Ne bis in idem and the DMA: the CJEU’s judgments in bpost and Nordzucker – Part I

[This is the first of two blog posts on the principle of ne bis in idem and the DMA. This post sets the scene by discussing the CJEU’s case-law on ne bis in idem, with a focus on the Court’s recent rulings in bpost and Nordzucker. A second blog post will discuss the implications of these rulings for the DMA and its interplay with EU and national competition law]

On 22 March 2022, the Grand Chamber of the Court of Justice delivered two seminal judgments concerning the interpretation of the ne bis in idem principle in EU (competition) law. The two cases were requests for a preliminary ruling, one from the Brussels Court of Appeal (bpost, C-117/20), and the other from the Austrian Supreme Court (Nordzucker, C-151/20). In its two judgments, the Court clarified the protection against double jeopardy provided by EU law, according to which no one shall be tried or punished again in criminal proceedings for the same offence. The principle is understood to prevent duplication of proceedings and penalties against the same (natural or legal) person and for the same offence. And while at first sight the principle seems limited to criminal proceedings, the case-law of the EU courts has expanded it to administrative proceedings of a “criminal” nature, including antitrust proceedings, as discussed below.

Hence the significance of the two judgments for the interplay between the Digital Markets Act (“DMA”) and (EU and national) competition law. It is recalled that the DMA is without prejudice to the application of Articles 101 and 102 TFEU and national competition rules. In a keynote speech last week, only hours after the Council and the European Parliament reached a political agreement on the DMA, Executive VP Commissioner Vestager reminded that the DMA and antitrust enforcement are complementary, and both will remain necessary. This means that going forward, large digital platforms will be subject to numerous regulatory frameworks in the EU, namely (1) the DMA; (2) EU competition law; and (3) national competition law, including national competition rules specific to digital markets (see e.g., the new section 19a of the German GWB). As a result, there is a risk the same digital platform could be subject to cumulative proceedings for the same conduct under different regulatory frameworks, raising the question whether this is compatible with the ne bis in idem principle.

In its two judgments, the Court seems to have finally unified its case-law on the ne bis in idem principle, bringing much needed coherence to what Advocate General (AG) Bobek described as “a fragmented and partially contradictory mosaic of parallel regimes”. However, while the Court did provide guidance on the application of the ne bis in idem principle, it would be overoptimistic to say the matter has been settled, and I expect this to be a fertile ground for litigation once the DMA comes into effect. Perhaps the key reason for this is that, as AG Bobek noted, the approach of the Court seems to be highly fact-specific, i.e., it depends heavily on the specific circumstances of each case.

In this first post, we take a step back and examine the case-law of the EU Courts on ne bis in idem as it has evolved throughout the years. This will allow us to set the two judgments in context and understand the Court’s approach in bpost and Nordzucker. We will then discuss the significance of the two judgments for the DMA and its interplay with competition rules in a second post, which we will publish tomorrow.

Background – the evolution of EU case-law on ne bis in idem

The ne bis in idem principle is a fundamental principle of EU law, also enshrined in Article 50 of the Charter of Fundamental Rights (the “Charter”), which has primary EU law status per the Lisbon Treaty. According to Article 50 of the Charter, “[n]o one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law”. At a high level, the concept is that no one shall be tried or punished again in criminal proceedings for the same offence. This fundamental right is also enshrined in Article 4 of Protocol No 7 to the Convention for the Protection of Human Rights and Fundamental Freedoms (“ECHR”), and has been the subject of a rich (albeit not always consistent) case-law by the Strasbourg court.

At the outset, it is worth recalling that the ne bis in idem principle is not limited to proceedings which are classified as “criminal” under national law. Indeed, the assessment of what amounts as “criminal proceedings” for the purposes of Article 50 of the Charter is done by reference to the so-called “Engel criteria”, originally conceived by the European Court of Human Rights (ECtHR) to broaden its jurisdiction under Article 6(1) of the ECHR. These criteria are: (i) the legal classification of the offence under national law; (ii) the intrinsic nature of the offence; and (iii) the degree of severity of the penalty which the person concerned is liable to incur. As a result, a procedure for the imposition of an administrative penalty may well be considered to be “criminal” in nature, and indeed antitrust proceedings have been considered by both the Luxembourg court (in Schindler) and the Strasbourg court (in Menarini) to be “criminal” in nature.

