FOURTH SECTION
Application no. 5556/10
by SA-CAPITAL OY
against Finland
lodged on 25 January 2010
STATEMENT OF FACTS
THE FACTS
The applicant, SA-Capital Oy, is a Finnish limited liability company which has its seat in Rovaniemi. It is represented before the Court by Mr Ari Huhtamäki, a lawyer practising in Helsinki.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
The applicant company is a limited liability company which was involved in the asphalt business until February 2000. In 2002 the Finnish Competition Authority (kilpailuvirasto, konkurrensverket) started to investigate whether the applicant company had been involved in national or regional cartels.
On 31 March 2004 the Competition Authority proposed to the Market Court (markkinaoikeus, marknadsdomstolen) that it find that the applicant company had been involved in a cartel from 1995 to 2000.
On 19 December 2007 the Market Court found, inter alia, that the applicant company had taken part in a cartel as far as the sharing of the markets of State asphalt contracts were concerned. A penalty payment (seuraamusmaksu, påföljdsavgift) of 75,000 euros was imposed on the applicant company. As to the evidence, the court noted that evidence in competition matters could be either direct or indirect, such as economic evidence. As direct evidence was not always available, an assessment was to be made of whether indirect evidence was sufficient to prove the existence of a cartel. The court found that in the present case the economic evidence alone was not sufficient to prove the existence of a cartel. The court also found that the existence of a cartel could not be proved on the basis of hearsay evidence either. The decision contained two dissenting opinions.
On 18 January 2008 the Competition Authority, and on 17 January 2008 the applicant company, appealed to the Supreme Administrative Court (korkein hallinto-oikeus, högsta förvaltningsdomstolen). The Competition Authority argued, inter alia, that the hearsay evidence should have been taken into account by the Market Court. The applicant company claimed that the Market Court had drawn wrong conclusions from the evidence as the Competition Authority had not been able to show that the company had participated in a cartel.
On 29 September 2009 the Supreme Administrative Court, after having held an oral hearing, quashed the Market Court’s decision and accepted the Competition Authority’s proposal as such in respect of the applicant company. The applicant company was ordered to pay a penalty payment of 500,000 euros. The court found that there had existed, between 1994 and 2000, one nationwide cartel in respect of all private, community and State asphalt contracts. The court noted that Article 6 of the Convention applied, under its criminal limb, to proceedings imposing a penalty payment. As to the evidence, the court had at its disposal all written evidence, including economic evidence, as well as the recorded witness statements of all witnesses heard by the Market Court. It also heard six witnesses in person. The court noted that in competition cases the evidence was not subject to the same requirements as in criminal cases and therefore inferences could also be drawn. In drawing inferences nothing prevented the court from taking into account hearsay evidence, alongside other circumstantial evidence. It was essential to take a holistic approach to the evidence presented. The court found that the Competition Authority had presented extensive evidence about the existence of a cartel and that the applicant company had not been able to present credible alternative explanations for its behaviour on the markets, nor to dispute the Competition Authority’s conclusions.
After the Supreme Administrative Court decision of 29 September 2009 and on the basis of this decision, the Finnish State and several municipalities have brought compensation claims against the applicant company in civil courts. These claims amount in total to several million euros.
B. Relevant domestic law
Provisions relating to penalty payment
Section 8 of the Act on Competition Restrictions (laki kilpailunrajoituksista, lagen om konkurrensbegränsningar, Act no. 480/1992, as in force at the relevant time) provided that an entrepreneur who violated the provisions of the Act should be subject to a penalty payment unless the impugned measures were insignificant or the imposition of a penalty payment was not justified in view of the competition situation. When imposing a penalty payment, the nature, extent and duration of the anti-competitive measure were to be taken into account. The amount of the penalty payment varied from 5,000 Finnish Marks (FIM, approximately 980 euros (EUR)) to 4 million FIM (approximately EUR 785,000). If necessary, the upper limit could be exceeded. However, the penalty payment could not exceed 10% of the entrepreneur’s previous annual turnover.
A penalty payment is imposed by the Market Court on a proposal of the Competition Authority. It is payable to the State.
According to the preparatory works of the Act on Competition Restrictions (HE 162/1999 vp), a penalty payment is a punitive type of payment which is imposed in administrative law proceedings. The amount of a penalty payment should exceed the amount of profit obtained as a result of the anti-competitive measures.
According to a preparatory working group report (KTM mietintö 1991:15), a penalty payment should be severe enough for the entrepreneur not to be able to draw any economic benefits from an intentional breach of a norm. As the sanction was to be imposed in administrative law proceedings, the legal guarantees needed to be adequate. The legal principles applied within the field of criminal law were to be applied. Particular attention should be paid to the existence of the principles on justification and excuse. The administrative law proceedings had to fulfil the criteria of foreseeability, and the reasoning in the decisions needed to be clear and sufficient.
Provisions concerning proceedings in competition matters
According to section 15a of the Act on Competition Restrictions, the provisions of the Administrative Judicial Procedure Act (hallintolainkäyttölaki, förvaltningsprocesslagen) are applicable to the proceedings before the Market Court.
As to the evidence, section 33 of the Act provides that the appellate authority is responsible for clarifying the matter. Where necessary, it shall inform the party, or the administrative authority that took the decision, of any additional evidence to be presented. The appellate authority shall, on its own initiative, obtain evidence in so far as the impartiality and fairness of the procedure and the nature of the case require.
According to section 34 of the Act, before the resolution of the matter, the parties shall be given an opportunity to comment on the requests of other parties and on evidence that may affect the resolution of the matter.
Section 51 of the Act provides that the appellate authority shall in its decision resolve all the demands made in the matter. It shall review all available evidence and determine on which grounds the resolution can be based.
COMPLAINTS
The applicant company complains under Article 6 § 3 (d) of the Convention that it did not have a fair trial as it was ordered to pay penalty payments in administrative law proceedings in which the Supreme Administrative Court had accepted hearsay evidence without the applicant company being able to examine or have examined the persons at the origin of this evidence. Moreover, the Supreme Administrative Court had also accepted that in competition matters the standard of proof could be lower than “beyond reasonable doubt” or, as in the present case, lower than “preponderance of evidence” standard. The applicant company complained that the shifting of the burden of proof to it by the Supreme Administrative Court violated the presumption of innocence under Article 6 § 2 of the Convention.
QUESTIONS TO THE PARTIES
1. Was the applicant company able to examine witnesses against it, as required by Article 6 § 3 (d) of the Convention? In particular, was it able to have the hearsay evidence, accepted by the Supreme Administrative Court, tested by cross-examination?
2. Did the applicant company have a fair hearing in the determination of the criminal charge against it, in accordance with Article 6 § 1 of the Convention? In particular, did the standard of proof used by the Supreme Administrative Court fulfil the requirements of the Convention?
3. Was the presumption of innocence, guaranteed by Article 6 § 2 of the Convention, respected in the present case?
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