Our topic today – the relations between anti-trust law and criminal law – raises a whole raft of questions regarding both dogma and application.
Bringing proceedings is in fact the role of the criminal law; the role of antitrust law; the assessment as to the possibility – opportunity of employing the sharp edged weapon of punishment for breaches of competition rules.
From the criminal lawyer’s point of view all this entails a broad analysis which must start with consideration of the provision.
Consideration must be given first and foremost to those fact situations set out in the Italian Criminal Code which, in an incoherent and often anachronistic context, expressly provides, in the list of protected interests, for matters hindering the protection of competition.
I refer to the offences set out in the chapter on crimes against industry and commerce and which, put simply, range from interference with competitive bid processes, unlawful competition through violence or threats to speculative practices in commodities.
They are offences which by their very nature, as I was saying, often bear the signs of the times and which, apart from a few cases, have been applied scarcely.
In any case, they are rules which apply to specific phenomena, even though the code does not contain a provision on “unfair competition” in general; the protection of this area still lies with the civil law.
A second level of relevance of competition from a criminal law perspective is linked to the gradual widening of the spectrum of protection of offences traditionally intended to monitor “traditional” assets.
It is certainly the most significant element from the point of view of criminal law policy decisions because it highlights the gradual widening of the values which are deemed to require the protection of the criminal law.
The reference is, in particular, to corruption – “domestic” and, even more so, international – whose axis over time has shifted from protection of the customary areas of the efficient conduct and impartiality of the public administration to those of free competition between undertakings. It is a clearly marked route in the supranational measures designed to combat corruption and which was undoubtedly boosted by the introduction of the vicarious liability of bodies under Law no. 231 of 2001 which first and foremost had regard to the crimes in question.
As regards corruption this is a line of development which, on close scrutiny, distinguishes public corruption too but which demonstrates, even more markedly, its characteristics in the case of private corruption.
Further, it is not a coincidence that in the Conventions designed to fight corruption, private corruption takes on a configuration such as to direct it clearly towards the protection of competition and that a similar such approach clearly emerges from the Council Framework Decision 2003/568/JHA which makes express reference, as an element delimiting the operation of the crime, to the distortion of competition in the acquisition of assets or services.
The route taken by the German legal system is also emblematic. In fact private corruption appears in the competition law in 1909 and much later it was included in the current article 299 of the German Criminal Code.
The crime of corruption between private individuals under the new article 2635 of the Criminal Code is also consistent with this approach. The provision takes into account not only the assets of the company but also the damage to competition as a criminal offence, in respect of which action may also be brought ex officio. The emergence of interests of a clearly public nature is also obvious in view, amongst other things, of a different regime for the bringing of proceedings. A criminal complaint is brought when purely financial interests are at stake.
The existing legal rules are thus in the process of being supplemented with a view to strengthening competition by way of the introduction of the vicarious liability of bodies for the conduct of those persons who give or promise money or some other gain.
The final level of relevance, that of overlap between criminal law and the protection of competition, which I would like to discuss, is the one most strictly pertinent, as I was saying, to competition law.
This, from a certain point of view, seems ground that is of less interest, or at least less direct interest, to the criminal lawyer given that, as is known, the decision of the legislature, differently from other systems, was in favour of protection outside the realm of criminal law.
The various provisions of the law of 1990 no. 287 rely entirely on administrative fines as preferred instrument of deterrence to phenomena which distort the market – agreements restricting competition, abuse of dominant position and concentrations – or of defence of powers of the regulatory authorities, along with the use of disqualification sanctions.
Room for the operation of the criminal law is however ensured by the provision on obstructing the exercise of the functions of the regulatory authority (article 2638 of the Civil Code) which, amidst the general “mildness” of corporate criminal law over the last few years, has retained its importance in terms of sanctions and scope of application.
This provision is also applicable to independent authorities such as the Competition Authority and, even though it is true that the first paragraph has a circumscribed scope of application, relating exclusively to the communications concerning the financial position of those subject to supervision – a possibility that is not of immediate relevance to us –; it is equally true that the second paragraph, at least on a wider interpretation of the provision, lends itself to sanctions more generally on the obstruction of the regulatory authority.
But does the picture I have just painted mean that the criminal lawyers can forego any interest in the question?
Can we really take the view that there is no affinity in terms of sanctions philosophy between criminal law and competition law?
We know very well that this would be a hasty conclusion and an unsatisfactory point of view.