The application of the ne bis in idem principle is subject to a twofold condition, namely, first, there must be a prior final decision (the “bis” condition), and secondly, the prior decision and the subsequent proceedings or decision must concern the same conduct (the “idem” condition). However, the precise content of the “idem” condition has been subject to considerable controversy, and for years the Luxembourg Court had interpreted the “idem” condition differently, according to whether the principle was applied in the field of EU competition law or not. To help set the scene, I shall use the two terms referred to by AG Bobek to denote the two different approaches to the “idem” condition:

Idem factum: according to the idem factum approach, the condition of “idem” is satisfied if the two proceedings concern the same person and the same facts, the legal characterization of the facts being irrelevant. In practice, this approach results in broadening the scope of the ne bis in idem principle (as it only requires identity of offender + facts).

Idem crimen: according to the idem crimen approach, the condition of “idem” is satisfied when the two proceedings concern not only the same person and the same facts, but also the same offence. The latter is typically framed in terms of the protected “legal interest”. In practical terms, this approach results in narrowing the scope of the ne bis in idem principle (as it requires identity of offender + facts + legal interest).

As AG Bobek notes, the principle ne bis in idem has developed in successive waves of case-law, and the Courts of Luxembourg and Strasbourg have influenced each other’s case-law. At a high level, and at the risk of oversimplification, the position of the CJEU case-law on the “idem” condition can be summarized as follows:

In the field of EU competition law, the CJEU had historically opted for the idem crimen approach, triggering the protection of ne bis in idem only if there is a three-fold identity of the offender, the facts, and the protected legal interest. Originally conceived in Wilhelm and Others, this approach was later endorsed in Aalborg Portland (2004) (a case decided before the modernization of EU competition law) and confirmed by the Grand Chamber in Toshiba (2012), despite AG Kokott inviting the Court to abandon it. The criterion of the protected legal interest was confirmed most recently in Slovak Telekom, delivered in 2021. However, as we discuss below, this seems to have changed following the bpost and Nordzucker rulings.

In the field of freedom, security, and justice, the CJEU has historically opted for the idem factum approach, thus triggering the protection of ne bis in idem if there is identity of offender and of the facts, regardless of their legal qualification. This approach was first adopted in Van Esbroeck (2006) and was later refined in a set of seminal judgments known as the Menci case-law, delivered in 2018. Apparently influenced by the evolution of the case-law of the ECtHR, the CJEU held that a duplication of proceedings may be tolerated under certain conditions. Specifically, the Court accepted that a duplication of proceedings (and penalties) is a limitation of the right guaranteed by Article 50 of the Charter, but such a limitation is justified if the conditions of Article 52(1) of the Charter are satisfied. According to the latter, any limitation in the exercise of the rights of the Charter “must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.”

The Menci or Toshiba dilemma in bpost and Nordzucker

As summarized above, the case-law has treated the ne bis in idem principle differently according to the field of EU law in which it was applied. In the field of EU competition law, the CJEU had adopted a more “light touch” approach (requiring triple identity of offender, facts, and legal interest), perhaps motivated by concerns that a broad application of ne bis in idem could undermine the effectiveness of EU competition rules. This is the approach in Toshiba. On the other hand, in all other fields of EU law the CJEU had adopted a broader view of ne bis in idem, while allowing for derogations based on the limitation of rights clause in Article 52(1) of the Charter. This is the Menci approach.

Needless to say, this fragmented approach had long been questioned by commentators and several Advocate Generals, including AG Kokott and AG Wahl. In bpost and Nordzucker the Menci or Toshiba dilemma was once more brought to the fore. I shall first focus on bpost, and then briefly address Nordzucker.

bpost

bpost, the incumbent postal operator in Belgium, had been fined by the sectoral regulator in July 2011 for applying a discriminatory tariff system, in accordance with postal regulation (the decision was later annulled on appeal). Shortly thereafter, in December 2012 the Belgian Competition Authority adopted a decision finding that bpost had abused its dominant position in breach of Article 102 TFEU and the equivalent provision of national law on the basis of the same tariff system, and imposed a fine of approximately € 37 million. bpost argued that the decision of the Belgian Competition Authority was incompatible with ne bis in idem, as it concerned the same tariff system for which it had been fined (and eventually acquitted on appeal) by the Belgian postal regulator. The Belgian Competition Authority on the other hand argued that each decision was adopted under different rules protecting different legal interests, hence the ne bis in idem principle was not triggered. After a round of appeals, the Brussels Court of Appeal stayed proceedings and referred the matter for a preliminary ruling to the CJEU, as it was unsure of the exact idem test it ought to apply to the combination of sectoral and competition proceedings.

