Decision of the European Ombudsman on complaint 75/99/ME against the European Commission

Dear Mr P.,
On 21 January 1999 you lodged a complaint with the European Ombudsman on behalf of the Forum of Private Business concerning DG IV of the European Commission and its allegedly negligent handling of a competition case under Article 81 and 82 of the EC-Treaty.
On 5 February 1999, I forwarded the complaint to the President of the European Commission. The Commission sent its opinion on 26 March 1999 and I forwarded it to you with an invitation to make observations, if you so wished. You sent your observations on 19 May 1999.
I am writing now to let you know the results of the inquiries that have been made.

THE COMPLAINT

The complainant is a national representative for smaller businesses. One of the undertakings he represents, Microwave Ovenware Ltd. (MOL), claimed that it had been forced to cease trading in 1989 because of the behaviour of another enterprise, Dynopack, situated in Norway. MOL complained to the Commission in May 1988 for breaches of Articles 81 and 82 of the EC-Treaty (former Articles 85 and 86) by Dynopack. The Commission examined the complaint but did not find any breach of EC competition law. In 1994 it finally informed MOL that the file on its case was closed.
The complainant claims that MOL tried for many years to get information and answers to questions arising from the complaint lodged with the Commission. The complainant stated that the Commission refused to give MOL the requested information and it did not handle the file nor did it examine the submitted documents properly. Further, the Commission wrongly stated that trade between Norway and the United Kingdom was not considered as trade between Member States in the meaning of the EC competition rules.
According to the complainant, only at a meeting in September 1997 did the Commission provide MOL with information it had requested for many years. The information demonstrated that the Commission had not handled the claim in accordance with the proper and correct procedure. In May 1998, the Commission agreed that trade between Norway and the United Kingdom was like trade between Member States. Despite this, it refused to reopen the file.
The Commission stated that it was not an investigative body but that it relied on written submissions and that administrative powers were insufficient. According to the complainant, this is not true since the Commission's investigative powers are well established, particularly in the area of competition law.
Moreover, the Commission never replied to the letter of the complainant of 21 July 1998.
Further information
In March 1999, Mr Elliott, MEP wrote to the Commission regarding MOL's case at the Commission and he sent a copy of his letter to the Ombudsman. In his letter he asked the Commission in summary the following four questions in relation to MOL's case:
- What examination was carried out by the Commission of the accuracy of the statements submitted to the Commission, bearing in mind MOL's claims that the evidence submitted was false?
- Mr Elliott sent a Parliamentary question in March 1991 concerning question number one. In its reply, the Commission stated that secrecy prevented comment. On what grounds was the decision taken that professional secrecy applied and what action will be taken in relation to the allegations of false evidence?
- The Commission stated that the behaviour of Dynopack did not appear to have effect on trade between Member States. No reason was given for this interpretation. On what grounds was that decision taken, and why was MOL not properly advised of this?
- The Commission stated that MOL has not been able to supply evidence of the alleged infringement. However, MOL stated that no substantive reply has been received to the request by MOL to provide dates and instances of these requests, in consequence, the Commission!s statement was flawed.
Mr Elliott asked the Commission to include the answers to these questions in the reply by the Commission to the Ombudsman.