This is demonstrated, I believe, even by the attention which in the last few years criminal lawyers – I must say somewhat tardily compared to the thought given to the matter in other countries – have started to show to competition law matters, having been stimulated by the question of sanctions.
And this could not be the case in view of the increasingly vast amount of attention – with at times “orthopedics” roles – paid by administrative law to the dynamics of the “market”.
The experience of other jurisdictions, for example Germany, in addition to our own (it suffices to mention the fundamental law no. 689 of 1981 regarding the decriminalisation of administrative wrongdoing and the recent tendencies in respect of market abuse), demonstrates that the administrative penalty is increasingly the main instrument for fighting economic crime rate.
Therefore a system of sanctions has been created which is different from traditional criminal law but clearly entails punishment.
This is also clearly evidenced by the sub-system created by the law of 1981 and then, in our own day, by Law no. 231 of 2001, which borrows from and is strongly underpinned by principles and rules inspired by criminal law.
The recent rulings of the European Court of Human Rights – the well-known Menarini is significant in this context – also invoke, regardless of the specific outcome of the claim, the need to give an interpretation to ‘criminal law matters’ which is becoming increasingly detached from formal labels to focus on the character of the penalty, on its severity and on the purposes of the repression and general prevention.
Does this mean rethinking how the law applies and rethinking the role of criminal law?
I do not believe that the solution is recourse to the criminal law outside the areas it already covers.
The challenge is, I believe, the opposite, ensuring a system which, although it has the necessary diversity and the appropriate adaptations, offers, on the substantial level and on the level of enquiry, the guarantees which the punitive nature of the sanctions requires.
It is my view that we must overcome the idea that criminal law and its mechanism of sanctions must be applied every time that civil or administrative sanctions are not able to operate efficiently.
In other words, criminal law cannot be required to play a supplementary role in respect of the other forms of sanction, nor can it be required to regulate, gradually, increasingly large areas of business law.
This is not and would not be good for criminal law – which by rarefying the legal assets protected risks becoming “symbolic” – or for the economy, which would see its natural dynamics altered and undergo a slow process of bureaucratisation.
What I have in mind is no longer criminal law but serious consideration of what can be valid instruments for an effective system of sanctions which, at the same time, are able to create incentives for companies.
I believe that, following ongoing reflection and experience at European level, it is possible and necessary to reason about the utility of compliance programs, above all with a view to acknowledging them in terms of sanctions.
In this sense the national model set out in Law no. 231 of 2001, to which I referred earlier, constitutes – including in respect of other experiences of models of “antitrust compliance” – a useful basis for comparison.
I believe that the essential prerequisites of a best practice regarding competition law should not diverge greatly from what forms the basis of a model preventing the “231 offences”.
No company best practice, no organisational model, whatever the intended scope, can exist without a robust commitment from the outset on the part of the company management involving serious risk mapping and a resulting identification of procedures for minimising the risks of misalignment. The whole mechanism, obviously, must be accompanied by an effective training of the personnel, a strict audit plan and a credible sanctions apparatus.
But what now amounts to decades of experience in administrative liability of undertakings teaches us that the “preventive” compliance programs is over time sustainable (for the undertakings) and credible (for the legal system in general) only if the approach of the Authority (the judiciary or administrative authority) is not one of “sceptical dismissal”.
I mean that, today, despite the efforts made by many undertakings to construct “231” risks prevention model, the “response” of judges has not always been “favourable” and often they have a closed mindset in respect of their efforts.
In other words, systems of prevention, in whatever subject area and industry one wishes to “implant” them – from workplace injuries to corporate crime, from environmental protection to offences against the public administration or from tax offences to competition law breaches – only make sense when they enjoy “credibility” and are considered a real instrument for mitigating risk by, amongst others, those charged with the task of verifying that they have been applied, being it the judiciary or an independent authority.
If that is not the case, the cost-benefit ratio of such measures soon reveals itself disadvantageous for the bodies regulated which, as a result, adopt a bureaucratic, formalistic and ineffective approach; this leads companies in the long run to abandon the positive “preventive tension” and to adopt an approach which sees the sanction as business cost.
I believe therefore in giving greater space to forms of corporate self-regulation, above all where guided by indications originating with Supervisory Authorities.
But I must stress, above all, at a time when undertakings are losing profitability, the organisational models – where they are adopted and implemented in a serious manner – must ensure a reasonable degree of certainty that undertaking will not be held liable.
This is the approach which we must bravely follow.
This is the edited transcript of the “Competition law sanctions and the relations between administrative and criminal law” Conference held in Rome on the 24th October, 2013.