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January 2012 |
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1.
The General Court Establishes
clear criteria for access 2.
The Commission adopted a new
package of rules on services of general economic interest 1. The General Court
Establishes clear criteria for access to a cartel file The present case1
concerns an action for annulment brought by CDC Hydrogene
Peroxide Cartel Damage Claims (CDC)2 against a Commission Decision that refuses
access to the statement of contents of the administrative file relating to a
cartel proceeding. The Commission rejected
the application on the grounds that the disclosure of the statement of
contents undermines protection of the
purpose of the investigation activities referred to in the third indent
of Article 4(2) of Regulation No 1049/20013 and
undermines protection of the commercial
interests of the undertakings which took part in the cartel referred to
in the first indent of Article 4(2) of Regulation No 1049/2001. On 15 December 2011, the
General Court handed down its judgment and annulled the Commission's decision
to refuse access to the statement of contents. It concludes that the
Commission failed to establish to the requisite legal standard that access to
the statement of contents is likely, specifically and effectively to
undermine the protection of commercial interests and protection of the
purpose of investigation activities. Findings of the
Court: Undermining the commercial interests of undertakings The General Court recalls
that access to the documents held by the institutions is a right subject to
certain exceptions on grounds of public and private interest provided for in
Article 4 of Regulation No 1049/2001 and, if the Commission refuses access to
a document, it must, in principle, explain how disclosure of that document
could specifically and effectively undermine those interests. The Commission contends
that undertakings, victims of the cartel, might consider that certain documents
listed in the statement of contents could contain further incriminating
evidence and therefore, could bring actions for damages. It believes that the
disclosure of this index would affect the commercial interests of the
undertakings involved in the cartel. First, the General Court points out that
it would be irrelevant to consider the content of the listed documents since
the applicant is only seeking access to the index of the administrative file
in the cartel case. Secondly, according to case law “it is not possible to
regard all information concerning a company and its business relations as
requiring the protection which must be guaranteed to commercial interests”. In addition, the General
Court observes that the Commission’s considerations concern solely
the risk that, as a result of disclosure of the index, the companies
involved in the cartel could face actions for damages. The General Court
refuses to regard the interest of a company to avoid high costs caused by actions for
damages as a commercial interest. It states that such an interest
does not deserve protection “having regard, in
particular, to the fact that any individual has the right to claim damages
for loss caused to him by conduct which is liable to restrict or distort
competition.” The General Court
concludes that the Commission has not established, to the requisite legal
standard, that access to the statement of contents is likely, specifically
and effectively, to undermine the commercial interests of undertakings which
took part in the cartel. Undermining the protection of the purpose of the investigation As regards the risk of
undermining “the protection of the purpose of the investigation”, the General
Court observes that is clear from the wording of the third indent of Article
4(2) of Regulation No 1049/2001, that the aim of this exception “is
not the protection of the investigation as such but rather the protection of
the purpose, which, in competition cases, is to determine whether an
infringement of Article 81 EC or Article 82 EC has taken place and to
penalize the companies responsible. It is for this reason that documents
relating to an investigation may remain covered by the exception in question
so long as that goal has not been attained, even if the particular investigation
or inspection which gave rise to the document to which access is sought has
been completed”. At the date of the
adoption of the contested decision, the Commission had already adopted the
hydrogen peroxide decision. Consequently, on that date, there was no
investigation in progress to prove the existence of the infringements in
question, which could have been jeopardized by the disclosure of the
requested documents. Even if actions against
the hydrogen peroxide decision were pending before the Court, the General
Court holds that “the investigation in a given case must be regarded as closed once the
final decision is adopted, irrespective of whether that decision
might subsequently be annulled by the courts, because it is at that moment
that the institution in question itself considers that the procedure has been
completed.” Furthermore, the General Court notes that to accept that the
various documents relating to investigations are covered by the exception
until all possible legal procedures have been decided would make access to documents
dependent on uncertain events. The General Court
concludes that the disclosure of the statement of contents was not likely to
undermine the protection of the purpose of the investigations as regards the
procedure before the Commission concerning the hydrogen peroxide cartel. However, the Commission
maintains that the exception must be interpreted in a way as to refuse the
disclosure of any document likely to undermine the Commission’s cartel
policies and in particular its leniency programme. The General Court refuses
to extend the scope of “the concept of the purpose of the investigation
activities” such as to include all of the Commission’s policy in regard to
punishment and prevention of cartels. The General Court observes that such a
broad interpretation of the concept of investigation activities is
