Exclusions to the non bis in idem principle

On 22 March 2022, the Court of Justice of the European Union (CJEU) ruled on two judgments that have caused a legal upheaval in the area of the general principle of non bis in idem, and in relation to unfair competition practices in the territory of the European Union.

In cases C-151/20 and C-117/20, the CJEU ruled on questions referred for preliminary rulings by the Austrian Supreme Civil and Criminal Court and the Brussels Court of Appeal respectively. These rulings are aimed at excluding the application of the most essential legal principle of the law on penalties, the principle of non bis in idem or the prohibition of penalising more than once for the same offence.

The impact of these judgments is particularly significant, given that in the European Union, although there is a Community regulatory framework in the field of competition, there is no individualised and independent authority that monitors compliance with competition law. The institution in charge of enforcing competition is the EU Commission itself, which has been attributed the functions of surveillance and investigation, with the powers of sanction delegated to the national courts or competition authorities.

This means that unfair competition practices are controlled by the national authorities of each EU Member State. The national authorities are independent and have the power to monitor, investigate and sanction, but they limit their scope of action to their own national jurisdiction. For any supranational unfair competition practice, at EU level, the national authorities should refer to and coordinate with the Commission.


What happened in the cases heard by the CJEU?


These are two separate and independent cases. In case C-151/20, perhaps the most interesting case, the German companies Nordzucker AG and Südzucker AG, which have a dominant and controlling position on the sugar market in both Germany and Austria, allegedly reached a non-competition agreement with each other in order to be able to face the new competition that was opening up with the accession of new Member States to the EU in 2004. This agreement, which was discovered by means of a recorded telephone communication, and which would be an act of unfair competition, led to the imposition of sanctions by the competent German and Austrian authorities. Faced with this double sanction for the same antitrust agreement, the parties sought rejection of the Austrian sanction on the ground that it infringed non bis in idem principle, since the German authority would have sanctioned first.

In Case C-117/20, the Belgian postal group bpost, by means of a new pricing system for the distribution of advertising mailings, allegedly committed an act of unfair competition by abusing its dominant position on the market. This unfair practice led to the Belgian competition authority sentencing it to pay a fine. The problem was that prior to the competition authority's sanction, the Belgian postal authority had tried, unsuccessfully, to sanction bpost for the same pricing system. According to the postal authority, the new pricing system discriminated against bpost's customers. In those circumstances, bpost argued that it could not be penalised on the basis of facts already judged.


How are the cases related to each other?


In reality, none, beyond the jurisprudential discussion on the limits of application of the non bis in idem principle regulated in Article 50 of the European Charter of Fundamental Rights.

In case C-117/20 it could even be argued that it is not even a question of the non bis in idem principle, but of the legal concept of res judicata. The latter figure, although related to the former, has different implications and regulations.

In case C-151/20, we are undoubtedly dealing with a case of possible non bis in idem infraction, and most importantly, it defines the sanctioning capacity of the national competition authorities in the face of the same anti-competitive conduct by the same players when they operate in several Member States.

However, the CJEU's legal analysis of the non bis in idem principle is the same in both cases, and its exclusion is based on the same grounds. According to the European Court, the key issue is to be found in the term idem, which would describe the level of equality of the sanctioned conduct.

For example, in case C-117/20, the infringement sanctioned is not the same, even though it is based on the same facts. The first sanction, judicially frustrated, would apply to an infringement of equality law, unrelated to competition law. The second sanction would relate to an infringement of competition law. It is not the same infringement, and therefore there are not two sanctions (bis) for the same infringement (idem). It is a different matter that both infringements arise from the same facts, and that these facts have already been previously heard in court; something that falls within the framework of res judicata and that could have, or not, consequences in terms of avoiding the second sanction.


Why are there different infringements in case C-151/20?


This is indeed the relevant issue in the judgments. In the bpost case the non-application of the non bis in idem principle is more obvious, but in the 151/20 case it is not at all.

The non-competition agreement adopted between the two German companies violates several competition rules. The agreement clearly and directly violates Article 101(1) of the Treaty on the Functioning of the European Union (TFEU), according to which:

“The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market (…)”..

In addition, the agreement violates the respective legal provisions of the German and Austrian competition laws.

Both competition authorities, the German and the Austrian authority, sanctioned the companies on the basis of the infringement of their national rules, but on the basis of the same agreement and the same facts (the telephone call which revealed the existence of the agreement).

According to Article 3 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 TFEU] and [102 TFEU], when national competition authorities sanction for infringement of national competition rules, they are also sanctioning for infringement of the corresponding competition articles (101 and 102) of the TFEU.

In other words, it makes perfect legal sense to assert that the concurrence of two different competition authorities’ sanctions on the same agreement should be considered a violation of Article 50 of the European Charter of Fundamental Rights.

The CJEU’s reasoning once again revolves around the idem concept. According to the Court, an infringement of competition law cannot be committed in the abstract, but must be inseparably linked to the territory in which the anti-competitive conduct takes place. In this sense, the German competition authority penalizes the same infringement in respect of the German territory, and on that basis calculates its penalty, whereas the Austrian authority does the same but in respect of the Austrian territory. In this case, it would be a matter of complementary sanctions, where each authority sanctions in respect of the consequence of the same infringement in its territory.

In short, there are no different infringements in case C-151/20, there is one infringement with two sanctions. There is a breach of the non bis in idem principle and therefore of Article 50 of the European Charter of Fundamental Rights, but it would be a justified breach. According to the CJEU, the pursuit of the general interest in competition matters within the EU would justify such violation. At the same time, the CJEU also suggests that national competition authorities are free to impose sanctions in their own territory, and even in the territory of another Member State.


What are the consequences of this pronouncement?


This ruling does not seem to be the right way forward. In a single judgment, the CJEU has concluded very conflicting points. On the one hand, the competition authority of a Member State, such as the Spanish one, could sanction one or several companies for unfair conduct affecting its territory and also extend it to the territory of another Member State, such as Italy. But on the other hand, no guidelines are specified to help the national authorities themselves to understand their ability to choose between sanctioning with territorial limitations or encroaching on the competence of another national authority.

This leads to undesirable legal uncertainty, where national competition authorities may or may not be incurring justified or unjustified violations of Article 50 of the European Charter of Human Rights. This will have to be assessed on a case-by-case basis and will undoubtedly lead to unnecessary litigation in this area.


What would be the desirable solution?


Faced with this ruling by the CJEU, the solution to this legal uncertainty lies in a legislative change in the European legal framework. Either national competition authorities would be obliged to turn to a supranational or European authority, either the Commission or another authority created for this purpose, to deal with anti-competitive conduct that covers several Member States; or the sanctioning capacity of each national authority would be limited to its territory, and sanctions could always and in any case be complemented by another national authority with respect to what concerns its territory.


How can Gowper help?


At Gowper we are experts in the area of unfair competition. Our litigation department is experienced in unfair competition litigation, both at the administrative level against national authorities and at the judicial level against authorities or between private parties.

Competition rules are not only useful to control, from a public perspective, the conduct of large companies. They are also useful to denounce and stop conduct by other companies that harms your business. It is important to empower entrepreneurs, especially SMEs in this matter, and at Gowper we are fighting for a free, but legal and ethical market.

In addition, given the legal uncertainty generated by this ruling of the CJEU, in the face of concurrent sanctions from several competition authorities, it will be necessary to analyse on a case-by-case basis whether or not Article 50 of the European Charter of Human Rights is being violated. To this end, we are at the full disposal of companies that may consider that their fundamental rights have been violated.


Team Member In Charge

Related Solutions

Related Services