Just as fishing inevitably results in bycatch, law enforcement wiretaps often capture information unrelated to the original investigation. This incidental data can raise complex legal questions—especially when it reveals evidence of unrelated offences.
What if the remaining irrelevant recordings contain evidence of price fixing? And what if that price-fixing evidence is transmitted by the criminal prosecutor to the competition agency under a national law permitting such transmissions? These questions are at the heart of a recent judgment of the Grand Chamber of the European Court of Human Rights which tested the compatibility of such transmissions under Article 8 of the Convention (the right to privacy).
Together with the right to a fair trial, Article 8 forms the bedrock of undertakings’ rights of defence in competition investigations. Any ECHR case involving investigative powers is therefore relevant to European competition investigations. Although a majority of judges ruled that there was no breach of the Convention in this case, there were several dissenting opinions, including from President Marko Bošnjak, who is rumoured to be joining the EU Court of Justice. Plenty to unpack.
Background
The judgment relates to two cartel investigations by the Dutch competition authority (the Nederlandse Mededingingsautoriteit or NMa, as it then was, now the ACM), one involving price fixing in the sector of ship-generated waste collection, and the other involving exchange of information in the construction sector.
In each case the NMa relied on intercepted telephone conversations that were obtained by the Public Prosecution Service in unrelated criminal investigations opened in 2006 and 2007 into illegal disposal of waste and bribery, respectively. In case of suspicion of a serious criminal offence, the prosecution can seek an investigating judge’s authorisation to intercept and record telephone conversations. This option is not open in competition investigations, as cartels are not criminal offences in the Netherlands.
When reviewing the wiretap recordings, the criminal investigators identified indications of price fixing that could be of interest to the NMa. Under the Judicial and Criminal Data Act (the “WJSG”), the Board of Prosecutors-General may transmit data obtained in the context of a criminal investigation and processed by the public prosecutor in a criminal file to another public authority for several purposes, including “the enforcement of legislation”. It may only do so if this is “necessary in view of a compelling general interest or the determination, exercise or defence of a right in law”.
This power was used in each case as follows:
- In Ships Waste Oil Collector, a criminal investigator wrote an official record in which the price-fixing evidence was detailed and to which summary transcripts were appended. Following this, the prosecutor authorised transmission to the NMa. The NMa subsequently provided search terms to the criminal investigators to identify further relevant recordings, which were then also provided.
- In Janssen de Jong, police officers gave NMa officials access to transcripts before such authorisation was given. Subsequently, the public prosecutor provided a CD containing audio recordings to the NMa “for information purposes only”, indicating they could not be used for any other purpose except with his permission. The NMa then sought the Public Prosecution Service’s permission to use the data, which the Service provided. Subsequently, the NMa again provided search terms to the investigators which led to further data transmissions.
The NMa used the wiretap evidence in its competition investigations, both of which led to infringement decisions and fines. In each case, there were appeals against the NMa decisions that ultimately ended up at the highest Dutch court for competition cases, which held that the transmissions had been lawful.
Following this, the cases were appealed to the European Court of Human Rights, where the applicants complained that the transmission of intercept data to the NMa had violated their Article 8 rights and that they had not had access to an effective remedy as required by Article 13 of the Convention. Following a judgment by the Third Section of the Court (4 votes to 3) that there was no breach of the Convention, the applicants requested a referral of the case to the Grand Chamber, which accepted the request. The Grand Chamber could not reach a unanimous judgment but ruled as follows:
- 12 votes to 5 that there had been no violation of Article 8 in respect of Ships Waste Oil Collector
- 10 votes to 7 that there had been no such violation in respect of Janssen de Jong
- 15 votes to 2 that there had been no violation of Article 13 in respect of all of the applicants.
There were five dissenting opinions. Below, we first discuss the majority judgment, and then the salient points of the dissenters.
Grand Chamber majority judgment
Legal Issue: the transmission of data lawfully obtained in a criminal investigation by the Dutch Public Prosecution Service to the Dutch Competition Authority, which then used this data in a price fixing investigation. The applicant argued that this data transmission violated its rights under the Convention.
