Background to the complaint

1. The complainant is a company providing foreign currency exchange services. On 6 November 2013, it submitted a complaint to the European Commission about a potential breach of EU law[1] concerning competition in the banking sector. On 17 December 2013, the complainant submitted a supplementary complaint about the same matters.

2. In the following months, there were several exchanges between the complainant and the Commission in writing, over the phone and during a meeting in Brussels. During these exchanges, the Commission sought additional information to assess the case.

3. In May and June 2014, the complainant repeatedly requested updates on the progress of the case. On 25 June 2014, the Commission informed the complainant that its assessment was underway.

4. On 15 July 2014, the complainant informed the Commission that it had made information public about its complaints.

5. In its reply of 24 July 2014, the Commission requested the complainant to provide a non-confidential version of the complaints that could be shared with the party against which the complaints were made.

6. On 29 July 2014, the complainant confirmed that the complaints submitted to the Commission could be treated as non-confidential. It also requested information about the progress of the case.

7. On 5 August 2014, the Commission sent the two complaints to the party that was the subject of the complaints, together with a request for information. The subject of the complaints replied and had a further exchange with the Commission in October 2014.

8. On 25 August and 4 September 2014, the complainant again requested information about the progress of its case.

9. On 3 October 2014, the Commission replied to the complainant’s letters of 29 July, 25 August and 4 September 2014. It confirmed it was still in the process of assessing the complaints. The Commission also explained that, due to the sensitive nature of its preliminary investigation, it could not give more specific information. However, this did not mean that the Commission was not looking into the complaints. On the contrary, it was gathering information in order to determine whether or not to open a formal investigation.

10. The Commission informed the complainant about the applicable, indicative time limit set out in its internal rules[2]. According to this indicative time limit, the Commission should inform complainants, within four months, of the action it proposes to take on their complaints. The Commission explained to the complainant that this time limit was indicative, subject to the circumstances of each case and depended on whether the Commission had received sufficient information from the complainant and/or third parties. In complex cases, the Commission stated that it may not be able to respect the indicative time limit. The Commission further explained that no decision had been taken yet whether to open a formal investigation.

11. On 4 November 2014, and on 10 and 22 December 2014, the complainant again inquired about the progress of its complaints.

12. In its reply of 28 January 2015, the Commission provided further clarifications and stated that its assessment was still ongoing. Given that the complaints raised complex competition law issues, the Commission could not indicate when it would complete its assessment.

13. The complainant replied on 6 February 2015 and criticised the Commission for the time it had taken to decide whether or not to open a formal investigation. It also made substantive comments on the Commission’s letter of 28 January 2015.

14. On 10 March 2015, in the absence of a reply from the Commission, the complainant turned to the European Ombudsman. It claimed that the Commission had failed to reply to its letter of 6 February 2015, and had failed to take a position on its complaints within a reasonable timeframe. On 26 March 2015, the complainant again asked the Commission how long it would take to reach a decision on the two complaints.

15. On 13 March 2015, the Commission sent requests for information to third parties, and received their replies between 2 April and 5 May 2015. On 5 August 2015, the Commission sent a request for information to another third party, and received a reply in September 2015.

The inquiry

16. On 27 April 2015, the Ombudsman opened an inquiry into the complainant’s concern that the Commission had failed to reply to its letter of 6 February 2015, and invited the Commission to reply to the complainant.

17. On 30 April 2015, the Commission replied to the complainant’s letters of 6 February and 26 March 2015. The Commission stated that it had already explained the practice of how it deals with antitrust complaints in letters, meetings and conference calls with the complainant. The Commission claimed that it had also explained the factors that it takes into account when deciding on the priority to be given to a case, as well as the time it takes to assess complaints. The Commission referred to its letter of 3 October 2014, where it had clarified that it was gathering information to determine whether to deal with the case as a ‘priority’[3] and formally open proceedings.

18. The Commission added that the complainant's concerns were being taken very seriously. The fact that it had not yet decided whether to make this case a priority did not mean that the Commission was not carrying out an investigation. It explained the detail of its antitrust procedure and stressed that it must first gather all the necessary information and carefully investigate the relevant facts before deciding to make a case a priority and conduct an in-depth investigation[4]. This was particularly necessary in the case raised by the complainant, which dealt with complex issues and potentially serious competition law breaches. The Commission also said that the complainant would be informed about the outcome of the preliminary investigations in due course.

19. As the Commission had yet not taken a decision as to whether or not to open an investigation into the antitrust complaints, the Ombudsman also decided to investigate the complainant’s concern that the Commission had failed to take a position on its antitrust complaints within a reasonable time.

20. The Ombudsman’s inquiry team inspected the Commission's files on 23 June and 20 November 2015. The complainant submitted observations on the reports of these inspections on 16 September 2015 and 13 January 2016 respectively.

Further developments after the opening of the Ombudsman’s inquiry

21. During the Ombudsman’s inquiry, on 23 May 2016, the Commission informed the complainant that there were insufficient grounds to open an antitrust procedure into the issues it had raised in its complaints (sending a so­called ‘pre-closure letter’)[5]. The Commission also gave the complainant access to the documents on which its decision to close the case was based, and invited it to submit its comments. The complainant did so on 6 July 2016.

22. On 5 December 2016, the Commission sent another request for information to a third party, which replied on 23 January 2017. On 23 March 2017, the Commission provided the complainant with access to that third party’s reply. According to the Commission, the complainant did not make any observations on that reply.

23. On 17 May 2017, the Commission informed the complainant that it had decided to reject its complaints.

24. The Ombudsman's decision takes into account the arguments and views put forward by the parties and the further developments mentioned above.

Failure by the Commission to reply to the complainant’s letter

25. Following the Ombudsman’s intervention, the Commission replied to the complainant’s letter of 6 February 2015 and has thus settled this aspect of its complaint to the Ombudsman.

Time taken by the Commission to deal with the complaints

Arguments presented to the Ombudsman

26. The complainant argued, in essence, that the Commission failed to take a decision on its antitrust complaints within a reasonable time. In the complainant’s view, the case was not as complex as suggested by the Commission, and did not warrant such a delay.

27. In the course of the inspections carried out by the Ombudsman’s inquiry team on 20 November 2015, and on 1 June 2017, the Commission gave the Ombudsman a detailed chronological overview of all the actions it had taken in dealing with the two complaints in question.

The Ombudsman's assessment

28. According to the Commission’s rules[6] on how it deals with competition law/antitrust complaints, it has a duty to decide on complaints within a “reasonable time”^[7]. What constitutes a “reasonable time” depends on the circumstances of each case. Factors to be considered include the context of the case, the various procedural steps followed by the Commission, the conduct of the parties in the course of the investigation, the complexity of the case and its importance for the various parties involved[8].

29. There are several stages in the Commission’s procedure for dealing with complaints[9]. During the first stage, the Commission examines the complaint and may collect further information in order to decide what action it will take[10]. During the second stage, the Commission may investigate the case further with a view to initiating formal proceedings against the company(-ies) that are the subject of the complaint. However, where the Commission considers that there are insufficient grounds for acting on the complaint, it should inform the complainant of the reasons why, and offer the complainant the opportunity to submit further comments within a set time limit[11]. Finally, in the third stage of the procedure, the Commission, having assessed the observations submitted by the complainant, can either launch an antitrust procedure against the company(-ies) that are the subject of the complaint or take a decision to reject the complaint[12].

30. In this case, it took the Commission nearly three and a half years to take a final decision to reject the initial complaints. The period in question corresponds to the three procedural stages described above. As such, the Ombudsman concluded it was necessary to examine each procedural stage to see whether its duration was reasonable.

31. Although the Commission did not make a clear distinction between these stages, it is the Ombudsman’s understanding that the first stage of the procedure lasted nine months, that is, from 6 November 2013 (the date of the first antitrust complaint) to 5 August 2014 (the date when the Commission sent the antitrust complaints and a request for information to the company that was the subject of the complaint). During this period, the Commission examined the complaints and was in contact with the complainant to clarify some of the information. The second stage of the procedure lasted nearly twenty-two months, that is, from 5 August 2014 to 23 May 2016 (the date of the ‘pre-closure letter’). The inspection of the Commission’s file showed that, during this period, the Commission sent requests for information to third parties and received their replies[13]. Finally, the third stage lasted between 6 July 2016 (the date when the complainant sent its observations on the Commission’s pre-closure letter) and 17 May 2017 (the date of the Commission’s decision to reject the complaints), that is, another ten months. During this time, the Commission sent another request for information to a third party, received its reply and provided the complainant with access to that reply.

32. The Ombudsman acknowledges that the duration of each of these stages, and in particular the second stage, appears at first sight to have been long. However, the inspections carried out by the Ombudsman’s team showed that the Commission was not inactive during any of these stages. In fact, the Commission was gathering important information from a considerable number of companies and certain national competition authorities. This information was then assessed and subjected to internal consultation to determine whether there was enough evidence to open a formal investigation. The Ombudsman’s inspections revealed the confidential nature of the Commission’s preliminary investigation, which meant that it could not discuss with or provide to the complainant any meaningful information, as doing so could have undermined the ongoing investigation. The inspections also showed that the issues that the Commission was looking into related to potentially serious and far-reaching infringements of EU competition rules, not only as regards the relevant product market but also the relevant geographical market.

33. In addition, the Ombudsman notes that, while the Commission’s initial assessment was still ongoing, the complainant made information public concerning its complaints. The Ombudsman’s inspection showed that this action forced the Commission to review the initial case report it had been preparing, abandon certain investigative actions that were planned and propose new ones. This change in the Commission’s investigative strategy appears to have further prolonged the time the Commission needed to gather the information necessary for it to decide whether it had enough evidence.

34. The Ombudsman’s inquiry also revealed that the Commission sent requests for information to and received replies from a number of third parties and, consequently, needed to analyse a large amount of information. The Commission also had to deal with a number of complicated competition law issues, which required a significant amount of internal consultation and meetings.

