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Legal Certainty and Cartel Criminalisation within the EU Member States

  • Peter Whelan (a1)

There is a trend within the EU Member States to introduce criminal sanctions for cartel activity. Such criminalisation must respect the human rights of the accused. Unfortunately the literature on cartel criminalisation pays scant regard to the investigation of human rights issues. A comprehensive analysis of the impact of the principle of legal certainty (Article 7 ECHR) upon cartel criminalisation in the EU Member States is conspicuously absent from the literature. This article rectifies this deficiency by examining how this particular principle of European human rights law may impact upon the concept, substance and existence of a criminal cartel offence.

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1 OECD, Recommendation of the OECD Council Concerning Effective Action Against Hard Core Cartels, adopted by the Council at its 921st Session on 25 March 1998.

2 See Council Regulation (EC) No 1/2003 of 16 December 2002 on the Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty (OJ 2003 L1 p.1).

3 See ibid., Article 23(5).

4 See generally K. Cseres, M. Schinkel and F. Vogelaar (eds), Criminalization of Competition Law Enforcement: Economic and Legal Implications for the EU Member States (Cheltenham 2006).

5 See, e.g., Wils, W., “Is Criminalization of EU Competition Law the Answer?” (2005) 28(2) World Competition 17.

6 G. Shaffer and N. Nesbitt, “Criminalizing Cartels: A Global Trend?”, University of Minnesota Law School, Legal Studies Research Paper Series, Research Paper No. 11–26, June 2011, 1.

7 See Whelan, P., “A Principled Argument for Personal Criminal Sanctions as Punishment under EC Cartel Law” (2007) 4(1) Competition Law Review 7.

8 See, however: P. Whelan, “Criminal Cartel Enforcement in the European Union: Avoiding a Human Rights Trade-Off” in C. Beaton-Wells and A. Ezrachi (eds), Criminalising Cartels: A Critical Interdisciplinary Study of an International Regulatory Movement (Oxford 2011); and P. Whelan, “Protecting Human Rights in the Context of European Antitrust Criminalisation” in I. Lianos and I. Kokkoris (eds), The Reform of EC Competition Law: Towards an Optimal Enforcement System (Amsterdam 2010).

9 See Department for Business, Innovation and Skills (hereafter “BIS”), A Competition Regime for Growth: A Consultation on Options for Reform, March 2011, 67.

10 Norris v Government of the United States of America and others [2008] UKHL 16, [2008] 1 A.C. 920.

11 Legal certainty is also a principle of EU law (see, e.g., T. Tridimas, The General Principles of EU Law, 2nd ed. (Oxford 2006), ch. 5) and is enshrined in Article 49 of the Charter of Fundamental Rights of the European Union, 2000/C 364/01. Relevant EU cases which have considered the principle include: Case 14/86, Pretore de Salò v. X [1987] E.C.R. 2545; Case 80/86, Kolpinghuis Nijmegen BV [1987] E.C.R. 3969; and Case C-168/95, Criminal Proceedings against Luciano Arcaro [1996] E.C.R. I-4705.

12 See: Kokkinakis v. Greece (Application no. 14307/88) (1994) 17 E.H.R.R. 397, particularly 423; and Veeber v. Estonia (No. 2) (Application no. 45771/99) (2004) 39 E.H.R.R. 6, [31].

13 Buxton, R., “The Human Rights Act and the Substantive Criminal Law” [2000] Criminal Law Review 331, 332.

14 See Ovey, C. and White, R.C.A., Jacobs & White, The European Convention on Human Rights (Oxford 2006), 209.

15 See, e.g., X v. Austria (Application no. 1852/63) (1965) 8 Yearbook 190, 198.

16 Gay News Ltd. and Lemon v. United Kingdom (Application no. 8710/79) (1983) 5 E.H.R.R. 123, 128–29.

17 R v Rimmington [2005] UKHL 63, [2006] 1 A.C. 459, [35].

18 Ibid. at [33], quoting R v Clark (Mark Grosvenor) [2003] EWCA Crim 991, [2003] 2 Cr. App. R. 363, [13].

19 SW and CR v. United Kingdom (Application no. 20166/92) (1996) 21 E.H.R.R. 363, 399.

20 See generally M. Dougan, “From the Velvet Glove to the Iron Fist: Criminal Sanctions for the Enforcement of Union Law” in M. Cremona (ed.), Compliance and the Enforcement of EU Law (Oxford 2012) 115.

21 Ovey and White, op. cit., p. 209.

22 On these objectives, see generally P. Whelan, “The Criminalisation of European Antitrust Enforcement: Theoretical and Legal Challenges”, Ph.D. Thesis, University of Cambridge, December 2010.

