Full Judicial Review: Menarini Practical Experiences and Beyond

Dear Organizers and Colleagues,

I am really pleased to be here and enrich the debate on such relevant issues, which have a strong domestic significance and an authentically European dimension at the same time.
This Meeting substantiates an opportunity for everybody to cast a bridge among the national legal systems, the judicial proceedings and the jurisprudence in the matter of competition law so as to look at them under an homologous, common prospective, as it must have been in the intention of the European legislator.
The topic entrusted to me today centres around the Judicial Rewiew of the acts of a national competition authority, in the light of the Menarini case and beyond, in order to look into the scope and intensity of the judicial scrutiny, and at the same time to point out clues for a fruitful judicial debate in the present Seminary.

The facts

In 2003, the Italian Antitrust Authority, AGCM (Autorità Garante della Concorrenza e del Mercato) had imposed a fine of € 6 million on Menarini for having operated between 1997 and 2001 with other four pharmaceutical firms a complex price-fixing and market-sharing arrangement in the market for diagnostic tests for diabetes. Menarini contested the decision, though without success, in front of the competent Italian courts (i.e., the Regional Administrative Tribunal of Latium, the Council of State and the Court of Cassation). Once exhausted all national remedies, the applicant brought its case before the ECtHR.

Menarini’s main contention was that the Italian system of judicial review of the AGCM’s antitrust decisions infringed its right to a fair trial under art.6 (1) ECHR, in so far as it did not allow the company to have access to a court with powers of full judicial review, nor to obtain a judicial re-examination of the antitrust decision (2).

In Menarini case the ECtHR, after stating that the allocation of the competence to persecute and sanction violations to an administrative authority is not incompatible with art. 6 (1) ECHR, it recalled the principle that a concerned person must be able to contest any decision affecting him before a judge supplying the guarantees under art. 6 (3); the same Court clarified that it must be a judiciary body having full jurisdiction (4) and pointed out that a system of a full judicial review calls for the power to examine all questions of fact and law relevant to the dispute and to modify the contested decision (5).

Then, the Court acknowledged that, in the case under examination, the applicant had had the possibility to contest the administrative sanction before judiciary bodies having the requirements of independence and impartiality of a “judge” within the meaning of art. 6 of the Convention (6).
The Court of Strasbourg observed that the Italian administrative judges had thoroughly reviewed Menarini’s claims in law and in fact as well as the evidence upon which the adoption of the decision was based; as a consequence, the Court considered that in the case at hand the competence of the administrative judges had not restrained itself to a simple external review of the legality of the Antitrust decision, since under the particular circumstances of the case they had checked the proper use of AGCM’s power and the soundness and proportionality of the Authority’s choices, thus verifying also its technical assessments.
Additionally, the Strasbourg Judges noted that the Italian courts had full jurisdiction with regard to the amount of the fine imposed on Menarini, and thus they could well have modified the latter had they deemed it inadequate or not proportionate in relation to the infringement in question.

In the light of the above, the ECtHR concluded that the AGCM’s decision had been subject to the scrutiny of judicial authorities enjoying powers of full judicial review, so that no infringement of art. 6(1) ECHR could be detected. (7).

Some fringe considerations
The ECtHR pronouncement on the Menarini case substantiated a judgement on the Italian system of judicial review as a whole; and if the conclusions of the in-depth analysis carried out by the Court of Strasbourg are definitely positive and reassuring in terms of compatibility of the Italian system with the requirements of art. 6 (1) ECHR, the logical reasoning followed by same Court conceals a transition argument - concerning the limits of the judicial review on the acts of the national Authorities - which, though undoubtedly justifiable at the time of the facts at hand, turns out no more reliable and shareable at present.

Before referring to it, we must state beforehand that the exclusive jurisdiction of the administrative judge on the national independent Authorities’ (Antitrust Authority and regulatory Authorities) acts is a jurisdiction on the legitimacy of the administrative act and not on the merit of the discretionary choice made in the decision, in the meaning that the judge is not allowed to take a decision in the place of the administrative authority.

This general statement, however, needs specifying in the light of three peculiar aspects recurring in the matter of competition law, i.e. the use of administrative discretion (8), the use of technical discretion (9) and the use of indeterminate juridical concepts (10) on the part of the Authority, any time the exercise of power depends on an evaluation implying administrative or technical discretion or is otherwise bound to indeterminate juridical concepts.

