New judgment concerning the prohibition of double prosecution

Preliminary ruling of the European Court of Justice dated 3 April 2019 in case C-617/17

By assistant attorney Christina Karstensen

The case in brief

The case concerns a decision made on 25 October 2007 by the Polish Office of Competition and Consumer Protection. According to that decision, the company Powszechny Zaklad Ubezpieczeń PZU Życie (PZU Życie) had abused its dominant position in the market for group life insurance for employees in Poland. The abuse had taken place in the period from 1 April 2001 to 25 October 2007.

By doing so, the company had infringed Article 8 of the Polish law on the safeguarding of competition and consumers, which had been punished with a fine of approx. EUR 7.7 million.

In addition, according to the Head of the Polish Office of Competition and Consumer Protection, PZU Życie had also violated Article 102 of the TFEU. The reason was that the conduct amounting to abuse could have a negative effect on trade between the Member States by preventing foreign insurers from entering the Polish market. PZU Życie was therefore ordered to pay yet another fine of approx. EUR 4 million.

Appeal

PZU Życie appealed the judgment, but the Court of Appeal in Warsaw upheld the decision made by the competition authority. Subsequently, PZU Życie brought an appeal on a point of law before the Supreme Court in Poland, claiming that the principle of "ne bis in idem" (prohibiting renewed prosecution of the same person for the same offence) – enshrined in Article 50 of the EU Charter of Fundamental Rights and in Article 4 of Protocol No. 7 to the European Convention on Human Rights – had been infringed. The prohibition protects undertakings from being prosecuted or punished for the same offence twice.

In this connection the Court of Appeal referred a question to the European Court of Justice for preliminary ruling concerning the interpretation of the prohibition of renewed prosecution. The question was whether a national competition authority can impose on an undertaking two fines in a single decision in respect of an infringement of national competition law and of an infringement of Article 102 of the TFEU.

Preliminary ruling of the European Court of Justice

The European Court of Justice answered in the negative to the question referred for the preliminary ruling. The Court has repeatedly held that EU competition law and national competition law apply in parallel, because the rules at European and at national level view restrictions on competition from different angles. Consequently, their areas of application do not (entirely) coincide.

The ruling therefore emphasizes that the national competition authority of a member state can decide that an undertaking abusing its dominant position can be fined for infringement of national competition law and for infringement of EU competition law. 

However, the European Court of Justice also ruled that in such a situation, the national competition authority must ensure that the total amount of the fines is proportionate to the nature of the infringement.

Read the preliminary ruling of the European Court of Justice.