23 See von Hirsch, A., Censure and Sanctions (Oxford 1993).

24 See Baker, D., “The Use of Criminal Law Remedies to Deter and Punish Cartels and Bid-Rigging” (2001) 69 George Washington Law Review 693.

25 Chadwell, J., “Antitrust Administration and Enforcement” (1955) 53 Michigan Law Review 1133, 1138–39.

26 Nordlander, K. and Harrison, P., “Are Rights Finally Becoming Fundamental?” (February 2012) (1) CPI Antitrust Chronicle, 810.

27 Akman, P., “Searching for the Long-Lost Soul of Article 82 EC” (2009) 29(2) Oxford Journal of Legal Studies 267, 297.

28 Ibid.

29 See, e.g., European Commission, Communication from the Commission — Guidance on the Commission's Enforcement Priorities in Applying Article 82 of the EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings, C(2009) 864 final, Brussels, 9 February 2009.

30 See, e.g., Akman, P., “The European Commission's Guidance on Article 102 TFEU: From Inferno to Paradiso?” (2010) 73(4) Modern Law Review 605.

31 See, e.g., Katsoulacos, Y., “Some Critical Comments on the Commission's Guidance Paper on Article 82 EC” (February 2009) 1 Global Competition Policy.

32 See generally Whish, R. and Bailey, D., Competition Law, 7th ed. (Oxford 2012), ch. 13.

33 See, e.g., Case COMP/F/38.899, Gas Insulated Switchgear, Commission Decision, 24 January 2007, C(2006)6762 final.

34 A. Günster, M. Carree and M.A. van Dijk, “Do Cartels Undermine Economic Efficiency?”, December 2011 (working paper in the possession of the author).

35 F.E.G. Diaz, D. Kirk, F.P. Flores and C. Verkleij, “Horizontal Agreements” in J. Faull and A. Nikpay (eds), The EC Law of Competition (Oxford 1999), 336. See also Whish and Bailey, op. cit., p. 520–21. A very recent, typical example is the (unsuccessful) appeal brought by ICI against a Commission decision imposing a fine upon it of €91 million for its participation in a cartel concerning acrylic glass: Case T-214/06, Imperial Chemical Industries Ltd. v. Commission, Judgment of 5 June 2012, not yet reported.

36 Albors-Llorens, A., “Horizontal Agreements and Concerted Practices in EC Competition Law: Unlawful and Legitimate Contacts between Competitors” (2006) 51(4) Antitrust Bulletin 837, 876.

37 See Sunday Times v. United Kingdom (Application no. 6538/74) (1979–80) 2 E.H.R.R. 245, 271.

38 For an example, see van Bael, I., “Fining à la Carte: The Lottery of EU Competition Law” (1995) 4 European Competition Law Review 237.

39 See Case T-17/93, Matra Hachette SA v. Commission [1994] E.C.R. II-595.

40 See, e.g.: European Commission, Xth Report on Competition Policy, Brussels, 1980, [115]; and ICN Working Group on Cartels, Defining Hard Core Cartel Conduct – Effective Institutions, Effective Penalties, ICN 4th Annual Conference, Bonn, 6-8 June 2005, 14.

41 United States v Topco Association (1972) 405 U.S. 596, 609, footnote 10.

42 See Stucke, M., “Does the Rule of Reason Violate the Rule of Law?” (2009) 42(5) U.C. Davis Law Review 1375.

43 M. Frese, “The Negative Interplay Between National Custodial Sanctions and Leniency” in Cseres et al., note 4 above, p. 205.

44 B. Lyons, “Agreements between Firms” in B. Lyons (ed.), Cases in European Competition Policy – The Economic Analysis (Cambridge 2009), 130.

45 Ibid. at p. 130. See also OFT, Powers for Investigating Criminal Cartels, OFT 515, January 2004, [2.2].

46 Frese, op. cit., p. 206.

47 R. Posner, Antitrust Law: An Economic Perspective, 2nd ed. (Chicago 2001), 53.

48 Report of the Attorney General's National Committee to Study the Antitrust Laws, 31 March 1955, 349. See also: Baker, note 24 above, pp. 694–95; and Baker, D., “To Indict or Not to Indict: Prosecutorial Discretion in Sherman Act Enforcement” (1978) 63 Cornell Law Review 405.

49 Cf. Committee of Ministers of the Council of Europe, The Role of Public Prosecution in the Criminal Justice System, Recommendation Rec(2000)19, 6 October 2000.

