According to the judgment of the European Court of Human Rights in the case SA-Capital Oy v. Finland, there was no violation of Article 6 § 1 (right to a fair hearing) of the European Convention on Human Rights. The Court rejected as inadmissible complaints under Article 6 § 1 and Article 6 § 2 (presumption of innocence) and ruled that the Supreme Administrative Court had had enough evidence of SA-Capital Oy’s involvement in the cartel and that the indirect, hearsay evidence had not been conclusive.

Background

The case concerned SA-Capital Oy’s (the “Applicant”) complaint to the European Court Of Human Rights (the “ECtHR”) in which it alleged that under the European Convention on Human Rights (the “Convention”) it had not had a fair trial because it had been ordered to pay penalty payments in competition law proceedings based on hearsay evidence and without being able to examine persons at the origin of this evidence. According to the Applicant, the Supreme Administrative Court had shifted the burden of proof onto the Applicant, hence violating its presumption of innocence under Article 6 § 2 of the Convention.

The Finnish Competition and Consumer Authority (the “FCCA”) started its proceedings in a nationwide asphalt cartel case in 2004. The Market Court found in 2007 that the Applicant, together with six other asphalt companies, was guilty of long-term market sharing and collusive tendering practices that occurred in Finland between 1994 and 2002. The Applicant was found to have taken part in the territorial allocations of markets, in minor degree price fixing and in restricting the supply of asphalt mass. Regarding the allegations of territorial allocation and price fixing in the markets for local government and private sector asphalt contracts, the Market Court held that the Applicant had not participated in a cartel. Considering the Applicant’s turnover, market position and the regionally-limited scope of the related restriction of competition, a relatively low penalty payment of EUR 75,000 was imposed.

Regarding evidence, the Market Court held that neither economic nor hearsay evidence alone was enough to prove the existence of a cartel. The Market Court reached its conclusion in respect of the central government asphalt contracts by relying on the testimonies of eight witnesses, in addition to other sources of evidence. However, to the extent that those testimonies contained hearsay evidence, such evidence was not considered. With regard to the regions in which the Applicant was doing business (Northern Finland and North Karelia), the Market Court held that the evidence was insufficient to support the existence of the cartel. Furthermore, the Market Court stated that the testimonies of two witnesses who had been heard on the matter were based on what the witnesses had heard from other people (hearsay). In contrast, other witnesses had not provided evidence that confirmed the existence of a cartel for local government and private sector contracts in said region.

The FCCA and the defendant companies appealed to the Supreme Administrative Court, which in 2009 overturned the Market Court’s decision. The Supreme Administrative Court found that a single nationwide cartel had existed between 1994 and 2002 affecting central and local government as well as the private sector. It ordered the asphalt companies to pay a total of EUR 82.55 million in fines (cf. EUR 9.4 million ordered by the Market Court). Contrary to the Market Court, the Supreme Administrative Court, found that the Applicant had taken part in Lapland and North Karelia, from May 1995 and 2000, and increased the fine to EUR 500,000. The decision was based on evidence that the Supreme Administrative Court heard directly in court and on testimony heard in the Market Court in the first instance, including evidence which witnesses had either experienced themselves or heard from others.

Assessment of the ECtHR

Concerning the Applicant’s complaint that the Supreme Administrative Court had relied on hearsay evidence, the ECtHR noted that assessment of the case by the Supreme Administrative Court was complex and involved a wide range of financial, factual and legal considerations. In addition, the ECtHR stated that the Applicant had been able to attend a preparatory meeting and, thus, had been able to influence what evidence was presented before the Supreme Administrative Court. The ECtHR found that the way the Supreme Administrative Court assessed evidence from witnesses had been justified. Even if some witness evidence might have been hearsay, the Supreme Administrative Court had not relied on such evidence to a decisive extent.

The Applicant alleged that the Supreme Administrative Court had accepted that the standard of proof in competition law cases could be lower than the level of “beyond reasonable doubt”. Regarding this argument, the ECtHR noted that large amounts of evidence of a cartel had been provided by the FCCA, while the defendant had not been able to refute the credibility of such evidence or FCCA’s conclusions.

The complaint of a reversal of the burden of proof was rejected by the ECtHR as manifestly ill-founded and inadmissible. According to the ECtHR, no conclusion could be drawn that the Supreme Administrative Court had shifted the burden of proof to the Applicant or that the standard of proof had been arbitrary in any way.

Furthermore, the ECtHR concluded that the manner and extent to which evidence from witnesses was examined before the Supreme Administrative Court was justified and the proceedings had been fair as a whole.

Comment

The Asphalt cartel was one of the largest national competition cases in Finland in terms of the amount of penalty payments imposed on the participants of the infringement and could easily be considered as a landmark case. Hence, the ruling of the ECtHR on this matter is significant. The Supreme Administrative Court has not been regularly challenged in this way in competition cases. Given the complex nature of competition cases involving several defendants and plentiful evidence, it is highly important that the rights of defence are tested.

However, it is unfortunate that it took almost ten years for the ECtHR to rule on the matter. The Supreme Administrative Court gave its judgment on the Asphalt cartel case in September 2009. European Union case-law, including the principle of single and continuous infringement, has developed significantly since then. The principle of single and continuous infringement is highly relevant for the adequacy of the evidence. Due to the concept of the single and continuous infringement, undertakings can be held responsible and fined for the entirety of a cartel, even though the involvement of some of the participants might be considerably less. Further, when applying the principle of single and continuous infringement, the responsible competition authority is not required to identify and prove the existence of a series of separate anticompetitive agreements and the parties involved in each of them.

Recent case law has nevertheless raised the bar for the level of evidence that would suffice for a finding that an undertaking participated in a cartel. In addition, the evidentiary standard applied by the General Court and the Court of Justice seems to be higher today than it was in 2009 when the Asphalt cartel decision was given (see e.g. cases C‑287/11 P, Aalberts and T-104/13, Toshiba).

Given the fact that there was no direct evidence to confirm the Applicant’s participation in the cartel in Northern Finland and North Karelia or the existence of a cartel for local government and private sector contracts in said region, it would be interesting to see whether the assessment of the case by the Supreme Administrative Court would differ if the case were settled today. With regard to the smaller undertakings that did not participate in all aspects of the cartel or their role has been marginal, there should be direct and clear evidence in order to hold said undertakings liable for the cartel as a whole based on the concept of single and continuous infringement.

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