Hear Me Out!

Recent Rulings from the EU Courts in Qualcomm, Optical Disk Drives and Google Android Show That Failure to Respect the Parties’ Defence Rights May Come at a High Price. In recent years, there has been much talk of ‘due process’ and of ensuring a fair and impartial case handling by competition authorities. The EU Courts consistently stress the importance of respecting the parties’ defence rights but often end up siding with the European Commission. By finding no violation of the parties’ defence rights they signal that the Commission respects these rights and manages to ensure a fair and balanced case handling. However, a recent row of rulings from the EU Courts suggest that the winds are changing and that the bar has now been raised for the Commission. In these cases, the courts found the Commission’s administrative procedure to be vitiated by procedural errors, and that these errors were so serious as to constitute a breach of the companies’ defence rights.

On 15 June, the General Court delivered its ruling in Qualcomm. There, the Commission’s failure to respect the right to be heard led the General Court to annul the infringement decision in its entirety, quashing the €997 million fine imposed on the US chipmaker. The following day, the Commission was hit by yet another blow as the Court of Justice of the European Union (the ECJ) delivered its rulings in the Optical disk drive cartel cases. Establishing an infringement of the parties’ defence rights, it set aside the General Court´s ruling and partly annulled the Commission’s infringement decision. A few months later, in September 2022, the next blow came. This time, the General Court handed down its ruling in the Google Android case and found that the Commission had failed to respect Google’s right to be heard by not issuing a supplementary statement of objections or allowing Google an additional oral hearing. This was one of the reasons why the General Court lowered the fine imposed on Google by €200 million.

Pursuing an enforcement policy with a one-eyed focus on efficiency and effectiveness may thus have devastating consequences, not only for the Commission but potentially also for the effective enforcement of the EU competition rules. Companies suspected of competition law infringements should enjoy the rights provided under the EU Charter, but it is equally important that Commission decisions are not successfully challenged on procedural grounds, as this will undermine the effectiveness of the enforcement system.

Read the full article posted on the Kluwer Competition Law Blog here.