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Article 82 and the courts The burden and standard of proof

This article explores the burden and standard of proof in cases involving Article 82 of the Treaty, addressing issues such as legality of presumptions, objective justification, and levels of dominance.

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Article 82 and the courts The burden and standard of proof

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  1. Article 82 and the courtsThe burden and standard of proof Kelyn Bacon 24 February 2006

  2. Burden of proof – starting point Regulation 1/2003 • Recital 5: “It should be for the party or the authority alleging an infringement of Article 81(1) and Article 82 of the Treaty to prove the existence thereof to the required legal standard.” • Article 2: “In any national or Community proceedings for the application of Articles 81 and 82 of the Treaty, the burden of proving an infringement of Article 81(1) or of Article 82 of the Treaty shall rest on the party or the authority claiming the infringement.”

  3. Legality of presumptions • Very large market shares as evidence of dominance. • Prices below AVC as presumption of predatory intent. • More generally: Napp §110 fact that burden of proof lies with the OFT does not “preclude the [OFT], in discharging the burden of proof, from relying, in certain circumstances, on inferences or presumptions that would, in the absence of any countervailing indications, normally flow from a given set of facts.”

  4. Objective justification Commission view: Article 82 discussion paper • §77: “The burden of proof for such an objective justification or efficiency defence will be on the dominant company. It should be for the company invoking the benefit of a defence against a finding of an infringement to demonstrate to the required legal standard of proof that the conditions for applying such defence are satisfied.”

  5. Objective justification Regulation 1/2003 • Recital 5: “It should be for the party or the authority alleging an infringement of Article 81(1) and Article 82 of the Treaty to prove the existence thereof to the required legal standard. It should be for the undertaking or association of undertakings invoking the benefit of a defence against a finding of infringement to demonstrate to the required legal standard that the conditions for applying such defence are satisfied.”

  6. Objective justification AG Kokott in British Airways (23.2.06) • §42: whether rebate is abusive turns on examination of (1) foreclosure effect and (2) whether there is an objective justification. • §43: “Whilst, of course, objective economic justification becomes relevant only if the rebates or bonuses granted do give rise to a foreclosure effect, both steps in this examination are designed to distinguish abusive from lawful conduct and thus ensure that legitimate price competition does not fall foul of Article 82 EC.”

  7. Objective justification Regulation 1/2003 • Article 2: “In any national or Community proceedings for the application of Articles 81 and 82 of the Treaty, the burden of proving an infringement of Article 81(1) or of Article 82 of the Treaty shall rest on the party or the authority claiming the infringement. The undertakings or association of undertakings claiming the benefit of Article 81(3) of the Treaty shall bear the burden of proving that the conditions of that paragraph are fulfilled.”

  8. Legal and evidential burden • RCA and BHB v OFT (CAT) §§130-134 • Attheraces v BHB (Etherton J) §§126-127 • Applies more generally to issues raised by undertaking in rebuttal of allegation of infringement (e.g. cost model, business methodology).

  9. Standard of proof: CAT Napp – contextual balance of probabilities • §109: “formally speaking, the standard of proof in proceedings under the Act involving penalties is the civil standard of proof, but that standard is to be applied bearing in mind that infringements of the Act are serious matters attracting severe financial penalties. It is for the Director to satisfy us in each case, on the basis of strong and compelling evidence, taking account of the seriousness of what is alleged, that the infringement is duly proved …”

  10. Standard of proof: European Court • “sufficiently precise and coherent proof” (Rheinzink) • “firm, precise and consistent body of evidence” (Ahlström) • “likelihood” or “in all likelihood” (Tetra Laval – CFI and ECJ)  close to contextual balance of probabilities applied by CAT • ?? “capability” standard for effects on competition (British Airways and Michelin II – CFI) • See now AG Kokott in British Airways

  11. Levels of dominance Article 82 discussion paper • §59: “In general, the higher the capability of conduct to foreclose and the wider its application and the stronger the dominant position, the higher the likelihood that an anticompetitive foreclosure effect results.” • Attempt to lower standard of proof for super-dominant undertaking.

  12. Article 82 and the courtsThe burden and standard of proof Kelyn Bacon 24 February 2006

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