With particular regards to the last two aspects under consideration, we observe that in the field of competition law juridical, economic and technical knowledge is so intermingled that the judge is required to be legally correct, economically proper and technically precise at the same time. In fact, considering that a distinctive trait of the administrative power performed in the matter is the so called “technical discretion”, the judge has to interpret the rules even in fields where he surely lacks the specific competence. Needless to say that the lack of technical knowledge on the part of the judge may also occur in other fields, namely in those left to the competence of other independent administrative Authorities; nevertheless, in the field of competition law, a further difficulty arises from the use, at a legislative level, of plenty of the so-called “indeterminate juridical concepts”, since E.U. and national rules give juridical relevance to concepts belonging to economics. (11 )

This having said, we can now revert to the ECtHR decision.

During the logical path leading to conclusions, the Court incidentally acknowledged that, in the framework of the Italian system of judicial review, no administrative court can substitute its own legal qualification of the facts and technical evaluation to those of the AGCM.

We observe that this assumption, gathered from the analyses of the Italian decisions at hand, did not actually correspond to any positive limit set to the judicial cognizance of a case; it was rather supported by the then current conception of the judicial review in matters marked with a high rate of technicality. At that time it was commonplace that the administrative judge could with a full cognition check the facts considered in the proceedings as well as the evaluation process through which the Authority had come to apply the very rule of law, undisputed being however that - once the legitimacy of the action and the correct use of the underlying technical rules had been ascertained - the jurisdictional review could not go beyond so as to substitute the judge’s evaluation to the one already effected by the Administration, who remained the only subject in charge of the exercised powers (12).

My personal feeling is that the shy and reluctant attitude then shown by the judge towards the technical notions underlying the matter at hand, which gave the impression of his relinquishing the position of “peritus peritorum”, was mainly due to his traditional strictly legal professional training. But the unceasing evolution of litigation in economic sectors where the exercise of administrative power presents pressing technical characters and other peculiarities, has meantime urged the administrative judge to reconsider his own role in the matter.

As a consequence, in process of time the national courts have definitely come to affirm the lawfulness of a stronger, more incisive review of the judge, even on acts of national independent authorities, oriented to a full and effective protection of the individual juridical situations deduced in litigation. This intrinsic review of the judge has been lately deemed to include a re-examination of the technical evaluations made by the Authority as well as of the economic principles and the indeterminate juridical concepts applied (13), and to be conducted by the judiciary by having recourse to rules and technical knowledge belonging to the same disciplines applied by the Administration, also with the aid of experts, if deemed necessary (14).

In particular the past distinction between “strong” and “weak” judicial review was abandoned, while perceiving and underlining the importance of a review aiming at a common model of European level: the judge accomplishes his task not by exercising administrative powers in the first person and in replacement of the Authority, but by verifying, without any intrinsic limitation, whether the power attributed to the Authority has been exercised correctly.

While performing this task the judge can count on a peculiar “tool”, i.e. his own “discretionary power” to mould the economic concepts implied in the legal texts; by so doing, the judge can reassess the technical choice of the Administration and apply the correct interpretation of the relevant indeterminate juridical concepts to the factual controversy ( 15).

And it will not be useless to notice that this orientation has been transposed also in litigation concerning other independent Authorities’ acts, properly conjugated with the specialty of those controversies.
To this purpose, using the judicial criteria elaborated for competition law cases also in the sector of regulated markets, has turned out not only logical and consistent but also justifiable in the light of the circumstance that the value of competition is well present in those markets and must be enhanced and preserved. (16 )

Final remarks

Having regard to the above considerations, I disagree with the statement denying that, in the framework of the Italian system of judicial review, an administrative court can substitute its own legal qualification of the facts and technical evaluation to those of the AGCM.

