While not completely overturning the Alrosa case law, the Court of Justice’s judgment in Canal+ (Case 132/19 P) crushed the “sky is the limit” reasoning that it introduced when it comes to commitments. Despite this, the weak application of the proportionality principle featured in Alrosa is still alive.

In Alrosa, the Court of Justice ruled that proportionality means something different in commitments cases (Article 9 of Regulation 1/2003), as compared to remedies imposed by the Commission in the context of infringement decisions (Article 7 of Regulation 1/2003). Accordingly, applying the principle of proportionality “is confined to verifying that the commitments in question address the concerns it expressed to the undertakings concerned and that they have not offered less onerous commitments that also address those concerns adequately” (Court of Justice, Alrosa, para. 41). When it comes to Article 7, however, proportionality has a stricter meaning, which is that the Commission’s remedies must “not exceed the limits of what is appropriate and [must be] necessary” (General Court, Case T-111/08, para. 323).

It is fair to say that for a long time, Alrosa was seen as a free pass for the Commission, as it allowed it to accept commitments that went beyond what was considered as proportionate under Article 7. In other words, the sky was the limit. However, there was always a caveat: “when carrying out [the] assessment [of commitments], the Commission must (…) take into consideration the interests of third parties” (Court of Justice, Alrosa, para. 41).

The Canal+ judgment was the first time the Court was overturning a commitments decision — and it did so on the basis on the interest of third parties. In other words, the last sentence of the 41th paragraph of the Court’s judgment in Alrosa had remained dead letter until Canal+ — and it came back to bite the Commission. In that sense, Canal+ put the Alrosa genie — which could grant the Commission almost any wish when it came to commitments cases — back in the bottle, with a clarification. In Canal+, Paramount’s commitments involved not enforcing certain territoriality clauses, resulting in Canal+’s contract with Paramount (which was based on this clauses) becoming effectively void. While the General Court claimed that disputes based on this contract could be solved before national courts, the Court of Justice dismissed this possibility, invoking Article 16 of Regulation 1/2003, which clearly states that national courts cannot issue decisions that conflict with a Commission decision. This meant the Commission adopted a decision that eliminated contractual rights of third-party Canal+ without giving it real legal recourse.

In Canal+, the Court distinguished (i) the proportionality of the commitment to solve identified competition issues from (ii) the proportionality of the commitment with regards to third parties.

While Canal+ goes a step towards a better consideration of third parties, the weak definition of proportionality for commitments themselves (i.e. with regards to their objective) remains well and alive. This poses several issues:

• Alrosa effectively shielded the Commission from substantive judicial control of the content of its commitment decisions, thereby becoming a preferred tool for DG COMP.
• Without a substantive proportionality review, the Commission can use commitments in a “regulatory” fashion, i.e. in order to influence the structure of markets (beyond what is necessary). It must be noted that although it is the parties who formally propose commitments, the Commission often has a significant influence on their content.
• Several key procedural rights apply with an Article 7 decision, and not an Article 9 decision — for example, the right to be heard and have access to the file kick in when a statement of objection is addressed to the undertaking(s), which is not the case for commitments.

While Canal+ was a step in the right direction to protect the rights of third parties, the principle of proportionality (enshrined in Article 5(4) of the TEU) has been durably weakened — even after Canal+ — by Alrosa.

In her song So What, P!nk sings that her mistakes don’t matter because she’s still “a rockstar.” Similar things might have been heard in the corridors of DG COMP after the 2017 Intel judgment, in which the Court of Justice considered the Court’s breach of the right of access to the file did not vitiate its decision (although the case was sent back to the General Court). Not all such breaches lead to annulment of a decision (or part thereof): this blog explores why, focusing on evidence from interviews.

Access to the file is a direct translation of the principle of equality of arms. In antitrust proceedings, access to the file is granted to the parties that are the addressees of a statement of objection (Article 15(1), Regulation 1/2003).

In antitrust proceedings, the basic principle is that a Commission decision (or part thereof) can be annulled by the CJEU on the basis of a procedural breach only if the applicant(s) show(s) that, absent the procedural breach, the outcome would have been different (Court of First Instance, Hercules Chemicals v. Commission, para. 56). When it comes to incriminating evidence, the parties must therefore show that the Commission based itself on the document to reach its decision and that its decision would have been different had the document not been used by it (Court of Justice, Aalborg Portland and Others v Commission, para. 73). Reversely, when it comes to exculpatory evidence, the applicant has to show that it could have defended itself differently and that this could have had an impact on the Commission’s decision (Ibid., para. 74).

The key question — for both inculpatory and exculpatory evidence — is therefore the following: what does one need to prove to show that a breach of the right of access to the file would have impacted the course of proceedings and that this could have led to a different outcome in terms of the content of the Commission’s decision?

An assessment of the relevant case law reveals a standard that takes the shape of a double-edged knife for the Commission. On the one hand, it means that many procedural breaches of the right of access to the file will be void of practical consequences, for it is sometimes fairly difficult for an undertaking to meet this standard. In the Intel case, for example, the Commission organized a meeting with Dell but did not properly disclose it or granted Intel access to the minutes — a procedural breach, according to the Court of Justice (Court of Justice, Intel, para. 96). Intel claimed the meeting contained exculpatory evidence that could have had an impact on the Commission’s decision.

However, Intel failed to prove that, based on an internal DG COMP note that was provided to it, it could show the meeting contained the said-exculpatory evidence; additionally, Intel did not make use of the possibility to ask for the person the Commission interviewed to be summoned before the General Court; and it failed to prove it contacted that person to obtain the exculpatory evidence (Ibid., para 99-102). In light of the above, the Court refused to annul the decision because of the procedural breach. Similary, in Google Android, “Google was able to obtain information from the Commission about the substance of what was discussed during those interviews (…) [but] has not put forward any detailed argument that might explain how it might have been better able to ensure its defence” (General Court, Google Android, para 946-947).

These judgments show the Court’s focus on establishing whether the undertaking can genuinely prove that the outcome of the proceedings would have been different, in order to distinguish claims that are aimed purely at discrediting a decision of the Commission, from those where the undertaking genuinely opiates that it has been harmed. The formula is the following: if the undertaking has sufficient information about the evidence but fails to prove that its defense during the proceedings (and therefore, potentially their outcome) could have been different, then the Court is rather strict and reaching the annulment of a decision is difficult.

However, when information on the content of a Commission’s meeting is so sparse that it is not possible to eliminate the possibility that exculpatory evidence might have been produced and that it could have been used by the undertaking(s) to change the outcome of a case, the standard of proof is less difficult to meet for the undertaking(s) which ‘only’ need(s) to provide arguments that “tend to demonstrate in concrete terms” that the interview “could” have contained evidence allowing for a better defense and potentially changing the outcome of the Commission’s (General Court, Quallcomm v. Commission, para. 221)

In other words, when it comes to access to file, when the Commission does it job, especially when it comes to recording and providing a proper record of the evidence produced in the course of meetings, it is very difficult for a procedural breach of the right of access to file to lead to the annulment of a decision (or part thereof). However, when a proper record has not been given access to, and that the undertaking(s) show(s), in a genuine manner, that there exists a possibility that exculpatory evidence could have been produced and that it could have helped building a better defense, with a potential favorable impact on the outcome of a case, a decision (or part thereof) can easily be annulled. Hence the double-edged sword of this standard from the Commission’s perspective.