Judgment: the Court held that the transmission of data did not constitute a violation of the applicant’s rights under the Convention.
As is standard practice in Article 8 cases, the judgment first assesses whether there was an interference with the applicants’ Article 8 rights. However, Article 8 is not an “absolute” right: an interference can be justified if it (a) was in accordance with the law; (b) pursued a legitimate aim; and (c) was “necessary in a democratic society”. The judgment therefore subsequently assesses these factors, focussing on (a) and (c), as we will do below.
Interference
The Court confirmed that the transmission of intercept data for use in competition proceedings amounts, in itself, to an interference with Article 8. In other words, it is not just the interception of the applicants’ phone conversations that interferes with their privacy, it is also the subsequent transmission to the competition agency.
Justification for the interference: was it in accordance with the law?
The Court next considered that the transmission had a clear basis in the WJSG, which is primary Dutch legislation. However, that does not in itself mean that the interference was “in accordance with the law”: the law on which the interference is based must also be accessible and foreseeable as to its effects to be compatible with the rule of law. The applicants had focussed their arguments on the requirement of foreseeability.
Under the WJSG, the transmission must (i) concern “criminal data”; (ii) be for a permitted purpose, which includes “the enforcement of legislation”; and (iii) be necessary in view of a compelling general interest.
The applicants had argued that the WJSG did not specify the minimum level of seriousness of violations of legislation that could justify transmission of criminal data. However, the Court held that the foreseeability requirement does not go so far as to compel States to enact legal provisions listing in detail all circumstances that may prompt a decision to transmit data. The WJSG sufficiently clearly defined the nature of the situations in which transmissions could be authorised, because it defined the data that could be transmitted, the permissible purpose, and the group of potential recipients.
The applicants had also questioned the foreseeability of the domestic courts’ interpretation of “criminal data” as including bycatch, i.e., data irrelevant to the criminal case. However, the Court found that the main statutory criteria for defining “criminal data” were that the data was (i) obtained in the context of a criminal investigation, and (ii) included in a criminal file or processed by automated means. The domestic courts had explained that the transcripts were part of the criminal file as they could become relevant at some stage of the criminal proceedings. In any event, they were processed by automated means. The domestic courts’ interpretation that the defined term “criminal data” included bycatch did not appear to be arbitrary or manifestly unreasonable to the Court.
Finally, the Court held that it was foreseeable that, to assess the necessity and proportionality of the transmission, the prosecutor might need to consult with the NMa to identify the relevant data. This helped to ensure that the transmissions of data were more targeted. Therefore, the fact that there had been informal interactions between NMa and the prosecution service, and even pre-authorisation access to the transcripts in the Janssen de Jong case, did not alter the Grand Chamber’s finding that the interference was foreseeable and therefore compatible with the rule of law.
Justification for the interference: was it necessary in a democratic society?
As a final step, the Court analysed whether the interference was “necessary in a democratic society”. This involves an assessment of factors like necessity and proportionality, as well as the relevance and sufficiency of the reasons adduced by the national authorities (which includes the domestic courts).
The applicants had complained, first, that there had been no prior notice of the planned transmission. However, the Court held that while the police and competition investigations were ongoing, notification of the transmissions could have undermined the investigations. With respect to a sub-set of data transmissions that occurred after the NMa dawn raids in the case of Ships Waste Oil Collector, the Court found it “regrettable” that the companies were not given prior notice. However, ultimately the applicants learned about all the data transmissions and the ex post review carried out by the domestic courts sufficiently protected their rights, so the Court did not attach consequences to the lack of prior notice of the transmissions.
Second, the applicants had submitted that there was a lack of reasons for the transmissions in the authorisations given by the public prosecutors. However, the Court noted that the domestic court hearing the applicants’ appeal had held that the lawfulness of the “factual act” of a transmission of data did not depend on the reasons given by the prosecutor when authorising the transmission. The lawfulness of such a factual act could be assessed retrospectively by the reviewing court carrying out its own de novo assessment of the lawfulness and compatibility with the Convention of the transmissions. The Court agreed with that approach by the domestic court. Because, as discussed below, the ex post review by the courts was sufficiently effective, and based on sound reasons, the lack of reasons in the authorisation decision did not cause a violation of the Convention.