As a matter of fact, in competition law cases the judicial review of the Italian administrative judge shall include and encompass all the following operations: - examine and verify the facts given by the parties; - evaluate the means of proof offered by the latter; - order the Authority the exhibition of documents necessary to complete the framework of proof hinted by the applicant (on the basis of a dispositive-inquisitorial method); - review the applicant’s claim in law and in fact; - seek and know ex officio the applicable law (“iura novit curia”), if necessary giving a diverse interpretation or application of the law but not changing the legal basis of the fining decision; - re-examine the technical evaluations made by the Authority as well as the economic principles and the indeterminate juridical concepts applied by it, by having recourse to rules and technical knowledge belonging to the same disciplines applied by the AGCM, also by means of experts, if necessary.

The judge shall also substitute his own evaluation to the one of the Administration and reduce the amount of the sanction accordingly, but not increase it, owing to the principles of the claim and of the disposable nature of the proceedings. The only limit that the judge encounters on re-examining the technical evaluations made by the Authority connoted by the application of rules of a non-exact science having a certain degree of disputability is that, while verifying the reasonableness, logicalness and consistency of the reasoning of the contested decision, he will not be allowed to replace a disputable evaluation of the AGCM - characterized by a very high level of technical discretion – with his own evaluation.

This is due to the fact that the judicial review must tend to verify the reliability of the evaluations made by the Authority, in respect of the correctness of the criteria used and applied; and so, assuming that technical evaluations peculiar to the sector have a certain degree of disputability, the administrative judge shall blame the sole evaluation falling outside the ambit of disputability; acting differently he would replace the disputable appreciation of the administration with his own and as much disputable appreciation (also recently, Court of Cassation, Sez. Un., 20.1.2014, n. 1013).

But the abovementioned constraint, which is inherent to the role of the judiciary as a guarantee of legality of the administrative function and not as a “super authority” itself, replacing the Public Administration in the care of the public interest, cannot be properly seen as an external limit to the judicial review of the administrative acts, but as an inner conformation of the judicial power itself, i.e. a “natural effect” of jurisdiction whose very essence is to virtually verify the legality of the choices made by an Authority and not to made choices and take actions in the first person.

That’s why we can conclude that the satisfaction of the requirement of a full judicial review under art. 6 (1) ECHR on the part of the Italian system of administrative judicial review of antitrust decisions is really and entirely effective.

Dear Participants,
A close observation of the jurisprudential attainments registered in the matter at hand bears out the distinctive role that the administrative judge has been lately playing in the fields of competition law, through a resolute, progressive affirmation of his position of “peritus peritorum”, despite the cumbersome technicalities underlying his cases.

The Judge plays a complementary role to the legislator’s activity, not only by carving concrete and proper solutions out of general and abstract legal rules, but also, to a certain extent, by assigning an historical content to indeterminate juridical concepts which in this field abound.

In this way the judicial decisions come to hold a supplementary position towards the texts of the competition law which eventually rises to a corpus juris partly and significantly of jurisprudential source.

1 “Fines and Crimes in the European Competition Law before Judges”, EJTN, Barcelona, June 26th 2014.

2 Under art. 6(1) ECHR, “[i]n the determination of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

3 Kadubec v. Slovacchia, 2 September 1998, § 57, Recueil des arrêts et décisions 1998-VI, e Čanády v. Slovacchia, n. 53371/99, § 31, 16 November 2004).

4 Schmautzer, Umlauft, Gradinger, Pramstaller, Palaoro e Pfarrmeier v. Austria, decision 23 October 1995, s. A nn. 328 A-C and 329 A-C, respectively §§ 34, 37, 42 e 39, 41 e 38.

5 Chevrol v. France, n. 49636/99, § 77, ECHR 2003-III, and Silvester’s Horeca Service v. Belgium, n. 47650/99, § 27, 4 March 2004.

6 Predil Anstalt S.A. v. Italy (dec.), n. 31993/96, 8 June 1999.

7 In Menarini the ECtHR recalls this principle and clarifies that among the most important features of a system of full judicial review, there is the power to examine all questions of fact and law relevant to the dispute and to modify the contested decision. Next, the ECtHR acknowledges that, in the framework of the Italian system of judicial review, no administrative court can substitute its own legal qualification of the facts and technical evaluation to that of the AGCM. However, it observes that, in the case under examination, the Italian administrative courts did not carry out a simple review of the legality of the AGCM decision, but thoroughly reviewed Menarini’s claims in law and in fact, the evidence upon which the adoption of the decision was based, and the soundness and proportionality of the AGCM’s choices, thus verifying its technical assessments. Additionally, the ECtHR notes that the Italian courts had full jurisdiction with regard to the level of the fine imposed on Menarini, and thus could have modified the latter had they found it to be inadequate or not proportionate in relation to the infringement in question. In light of the above, the ECtHR concluded that the AGCM’s decision was subject to the scrutiny of judicial authorities enjoying powers of full judicial review and, consequently, no infringement of art.6(1) ECHR could be detected

