The Court of Justice (“CoJ”) handed down its judgment in a very interesting abuse of dominance case, namely Case C-295/12 P Telefónica SA v Commission on 10 July 2014. The judgment deals with many interesting 102 TFEU related issues; so several posts will follow. In this post though, I would like to touch upon the very well-structured reiteration of the previous case-law of the CoJ regarding the EU judicature’s obligation to carry out a review exercising its powers of unlimited jurisdiction, basically Case C-386/10 P Chalkor v Commission, Case C-272/09 P KME v Commission and Case C-501/11 P Schinlder Holding  v Commission.
Very briefly on the facts of the case, the contested Commission decision was adopted in July 2007. It found that Telefónica had a dominant position on two wholesale broadband markets and one retail broadband market. Subsequently, it concluded that Telefónica had infringed Article 102 TFEU by imposing unfair prices on its competitors in the form of a margin squeeze between the prices for retail broadband access on the Spanish “mass” market and the prices on the regional and national wholesale broadband access markets, throughout the period from September 2001 until December 2006.
One of the grounds of appeal against the General Court’s judgment upholding that decision was that the General Court had failed to have regard to its obligation to carry out a review exercising its powers of unlimited jurisdiction for the purpose of Article 6 of the European Convention on Human Rights (“the ECHR”).
The CoJ begins its reasoning by reiterating that the principle of effective judicial protection is a general principle of EU law to which expression is now given by Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and which corresponds, in EU law, to Article 6(1) of the ECHR (see Case C 386/10 P Chalkor , paragraph 51; Case C 199/11 Otis and Others, paragraph 47; and Case C 501/11 P Schinlder Holding, paragraph 36).
EU law provides for a system of judicial review of Commission decisions relating to proceedings under Article 102 TFEU which affords all the safeguards required by Article 47 of the Charter (Chalkor, paragraph 67, and Otis and Others, paragraphs 56 and 63). That system of judicial review consists in a review of the legality of the acts of the institutions for which provision is made in Article 263 TFEU, which may be supplemented, pursuant to Article 261 TFEU, by the Court’s unlimited jurisdiction with regard to the penalties provided for in regulations.
As regards review of the legality of Commission decisions in competition matters, the first and second paragraphs of Article 263 TFEU provide that the CoJ is to review the legality of acts of the Commission intended to produce legal effects vis-à-vis third parties and, to that end, it has jurisdiction in actions brought on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application, or misuse of power. Under Article 256 TFEU, the General Court has jurisdiction to review at first instance the legality of Commission decisions in competition matters, as provided for in Article 263 TFEU.
That review of legality is supplemented, in accordance with Article 261 TFEU, by the CoJ’s unlimited jurisdiction with regard to the fines and periodic penalty payments imposed by the Commission for infringement of the competition rules. Article 17 of Regulation No 17, replaced by Article 31 of Regulation No 1/2003, provides that the CoJ is to have unlimited jurisdiction to review decisions whereby the Commission has fixed a fine or periodic penalty payment, which means that it may cancel, reduce or increase the fine or periodic penalty payment imposed.
Thus, the scope of judicial review extends to all Commission decisions relating to a proceeding under Article 102 TFEU, whereas the scope of the unlimited jurisdiction conferred by Article 31 of Regulation No 1/2003 is confined to the parts of such decisions imposing a fine or a periodic penalty payment.
It is also apparent from the case-law of the European Court of Human Rights, the CoJ continues, that the characteristics of a judicial body endowed with unlimited jurisdiction include the power to quash in all respects, on questions of fact and law, the decision at issue. Such a body must in particular have jurisdiction to examine all questions of fact and law relevant to the dispute before it (see the judgment of the European Court of Human Rights, A. Menarinin Diagnostics v. Italy, § 59; and Schindler Holding and Others , paragraph 35).
The review of legality provided for in Article 263 TFEU involves review by the European Union judicature, in respect of both the law and the facts, of the arguments relied on by applicants against the contested decision, which means that it has the power to assess the evidence, annul the decision and to alter the amount of the fine (Schindler Holding , paragraph 38).
Whilst, in areas giving rise to complex economic assessments, the Commission has a margin of discretion with regard to economic matters, that does not mean that the EU judicature must refrain from reviewing the Commission’s interpretation of information of an economic nature. The EU judicature must, among other things, not only establish whether the evidence put forward is factually accurate, reliable and consistent, but must also determine whether that evidence contains all the relevant data that must be taken into consideration in appraising a complex situation and whether it is capable of substantiating the conclusions drawn from it (Chalkor , paragraph 54; and Otis and Others, paragraph 59).
Moreover, failure to review the whole of the contested decision of the court’s own motion does not contravene the principle of effective judicial protection. Compliance with that principle does not require that the General Court — which is indeed obliged to respond to the pleas in law raised and to carry out a review of both the law and the facts — should be obliged to undertake of its own motion new and comprehensive investigation of the file (Chalkor , paragraph 66).
Accordingly, the EU judicature must carry out its review of legality on the basis of the evidence adduced by the applicant in support of the pleas in law put forward and it cannot use the Commission’s margin of discretion as regards the assessment of that evidence as a basis for dispensing with the conduct of an in depth review of the law and of the facts (Chalkor, paragraph 62; Schindler Holding , paragraph 37).
Given those characteristics, the review of legality provided for by Article 263 TFEU satisfies the requirements of the principle of effective judicial protection enshrined in Article 6(1) of the ECHR, which corresponds in EU law to Article 47 of the Charter (Chalkor , paragraph 67; Otis and Others, paragraph 56; Schindler and Others , paragraph 38).
In the present case, the CoJ finds that the General Court did not merely ascertain whether there were any manifest errors of assessment but carried out an in-depth review, as regards questions of both fact and law, of the contested decision in the light of the pleas in law put forward by the appellants, and thus it satisfied the requirements of an unrestricted review for the purpose of Article 47 of the Charter. The CoJ also finds that the appellants simply claimed, by means of general assertions, that the General Court erred in law in its examination of the evidence adduced by the Commission, and did not specifically identify the nature of any such error. They did not maintain that the General Court had failed to establish whether the evidence put forward is factually accurate, reliable and consistent or that the evidence reviewed by that court does not contain all the relevant data that must be taken into consideration in appraising a complex situation. Moreover, they failed to explain how the General Court erred in law in its conclusions.