incompatible with the principle guaranteeing the widest possible public
access to documents emanating from the institutions. The exceptions laid down in that Regulation must be interpreted and
applied strictly. In addition, the General Court notes that the Commission
wishes by a broad application of the exception to prevent the access to the
statement of contents; a document which was not submitted for leniency and contains
no information likely in itself to damage the interests of the companies
which applied for leniency. Then, the General Court
stresses that nothing in Regulation No 1049/2001 leads to interpret the
concept of the ‘purpose of the investigation activities’ differently in the
context of competition policy than in other EU policies.” Finally, such as in the Pfleiderer Case4, the
General Court emphasizes that a leniency programme
is not the only means of ensuring compliance with EU Competition law. Actions
for damage before national courts can also make significant contribution to
the maintenance of effective competition in the EU. Conclusion This judgment is
interesting since: - The General Court firmly stresses
that the exceptions provided for in Article 4 of Regulation 1049/2001 have to
be interpreted strictly. - The General Court develops a clear
interpretation of the exception based on “the protection of the purpose of
the investigation”. The General Court affirms that such protection is valid
as long as a procedure to prove the existence of anti-competitive behaviour
is on-going and that the disclosure of documents could jeopardise that
procedure. Also, the General Court refuses to make access to documents
dependent on uncertain events. Thus, it is not accepted that documents remain
covered by this exception until all pending actions before the Court are
decided. The General Court considers that once the Commission has attained
the goal which is to determine the existence of infringement, “the protection
of the purpose of the investigation” is obsolete. - The General Court refuses to
extend the scope of “the concept of the purpose of the investigation
activities” so as to allow the Commission to refuse the disclosure of a document
in a competition case merely because of a possible adverse impact on its
leniency programme. - Finally, the General Court
provides the possibility for private damage claimants to access one precise document,
namely the statement of contents of the administrative files. It is not a
document containing business secrets requiring the protection of commercial
interest.
- A revised Decision on the
application of Article 106(2) TFEU to State aid in the form of public service
compensation granted to certain undertakings entrusted with the operation of
services of general economic interest. The Decision replaces Decision
2005/842/EC6
and specifies the conditions under which compensation to companies entrusted
with the provision of public services is compatible with the EU state aid
rules and exempt from the requirement of notification laid down in Article
108(3) TFEU. - A new Communication on the
application of the EU State aid rules to compensation granted for the provision
of services of general economic interest. This Communication provides
a comprehensive and practical overview of the EU state aid requirements
applicable to compensation granted for the provision of SGEI. The
Communication summarizes key cases of the Court of Justice of the EU and of
the Commission to facilitate the application of state aid rules. - A revised Framework for State aid
in the form of public service compensation. The framework defines the conditions under
which compensation not covered by the decision is compatible with EU state
aid rules. - A proposal for a de minimis Regulation. The Commission is consulting
on the proposed Regulation that exempts small subsidies from the obligation
to notify in advance to the Commission for clearance under the EU state aid
rules. The Commission expects to adopt the Regulation in spring 2012. The Decision and
Framework will replace the existing 2005 Commission Decision and Framework7
on SGEI from 31 January 2012, subject to certain transitional rules. The revised package
introduced new rules for the following points: Exemption The revised Decision
introduces a new threshold for greater scrutiny. The exemption will concern
compensation not exceeding an annual amount of EUR 15 million (formerly EUR 30
million) for the provision of SGEIs in areas other than transport and
transport infrastructure. This Decision only applies where the period for
which the undertaking is entrusted with the operation of the SGEI does not
exceed 10 years (formerly 5 years). Social Services The Commission extends
the scope of the exemption from the notification obligation to social
services. The Commission notes the specific characteristics of hospitals and
undertakings in charge of social services. In particular, it considers that
social services may require an amount of aid beyond the threshold indicated
in the Decision to compensation for the public service costs. In addition, a
larger amount of compensation for the provision of social services does not necessarily
produce a greater risk of distortions of competition. Consequently, the
Commission extends the exemption provided for social services to social
housing for disadvantaged citizens, hospitals providing medical care
including emergency services and ancillary services directly related to their
main activities in particular in the field of research. However, in order to
benefit from the notification exemption, the social services must be clearly
identified as being services meeting social needs such as health, long
term care, childcare, access or reintegration to the labour market, social
housing and social inclusion of vulnerable people. Airports The Commission changes
the exemption of notification for airports to promote small regional
airports. The new decision exempts from notification public service
compensation for airports with average annual traffic during the two
financial years preceding that in which the service of general economic
interest was assigned not exceeding 200 000 passengers instead of the