THE INQUIRY

The Commission's opinion
In its opinion the Commission put forward that Microwave Ovenware Ltd. (MOL) complained to the Commission in 1988 alleging that it had suffered losses because of the behaviour of Dynopack, a firm that had earlier supplied MOL with accessories for use in microwave ovens. During the years 1988 and 1993, DG IV of the Commission examined the complaint and had numerous contacts with the complainant via letters and informal discussions. This was shown by a table which was annexed to the opinion outlining the communications and contacts between the Commission and MOL. However in 1993, the Commission sent MOL a letter under Article 6 of Regulation 99/63/EEC to advise them that the Commission envisaged rejecting the complaint. In this letter the Commission informed the complainant that the requirement of Article 85 of the EC-Treaty (now Article 81) was not met: trade between Member States was not affected. Following that letter, the complainant did not add further evidence in support of his complaint and in 1994 the Commission informed MOL that the case was considered closed.
In 1997, more than three and a half years later, MOL asked for the case to be reopened. In doing this, MOL alleged mismanagement regarding the handling of its file and questioned the given reasons of lack of effect on trade between Member States. During this contact it also became clear that MOL ceased trading in 1989. The Commission informed MOL by letter of 16 July 1998 in detail why the original case could not be reopened. In this letter the Commission referred to the so called Article 6 letter and its letter from 1994 informing MOL that the case was closed. The Commission pointed out that following this correspondence MOL did not act and did not ask for a formal decision rejecting the complaint, so that MOL could have brought the matter before the Court of First Instance. As regarded the request to reopen the case, the Commission pointed out that it would mean re-examining facts occurred between 1988 and 1993 concerning a firm that currently does not carry out any economical activity. The Commission pointed out that in accordance with the case-law of the Court of First Instance (T-77/95, SFEI and others v Commission, [1997] ECR II-1, para. 57) the Commission is not required to take action on complaints denouncing practices which have ceased. The Commission concluded that the reopening of the case would involve use of the Commission's resources which would be out of proportion to the importance of the alleged infringement for the functioning of the common market. It did, therefore, not find sufficient Community interest to justify the reopening of the investigation of MOL's complaint.
The complainant's letter of 21 July 1998 was regarded by the Commission as an acknowledgement of receipt of its own letter of 16 July 1998 since the same arguments were being repeated. The Commission felt that no reply was called for.
The Commission pointed out that it does not possess the same means as a national court to hear witnesses and it can therefore not establish the veracity of information provided by other parties.
Moreover, this was the subject of two written questions by Mr Elliott, MEP to the Commission. Mr Elliott also wrote directly to and received an answer from Sir Leon Brittan in 1991.
The complainant's observations
In his observations the complainant put forward in summary the following points:
It was not possible to comment fully on the Commission's list of letters and replies annexed to its opinion, because page three of the list was lacking. There were no numerous informal discussions between MOL and the Commission. There was no evidence to show that the file was in fact examined.
As regards the question whether trade between Member States had been affected the Commission indicated that this requirement did not appear to be met. However, the Commission never explained why it had changed its view and until the meeting in September 1997, the Commission never answered MOL's request for clarification on this point. Finally, in 1998 the Commission agreed that trade between Norway and the United Kingdom was like trade between Member States. Further the Commission has to explain why the case was opened under Article 86 of the EC-Treaty (now Article 82) and why a resubmission under Article 85 of the EC-Treaty (now Article 81) was allowed if there was no qualifying trade.
MOL did not act between 1994 and 1997 because it was clear to them that the Commission had no intention to respond to them. It was first when friends and lawyers advised MOL that the Commission should have answered to MOL, that it resumed contact with the Commission through its business representative.
As regards the fact that the Commission is not required to act on complaints denouncing practices that have ceased, the complainant put forward a newspaper article stating that the Commission does act in relation to certain cases like this.
The Commission did not answer to the letter of 21 July 1998, which in contrast to what the Commission stated, raised new points.
Contrary to what it says, the Commission has investigation powers under Article 14 of Council Regulation No. 17. The complainant did therefore not agree with the Commission's statement that it cannot establish the veracity of information submitted to it, being only an administrative body.
As regards the Commission's statement that it in vain tried to find solid evidence to support MOL's allegations, the complainant put forward that it supplied the Commission amongst other things, copies of invoices and signed orders, sworn affidavits, import/export documents and bank statements. If this was not evidence enough, the complainant asked the Commission to specify what it classed as evidence.
Finally, the complainant hoped for the Commission to give full answers regarding both the complaint and the four questions submitted to the Commission by Mr Elliott, MEP.

