Delimitation of jurisdiction in competition law
What happens to the allocation of respective competences of the Commission and national competition authorities in if an international cartel is implemented both in the EU and the Czech Republic before accession to the EU but action is taken after accession? A number of undertakings had formed a worldwide cartel on the market for gas insulated switchgear and those companies were fined by the Commission and the Czech competition authority. The Commission decision concerned the implementation of the cartel within the EU, while the Czech competition authority concerned the implementation of the cartel within the Czech Republic before accession. However, the decisions were dated after the date of accession of the Czech Republic and after the entry into force of Regulation 1/2003. Does this preclude the Czech competition authority from fining the undertakings in question for the implementation of the cartel in Czech territory? The Court does not think so. The Court first holds that
the provisions of Article 81 EC and Article 3(1) of Regulation No 1/2003 must be interpreted as meaning that, in the context of a proceeding initiated after 1 May 2004, they do not apply to a cartel which produced effects, in the territory of a Member State with acceded to the Union on 1 May 2004, during periods prior to that date.
The Court also stated that Regulation 1/2003 does not prevent national competition authorities from applying national competition law in cartels dated before accession:
the opening by the Commission of a proceeding against a cartel under Chapter III of Regulation No 1/2003 does not, pursuant to Article 11(6) of Regulation No 1/2003, read in combination with Article 3(1) of the same regulation, cause the competition authority of the Member State concerned to 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 Union.
So, the undertakings can be fined for participating in a worldwide cartel by both the Commission and a national competition authority for the effects taking place in the EU and a third country respectively.
Is this contrary to the ne bis in idem principle? No, because the decision of the Commission only concerned the implementation of the cartel within the EU, not the Czech Republic. The application of the ne bis in idem principle requires ‘is subject to the threefold condition of identity of the facts, unity of offender and unity of the legal interest protected’ (paragraph 97 of the judgment). In this case the first condition was not satisfied:
the Commission’s decision refers specifically, in many of its passages, to the consequences of the cartel at issue in the main proceedings within the European Community and the EEA, referring expressly to the ‘Member States of the time’ and the States ‘which were contracting parties’ to the EEA Agreement. Next, as has been pointed out in paragraph 41 of this judgment, that decision does not penalise the possible anti-competitive effects produced by that cartel in the territory of the Czech Republic during the period prior to the accession of that State to the Union. Finally, it is apparent from the methods of calculation of the fines that, in its decision, the Commission did not take account of the States which acceded to the Union on 1 May 2004. According to point 478 of the grounds of the Commission’s decision, the latter used as the basis for calculation of the fines the turnover figures achieved by the members of the said cartel in the EEA during 2003.