- 1 August 2017

The Competition Council censored by the Administrative Court

On June 1st, 2017, the Administrative Court issued a decision in a very important case concerning a conviction of the company Post for abuse of a dominant position. The Competition Council (hereinafter « the Council ») condemned Post by its decision of November 13, 2014 , to a fine of 2.52 million euros, the largest fine since its establishment.
The Administrative Tribunal censoring the Council’s decision, by its judgment of 21 November 2016 , the State appealed. The Administrative Court has confirmed the judgment of first instance.
The Court upheld the Administrative Tribunal’s earlier decision concerning the failure to observe the reasonable time in the present case. Indeed, the first statement of objections only took place in 2014, so eight years after the first complaint against Post and the cancellation of the protective measures in 2008. The judges consider that such cases require a fast intervention of the Council in order to protect the other companies in the market and to respond to a current situation, knowing that this is an extremely technological and economic field scalable. However, it should be noted that, in isolation, the fact that the reasonable period of time has not been respected cannot lead to the annulment of the procedure. The cancellation of the Council’s decision is a result of multiple irregularities on the backdrop of this overrun.
It is in the interest of the Council to respect the right to a trial within a reasonable time, as enshrined in Article 6 of the European Convention on Human Rights.
As regards requests for information, it should first be noted that, under penalty of invalidity, such requests must indicate the legal basis and the purpose behind them, and the penalties provided for in the event that inaccurate or denatured information would be provided. However, the request addressed to the company concerned did not contain this essential information. In this context the Court has stated that it is not sufficient for the company concerned to have been well aware of the file in which the request for information was made to it and to have understood the scope of that request in relation to the information therein requested.
Moreover, in so far as the aim pursued by the request for information and the indication of the penalties incurred in the case of the supply of inaccurate or misleading information are to be seen in a global manner, it is unnecessary to establish a causal link between the request for information and the grievance ultimately retained by the decision-making authority in order to underpin its decision to convict. This element, in turn, was part of the global decision to quash the Council’s criticised decision.
As to the determination of the relevant market, the Council having taken over the market definition adopted by the Luxembourg Regulatory Institute, the Court requires the existence of a specific analysis as well as a concrete analysis carried out ex post on the basis of the situation on the ground during the two years in question in relation to the possible absence of such a specific market for multi-product offers. In a highly competitive and highly evolving market situation, the Council should have conducted such an analysis by identifying the elements which would make it possible to define a specific market. This argument constitutes an essential and considerable part of the annulment decision of the Administrative Court in so far as the definition of the market is the basis of subsequent arguments of the Council
In conclusion, the Council must enforce procedural safeguards in its investigations, strictly enforce the law and conduct its own analysis in order to determine the relevant market. As the Council failed to comply with these obligations in the case at issue, the Administrative Court properly upheld the trial judgment.

Towards the adoption of a new law on public procurement
On May 23, 2017, the State Council submitted its opinion concerning bill No. 6982 on public procurement. One month later, the Commission on Sustainable Development of the Chamber of Deputies amended the bill in order to take account of the opinion of the State Council.
The referred bill transposes into Luxembourg law Directive 2014/24 / EU of 26 February 2014 on public procurement and Directive 2014/25 / EU of 26 February 2014 on procurement by entities operating in the sectors of water, energy, transport and postal services , which should have been transposed no later than April 18, 2016.
The bill wants itself innovative. In this sense, economic operators must comply with the applicable obligations in the areas of environmental, social and labor law, so that public procurement becomes an instrument of social and environmental policy. In addition, with the aim of modernising the law applicable to public procurement, the respective procedures should be simplified in order to make them more effective. So in general, the bill is moving in the right direction.
However, it should be noted that the State Council made several formal objections, linked to bad transpositions in the text of the directives, even though it did not issue any major criticism of the substance of the draft bill.
One aspect that seems to be interesting to deal with is article 14 of the bill. Following the opinion of the State Council, the Parliamentary Committee adopted an important amendment to this text. Indeed, the text initially proposed prohibited categorically to the same operator to be part of more than one group of economic operators. The version proposed by the Parliamentary Committee foresees such a prohibition only if it is duly justified. It is doubtful that this new version complies with the opinion of the Competition Council , very reluctant in relation to the idea that an operator can be part of two or more groups of economic operators or that an operator simultaneously submits an offer in a personal capacity and form part of a group of economic operators.
In any event, economic operators are well advised to follow the recommendations of the Competition Council in order to avoid any procedure against them in the area of public procurement.
Given the divergent positions of the State Council and the Competition Council, the next discussions on the bill and the implementation of the new law can be followed with interest.

Loss of LNS monopoly in the field of pathological anatomy
In a judgment of 27 April 2017 the Administrative Tribunal (hereinafter « the Tribunal ») annulled a ministerial decision of 23 October 2015 rejecting the request of a Luxembourg laboratory aimed at obtaining an authorisation for the extension of its laboratory activities to the field of pathological anatomy.
The Minister having decided to refuse the joint-stock company after consulting a professor’s report and ignoring the favorable opinion of the Medical College and the Laboratory Advisory Board, did not see « any obligation or compelling reasons to create one or more new pathological anatomy laboratories ». Such an opening of the market would lead to competition between the different laboratories, which would no longer have the capacity and the means to provide reliable work. Thus, according to the Minister of Health, the principle of freedom to provide services does not apply to examinations of pathological anatomy.
Furthermore, the applicant has been criticised for failing to demonstrate that the other legal requirements for the overall activities of a medical analysis laboratory are satisfied.
According to Article 3 of the Law of 16 July 1984, the establishment of a new laboratory must correspond to a need at national, regional or local level and, in addition, several legal and regulatory requirements must be fulfilled so that an authorisation may be granted to a new laboratory on the territory of Luxembourg.
The Tribunal found that the Minister did not provide any evidence to support the view that the physician’s opinion would be more reliable or relevant than those of the Medical College and the Advisory Board. As to the reason for the Minister’s refusal, the Tribunal deduces that « the Minister was wrong to conclude that there was no national, regional or local need for the extension of the applicant’s activities to the field of pathological anatomy » knowing that at the moment the laboratories from outside the borders subcontract requests for analyses sent to the LNS (Laboratoire national de santé). The refusal sought to ensure the continuity of the State monopoly of the LNS.
As to the alleged failure to provide evidence that the laboratory meets the legal and regulatory requirements, the Tribunal finds that the applicant has carried out analyses in other areas for years and thus has all the necessary authorisations.
The State of the Grand Duchy of Luxembourg has now appealed in this case.

Source : http://www.moysebleser.lu/fr/newsletter-moyse-bleser-july-2017/#fr1