Op-Ed: “Ne Bis in Idem before the Grand Chamber of the Court of Justice: Is the ‘Legal Interest’ Protected the Only Way Forward?” by Renato Nazzini
Advocate General Bobek’s Opinions in Nordzucker (C-151/20) and bpost (C-117/20) address fundamental issues concerning the ne bis in idem principle under Article 50 of the EU Charter of Fundamental Rights, which forbids a second criminal prosecution or punishment if a person has already been finally convicted or acquitted of the same offence within the European Union. In Nordzucker, the German competition authority had decided that certain undertakings had infringed German and EU competition law. The Austrian competition authority then sought a declaration that the same undertakings had infringed Austrian and EU competition law with respect to the same facts. In bpost, the former Belgian monopolistic provider of postal services was fined by the postal regulator for having adopted a discriminatory price schedule in breach of sectoral regulation. The decision was set aside on judicial review. The Belgian competition authority then fined the same undertaking for the same rebate system under competition law.
As the Advocate General rightly points out, the two cases in question give the Grand Chamber of the Court of Justice a unique opportunity to clarify the law on ne bis in idem in the European Union. Currently, there are, at the very least, two coexisting, but clearly irreconcilable tests. In competition law, the principle of ne bis in idem prohibits a second prosecution or punishment only if the offender, the facts, and the legal interest protected are the same: Toshiba Corporation and Others (C‑17/10). As a consequence, the same undertaking can be prosecuted and punished, even in relation to the same facts, for breaches of national or EU competition or for breaches of different national competition laws. In non-competition matters, the test requires only the identity of the offender and the facts, while allowing a second prosecution or punishment under Article 52(1) of the Charter if the legislation under which the second set of proceedings is brought ‘pursues an objective of general interest which is such as to justify such a duplication …, it being necessary for those proceedings and penalties to pursue additional objectives, contains rules ensuring coordination which limits to what is strictly necessary the additional disadvantage which results, for the persons concerned, from a duplication of proceedings, and provides for rules making it possible to ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned’: Menci (C‑524/15, paragraph 63).
To complicate matters, the test applied by the European Court of Human Rights under Article 1 of Protocol 1 to the ECHR is yet different: for the ne bis in idem prohibition to apply there must be identity of the offender and the facts but subsequent proceedings are permissible if they have ‘a sufficiently close connection’ with the previous proceedings, ‘both in substance and in time, to consider them as forming part of an integral scheme of sanctions’: A and B v Norway. Under Article 52(3) of the EU Charter, EU law must provide a level of protection of fundamental rights not lower than that which is afforded by the ECHR to corresponding rights.
In bpost, the Advocate General considers that the coexistence of different and conflicting tests in EU law is untenable. He then goes on to propose a three-pronged cumulative test that requires the identity of the offender, of the facts and of the protected legal interest. The protected legal interest, however, is not – in the Advocate General’s opinion – simply the stated legal classification of the offence under national or EU law but the ‘societal good or social value that the given legislative framework or part thereof is intended to protect and uphold’.
As regards the application of the proposed test, in bpost the Advocate General concludes that sector regulation aimed at liberalisation of postal services and competition law protect two different legal interests whereas, in Nordzucker, he takes the view that national and EU competition law protect the same legal interest.
In my previous writings (fn 1), I have taken the view that the ne bis in idem test under EU law must be the same regardless of the sector involved and that there is no justification for applying a stricter test to undertakings that infringe competition law than to those that infringe labour, environmental or tax law. I remain firmly of this view, and I agree, therefore, with the Advocate General that a unified test must be adopted. Furthermore, as I have previously argued, it is an inescapable conclusion that a same undertaking cannot be prosecuted or punished multiple times for infringements of EU competition law or the national competition laws of the EU Member States if the infringement relates to the same facts. To hold otherwise would make a mockery of the ne bis in idem principle, which intends to protect individual and legal persons precisely against this type of abuse of power. Finally, I agree with the Advocate General that the Menci approach that allows a second set of proceedings under a broad and fact-specific proportionality test pursuant to Article 52(1) of the EU Charter – and, to a certain extent, the corresponding ECHR test in A and B v Norway – weakens the ne bis in idem protection and fails to provide normative certainty ex ante.
I do, however, disagree that the adoption of the criterion of the same legal interest is necessary to remedy these shortfalls while preserving the integrity and effectiveness of the system of law enforcement within the European Union. In my view, a better criterion would be to preserve the current ECHR and EU tests requiring only the identity of the offender and the facts, with an important qualification. The same facts are not only the factual elements of the conduct that is the subject-matter of the offence but also the harm that the proceedings in concreto – and not the legislation in the abstract – aim to punish or deter. A close reading of the excellent Opinions of the Advocate General reveals, in my view, that he comes close to this articulation of the test. The legal interest protected, in the Advocate General’s opinion, is not the legal classification of the offence. This – he rightly argues – would allow Member States or EU institutions to circumvent the ne bis in idem rule by enacting narrowly defined, and perhaps unusual offences, purporting to protect very specific or narrow legal interests, thus enabling themselves to prosecute the same individual or undertaking multiple times for essentially the same offence. The legal interest protected is, in the words of the Advocate General, the ‘societal good or social value that the given legislative framework or part thereof is intended to protect and uphold’. It would have taken only a modest step forward to recognise that what really matters is not, therefore, the protect legal interest, which, being a ‘legal’ concept, can only be what is purported to be protected by the statutory scheme under review, but the societal harm that, as a matter of fact and not abstract legal definition, the offence under review aims to punish or deter.