The approach suggested by AG Bobek

Adopting a rather critical view of the fragmented state of the case-law, AG Bobek called for a unification of the test to be applied under Article 50 of the Charter across all fields of EU law. However, AG Bobek invited the Grand Chamber to opt for a version of the Toshiba test and extend it to all fields of EU law, taking the view that Menci is a problematic decision. According to AG Bobek, Menci is a paradox, in that while it was apparently aimed at providing increased protection per the case-law of the ECtHR, in fact it fails to provide effective individual protection.

Instead, AG Bobek suggested making the examination of the protected legal interest part of the consideration of “idem”, as it is that element alone which allows one to decide normatively, clearly and upfront, whether ne bis in idem is triggered. This allows for the scope of the protection under Article 50 of the Charter to be ascertainable ex ante. The idem test should thus be one of a triple identity: same offender, same facts, and same protected legal interest, the latter defined as “the societal good or social value that the given legislative framework or part thereof is intended to protect and uphold”.  

The approach chosen by the Grand Chamber: one Menci to rule them all

While unifying the test for ne bis in idem across EU law (finally shattering the “mosaic of parallel regimes”), the Grand Chamber declined to follow AG Bobek’s suggestion of including the criterion of protected legal interest as part of the idem test. Instead, the Court chose Menci as the basis for a unified test to ne bis in idem, implicitly overruling Toshiba.

The Court started its reasoning by recalling that the ne bis in idem principle is a fundamental principle of EU law, enshrined both in the Charter and the ECHR (paras. 22-23). It then referred to the Engel criteria for assessing the criminal nature of the proceedings (paras. 25-26) and noted that in that case the two sets of proceedings were of criminal nature (para. 27).

The Court then moved on to the crux of the issue, namely the “idem” condition. Citing Menci, the Court stated that the relevant criterion for assessing the existence of the same offence is the “identity of the material facts, understood as the existence of a set of concrete circumstances which are inextricably linked together”, the legal classification of the facts under national law and the legal interest protected being irrelevant (paras 33-34). The Court then stated that the same is true of the application of the ne bis in idem principle in the field of EU competition law, thus implicitly overruling Toshiba on this point (para. 35). In other words, the idem crimen approach, endorsed as recently as last year in Slovak Telekom, is officially dead. 

However, even if the facts are identical, this is not the end of the inquiry. The duplication of proceedings constitutes a limitation of the fundamental right guaranteed by Article 50 of the Charter, hence the next step is to consider whether such limitation can be justified per Article 52(1) of the Charter. In bpost, the Court went on to apply a slightly modified version of the framework laid down in Menci:

Provided by law: the possibility of duplicate proceedings must be provided by law.

Essence of the right: the possibility of duplicate proceedings must respect the essence of Article 50 of the Charter. This is the case when the national legislation “does not allow for proceedings and penalties in respect of the same facts on the basis of the same offence or in pursuit of the same objective, but provides only for the possibility of a duplication of proceedings and penalties under different legislation”. This suggests that the protected legal interest criterion is in fact part of the legal test (albeit not under the “idem” condition); if the objective pursued or the offence punished by the two proceedings is the same, then the duplication of proceedings violates the essence of the ne bis in idem right.

Objective of general interest: the two sets of legislation at issue must pursue distinct legitimate objectives.

Proportionality: the duplication of proceedings provided for by national law should not exceed what is appropriate and necessary to attain the objectives legitimately pursued by that legislation. With respect to strict necessity, the Court drew inspiration from Menci and the ruling of the ECtHR in A and B v Norway to lay down the following test: it is necessary to assess (i) whether there are clear and precise rules making it possible to predict which acts or omissions are liable to be subject to a duplication of proceedings and penalties, and also to predict that there will be coordination between the different authorities; (ii) whether the two sets of proceedings have been conducted in a manner that is sufficiently coordinated and within a proximate timeframe (the proceedings must be sufficiently close in substance and in time); and (iii) whether any penalty that may have been imposed in the first proceedings was taken into account when assessing the second penalty.

The Court considers that this solution observes the essence of the right guaranteed by Article 50 of the Charter. This is because reliance on Article 52(1) of the Charter requires certain conditions (the close proximity between the two proceedings) which, when satisfied, are intended to limit the functionally distinct character of the proceedings and thus the actual impact on the persons concerned of the duplication of proceedings.

Cognizant of the fact it may not be obvious how to apply the above framework in practice, the Court provided the national court with the following guidance regarding the case before it:

• A provision of national law providing for cooperation and exchange of information between the authorities concerned would constitute an appropriate framework for ensuring coordination. Of course, such coordination must have actually taken place.