previous 1 million passengers. The act of entrustment The revised Decision
requires further details in the act of entrustment. Thus, the act of
entrustment must include a clear description of the compensation mechanism
and it must refer to the Commission Decision. Transparency requirement When the compensation
granted to an undertaking which also has activities outside the scope of the
SGEI is above EUR 15 million, the Member State concerned shall publish (i) the entrustment act or a summary and (ii) the amounts
of aid granted to the undertaking on a yearly basis on the internet or by
other appropriate means. The amount of compensation In order to avoid
unjustified distortions of competition, the amount of compensation for the
service operated should not exceed what is necessary to cover the net cost
incurred by the undertaking in operating the service, including a reasonable
profit. The Framework introduces
new methodologies to calculate the net cost necessary to discharge
the public service obligations. The net cost should be calculated as the
difference between the cost incurred in operating the SGEI and the revenue
earned from the SGEI according to the Methodology based on cost allocation
or, alternatively, as the difference between the net cost of operating with
the public service obligation and the net cost or profit operating without
the public service obligation according to the Net Avoided Cost Methodology. The revenue to be taken into
account must include at least the entire revenue earned from the SGEI and the
excessive profits generated from special or exclusive rights. The reasonable profit
should be taken to mean the rate of return on capital that would be required
by a typical company considering whether or not to provide the service of
general economic interest for the whole duration of the period of
entrustment, taking into account the degree of risk incurred. The notion of quality service The Commission emphasizes
the quality service criteria. Thus, to determine the reasonable profit of the
undertaking in operating the service, the revised Decision requires the
Member States, when it feasible or appropriate, to introduce incentive
criteria relating to the quality of service provided and gains in productive
efficiency (efficiency gains should not reduce the quality of the service
provided). Efficiency incentives can
be designed in different ways to best suit the specificity of each case or
sector. Member States can define
productive efficiency targets in the entrustment act. If the undertaking does
not meet the objectives, the compensation should be reduced following a
calculation method specified in the entrustment act. In contrast, if the
undertaking exceeds the objectives, the compensation should be increased
following a method specified in the entrustment act. Turnover Thresholds The Commission decided to
remove the thresholds which provided exemption from the notification
obligation to a company with an average annual turnover before tax, all
activities included, of less than EUR 100 million during the two financial
years preceding that in which the service of general economic interest was
assigned. Closer scrutiny on serious competition distortions The Framework indicates
that where an SGEI measure has the potential to create serious distortions of
competition, the Commission will carry out an in-depth assessment of its
impact on competition. In such cases, the Commission will examine whether
such distortions can be mitigated by requiring conditions or requesting
commitments from the Member State. The Commission will also
pay attention to situations where the aid allows the undertaking to finance
the creation or use of an infrastructure that is not replicable and enables
it to foreclose the market where the SGEI is provided or related relevant
markets. Proposal for a de minimis Regulation The Commission will set
out the conditions under which small amounts of public service compensation
should be deemed not to affect trade between Member States and/or not to
distort or threaten to distort competition. In those circumstances,
compensation is not caught by Article 107(1) TFEU and consequently does not
fall under the notification procedure provided for in Article 108(3) TFEU. Report The Member States must
submit the first report in the implementation of this decision and the
Framework by 30 June 2014. Transitional period The Decision and
Framework will replace the existing 2005 Commission Decision and Framework on
SGEI from 31 January 2012, subject to certain transitional rules. The Framework requires
Member States to publish their list of existing aid schemes regarding public
service compensation that have to be brought into line with the Framework by
31 January 2013, and to bring those aid schemes into line with the Framework
by 31 January 2014. Individual aid put into
effect before the entry into force of the revised Decision and which complies
with the 2005 Decision continue to be compatible for a further period of two
years. Individual aid that was
granted before the entry into force of the revised Decision and was
incompatible with the 2005 Decision, but fulfils the conditions of the
revised Decision, is compatible aid.
Footnotes 1. Case T‑437/08 - CDC Hydrogene
Peroxide Cartel Damage Claims v Commission - [2011] ECR II-0000.12 December 2011. 2. CDC is an organisation bringing damages actions on behalf of
undertakings harmed by the bleaching chemicals cartel. 3. Regulation (EC) No 1049/2001
of 30 May 2001 regarding public access to European Parliament, Council
and Commission documents - [2001] OJ L145/43 31 May 2001. 4. C-360/09 Pfleiderer
AG v Bundeskartellamt [2011] ECR I-0000, 14 June 2011. 5. New SGEI Package adopted on 20 December 2011- [2012] OJ L7/3
and [2012] OJ C 8/4-27 11 January 2012 6. Commission Decision 2005/842/EC of 28 November 2005 – [2005] OJ L312/67 29 November 2005 7. Community framework for State aid in the form of public service compensation- [2005] OJ C 297/4 29 November 2005
The content of this article
does not constitute legal advice and should not be relied on as such.
Specific advice should be sought about your specific circumstances. |
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