On 14 February 2012, the European Court of Justice ("ECJ") handed down a preliminary ruling regarding the application of the principle of ne bis in idem in the framework of EU competition law and, in particular, Regulation 1/2003. The ruling follows a preliminary reference from a Czech court arising out of the gas insulated switchgear cartel case, where the cartelists were sanctioned by both the European Commission and the Czech Competition Authority. In its ruling, the ECJ held that the fact that the European Commission had initiated an investigation and sanctioned the cartel did not prevent the Czech Competition Authority from sanctioning the effects the same conduct produced in the Czech Republic prior to its accession to the EU on 1 May 2004. Therefore, according to the ECJ, the principle of ne bis in idem did not preclude the imposition of fines by both the European Commission and a national competition authority in such a case.
The case brought before the ECJ concerned an international cartel on the market for gas insulated switchgear, in which a number of European and Japanese undertakings participated for different periods between 1988 and 2004. In 2006 and 2007, both the European Commission and the Czech Competition Authority dealt with certain aspects of this case and each imposed fines on the undertakings concerned. The Czech Authority's decision to penalise the cartel was adopted after 1 May 2004, the day of the Czech Republic's accession to the EU. It was also adopted after the European Commission's decision dealing with the case.
Toshiba Corporation and a number of other undertakings fined by the Czech Competition Authority brought an action against the decision before the Czech courts. The appellants argued that they had been penalised twice for the same infringement, as the Czech Competition Authority had fined them for an infringement which had already formed the subject matter of a decision by the European Commission at EU level. According to the appellants, this infringed the principle of ne bis in idem, which prohibits the imposition of multiple penalties by different authorities for the same infringement.
Whereas the Czech court ruling at first instance found in favour of the appellants, on appeal the Czech Supreme Administrative Court disagreed with those findings and referred the case back to the first instance court for a new ruling. In this context, the first instance court decided to stay the proceedings and to refer the issue to the ECJ for a preliminary ruling.
In its ruling, the ECJ clarified that EU competition law does not apply to the effects produced by a cartel in the territory of a Member State during the period prior to its accession to the EU. This is so even in case the proceedings against the cartel started after the Member State's accession to the EU. Therefore, anti-competitive practices that produced effects in the territory of a Member State before its accession to the EU can only be sanctioned under the national competition law of the affected Member State.
According to the ECJ, the fact that the European Commission had opened a proceeding against the cartel in question under Regulation 1/2003 before the initiation of investigations by the Czech Competition Authority did not alter this conclusion. Moreover, the ECJ found that the competition authority of the Member State concerned does not lose its power, by the application of national competition law, to penalise the anti-competitive effects produced by that cartel in the territory of the said Member State during periods before the accession of the latter to the EU. The ECJ suggests that the imposition of two penalties in such a case is in conformity with the ne bis in idem principle, because the fines imposed on the same cartel members by a European Commission decision - taken before the decision of the national competition authority was adopted - were not designed to penalise the effects the cartel produced outside the EU.
In reaching the above conclusions, the ECJ adopted a broad reading of the principle of ne bis in idem and of the provisions of Regulation 1/2003 on the cooperation between the European Commission and national competition authorities. According to the ECJ, the opening of a proceeding by the Commission does not permanently and definitively remove the national competition authorities' power to apply national legislation on competition matters. On the contrary, the ECJ held that once the proceeding initiated by the Commission is concluded, the power of national authorities is restored. Therefore, the ECJ seems to suggest that national competition authorities may apply EU and/or national competition law after the European Commission has adopted a decision on the same case, provided that they do not contradict the Commission's decision. In that respect, the Court adds that the jurisdiction of the competition authorities of Member States is restored not only when the Commission has decided not to apply EU competition rules to a cartel but also in respect of all conceivable decisions that the Commission may have adopted on the basis of Regulation 1/2003. It is notable that the Court does not seem to expressly limit these propositions only to cases where the national authority decides to sanction the effects an anti-competitive practice produced in a Member State before its accession to the EU.
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