THE DECISION

1 Preliminary remarks
In the observations, the complainant raised new points in relation to the original complaint. These points concerned requests for information and clarification from the Commission including receiving answers to the four questions put forward by Mr Elliott. The Ombudsman did not find it justified to start inquiries into the new points raised in the complainant's observations as they went beyond the scope of the original complaint and rather only constituted a request for information.
2 The handling of the file by the Commission
2.1 The complainant claimed that the file was not handled or examined by the Commission. Further it had not answered to the complainant's letter of 21 July 1998.
2.2 The Commission stated that it examined the complaint during the years 1988 through 1993 and that it had had numerous contacts with the complainant as shown in the table enclosed to its opinion. Further it felt that no reply was needed regarding the letter of 21 July 1998, as no new points were raised in the letter.
2.3 As regards the handling of the case, the Commission enclosed a table concerning the communications and contacts with MOL but, as the complainant correctly pointed out, page three of this table was missing. The table showed however, only the main documents of the file. Moreover, the documents submitted by both the Commission and the complainant (such as copies of correspondence) still permits a proper evaluation of the handling of the case. The documents shows that there was a huge amount of correspondence between the Commission and MOL during a period of several years. During this period the Commission regularly responded to the complainant. Although, the Commission did not answer or acknowledge every single letter, sometimes because the complainants' letters were sent so closely, it always replied when it found it appropriate and it is shown that correspondence took place on a regular basis. Further, in competition cases like this, it cannot be required that the complainant receive a reaction on all the material handed in to the Commission when correspondence is taking place so frequently and for such a long period of time. The Ombudsman also notes that, although there were misunderstandings between the Commission and the complainant, along with the occurrence of some practical problems, the file shows that the Commission gave the complainant the opportunity to properly take part in the procedures. In addition, the Commission respected the procedure foreseen in competition cases regarding for example the sending of a so called Article 6 letter. There is, therefore, nothing to indicate that the Commission did not handle the file correctly.
2.4 Concerning the allegation of the complainant that the file was not examined, it shall be recalled that the Commission in its Article 6 letter of 5 February 1993 stated that it had carried out a thorough study of the case and that it was fully aware of the case. There is nothing in the file to indicate that the Commission had not fulfilled this statement or did not properly examine the case.
2.5 As concerns the letter of the complainant of 21 July 1998, the Ombudsman notes that in general letters should be replied to. An evaluation of the letters by the Ombudsman revealed that the letter of the complainant of 21 July 1998 contained questions relating to the basis for the Commission closing the file and concerning the duty of the Commission to provide clear advice on the progress of the procedures. As regards the Commission's decision to close the case, the Commission in its letter of 16 July 1998 referred to its Article 6 letter of 5 February 1993 which properly dealt with this issue. Regarding the duty of the Commission to provide clear advice, the Ombudsman notes that the Commission did follow the procedures foreseen in competition cases and the Ombudsman does, therefore, not find it justified to pursue this point of the complaint further.
2.6 Therefore, the Ombudsman finds that there is no instance of maladministration in relation to this aspect of the case.
3 The Commission's opinion as regards whether trade between Norway and the United Kingdom is being trade like between Member States
3.1 The complainant claimed that the Commission first considered that trade between Norway and the United Kingdom was trade like between Member States in the meaning of the EC competition rules (Article 81 and 82 of the EC-Treaty), but later it wrongly changed its opinion. Only in 1998, did it again agree with the complainants' view that it was to be seen like trade between Member States.
3.2 The Commission referred to its Article 6 letter of 5 February 1993 and stated that since trade between Member States was not affected, the requirement of Article 81 of the EC-Treaty had not been met.
3.3 As regards this question, it appears necessary to refer to the Article 6 letter of 5 February 1993. This letter states:
"So far as Article 85(1) EEC is concerned, the evidence shows that the trade affected by the behaviour you have complained of is direct trade between Norway and the United Kingdom. While this does not mean that the behaviour complained of cannot have an effect on trade between Member States, there is no evidence in this case of any appreciable effect on such trade. Thus, even if the Commission were to accept unquestioned that the situation is what you allege and that Dynopack and its British distributors or subsidiaries have "squeezed you out" of your United Kingdom markets, the evidence is lacking to show that one of the essential conditions for applying Article 85(1) EEC is fulfilled. We have tried to give you every opportunity of showing the opposite, which is why we have not moved to close the file sooner; we have to conclude, however, that you have not been able to provide any evidence of an appreciable effect on trade between Member States, although we have frequently emphasised that this is the main obstacle to pursuing your complaint."
