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‘Procedural Rights in EU Administrative Competition Proceedings: Ex Ante Mergers’ by Anca Chirita

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This contribution, available on SSRN, has two inter-related purposes: first, to analyse the context and legal framework of procedural rights in EU competition law, in particular, the administrative notification of mergers, and second, to critically review any perceived flaws in the substantive, institutional design or exercise of these procedural rights in practice, thereby offering proposals for institutional reform.

The first and second sections provide an overview of the purpose and scope of application of the EU Merger Control Regulation 139/2004, including its Implementing Regulation 1269/2013, highlighting the major principles underpinning the informal stage, Phase I and II investigations, and procedural deadlines. The third section goes on to question why procedural rights in mergers are contestable and offers constructive reviews of the criticism of the current system. This section questions primarily whether there should be social responsibility for corporations’ procedural rights as is the case under the ECHR regime. Since the administrative procedure of notification of mergers aims to protect the public choice of individual consumers before the corporatist intentions to merge and expand, the EU Merger Regulation produces a contrasting ‘vertical’ rather than ‘horizontal’ effect (supra-national competition law protecting the public, not the individual citizen). The section also prepares the ground for the fourth section, which thoroughly examines whether a human rights inspired catalogue is also feasible for corporations in merger proceedings.

The fourth section offers a comparative analysis of the ECHR system to distinguish ‘original’ or ‘express’ procedural rights in mergers, such as the right to good administration of justice, namely, the right to a fair hearing, within a reasonable time, and before an independent and impartial tribunal; ‘implied’ rights, such as the right to due process, including the right to a fair presentation of evidence through the sending of the statement of objections, the right to an adversarial hearing by replying to the statement of objections, the right to have access to one’s file, and the right to a reasoned decision; and ‘derived’ rights, such as the right not to give evidence against oneself. The most heated debate concerns the independence of the European Commission as public administration and the decision-making process in merger cases, which demands institutional reform, both from inside because of a strongly hierarchical administration of justice, thus combining both investigative and prosecutorial functions, and from outside because of the perception of politicisation of economic merger decisions by the College of Commissioners and by the mandate of the Commissioner for Competition. The paper argues in favour of a de-centralisation of such internal and external administrative competences, including a Public Hearing Office.

4.1.1.   Independence and impartiality from outside: the case against policitisation of the Directorate-General for Competition

The EC’s Guidance on the procedures of an HO assigns to the HO the role of ‘guardian of fair proceedings before the EC’.[1] To respond to earlier concerns and criticisms, the EC has strengthened the HO’s role to guarantee the independence and the transparency of the whole procedure.[2] Unfortunately, this effort at institutional improvement is still insufficient to warrant giving the HO the prestige of a prosecutorial Hearing Office. The strongly hierarchical structure within DG COMP misses, again, the same institutional ‘independence’ target, both inside, since case handlers and investigation units are subordinated to divisions and directorates, and outside, since directorates are hierarchically controlled by the Commissioner for Competition, who is subordinate to the College of Commissioners. Two critical propositions can be abstracted here: the stronger the internal hierarchy, the more likely is the perception of subordination bias to emerge from the former, while the outside colour of the College of Commissioners triggers the perception of politicisation. This is obvious from the dramatic changes brought about by every single mandate of the Commissioner for Competition and the infusion of different and unpredictable goals and targets. Nevertheless, without its politicisation from outside, the DG COMP could also too easily become stagnant, more predictable, and even less dynamic in the absence of any political interference, be it for better or for worse. This means that the exigency of absolute independence in the decision-making involving mergers can be met only by removing the College of Commissioners from the institutional landscape of DG COMP and by recognising the latter’s status as an independent competition authority of the EC.

The national merger review is recognised primarily as private litigation by legal persons against the administrative competition authority. In contrast, the judicial review undertaken by the ECJ has to be understood in the supra-national context in which it has to be performed. The institutional setting requires the EC as a collegiate body to issue a decision on the compatibility of the proposed merger with the internal market. After the EC has consulted the Advisory Committee, it prepares the final decision, which the Commissioner for Competition presents to the College of Commissioners for adoption in an oral procedure; a written procedure is also possible. However, in practice, prior to the presentation to the College of Commissioners, the draft decision is defended by a member of the Cabinet of the Commissioner for Competition in a meeting with his/her colleagues from the cabinets of other Commissioners.[3] Representatives of DG COMP and the EC’s Legal Service will also be in attendance. Upon adoption, the General Secretariat of the EC notifies the parties of the decision.

