Commission’s power to issue information requests after formal proceedings have begun, provided these requests are justified and proportional. Here, it was the case as the contested decision was adequately reasoned. It was confirmed by the CJEU.
Lately, in the Meta case (T-451/20 and T-452/20), Meta questioned the Commission’s request for documents containing specific keywords related to alleged anti-competitive practices. Meta argued that the Commission had not sufficiently explained the purpose of the investigation and denounced the broadness of the request. However, the Court dismissed Meta’s action. More specifically, the Court found that the Commission had clearly described the alleged anti-competitive practices and identified the products and services concerned. As a result, Meta could understand the need for the information requested, and this allowed for judicial review.
Ultimately, the Court strikes a delicate balance in request for information. While it is prepared to hold the Commission to account where it goes too far and infringes the right of defense, it also provides clear guidance through its case law to ensure that the Commission’s powers are not unduly restricted.
[1] Claire Lavin, Eric Barbier de la Serre, « Rights of Defence and competition law: An overview of EU and national case law », e-Competitions Rights of Defence, Art. N° 81215, (2016).
[2] Francesco Carloni, Gabriela Da Costa, “Judgments in the Cement Case: Requirement for Greater Clarity, Specificity, and Justification of Information Requests from the Commission”, Journal of European Competition Law & Practice, Volume 7, Issue 7 (2016): 459, https://doi.org/10.1093/jeclap/lpw032
[3] Katri Havu, “Duty to State Reasons and Competition Investigation Information Request Decisions: the ‘Cement Judgments’ in Cases C-247/14 P, C-248/14 P, C-267/14 P and C-268/14 P”, Review of European administrative law (2016): 55.
Co(E)mpetition Procedure 