Communicated on 27 May 2016
FOURTH SECTION
Application no. 47072/15
PRODUKCIJA PLUS STORITVENO PODJETJE D.O.O.
against Slovenia
lodged on 18 September 2015
STATEMENT OF FACTS
The applicant company, Produkcija Plus Storitveno podjetje d.o.o., is a private media company, whose registered office is in Ljubljana. It is represented before the Court by Mr A. Melihen, a lawyer practising in Ljubljana.
A. The circumstances of the case
The facts of the case, as submitted by the applicant company, may be summarised as follows.
1. The proceedings concerning the imposition of a fine
On 10 August 2011 the Competition Protection Office initiated proceedings against the applicant company under the Prevention of Restriction of Competition Act, following a complaint from two television stations that the applicant company had abused its dominant position. On the same day the Competition Protection issued an order for inspection, containing a warning that in case of obstruction an order imposing a penalty payment, amounting to one percent of the applicant company’s annual turnover in the preceding business year, could be issued.
The inspection report of 21 September 2011 indicates that on 11 August 2011 the officers of the Competition Protection Office arrived at the company’s premises at 09:05. Mr. V., the company’s director, was not present and none of the applicant company’s employees wanted to accept the order for inspection. The officers eventually left the order in the mailroom. At 09:25 Mr P. (the deputy director of finances) allegedly refused to cooperate with the officers and asked them in a loud voice to leave, despite being warned by them on several occasions that a refusal to cooperate would have been regarded as an obstruction of inspection resulting in a fine. At 09:33 the head of the inspection asked the police for help. At 09:57, after the arrival of the police, the officers entered the company’s premises. At 10:00 Mr V. arrived. He apologised for the inconvenience and was ready to cooperate.
It is clear from the inspection report that the Competition Protection Office obtained written consent from six individuals, who were working for the applicant company, to check their electronic correspondence by using pre-defined keywords. Furthermore, the individuals concerned seem to have been present whilst their emails were being checked.
The inspection report lastly indicated that the applicant company was able to provide comments to the inspection report within 15 days from its service in accordance with Section 34 (4) of the Prevention of Restriction of Competition Act.
It seems that on 6 October 2011 the applicant company commented upon the inspection report, maintaining that none of its employees had obstructed the inspection by raising their voices against the officers or by asking them to leave the company’s premises. The officers had only been asked to wait for the management in the reception; the officers had decided on their own motion to leave and call the police; and the police intervention had not been necessary. The applicant company further complained that the email correspondence of the individuals concerned had been checked without their consent.
By a decision of 21 February 2012 the Competition Protection Office fined the applicant company 105,000.00 euros (EUR); 0.2 % of the company’s annual net turnover) for obstructing the inspection. In its view, access to evidence and its preservation did not depend on a company as there was a danger that evidence would be destroyed or concealed. The applicant company’s employees had been warned several times that sending the officers to the reception would have been regarded as obstructing the inspection. The fact that the police had not resorted to physical violence could only affect the amount of the fine. In fixing the fine, the Competition Protection Office considered that the inspection had been postponed for one hour and thirty minutes and for 26 minutes the company’s conduct was outside the officers’ control and could have resulted in the destruction of incriminating evidence.
On 22 March 2012 the applicant company lodged an action and a motion for an interim measure before the Supreme Court, requesting an oral hearing. It reiterated the complaints it had raised before the Competition Protection Office, adding that the acts described by the Office could not be regarded as obstructing the inspection and this fact could have been confirmed by four witnesses. The only person authorised for the collection of mail had been Mr M. who was busy with a video-conference, while other managers were on leave. The obstruction of an inspection could not be committed by omission. The officers had not told anyone who they were, what their intention was and what were the consequences of not abiding by their orders and the persons who had contact with them had not understood the proceedings at issue. Lastly, given the amount of the fine imposed, which was excessive and immediately enforceable, the proceedings at issue had been criminal in nature and required the application, mutatis mutandis, of the Minor Offences Act’s fair trial guarantees.
Meanwhile, in December 2012 the Competition Protection Agency (“the Agency”) took over the functions of the Competition Protection Office.
On 26 November 2013 the Supreme Court dismissed the applicant company’s action. It noted at the outset that the applicant company could not adduce new facts and evidence before it. Secondly, the imposition of a fine under the Prevention of Restriction of Competition Act had not been a minor offence attracting the application of the Minor Offences Act’s fair trial guarantees. Thirdly, the applicant did not contest the fact that the Competition Protection Office could not immediately start the inspection. The applicant company merely argued that the acts of its employees or contractors did not amount to an obstruction of the inspection and this was, in the Supreme Court’s view, a legal question. Fourthly, allowing a company to prepare for the inspection or waiting for the company’s director was contrary to the purposes of an inspection. A company’s conduct had to be assessed from an objective point of view, regardless of the question whether its employees understood the proceedings or not. Lastly, in the absence of any person in the mailroom, the officers had left the order for inspection on the mailroom’s counter, to the effect that service of the document had to be deemed as having been duly effected.
On 30 January 2014 the applicant company lodged a constitutional complaint, reiterating its previous complaints. It further complained about the impossibility to adduce evidence on its behalf and to have an oral hearing before the Supreme Court. On 6 May 2015 the Constitutional Court dismissed the constitutional complaint, finding that it did not concern an important constitutional question or entail a violation of human rights which would have serious consequences for the applicant company. This decision was served on the applicant company on 11 May 2015.
2. The proceedings concerning the finding of a violation of the rules on competition
Meanwhile, on 8 August 2012 the Competition Protection Office sent the applicant company a summary of the facts as established by the former. Based on the data obtained during the inspection from the applicant company and its competitors, as well as from its own analysis of the market and studies from two market research firms, the Competition Protection Office found that the applicant company had been in a dominant position in respect of its competitors. It found that the applicant company had abused this position by either requesting exclusivity from advertising agencies and other customers (100 % in advertising) or by tying them to the company with loyalty discounts or by issuing penalties for advertising with its competitors, thereby foreclosing competitors from, or restricting their access to, the market.
On 11 July 2012 the applicant company offered commitments with a view to eliminating the circumstances giving rise to the allegation of infringement. On 24 September 2012 the applicant company replied to the summary of facts, requesting an oral hearing and the examination of several witnesses aimed at proving that it had not restricted the competition. In particular, the applicant company drew attention to low entry barriers to the market and the fact that the advertisers were moving between different service providers. The applicant company further maintained that the Agency had erroneously interpreted its email correspondence as showing the existence of exclusivity clauses, which could be proved with the examination of its employees and the representatives of advertising agencies. The applicant company lastly maintained that the inspection had been conducted unlawfully without a prior court order and without the consent of the individuals concerned. All the evidence thus obtained should have, therefore, been excluded.
By a decision of 24 April 2013 the Agency found that the applicant company had abused its dominant position and ordered it to end the infringement of the competition rules. It refused to hold a hearing on the ground that it was not necessary to hear the witnesses adduced by the applicant company and that the applicant company had had adequate opportunity to present its case in writing. As to the exclusion of evidence obtained by checking the relevant emails, the Agency held that the email correspondence at issue was strictly of a commercial nature and was relevant for the infringement of the competition rules at issue.
On 24 May 2013 the applicant company lodged an action before the Supreme Court. It reiterated the complaints made before the Agency and requested that the Supreme Court examine the witnesses it had proposed at an oral hearing. By referring to the Constitutional Court’s decision of 11 April 2013, the applicant company requested that the emails obtained during the inspection be excluded as evidence as being in breach of the right to privacy of the individuals concerned.
On 3 December 2013 the Supreme Court dismissed the action without holding a hearing. It, firstly, noted that, according to the Constitutional Court’s decision of 11 April 2013, the Agency had a legal basis for conducting inspections until the established unconstitutionality was remedied. Secondly, the Agency had grounds to suspect that the applicant company had abused its dominant position and in order to prevent the destruction of relevant evidence it was able to conduct an unannounced inspection. The Agency had based its conclusions on several written documents which could not be undermined by the witnesses adduced by the applicant company. Neither did the applicant company explain why it was necessary to examine the witnesses.
On 14 February 2014 the applicant company lodged a constitutional complaint, complaining about the impossibility to have examined evidence on its behalf at an oral hearing before the Supreme Court which could not make any findings of fact. On 30 June 2015 the Constitutional Court dismissed the constitutional complaint, finding that it did not concern an important constitutional question or entail a violation of human rights which would have serious consequences for the applicant company. On 3 July 2015 the Constitutional Court’s decision was served on the applicant company.
B. Relevant domestic law and practice
The Prevention of Restriction of Competition Act (Official Gazette of the RS no. 36/08, with further amendments) provides that the Competition Protection Agency is competent to exercise control over the execution of this Act and of Articles 101 and 102 of the Treaty Establishing the European Union (“the TFEU”)), and to decide on minor offences due to violations of the provisions of the above mentioned instruments (Section 12). The Agency’s decisions may be contested in judicial protection proceedings in which the law governing administrative disputes shall be applicable mutatis mutandis (Sections 54 and 55). A plaintiff in judicial protection proceedings may not introduce new facts or present new evidence (Section 57). As a rule, the court shall decide without a hearing (Section 59). No appeal shall be allowed against a judgment or order delivered in judicial protection proceedings (Section 61).
In a decision of 11 April 2013 (U-I-40/12) the Constitutional Court held that Section 28 (1) of the Prevention of Restriction of Competition, allowing the Agency to carry out a search interfering with communication privacy without a prior court order had been inconsistent with the Constitution. The Constitutional Court decided that until the established unconstitutionality was remedied, Section 28 (1) should have continued to apply.
COMPLAINTS
The applicant company complains about the lack of an oral hearing and the impossibility to be heard and have witnesses examined on its behalf in the proceedings resulting in the imposition of a fine and in the finding that it had violated the rules on competition. It invokes Articles 6 and 13 of the Convention.
QUESTIONS TO THE PARTIES
1. Was Article 6 § 1 of the Convention under its criminal head applicable to the proceedings in the present case (see Alenka Pečnik v. Slovenia, no. 44901/05, §§ 30-35, 27 September 2012)?
2. If yes, did the applicant company have a fair hearing in accordance with Article 6 § 1 of the Convention in the proceedings conducted under the Prevention of Restriction of Competition Act?
(a) In particular, did the applicant company have a real possibility of challenging the fine imposed on it before a tribunal that offered the guarantees of Article 6, in particular the right to a public hearing, including the right to defend oneself in person and to examine, or have examined, witnesses, given that no hearing was held in these proceedings (see Milenović v. Slovenia, no. 11411/11, 28 February 2013)?
(b) Were the proceedings before the Slovenian Competition Protection Agency and the Supreme Court, resulting in the decision of 21 February 2012 finding a violation of the competition rules, compatible with Article 6 § 1 of the Convention (see Lamovec v. Slovenia (dec.), no. 31765/08, 20 May 2014; and Hannu Lehtinen v. Finland, no. 32993/02, 22 July 2008), given that no hearing was held in these proceedings?
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