United States: Enter Margrethe Vestager: Exit Joaquin Almunia Pursued By An Ombudsman

Last Updated: November 12 2014
Article by Alec J. Burnside

Most Read Contributor in United States, September 2018

As outgoing EU competition commissioner, Joaquin Almunia, packs his family photos into the obligatory single cardboard box that embodies professional departures, the Brussels competition community is abuzz with speculation as to what might lie ahead under his replacement, Margrethe Vestager. Their contrasting public styles also invite some comment, with Mr Almunia under the cloud of an ombudsman investigation for outspoken public comment on a pending case.

Ms Vestager gave a polished performance during her successful confirmation hearing before the European parliament on 2 October. Denmark's deputy prime minister and minister for economic affairs and the interior until taking up this new challenge, this one-time unpaid intern in the European parliament showed qualities reminiscent of the fictional and charismatic Danish prime minister Birgitte Nyborg in the hit Nordic Noir series Borgen: quietly confident in her own abilities, measured but progressive, and with impeccable English. Ms Vestager is, after all, the leader of the Danish Radical Left Party (nicknamed the "Radicool" party). By her own admission, "literally it is radical left" but in substance it is "social liberals".

A full programme

Ms Vestager's in-tray when she takes office (on 1 November, if the schedule holds) will keep her busy. Her biggest customer, literally and figuratively, is arguably Google, with DG Comp presently looking at its alleged dominant practices in Search, the Android platform and other matters, while, in other quarters, Big Data concerns keep it equally in the limelight, along with calls for Europe to develop tech champions to counter Silicon Valley giants. And DG Comp's state aid investigations into sweetheart tax deals struck by member states such as Ireland, Luxembourg and the Netherlands with prominent multinationals such as Apple, Fiat and Starbucks have come to the fore just in the last few weeks, as the European Commission reaches for any available angles of attack on member states engaging in unfair tax competition. Also in the in-tray are cartel investigations into various financial services (Libor, Forex, CDS) as well as auto parts, which have been trundling along for some time. Ms Vestager will in addition be responsible for pushing through changes to the EU Merger Regulation currently under debate in DG Comp's white paper Towards more effective EU merger control. And the potentially incendiary investigation into Gazprom's abusive terms of supply is presently on hold, pending the international crisis in the Ukraine.

Ogling Google

At the top of the new commissioner's inbox is DG Comp's investigation into Google's dominance in Search, opened in 2010. Competition Commissioner Almunia recently conceded he would not be able to conclude the case during his term of office, despite his previous advocacy of the likely sufficiency of Google's third offer of commitments. He broke the news that he now judged the offer insufficient in an interview with Bloomberg TV – just as he had chosen a Spanish radio interview to announce the rejection of an earlier offer. The likely failure of the third offer was already in the wind from the moment in late July when he gave an unattributable briefing to leading members of the Brussels press corps about his developing views on the case.

Ms Vestager told the European parliament during her confirmation hearing that she hopes the Google Search probe will not be further delayed by other antitrust investigations into Google. Whether the case will progress to a formal statement of objections – and then ultimately a fine – remains to be seen. When pushed during the European parliament hearing on this point, she said that she does not yet know what the next steps in the case will be. This was indeed the only appropriate answer in the circumstances.

Strong and silent type?

Which brings us to the subject of the manner in which the EC – generally through the mouthpiece of the competition commissioner, although sometimes through an official spokesperson or other senior official – puts information into the public domain about ongoing competition cases.

To some extent, this is specific to the style of the individual competition commissioner. But the practice has been common to some degree to all the EU competition commissioners who have held office during the last two decades. Mr Almunia, though, might be said to have taken the practice to heights previously unseen, to the extent that, in August this year, the European ombudsman opened an investigation into a complaint by Crédit Agricole over statements made by the commissioner during the ongoing cartel investigation into the financial benchmark Euribor.

Not for nothing has Mr Almunia earned himself a reputation among the Brussels antitrust press corps as "always good for a story". And although the press pack will be hoping that the arrival of Ms Vestager does not see the disappearance of what has, in many respects, been their lifeblood over the last five years, a more serious question remains: what is appropriate for a competition commissioner to say in the public domain about ongoing cases?

No-one would say that the commissioner should decline all invitations to speak, since communication about policies and priorities is an important role. On the other hand, the commissioner has important decision-making powers and (to put it in legal terms) they should act in a quasi-judicial way. It is one thing to announce a decision once taken, or an opening of a Phase 2 merger investigation, for example. But it is a much more delicate thing to comment on a case that is still under examination – for example, as to the extent of concerns in a pending investigation, the imminence of a statement of objections, the extent of remedies that may be required, or the quality of a commitment offer.