8 In case of “administrative discretion” the Public Administration aims at a public purpose attributed to its care by law, by means of an activity of selection, acquisition, comparison and evaluation of public and private interests implied in its action. The use of administrative discretion is common to many sectors of the public Administration so that it has been natural for the judge of the competition law to make reference to the general attainments of the jurisprudence on the question. According to the traditional and consolidated opinion the judge can verify whether the discretion has been used by the authority in adherence with the spirit of the law or instead the exercise of power has been affected by “détournement de povoir” and “excès de povoir”, as it may be revealed by some signs or “symptoms” of the contested act, such as illogicality, unreasonableness, manifest injustice, inconsistency with previous acts of the same Administration or of the same procedure, disparity in treatment. But recently a noticeable change has been registered: the national judges have progressively become part of the system comprehending the jurisdictions of all member States - a system which uses the case law of the European Union as an indefectible reference frame - and the Court of Justice has finally departed from the paradigm of the “excés de pouvoir” of ancient French derivation and elaborated a series of criteria for the examination of the relationship between the exercise of the administrative power and the protection of the fundamental rights, these criteria being encompassed and summarized by the principle of proportionality, which expresses the suitability, adequacy and necessity of the administrative act for achieving the desired end. In the wake of this evolution the national judge has made convincing and convinced application of the principle of proportionality, which has come to enrich the judicial practise in the fields at hand. This new jurisprudence is bound to mark the transition from the judicial symptomatical control of the administrative discretion to a direct review of the discretion by raising the principle of proportionality to an elective conceptual tool which the administrative judge utilizes in the age of market economy.

9 The technical discretion is connoted by the application of rules of a non-exact science having a certain degree of disputability; it therefore differs from the “technical verification”, which is founded on the application of an exact science in order to attain a sure outcome.

10 The category of indeterminate juridical concepts relates to a particular legislative technique – prone to the need of the legal system’s flexibility - in which the legal provision, in order to identify a fact as productive of juridical effects, does not describe the fact itself in a precise and exhaustive manner but makes a remand to an integrative operation of the interpreter, by using undetermined concepts that will be completed and specified with extra-juridical elements or criteria to be inserted into the legal paradigm.

11 For instance, the ascertainment of a dominant position under antitrust law demands a multi-factorial investigation and a complex legal evaluation (TAR Latium, Rome, I, 30.3.2007, n. 2798).

12 Ex multis: Cons. St. VI, 12.2.2007, n° 550; Cons. St., VI, 10.3.2006, n° 1271; TAR Latium, Rome I, 24.8.2010, n° 31278; id., 29.12.2007, n° 14157; id., 30.3.2007, n° 2798; id., 13 March 2006, n° 1898.)

13 Cons. St., VI, 20.2.2008, n. 595; 8.2.2007, n° 515)

14 Cons. St., VI, 23.4.2002, n° 2199

15 Cons. St., VI, 2.3.2004, n° 926;

16 Also in the field of regulated markets, such as the electronic communication sector, the Italian judge has finally relinquished its previous reluctant attitude towards the cognizance of the material issues underlying the highly technical matter at hand, and reconsidered his own role by enriching his practise with the jurisprudential attainments already registered in the contiguous antitrust sector (Cons. St., III, 2.4.2013, n. 1856; 28.3:2013, n. 1837; Tar Lazio, Rome, I, 14.4.2014, n. 4032; id., 21.6.2013, n. 6259; III ter, 14.12.2011, n. 9739), so resulting more consistent with the trends emerged in the forum for national judges organized by the European Commission in order to elaborate and disseminate an acquis communautaire for the sector (see, for instance: “Seminar on predictable market regulation and effective right of appeal”, November 26, 2012; “Implementing the revised regulatory framework in electronic communications”, November 29, 2011)