The analysis of the above two issues is peppered with the Court’s assessment of the effectiveness of the remedies available under domestic law to the applicants. The Court finds that the applicants were able to challenge the lawfulness and Convention-compliance of the transmissions in their ex post appeals against the NMa’s infringement decisions. In those appeals, the courts examined the lawfulness and Article 8-compatibility of the transmissions. Moreover, the appeal could bring the applicants appropriate redress because the courts could hold that the transmitted evidence was inadmissible. Finally, the applicants could have pursued civil tort proceedings against the transmissions, which could have led to the civil courts preventing the NMa from using the data.
The Court completed its analysis by scrutinising the reasoning applied by the domestic courts in their ex post analysis. The Court agreed with the domestic courts that there is strong public interest involved in the effective enforcement of competition law and that the competition infringements revealed by the wiretaps were “undoubtedly serious” and could lead to “significant damage”. It also referred to the fact that the Court has previously classified similar administrative competition proceedings as “criminal” within the autonomous meaning of Article 6 of the Convention (Menarini v Italy, no. 43509/08, §§ 39-45). At the same time, the data transmissions were limited to material relevant to the competition proceedings, and “did not contain data that could be considered sensitive”.
The Court was therefore satisfied that the data transmissions had not violated the Convention.
Dissenting opinions
Dissenting opinions: There were 5 dissenting opinions. Key points to note: the dissenting judges considered it inappropriate that the competition authority had been given access to transcript pre-authorisation, and several of the judges considered the Dutch law that allowed for the transmissions to be too vague and broad in its application.
There were five dissenting opinions, of which we discuss three (a fourth, by Judge Serghides in relation to the locus standi of companies to bring cases at the Court is also worth reading, but extends beyond the competition law focus of this blog).
Judges Guyomar and Ravarani: Article 8 violation with respect to Janssen de Jong
The first is by Judges Guyomar and Ravarani, who dissented from the majority judgment with respect to Janssen de Jong. As noted, in the case of Janssen de Jong, NMa officials were given access to transcripts prior to the authorisation for the transmissions. In the dissenting judges’ view, this was “clearly devoid of any legal basis and irreparably vitiated the remainder of the proceedings in question”.
The judges did not agree that it was foreseeable that there would be exploratory interactions between the NMa and the public prosecutor prior to the transmission authorisation. While the prior consultations could be regarded as “reasonable” in the light of their purpose, it was not “foreseeable” that the authorisation of a transmission be coupled with prior access to the data in question. The subsequent transmission authorisation could not be regarded as having expunged the infringement of Article 8 earlier in the proceedings. There was therefore a violation of Article 8 in respect of Janssen de Jong.
Judge Arnardóttir, joined by Judges Serghides and Šimáčková: transmissions only for “weighty interests”
Judge Arnardóttir, joined by Judges Serghides and Šimačkova, submits, first, that transmission of intercepted criminal data for purposes unrelated to the original purpose of the interception can only be justified in pursuit of weighty interests. By failing to hold as such, the majority opted for an approach that affords less protection than the EU’s ePrivacy Directive. As the CJEU held in Lietuvos Respublikos generalinė prokuratūra, that Directive provides that intercept data cannot in principle be transmitted for use in pursuit of purposes of lesser importance than those which justified the interception.
In addition, they consider that the way in which the WJSG allowed for transmission in this case was too broad to meet Convention standards. The law does not contain a minimum severity threshold, does not narrow the potential recipients of the data, does not limit the type of data that can be transmitted, and is not limited by any description of what might constitute a “compelling general interest”. The discretion conferred by the WJSG is therefore too broad to guard against arbitrary interference and abuse of power.
Finally, they criticise the lack of reasoned contemporary authorisations. Indeed, this meant that when the applicants appealed, they were unaware of the reasons for the transmission, which impeded their ability to challenge the transmissions effectively.
Judges Bošnjak and Derenčinović: do not mess with Article 6
Judges Bošnjak and Derenčinović agree with most of the views of Judge Arnardóttir, summarised above. They also point out that data-sharing arrangements should be subject to strict procedural and substantive safeguards which were lacking in this case.