During Mr Almunia's term, there have regularly been cases in the headlines because of comment of this kind. When the procedural step is actually taken by the institution, there are usual channels for communication. Until it has been taken, many would argue, there should be radio silence.

The fact that there is a media appetite for comment (and even nowadays an expectation that there will be comment) does not make it right to give comment. Nor equally the fact that information may emerge from other sources. "No comment on pending investigations" is a simple but effective response.

Examples from near and far

The German Federal Cartel Office, the UK's Competition and Markets Authority and the US antitrust agencies all work in that way. The US Department of Justice's antitrust division manual (Chapter VII, H., 2.) states:

"The policy of the Department of Justice and the antitrust division is that public out-of-court statements regarding investigations, indictments, ongoing litigation and other activities should be minimal, consistent with the Department's responsibility to keep the public informed... Public comment [...] should be limited out of fairness to the rights of individuals and corporations and to minimise the possibility of prejudicial pre-trial publicity."

The US Federal Trade Commission takes a similar line in its operating manual (chapter 17, sections 2.1 and 2.5): "The basic premise underlying the Commission's public information program is the public's right to know what the Commission is doing, tempered by the parameters established by the FTC Act and the Commission's Rules. "Staff also speak with the press on a broad range of topics. [...] Any discussion with the press, however, may include only information that has been released to the public."

Perhaps Commissioner Dixon encapsulated the issue most effectively in his statement in the US Cinderella Career and Finishing Schools v FTC case as far back as 1970:

"There is in fact and law authority in the Commission, acting in the public interest, to alert the public to suspected violations of the law by factual press releases whenever the Commission shall have reason to believe that a respondent is engaged in activities made unlawful by the Act.

"This does not give individual commissioners license to prejudge cases or to make speeches which give the appearance that the case has been prejudged.

"Conduct such as this may have the effect of entrenching a commissioner in a position which he has publicly stated, making it difficult, if not impossible, for him to reach a different conclusion in the event he deems it necessary to do so after consideration of the record." (425 F.2d 583 (DC Circuit 1970), 590).

Communication dilemmas in hybrid cartel cases

Crédit Agricole is alleging precisely this in its complaint before the European ombudsman now: that Mr Almunia made statements during the Euribor cartel investigation indicating that he may have taken a position even though the investigation had not yet concluded.

Crédit Agricole was one of three banks that decided not to voluntarily settle when the Commission settled with other banks and levied reduced fines on them (in December 2013) for their role in attempting to manipulate Libor and Euribor benchmark interest rates. In May 2014, JPMorgan Chase, HSBC and Crédit Agricole each received statements of objection. In June, Mr Almunia said that the investigation could be wrapped up by the end of October.

It is unclear which specific statements by Commissioner Almunia since the original dawn raids carried out in October 2011 are the subject of Crédit Agricole's complaint to the ombudsman, but a review of media stories on the Euribor cartel investigation reveals that there could be several which, it might be argued, bring into question the impartiality of the investigation. In September 2012, for example, the commissioner stated that the conduct under investigation in the Euribor and other cartel probes may be of a "level of gravity above average". Earlier, in June 2012, Mr Almunia remarked to a news service that the evidence DG Comp had collected in the probe was "telling" and that he was sure the investigation would not be closed without results.

The "hybrid" nature of this particular cartel case, involving a group of confessor banks prepared to settle for reduced fines on the one hand, alongside three that are still fighting to maintain their innocence, undoubtedly raises new communication challenges for Europe's competition regulator. The Commission has made clear that it does not want parties that participate in good faith in cartel settlement processes to fall hostage to those that do not want to settle, but it has a fine line to tread. The three banks which did not settle in the Euribor investigation now face an uphill battle trying to maintain their lack of involvement against a backdrop of clear confessions from their alleged conspirators. That one of them has turned to the ombudsman with due process concerns following various statements made in the public domain is hardly surprising.

Can she rise above it?

Ms Vestager has to date conducted herself with aplomb. Following her confirmation hearing in the European parliament, one MEP even went as far as to call her a "star commissioner". The competition portfolio, of all EC portfolios, arguably provides the greatest opportunity for media exposure for the individual in the competition commissioner seat. But it also brings with it the significant responsibility of protecting the integrity of that role, because that integrity is inextricably linked to the fairness of the procedures as a whole. Ms Vestager takes office amid a clamour of voices seeking support for European champions and the tilting of the antitrust playing field to serve other policy goals. Her demeanour in parliament promises a welcome determination to tread a straight and narrow path in applying the law in the required objective manner.

And to add to her in-tray: the DG Comp rulebook is noticeably lacking any guidance of the kind cited from the US agencies, as to the extent of permissible public comment on ongoing cases. It would be a proud part of a legacy, five years from now, to have added that missing chapter.

Originally published by Competition Law Insight, 14 October 2014.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions