ECHR — its growing influence on substantive competition law

By Stephen Hornsby

To date, the impact of the European Convention on Human Rights (EHCR) on competition law has mostly been confined to procedural matters. For example, Article 6 provisions in the ECHR that recite a number of fundamental rights of defence, have often been invoked by companies that have been found guilty of competition law infringements on the grounds that these rights were ignored by the European Commission. Although these challenges have generally been unsuccessful, it is now accepted that Article 6 rights apply not only to criminal proceedings in the classic sense, but can be used by companies subjected to regulatory fines.

However, the ECHR has had some impact on substantive law as well and this may be set to increase. For example in 2010, the European Court of Justice made it clear that the principle of legal certainty (referred to in Article 49 of the Charter of Fundamental Rights and Article 7 ECHR) meant that the test for ‘margin squeezing’ (selling below retail costs by a vertically integrated dominant company) cannot be based on an assessment by the dominant company of the retail costs of a competitor (rather than its own retail costs) because the dominant company would not know its competitor’s costs and could not find them out legitimately. This finding, which the European Commission somehow reserves the right to disregard in certain cases, is a significant limiting factor in the application of Article 102 — as was confirmed very recently by the UK’s Competition Appeal Tribunal decision in the BSkyB/Ofcom case…

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