Moreover, the dissenting judges take umbrage at the majority’s justification for the transmission on the basis that the Court has previously classified competition proceedings as ‘criminal’ within the autonomous meaning of Article 6 of the Convention. The reference to Article 6 is, according to the dissenting judges, “in clear contradiction with the very purpose of subsuming the facts of the case under the “protective” ambit of the criminal limb of Article 6. The purpose of this exercise is not to convert certain conduct on the part of an applicant into a criminal offence and/or to prove its criminal character but rather to provide for the protection of procedural rights enshrined in fair trial guarantees in the context of criminal proceedings”.
Comment
Key takeaways: (i) transmissions of lawfully obtained data must in themselves be Article 8-compliant; (ii) transmission is more likely to withstand scrutiny if the authorisation is properly reasoned; (iii) dissenting judges’ concerns relating to unauthorised early access to transcripts in Janssen de Jong case seem valid; (iv) arguably there is a disconnect between when agencies consider a document to be disclosed to parties, and when the Court considers an intercepted communication to be “transmitted”.
Despite the significant sanctions that can be imposed in competition cases, and the relatively strong investigative powers granted to competition agencies, it is still extremely rare for a competition case to reach the Human Rights court in Strasbourg, let alone its Grand Chamber, or indeed to have so many dissenting opinions. By way of comparison, the Menarini case did not reach the Grand Chamber and only one judge dissented in that case. And yet, commentators have so far been mostly silent about the Ships Waste Collector and Janssen de Jong v the Netherlands judgment.
However, when read as a whole, including dissenting opinions, this is an interesting judgment for competition practitioners. I would highlight four key takeaways.
First, if competition agencies transmit lawfully obtained information to other agencies, they should separately assess the Article 8 compliance of such a transmission. They cannot simply rely on the fact that the way in which the information was initially obtained was Article 8-compliant. This is relevant to domestic transmissions of evidence, which occur between different national, but also to international transmissions under competition cooperation agreements such as the EU/Switzerland agreement.
Second, this is a case that turned on a knife-edge, where the NMa (now ACM) was essentially saved by the depth of the review applied by the domestic appeal courts. Had those courts applied a more succinct analysis, then the transmissions would likely have violated Article 8 of the Convention. This judgment therefore contains lessons for agencies to improve their processes to make them more “Convention-proof”. For example, the lack of reasons in the authorisations by the public prosecutor was clearly problematic. One would not want to be dependent on the de novo assessment of an appeal court to save such a lack of reasoning. Better to build it in from the beginning.
Third, the concerns of several judges with respect to the lack of any legal basis for the NMa’s pre-authorisation access to some of the wiretap transcripts seem to me to be entirely correct. There are less-intrusive ways of allowing the ultimate transmissions to be “more targeted” than letting the NMa officials sift through transcripts unauthorised. Where the law prescribes authorisation before a transmission can be made, it is necessary that such an authorisation occurs before the transmission.
Fourth, and relatedly, it seems odd to me that the definition of what constitutes a “transmission” was not in dispute before the Court. Indeed, is it not already a “transmission” when NMa officials are invited to come and review the transcripts? The same can be said for the CD that the prosecutor provided “for information purposes only” (leaving aside that “information purposes” are not a legitimate purpose for transmission under the WJSG).
The European Commission takes the view that if it makes evidence available in a data room, this discharges its disclosure obligations (see our recent post), so why would a “transmission” only occur when transcripts are physically sent from one public agency to another? The harm that the law seeks to prevent is the unauthorised use of evidence, which must include the initial review of that evidence. Indeed, once the relevant officials have done an initial review of the wiretap transcripts, they may know where to look for other incriminating evidence, even if there is ultimately never a formal transmission of those transcripts.
The application of human rights law to competition cases continues to develop, not least now the CJEU also regularly refers to the Charter in its judgments. The present judgment may not represent a seismic shift in this regard, but it is an interesting development and the large number of dissenting opinions shows that we are nowhere near the end of the debates that will be had under the ECHR and the Charter in competition cases.
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