• The file submitted to the Court indicated there was a sufficiently close connection in time between the two sets of proceedings and the decisions taken (recall that the postal regulator and the Belgian Competition Authority issued their decisions in July 2011 and December 2012 respectively).

• The fact that the second fine imposed was larger than the first did not show in itself that the duplication of proceedings was disproportionate, in that the two sets of proceedings may constitute complementary and connected, but still distinct, legal responses to the same conduct.

Nordzucker

In Nordzucker, the eponymous undertaking (a major producer of sugar in Germany) filed leniency applications to the German and Austrian competition authorities, disclosing the existence of a cartel between Nordzucker and two other major producers of sugar (one of them being Südzucker). In response, in September 2010 the Austrian authority brought an action before the Higher Regional Court in Vienna, seeking a declaration that Nordzucker had breached Article 101 TFEU and the corresponding provisions of Austrian law (and seeking the imposition of two fines on Südzucker). For the purposes of establishing the existence of a cartel in the Austrian market between Nordzucker and other producers of sugar, the Austrian authority relied on a telephone conversation between Nordzucker and Südzucker discussing the Austrian market.

Meanwhile, in September 2014 the German competition authority adopted a decision finding that Nordzucker and Südzucker had infringed Article 101 TFEU and the corresponding provisions of German law. In its decision, the German authority also reproduced the content of the telephone conversation mentioned above which related to the Austrian market.

In 2019, the Higher Regional Court of Vienna dismissed the action brought by the Austrian authority, holding that the agreement concluded during the telephone conversation had already been subject to a penalty by the German authority. On appeal, the Supreme Court of Austria decided to stay proceedings and refer the matter to the CJEU. Two were the key issues: (i) first, whether the two competition authorities had ruled on the same facts, and (ii) second, whether the third criterion of the CJEU’s Toshiba case-law (the protected legal interest) was met in that case, whereby the two authorities were called to apply the same provisions of EU law (Article 101 TFEU) in addition to provisions of national law.

In its ruling, the Court reiterated the approach in bpost, according to which the ne bis in idem principle is triggered if there is identity of offender and facts (per Menci). As regards the identity of facts, the Court noted that the issue of whether undertakings have restricted competition cannot be assessed in the abstract, but must instead be examined by reference to the territory, the product market, and the period during which the conduct in question had the alleged object or effect of restricting competition (citing Slovak Telekom). In the present case, the referring court had thus to determine whether the German authority sought to find that the cartel at issue existed, and to penalize it, on the basis of the cartel’s anticompetitive object or effect in Austrian territory. If not, then the Austrian proceedings did not relate to the same facts, hence the ne bis in idem principle was not triggered. If, on the other hand, the answer to the above question was affirmative, then the duplication of proceedings would amount to a limitation of the right enshrined in Article 50 of the Charter. In that case, it would be necessary to examine whether such a limitation could be justified per Article 52(1) of the Charter.

In the case in question, the Court held that such a limitation could not be justified per Article 52(1) of the Charter, in that the two proceedings by the national competition authorities did not pursue complementary aims (they pursued the same objective). The Court stressed that Regulation 1/2003 establishes a close link between Article 101 TFEU and corresponding provisions of national law, in that the application of the latter cannot lead to a different outcome from that which would result from applying Article 101(1) TFEU. In such a setting, two national competition authorities acting under Article 101 TFEU and corresponding provisions of national law pursue the same objective of ensuring that competition in the internal market is not distorted. As these proceedings do not pursue complementary aims, the Court held they “cannot in all evens by justified under Article 52(1) of the Charter”.

To put it in a nutshell, the Court took the view that proceedings brought by two national competition authorities for the prohibition of anticompetitive agreements pursue the same objective (the same legal interest). While this is not required to trigger the ne bis in idem principle (as the legal interest is not part of the “idem”), it means that a duplication of such proceedings against the same person for the same facts cannot be justified per Article 52(1) of the Charter.

Now, Regulation 1/2003 allows Member States to introduce stricter national laws that prohibit unilateral conduct. In that case, the link between Article 102 TFEU and corresponding provisions of national law is looser (in that a Member State may prohibit unilateral conduct permitted under Article 102 TFEU). In such a setting, one could argue that two national competition authorities acting under Article 102 TFEU and corresponding national law do not pursue the same objective, hence a duplication of proceedings can be justified per Article 52(1) of the Charter.

More on this and the interplay between the DMA and national competition rules in our second post!