“Neelie Kroes violated our human rights!”
That is the curious claim being made by Intel in its appeal of the European Commission’s ruling that the company had violated European antitrust laws and the concomitant record breaking 1.06 billion euro fine, according to the Wall Street Journal Europe’s Charles Forelle.
While Forelle calls the argument a bit of a “Hail Mary,” he also explains that Intel is just one of many companies that are making it.
Intel isn't alone. A growing list of companies are raising the charge that the EU's vigorous antitrust watchdog is running afoul of protections afforded by European human-rights law. The companies argue they have a right to have their case heard in a court instead of an administrative body.
In fact, the more I read, the more interesting this line of reasoning gets.
At the center of this argument is the peculiar structure of the European antitrust apparatus, one that most people (especially in the US) do not fully grasp. In Europe, the Competition Commissioner and her staff play the role of prosecutor, judge, and jury. As Forelle explains:
The issue calls into question the EU's practice of having a political appointee — the current antitrust commissioner is Neelie Kroes of the Netherlands — who supervises investigations, and then decides whether the company is guilty and what the punishment should be. Her decisions are formally approved by all the 27 EU commissioners, but in practice they are rarely questioned. That kind of administrative procedure was appropriate four decades ago, when the EU began handing out relatively small fines, defense lawyers say, but outmoded in an era in which nine-figure penalties are common.
It’s a system that is certainly weighted against companies, but where do Intel’s “human rights” come into the picture?
It appears that the Global Competition Law Centre (GCLC) at the College of Europe has been raising concerns for the past couple years about how the EC antitrust body violates the European Convention of Human Rights. In a white paper released in April 2008, the GCLC argued that:
“…from a strictly legal point of view, the combination of all powers within one institution raises the question of the compatibility of competition law proceedings led by the European Commission ("the Commission") with the fundamental right to a fair trial as enshrined in Article 6 of the European Convention of Human Rights ("ECHR").”
The traditional view has been that the Commission does NOT need to have an impartial tribunal because the EC classifies antitrust as “minor offences” (not criminal) and, as EC spokesperson Jonathan Todd argued, "Each and every decision can be appealed" to the Court of First Instance in Luxembourg, which is independent. The GCLC paper refutes these ideas by arguing that:
- “Although fines imposed by the Commission are explicitly classified as non-criminal, this does not necessarily imply that proceedings relating to EC competition law infringements are inherently non-criminal in nature" and references efforts by the EC to heavily stigmatize "violations of EC competition law, and indeed the current Competition Commissioner has explicitly equated cartel activity to theft.”
- “The current system also leads to the accumulation of investigative, prosecutorial and adjudicative powers by the Commission during the whole proceedings in antitrust cases leads naturally to what is called "prosecutorial bias"
- Review by the CFI is limited to merely reviewing what the Commission has already decided for "manifest errors" in law. The CFI cannot “rehear the case” or “substitute its own opinion for that of the Commission.”
A Positive Reason, Or Just Excuses?
As Forelle noted, this is still not an easy legal case to make (companies also need to convince the CFI that the EC is actually bound by the ECHR), but it is a compelling idea.
Regardless of whether you believe the Commission generally arrives at the right conclusions, it is essentially uncontested that the European antitrust apparatus does not meet the requirement of a fair criminal trial as enshrined in the ECHR (and most international ideals). Yet, the only defense for this system seems to be, “It doesn’t NEED to meet that bar.”
As the ECHR declares, fair trials are a fundamental human right. In order for a society to deny that right, even in the case of a “civil penalty,” should it not have a positive reason for why it must…not just an excuse for why it can?”