Thus, it is not so obvious that national and EU competition law protect the same ‘legal’ interest. Under the Treaties, EU competition law has the objective of contributing to ensure the proper functioning of the internal market, whereas national competition laws may be exclusively concerned with the national market of each individual Member States, so much so that they may apply when the conduct under review has no effect on trade between Member States. What matters, however, is not a metaphysical discussion about the ‘legal interest’ protected but the societal harm that is actually intended to be punished or deterred. And when the focus shifts from legal metaphysics to actual harm analysis, it is immediately clear to everyone that national and EU competition laws intend to punish and deter the same harm: higher prices, exclusion of competitors, and, in certain circumstances, exploitation of customers. In the bpost case, while it is undoubtedly correct that postal regulation and competition law pursue, in the abstract, different legal interests, it seems to me entirely clear that a prohibition of a discriminatory price schedule imposed by postal regulation on the former monopolist with the aim of liberalising the market pursues exactly the same socio-economic interest, as a matter of fact and regardless of abstract legal labels, as the prohibition of a discriminatory price schedule under Article 102 TFEU or any equivalent national law prohibition of abuse of dominance. If the aim of postal regulation is liberalisation, a prohibition of discriminatory pricing can only serve the objective of ensuring that competitors are allowed to compete effectively and customers are not exploited insofar as, and until, the former monopolist retains significant market power. This is exactly the same rationale that justifies the prohibition of a discriminatory price schedule by a dominant former monopolist on a liberalised market under Article 102 TFEU or equivalent national prohibitions of abuse of dominance.
One more example is perhaps useful. The proposed Digital Markets Act (DMA) – intended to introduce a set of regulatory obligations for digital undertakings designated as ‘gatekeepers’, enforced by way of regulatory fines and remedial orders – is at pains to define the ‘legal interest’ protected as different from that which is protected by competition law. Even in a short editorial opinion, it is worth quoting in full the tenth recital to the DMA as it is an enlightening illustration of precisely the type of problem that the criterion of the ‘legal interest’ gives rise to. The tenth recital explains as follows:
Articles 101 and 102 TFEU and the corresponding national competition rules concerning anticompetitive multilateral and unilateral conduct as well as merger control have as their objective the protection of undistorted competition on the market. This Regulation pursues an objective that is complementary to, but different from that of protecting undistorted competition on any given market, as defined in competition-law terms, which is to ensure that markets where gatekeepers are present are and remain contestable and fair, independently from the actual, likely or presumed effects of the conduct of a given gatekeeper covered by this Regulation on competition on a given market. This Regulation therefore aims at protecting a different legal interest from those rules and should be without prejudice to their application.
The problem is that many of the prohibitions in the DMA are, as a matter of actual fact, aimed at deterring and punishing precisely the same conduct that could be an abuse of a dominant position and – I would suggest – precisely for the same reasons. The law – it is true – is an exercise in language and linguistics but words cannot, and should not, be allowed to obfuscate the socio-economic matrix and the values that form the substance and the purpose of the law. To give but one example, Article 6(1)(d) of the proposed DMA provides that a gatekeeper shall ‘refrain from treating more favourably in ranking services and products offered by the gatekeeper itself or by any third party belonging to the same undertaking compared to similar services or products of third party and apply fair and non-discriminatory conditions to such ranking’.
As is well known, the European Commission has imposed a substantial fine on Google and its parent company Alphabet for ‘positioning and displaying more favourably, in Google Inc.’s general search results pages, Google Inc.’s own comparison shopping service compared to competing comparison shopping services’: Google Shopping, Article 1 of the operative part (the decision is currently under appeal). Could one seriously argue that, if the same ‘gatekeeper’ designated under the DMA is also dominant under Article 102 TFEU, the ne bis in idem rule should not apply to prevent a second set of proceedings, once the ‘gatekeeper’ has already been found to have infringed either the DMA or Article 102 TFEU with respect to exactly the self-preferencing conduct, because the ‘legal interest’ protected by the DMA is to ensure that markets are ‘fair and contestable’ whereas the legal interest protected by Article 102 TFEU is to ensure ‘undistorted competition’? Presumably, this would be a case in which the legal interested as defined in the legislative scheme could be ‘re-classified’ for the purpose of the application of Article 50 of the EU Charter in line with the test proposed by the Advocate General. But a more straightforward way of dealing with this sort of problem is to adopt a test in which the ‘legal interest’ is definitively abandoned and replaced by an analysis, in concreto, of the societal harm that the different offences aim to prevent or deter.
Renato Nazzini is Professor of Law at King’s College London. He is the author of Competition Enforcement and Procedure (Oxford, Oxford University Press, 2016), The Foundations of European Union Competition Law: The Objective and Principles of Article 102 (Oxford, Oxford University Press, Oxford Studies in European Law, 2012) and Concurrent Proceedings in Competition Law. Procedure, Evidence and Remedies (Oxford, Oxford University Press, 2004) as well as the editor or co-editor of five more books and the author of more than one hundred articles and book chapters. Renato has been Visiting Professor at the University of Turin, at the University of Zurich and at the FGV School of Law, San Paulo, Brazil, Senior Research Fellow at the British Institute of International and Comparative Law, and Professor of Competition Law and Arbitration at the University of Southampton as well as a non-governmental adviser (NGA) to the International Competition Network (ICN).
(fn 1) R Nazzini, ‘Parallel Proceedings in EU Competition Law: Ne Bis in Idem as a Limiting Principle’ in B van Bockel, Ne Bis in Idem in EU Law (Cambridge, Cambridge University Press, 2016) 131- 166; R Nazzini, ‘Fundamental Rights beyond Legal Positivism: Rethinking the Ne Bis in Idem Principle in EU Competition Law’ (2014) 2 Journal of Antitrust Enforcement 1- 35; R Nazzini, Competition Enforcement and Procedure (Oxford, Oxford University Press, 2016) 208 – 239.