3.4 When reading the Article 6 letter of 5 February 1993, it appears that the complainant has misunderstood the position of the Commission. It is clear from the letter that the Commission does not state that trade between Norway and the United Kingdom can never be seen like trade between Member States. With the wording "While this does not mean that the behaviour complained of cannot have an effect on trade between Member States,…" rather the opposite view is taken by the Commission. However, it appears that the Commission did not find "any appreciable effect on such trade" in this specific case. Further, there is nothing in the file to indicate that the Commission did in fact state that trade between Norway and the United Kingdom cannot be considered as trade between Member States. What the Commission did state on the other hand was that there was no appreciable effect on trade between Member States in this specific case.
3.5 Therefore, the Ombudsman finds that there is no instance of maladministration in relation to this aspect of the case.
4 The Commission's investigation powers
4.1 The complainant alleged that the Commission wrongly stated that it was not an investigative body but that it relied on written submissions and that its administrative powers were insufficient. According to the complainant, this is not true since the Commission's investigative powers are well established, particularly in the area of competition law.
4.2 The Commission stated that it does not possess the same means as a national court to hear witnesses and it can therefore not establish the veracity of information provided by other parties.
4.3 The investigation powers of the Commission in competition cases is laid down in Council Regulation No. 17(1) and by case law of the Court of Justice. Although it is recognised that the Commission has broad investigation powers in the area of competition law, this does not mean that it possesses the possibility to hear witnesses or to control the veracity of documents submitted to it. According to Article 14 of Regulation No. 17, the Commission has the right "to ask for oral explanations on the spot". However, Article 14 applies to investigations of the Commission performed in the premises of the undertaking and further, the case law of the Court of Justice has recognised a limited privilege against self-incrimination to the effect that an undertaking is not required to answer to questions which would be an admission of the very offence which the Commission is investigating(2). Moreover, there is no established right for the Commission to call witnesses, or to seek oral explanations outside the remit of Article 14 of Regulation No. 17.
Although any natural or legal person with a legitimate interest may complain to the Commission in accordance with Article 3 (2)(b) of Regulation No. 17, it is clear from the case law of the Court of Justice that this right does not include the right to obtain a decision, within the meaning of Article 249 of the EC-Treaty, as to the existence or otherwise of the alleged infringement(3). This further indicates that the Commission has no obligation to inquire into the veracity of the documents submitted to it.
4.4 It appears that the Commission did not break any rule or principle binding upon it when stating that it did not possess the same means as a national court to hear witnesses and that it cannot establish the veracity of submitted information. The Ombudsman, therefore, finds that there is no instance of maladministration in relation to this aspect of the case.
5 The Commission's refusal to reopen the file
5.1 After the complainant resumed contact with the Commission he requested the reopening of the file. The Commission informed MOL by letter of 16 July 1998 why the original case could not be reopened. In the letter the Commission stated:
"With regard to your request, introduced in 1997 and confirmed in 1998, for reopening of the examination of the case, I regret to note that it merely seeks to have the Commission re-examine facts alleged to have occurred between 1988 and 1993. The justification you put forward is that false evidence was supplied at the time. You yourself concede, however, that the alleged infringement has ceased and that currently you carry out no relevant economic activity.
The Commission considers that it is not required to take action on complaints denouncing practices which have ceased (Court of First Instance, case T-77/95, SFEI and others v Commission, ([1997] ECR II-1, paragraph 57). The reopening of your case would involve use of the Commission's resources which would be out of proportion to the importance of the alleged infringement for the functioning of the common market. There is therefore no sufficient Community interest to justify the reopening of the investigation of the complaint."
5.2 The Commission has discretionary powers to decide in competition cases what action to take as long as it gives reasons for its decision. In its letter of 16 July 1998, the Commission explained why it did not find it necessary to reopen the case. The reasons given were firstly that MOL had ceased trading which meant that the Commission was not required to examine the case further. Even if it were to be shown that the Commission pursues certain cases relating to undertakings that have ceased (as put forward by the complainant), it is within the powers of the Commission to decide which cases it wishes to examine. Secondly, the Commission considered that there was not sufficient Community interest to justify the reopening of the case. The reasons given by the Commission for denying the reopening of the case appear to be in accordance with the case law of the Community Courts. The Ombudsman therefore finds that the Commission acted within the limits of its legal authority when denying the reopening of the case.
5.3 Therefore, the Ombudsman finds that there is no instance of maladministration in relation to this aspect of the case.
6 Conclusion
On the basis of the Ombudsman's inquiries into this complaint, there appears to have been no maladministration by the European Commission. The Ombudsman has therefore decided to close the case.
The President of the European Commission will also be informed of this decision.
Yours sincerely
Jacob SÖDERMAN

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(1) OJ 1962 13/204.

(2) Case 374/87, Orken SA v. Commission, [1989] ECR 3283.

(3) Case 125/78, GEMA v. Commission, [1979] ECR 3173.