50 The Canadian authorities recently adopted such an approach in their redrafting of their criminal cartel laws. On the new Canadian regime, see D.M. Lowe and C.W. Halladay, “Redesigning a Criminal Cartel Regime: The Canadian Conversion” in Beaton-Wells and Ezrachi, note 8 above.

51 See OECD, note 1 above.

52 See generally: M. Furse and S. Nash, The Cartel Offence (Oxford 2004); and A. MacCulloch, “The Cartel Offence: Is Honesty the Best Policy?” in B. Rodger (ed.), Ten Years of UK Competition Law Reform (Dundee 2010).

53 There is also a disconnect between the UK Cartel Offence and the (civil) cartel prohibition in the Competition Act 1998. For the sake of conciseness, the discussion which follows focuses on the consequences of the disconnect between the Cartel Offence and the EU cartel prohibition. This choice does not materially affect the relevant analyses.

54 See Case 5/69, Völk v Vervaecke [1969] E.C.R. 295.

55 See, e.g., R. v B. [2009] EWCA Crim 2575, [2010] 2 All E.R. 728, [18].

56 R v Ghosh [1982] Q.B. 1053.

57 R v George and others [2010] EWCA Crim 1148, [2010] 1 W.L.R. 2676, [6].

58 MacCulloch, A., “Honesty, Morality and the Cartel Offence” (2007) 28(6) European Competition Law Review 355, 356.

59 OFT, The Proposed Criminalisation of Cartels in the UK — A Report Prepared for the Office of Fair Trading by Sir Anthony Hammond KCB QC and Roy Penrose OBE QPM, OFT 365, November 2001, [2.5].

60 See Fisse, B., “The Cartel Offence: Dishonesty” (2007) 35 Australian Business Law Review 235.

61 See Parkinson, S., “The Cartel Offence under the Enterprise Act 2002” (2004) 25(6) Company Lawyer 187.

62 Ibid., at p. 189.

63 Cf. MacDonald, K. and Thompson, R., “Dishonest Agreements” [2003] Competition Law Journal 94, 96.

64 Parkinson, op. cit., pp. 188–89.

65 Ibid., at p. 189.

66 HL Deb. vol. 637 col. 1537 (18 July 2002) (Lord Hunt of Wirral).

67 See Ovey and White, note 14 above, pp. 214–15.

68 Buxton, note 13 above, p. 332.

69 There are English cases concerning offences based upon dishonesty, public mischief or conspiring to corrupt public morals where violation of the principle of legal certainty has been (unsuccessfully) argued: Shaw v DPP [1962] A.C. 220; Knuller Ltd. v DPP [1973] A.C. 435; and R v Pattni, Dhunna, Soni and Poopalarajah [2001] Crim. L.R. 570.

70 R v Pattni, Dhunna, Soni and Poopalarajah [2001] Crim. L.R. 570.

71 Hashman and Harrup v. United Kingdom (Application no. 25594/94) (2000) 30 E.H.R.R. 241, 258.

72 Ovey, C., “Case and Comment: Hashman and Harrup v United Kingdom” [2000] Criminal Law Review 185, 186.

73 Ibid.

74 Law Commission, Legislating the Criminal Code, Fraud and Deception: A Consultation Paper, Consultation Paper 155, London, March 1999, [1.23] and [5.9]–[5.53].

75 Law Commission, Fraud, Law Com No.276, London, July 2002.

76 See Parkinson, note 61 above, p. 189.

77 Green, S., Lying, Cheating, and Stealing: A Moral Theory of White-Collar Crime (Oxford 2006).

78 See Beaton-Wells, C., “Capturing the Criminality of Hard Core Cartels: The Australian Proposal” (2007) 31(3) Melbourne University Law Review 675.

79 On these assumptions, see Whelan, note 22 above, ch. 4.

80 See generally: C. Parker, “Criminal Cartel Sanctions and Compliance: The Gap Between Rhetoric and Reality” in Beaton-Wells and Ezrachi, note 8 above; and M. Stucke, “Am I a Price Fixer? A Behavioural Economics Analysis of Cartels” in Beaton-Wells and Ezrachi, ibid.

81 See: BIS, Growth, Competition and the Competition Regime – Government Response to Consultation, March 2012; and Enterprise and Regulatory Reform Bill, HC, 23 May 2012, Bill 7, 55/2, s 39(2).

82 On antitrust sanctions and the reaction of business, see Parker, C., “The ‘Compliance Trap’: The Moral Message in Regulatory Enforcement” (2006) 40 Law & Society Review 591.

