Sense and Nonsense of Rules on Proof in Cartel Cases
28 Pages Posted: 31 Jan 2008
Date Written: January 2008
EC competition law has undergone major changes in the last years. A so-called more economic approach has been introduced: for vertical restrictions safe harbours were created for undertakings with low market shares and only a limited number of hard-core restrictions are still considered detrimental for the economy. For horizontal agreements, the Commission adopted guidelines and new group exemptions allowing for more flexibility for certain types of agreements that can have pro-competitive effects. Where hard-core cartels are concerned, there is no question of introducing more flexibility at a policy level. On the contrary, due to procedural reforms, decentralisation and the successful introduction of leniency programs, the focus of the Commission and most national competition authorities is now on cartels and large fines are imposed.
Even in hard-core cases there is some pressure on the competition authorities to have sufficient consideration for economic reality and impact on the market. This pressure is coming from the insights of economic doctrine, but also from the courts upon review. It is the result of a growing attention for issues of proof and evidence that we can observe in the last years in several areas of competition law. Community courts are requiring the Commission to substantiate adequately its findings of infringement of competition law by demonstrating adverse effect on the market place. Similar requirements are imposed by national courts when it comes to justifying the sanctions that are imposed by national competition authorities. This stricter approach towards proof is, at least partly, inspired by the seriousness of the sanctions that are imposed on companies. Increasingly high sanctions bring more attention for rights of defence and rules on proof and evidence.
The impression could exist that there is a contradiction between on the one hand more economics and more flexibility, and on the other hand a stricter approach when it comes to the procedural framework in which specific competition cases are dealt with. The paper addresses how to reconcile a more economics-based approach to competition law with procedural rules, in particular rules on proof and evidence.
First, a short description is given of the general characteristics of rules on proof and their role in the legal system with special attention for general principles of law. Then the relevant specific characteristics of EC law and of cartel cases are described, as well as a number of recent developments that have their impact on proof. Thirdly, an attempt is made to define the practical features of workable rules on burden of proof and standard of proof and some proposals are made to develop a pragmatic approach that reconciles the different, seemingly contradictory trends in current competition law. This approach requires both economists and lawyers to deviate somewhat from their dogmas for the sake of efficient enforcement of competition law.
Keywords: Proof, Standard of proof, Cartels, Law and Economics
JEL Classification: K 21, K 41
Suggested Citation: Suggested Citation