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European Court of Justice: principle against double jeopardy does not preclude dual fines

European Court of Justice: principle against double jeopardy does not

European Court of Justice: principle against double jeopardy does not preclude dual fines

02.05.2019 NL law

The European Court of Justice recently confirmed that a national competition authority can impose a single fine on a company for infringements of both national and EU competition law without violating the principle against double jeopardy.

The Court of Justice held that the principle applies to the repetition of proceedings which have previously been concluded by a final decision and not to the situation in which a national competition authority applies national and EU competition rules in parallel to the same conduct. However, when imposing a single fine for breaches of national and EU competition law, a national competition authority must ensure that the fine is proportionate.

On 3 April 2019, the European Court of Justice confirmed in a request for a preliminary ruling from the Polish Supreme Court that a fine imposed on the basis of the simultaneous application of national and EU competition laws does not violate the principle of double jeopardy. This principle, which is enshrined in Article 50 of the Charter of Fundamental Rights of the European Union, prohibits proceedings being brought against an undertaking on the basis of anticompetitive conduct for which it has already been penalised or declared not liable by an earlier decision that can no longer be challenged.

The request for a preliminary ruling was made in the context of proceedings between life insurer Powszechny Zakład Ubezpieczeń na Życie S.A. (PZU Zycie) and the Head of the Polish Office of Competition and Consumer Protection concerning a fine imposed on PZU Zycie for the abuse of a dominant position. The fine consisted of two parts: a fine of approximately EUR 7.6m for an infringement of Polish competition law from 1 May 2001 to 25 October 2007, and a fine of approximately EUR 4m for an infringement of EU competition law from 1 May 2004 (the date of Poland's accession to the EU) to 25 October 2007. Therefore, for the period between 1 May 2004 and 25 October 2007, the fine reflected breaches of both national and EU competition laws.

PZU Zycie argued that it had been fined twice in respect of the same infringement, in violation of the principle against double jeopardy. This argument went to the heart of the system of parallel application of national and EU competition rules. The Court of Justice rejected PZU Zycie's argument, endorsing AG Wahl's view that the principle applies to the repetition of proceedings which have previously been concluded by a final decision, not to the situation in which a national competition authority applies national and EU competition rules in parallel. Put differently, the principle is not relevant to the determination of whether one act may constitute more than one infringement.

However, implicitly recognising that the imposition of a single fine for national and EU infringements may result in an unjustly high fine, the Court of Justice imposed an obligation on national competition authorities to ensure that the fine is proportionate.

Finally, following the finding that the principle of double jeopardy did not apply as there was no repetition of proceedings, the Court of Justice was not required to address other questions raised by the Polish Supreme Court regarding the scope of the principle in the context of EU competition law. These questions remain to be answered.

 

This article was published in the Competition Law Newsletter of May 2019. Other articles in this newsletter:

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