83 See OECD, Report on Hard Core Cartels, OECD Competition Committee, 2000, 20.

84 As occurred in Australia prior to its adoption of a new criminal cartel law in the summer of 2009; see, e.g., B. Fisse, “Defining the Australian Cartel Offences: Disaster Recovery”, Competition Law Conference, Sydney, 24 May 2008,

85 The UK Cartel Offence, for example, only applies to conduct occurring after 20 June 2003.

86 Cf. Corker, D. and Smith, A., “Cartels: Who's Liable?” (2007) 157 New Law Journal 1593.

87 See R v GG plc and others [2008] UKHL 17, [2009] 1 W.L.R. 458.

88 Norris v Government of the United States of America and others [2007] EWHC 71 (Admin), [2007] 1 W.L.R. 1730; and Norris v Government of the United States of America and others [2008] UKHL 16, [2008] 1 A.C. 920.

89 Lever, J. and Pike, J., “Cartel Agreements, Criminal Conspiracy and the Statutory ‘Cartel Offence’: Parts I & II” (2005) 26(2) European Competition Law Review 90, 93.

90 [2007] EWHC 71 (Admin), [2007] 1 W.L.R. 1730 at [66]–[67].

91 [2008] UKHL 16, [2008] 1 A.C. 920 at [17].

92 For criticism of this interpretation, see Whelan, P., “Resisting the Long Arm of Criminal Antitrust Laws: Norris v. US” (2009) 72(2) Modern Law Review 272, 277.

93 [2008] UKHL 16, [2008] 1 A.C. 920 at [55].

94 On this, see Stephan, A., “Survey of Public Attitudes to Price-Fixing and Cartel Enforcement in Britain” (2008) 5 Competition Law Review 123.

95 [2008] UKHL 16, [2008] 1 A.C. 920 at [57], quoting Hashman and Harrup v. United Kingdom (Application no. 25594/94) (2000) 30 E.H.R.R. 241, 258.

96 Gay News Ltd. and Lemon v United Kingdom (Application no. 8710/79) (1983) 5 E.H.R.R. 123, 128–29.

97 R v Rimmington [2005] UKHL 63, [2006] 1 A.C. 459, [35].

98 [2008] UKHL 16, [2008] 1 A.C. 920 at [55]. On the importance of publicly-accessible, identifiable sources for legal certainty, see Fothergill v Monarch Airlines Ltd. [1981] A.C. 251, 279.

99 See P. Whelan, note 92 above, p. 278.

100 See Gotting, S. and Lampert, T., “Opening Shot for Criminalisation of German Competition Law? Federal High Court Judgment Simplifies Options for Prosecuting Competition Law Violations as Fraud under German Penal Code” (2003) 24(1) European Competition Law Review 30.

101 See, e.g., Department of Trade and Industry, A World Class Competition Regime, Cm 5233, July 2001, [7.2.4].

102 M. Bloom, “Key Challenges in Public Enforcement”, Speech, British Institute of International and Comparative Law, London, 17 May 2002, 6.

103 OFT, note 59 above.

104 [2008] UKHL 16, [2008] 1 A.C. 920 at [46].

105 O'Kane, M., The Law of Criminal Cartels: Practice and Procedure (Oxford 2009), 33.

106 One should remember in this regard that their article ‘was not only published after the 2002 [Enterprise] Act, but a number of years after the activities complained of in [the indictment] had ended. So it is not as if even an astute reader of legal articles in this area of law could have informed [herself] at the relevant time [i.e., between late 1989 and May 2000] of the possibility of [her] price fixing activities attracting criminal sanctions’: Norris v Government of the United States of America and others [2008] UKHL 16, [2008] 1 A.C. 920, [60].

107 Not only was the article quoted in both the High Court and the Supreme Court – although admittedly as a result of the Norris case itself – it was also the subject of a number of specialised conferences in respectable legal fora; e.g., “Cartel Agreements, Criminal Conspiracy and the Statutory ‘Cartel Offence’”, 22 February 2005, British Institute of International and Comparative Law, London.

108 See S. Hammond, “The Evolution of Criminal Antitrust Enforcement Over the Last Two Decades”, Speech by the Deputy Assistant Attorney General for Criminal Enforcement at the Antitrust Division of the US Department of Justice, 24th Annual National Institute on White Collar Crime, Miami, Florida, 25 February 2010.

109 See, e.g., J. Joshua, “The Brave New World of Extradition: A North Atlantic Treaty Alliance Against Cartels” in P. Marsden (ed.), Handbook of Research in Transatlantic Antitrust (Cheltenham 2006).

110 United States v Nippon Papers Industries Co. Ltd. (1997) 109 F. 3rd 1 (1st Circuit).

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