This administrative procedure is of a sui generis nature and provides a strong argument favouring the view that merger decisions are essentially political-economic decisions. It is difficult to reconcile their nature with the guarantees of the independence and non-subordination of political appointees,[4] such as the College of Commissioners, who do not bear democratic legitimacy due to them being part of the executive. This political bias also explains why the ‘judge-led system’ plays an essential role in safeguarding the principle of check and balance between the same investigative and quasi prosecutorial administrative function. This has to respect the rule of law and the principle of legal certainty to perform the judicial review of the administrative decision.


[1] The HO’s independence from those investigating breaches of the competition rules is also reflected in his mandate. For the criticism that the mandate is inadequate to ensure the HO’s independence and impartiality, see e.g. Celli et al., ‘Transparency and Process: Do We Need a New Mandate for the Hearing Officer?’ Eur Comp J (2010), 475.

[2] See EC decision 23 May 2001 on the terms of reference of Hearing Officers in certain competition proceedings, [2001] OJ L 162/21.

[3] Navarro et al., cited above, para 1391, 392.

[4] See also B Holles, ‘The Hearing Officer: Thirty Years Protecting the Right to Be Heard’ 36 World Comp (2013) 1, 16.

AUTHOR
Anca Chirita
Anca Daniela Chiriţă joined Durham Law School in 2011 where she convenes Competition Law at both undergraduate and postgraduate level. During the academic year 2013/2014, she was also Co-Director of the Durham European Law Institute (DELI). Prior to taking up her lectureship, she was Konrad-Adenauer fellow at the Europa-Institut, Saarland University, Faculty of Law and Economics in Saarbrücken, Germany. Her PhD in competition law (Dr.iur.) awarded Summa cum laude was examined by Professor H.C. Helmuth Schröter (former Hearing Officer and Director at DG Competition, European Commission), Professor (emeritus) Torsten Stein, Professor (emeritus) Günther Hönn and Professor Helmut Rüßmann. At the Europa-Institute (founded in 1951), she completed the 'European Integration' master programme with specialisations in Economic Law, External Trade and Human Rights. During her PhD she worked in a team of researchers selected by the College of Europe, Bruges, Belgium on 'Study on the impact of national rules on unilateral conduct that diverge from Article 102 TFEU' (DG Competition), as a legal trainee with the Monopolies Commission in Bonn (2009) and as a Blue Book trainee with the European Commission in Brussels (2007/2008). Since 2014 she also acts as Of Counsel with Mircea & Partners on EU/Romanian competition law. Anca is recipient of numerous academic scholarships such as the DAAD (the German Academic Exchange Service), Konrad Adenauer Stiftung, Federal Foreign Office (Auswärtiges Amt), LLB (four-year degree in law) national scholarship for excellent results. During 2012-2014 Anca is a DAAD visiting fellow at the Max-Planck-Institut für ausländisches und internationales Privatrecht and Europa-Kolleg in Hamburg, Germany, working on a competition law study which will be published in the edited series of Professor Peter Behrens (Schriftenreihe des Europa-Kollegs Hamburg zur Integrationsforschung). She is member of the Editorial Review Board of Oxford Competition Law, Oxford University Press. Anca is also a member of the Senior Common Room at Grey College. Anca's research interest lies primarily in all aspects of competition law and policy, including comparative competition law. Her first book published by Nomos, Baden-Baden, on the abuse of a dominant position under Article 102 TFEU and national competition rules comparatively won the Dr. Friedrich-Feldbausch-Stiftung Prize for best dissertation at Saarland University in the academic year 2010/2011 (also praised in the Romanian Competition Journal 'Revista Română de Concurenţă' 1/2013, 74-76 published by the Romanian competition authority). Recent research examined 'Procedural rights in EU competition law' for the conference in Beijing funded by CESL (China-EU School of Law) as part of a collaborative volume on procedural rights in administrative competition law proceedings to be published by Springer and translated into Chinese; comparative competition law in the EU (Hamburg project); 'The Impact of the European Union Curent Crisis on Law, Policy and Society' (audio), forthcoming in the Cambridge Yearbook of European Legal Studies, and the historical interpretation of the EU competition rules published by the International & Comparative Law Quarterly. Anca has presented her research at University of Cambridge, UC Cork, UC Dublin, Amsterdam, Utrecht, UC London, KCL, Queen Mary, Nottingham, Romanian Academy, Romanian Competition Council, Bucharest, Craiova, Beijing, Bonn, Saarbrücken, Hamburg, Madrid, forthcoming Oslo and Liverpool.
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