Better fact-finding in ACM cartel investigations? Expand the right of suspects to examine witnesses!

This article was published on www.maverick-law.com

Companies and individuals that are suspected of cartelisation by the Netherlands Authority for Consumers & Markets (“ACM”) should be given more opportunities to examine witnesses and leniency applicants. The current system interferes with fact-finding and is in breach of the right to a fair trial.

A renewed plea is presented in this blog to allow the suspects themselves to examine witnesses and leniency applicants in the decision-making phase. That will be beneficial to ACM’s decision-making, will better convey the sense of a fair trial to the companies and persons involved and will make legal proceedings less likely.

What is the problem?

ACM is in charge of investigating breaches of the cartel prohibition (set out in Article 6 of the Mededingingswet (Competition Act)). As an administrative authority, ACM has a great deal of freedom to determine which persons it wishes to examine during the investigation and how it wishes to do so. ACM’s current approach involves risks. We have found in practice that:

- ACM is able to create “desired” answers by asking leading questions, or closed or rhetorical questions. Also, ACM itself draws up the depositions, which are usually not verbatim reports;
- Individuals are inclined in light of the threat of sanctions to make incorrect exculpatory statements about themselves and incorrect incriminating statements about others; and
- In the hope of a significant reduction of the fine, leniency applicants are inclined to report as many acts as possible (over-confessing) or rather to omit certain acts, for instance by unnecessarily making light of their own roles (under-confessing).

ACM does not always sufficiently take these risks into account, which may have consequences for the fact-finding and decision-making in individual cases. This problem is aggravated by the all-in-one-hand system, in which ACM not only performs the investigation but also imposes the fines and subsequently decides on objections too. This gives rise to the risk of tunnel vision.

It is difficult for accused companies and persons to do anything about this, since they have few possibilities of examining the persons involved at ACM themselves. Article 7:8 of the Algemene wet bestuursrecht (General Administrative Law Act – the “Act”) currently only offers interested parties the possibility of bringing witnesses of their own to the hearing during the objection phase to have them examined by ACM (therefore not during the principal decision-making phase).

There are more possibilities of examining witnesses at the administrative court. Article 8:60(1) of the Act, for instance, offers the administrative court the possibility of summoning witnesses. Witnesses are obligated to appear in court. Article 8:60(4) of the Act allows parties to bring their own witnesses to the administrative court or to summon them to appear. They must be summoned by registered letter or bailiff’s writ. They are not obligated to appear in that case.

In the Foreclosure Sales case, the Cold Storage case and the Traction Batteries case, the companies involved made use of the possibility of bringing witnesses of their own and having them examined by the Trade and Industry Appeals Tribunal and the Rotterdam Court, respectively. In all three of those cases, the ruling that ACM had produced insufficient evidence of the accusations was partly due to the witness statements. All three of the legal actions would most likely have ended differently if the accused companies or persons had been able to request witnesses or leniency applicants to provide a clarification during the decision-making phase already.

Breach of the right to a fair trial

The impossibility of examining witnesses and leniency applicants during the decision-making phase is in breach of a suspect’s fundamental right to a fair trial (Article 6(3)(d) of the ECHR and Article 48(2) of the Charter of Fundamental Rights of the European Union). Everyone charged with a criminal offence has the right:

“to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him.”

This fundamental right applies the moment criminal prosecution is instituted (therefore in any event the moment ACM publishes the report). This right does not form part of the current ACM procedure. A suspect therefore does not have the right to bring witnesses to the hearing in the principal decision-making phase and does not have the right to examine the persons involved or the leniency applicants at ACM.

This criticism is not new. The Competition Law Association and the Competition Advisory Committee of the Dutch Bar Association have drawn attention to this issue in the past. Academics have also criticised the current system and the lack of adequate guarantees during the administrative phase (Wesseling in his “De Kartelhel” address and Beumer in her thesis on public enforcement procedures of competition law in light of human rights).

What changes should be made?

To improve fact-finding by ACM and to honour the right to a fair trial, the possibility of examining witnesses and leniency applicants during the hearing in the principal decision-making phase must be recorded in the law. The most obvious solution is to provide in the Act establishing the ACM that the accused company or person may file a request with a designated ACM officer within a certain period and on certain conditions (similar to the Hearing Officer at the Commission), who then summons the witnesses or leniency applicants. The witnesses and leniency applicants must then of course be obligated to appear.

We are aware that such a change in the law is not easily made. To solve part of the problem now already, it could be added to ACM’s Policy Rules on Leniency that, on the grounds of their obligation to cooperate, leniency applicants must be present during the hearing in the principal decision-making phase to orally answer questions presented by the accused company or person. This would be a (first) step towards improving the fact-finding at ACM and towards better conveying a sense of a fair trial to the companies and persons involved. Until changes are made at ACM, companies and persons that are fined will most likely continue to apply to the courts.

See invalacm.nl for detailed information on dawn raids by ACM and the European Commission.