35. Thus, the Ombudsman finds that, contrary to the complainant’s contention, the two complaints in question raised a number of significant and also complex legal and factual issues, and necessitated a number of investigatory steps. This justified the time it took the Commission to come to a final decision.

36. The Ombudsman thus concludes that there was no maladministration by the Commission.

37. Having said that, the Ombudsman also notes that, according to the Commission’s own rules, it should endeavour to inform complainants of the action that it proposes to take within an indicative period of four months from receiving the complaint[14]. In addition, the principle of good administrative behaviour also requires the Commission to regularly keep complainants informed of the status of their complaints.

38. The Ombudsman has consistently stated that smooth and regular communication with complainants is good administrative practice. However, the communication between the Commission and the complainant in this case was not always smooth, leading the complainant to believe that the Commission was not dealing with its complaints. At times, it took the Commission weeks or even months to acknowledge receipt of the complainant’s letters. The Commission also did not always reply to other letters from the complainant within a reasonable time. As explained above, the Commission replied to one of the complainant’s letters only after the Ombudsman intervened.

39. The Ombudsman acknowledges that, for most of these instances, the Commission was not in a position to provide a meaningful update on the progress of the investigation, due to confidentiality issues. However, the Commission could have still replied to the complainant in a timely manner, and confirmed that it was not merely assessing the complaints but was carrying out a preliminary investigation. This could have reassured the complainant that the Commission was not ignoring its complaints. Bearing in mind the importance of smooth and regular communication with all complainants, the Ombudsman will make a suggestion for improvement to this end.

Conclusions

Based on the inquiry, the Ombudsman closes this case with the following conclusions:

By replying to the complainant’s letter of 6 February 2015, the Commission has taken adequate steps to settle this issue.

There was no maladministration by the Commission regarding the time it took to deal with the complaints.

The complainant and the Commission will be informed of this decision.

Suggestion for improvement

The Commission should pay due attention to maintaining smooth and regular communication with complainants in antitrust complaints.

 

Emily O'Reilly

European Ombudsman

Strasbourg, 02/03/2018

 

[1] Articles 101 and 102 of the Treaty on the Functioning of the EU.

[2] The Commission referred to the ‘Antitrust Manual of Procedures’, which was issued by its Directorate-General for Competition.

[3] After the Commission has carried out an initial investigation of a complaint, it then decides whether to pursue the case “as a matter of priority” and to conduct an in-depth investigation, or to close it. In cartel cases, if the case is to be pursued, the Commission decides whether or not the case is suitable for the settlement procedure. http://ec.europa.eu/competition/antitrust/procedures_101_en.html

[4] Details on the antitrust procedure can be found at: http://ec.europa.eu/competition/antitrust/procedures_101_en.html.

^[5] Pre-closure letter according to Article 7(1) of Regulation (EC) No 773/2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, OJ L 123, 27.4.2004, p. 18–24.

[6] See Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, OJ L 123, 27.4.2004, p. 18, Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1, 4.1.2003, p. 1, as amended by Regulation (EC) No 411/2004 (OJ L 68, 6.3.2004, p. 1). See also the Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty, OJ C 101, 27.4.2004, p. 65–77, and the Antitrust Manual of Procedures of the Directorate-General for Competition. The latter is an internal non-binding working tool intended to give practical guidance to staff on how to conduct an investigation applying Articles 101 and 102 of the Treaty on the Functioning of the EU. The Manual reflects the experience gained by the case teams in applying the competition rules of the Treaty, and the Regulations, notices and other guidance adopted thereunder, such as, for example, the Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty above-mentioned. The Manual is available here: http://ec.europa.eu/competition/antitrust/antitrust_manproc_3_2012_en.pdf

^[7] See the Commission’s Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty, point 60 and the case-law referred to therein (Case C-282/95 P, Guérin automobiles v Commission, paragraph 37).

[8] See point 60 of the Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty, and the case-law referred to therein (judgement of 22 October 1997 in joined cases T-213/95 and T-18/96, Stichting Certificatie Kraanverhuurbedrijf (SCK) and Federatie van Nederlandse Kraanbedrijven (FNK) v Commission, paragraph 57.

[9] See point 54 of the Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty.

[10] See point 55 of the Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty: “During the first stage, following the submission of the complaint, the Commission examines the complaint and may collect further information in order to decide what action it will take on the complaint. That stage may include an informal exchange of views between the Commission and the complainant with a view to clarifying the factual and legal issues with which the complaint is concerned. In this stage, the Commission may give an initial reaction to the complainant allowing the complainant an opportunity to expand on his allegations in the light of that initial reaction”.

[11] See point 56 of the Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty.

[12] See point 57 of the Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty:

[13] The Commission initially sent requests for information to third parties on 13 March 2015, and received their replies between 2 April and 5 May 2015. On 5 August 2015, the Commission sent a request for information to another third party, to which the latter replied on several occasions in September 2015.

[14] Subject to the circumstances of the individual case and, in particular, the possible need to request additional information from the complainant or third parties, the Commission in principle informs the complainant within four months as to whether or not it intends to further investigate the case. This time limit does not constitute a binding statutory term. See point 61 of the Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty.