First published in e-Competitions Bulletin June 2009-1

On 29 April 2009, the Paris Court of Appeal dismissed for the second time the appeal of Philips and Sony against a decision of the Competition Council in 2005 condemning an agreement between the two companies and their respective distributors. In so doing, the Court of Appeal expressed its opposition to the judges of the French Supreme Court concerning the delicate matter of the admissibility of evidence obtained without the knowledge of the companies under investigation.

In its decision No. 05-D-66, the French Competition Authority accepted as evidence, audio recordings produced by the claimant of conversations with representatives of suppliers and wholesalers, accompanied by their transcripts. Philips and Sony lodged an appeal against the decision, arguing, inter alia, that the recordings had been made without the knowledge of the authors. The Paris Court of Appeal upheld the decision of the Council on 19 June 2007. The Commercial Chamber of the French Supreme Court, however, pronounced its opposition to this procedure, arguing that the recording of a telephone conversation made by a party without the other knowing it, is an unfair practice and an inadmissible piece of evidence insofar as it is contrary to Article 6 § 1 of the ECHR. By a decision dated 2 June 2008, the Supreme Court annulled the first decision of the Paris Court of Appeal and ordered the case to be remitted to the same, though differently composed, Court in order to re-judge the case on its merits.

What is unusual about this case is the fact that in its second ruling the Court of Appeal maintained its initial position and did not follow the Supreme Court’s interpretation of the right to a fair trial guaranteed by Article 6 § 1 of the ECHR. According to the Court of Appeal, the European Court of Human Rights case law on Article 6 § 1 entitles adversely affected parties to be informed of all the evidence, to submit a complete statement of their objections and to make known their own views. Article 6 § 1, however, merely requires that the procedure guarantees a fair trial and it does not apply to the admissibility of the evidence, which remains a matter governed by national law.

The Court of Appeal then mentioned that in the absence of specific rules of evidence, violations of Articles 81 and 82 EC can be established by any means admissible under the laws of Member States. In order to apply this reasoning in the case of national French law, the Court evoked the difference between the objectives pursued by the provisions of the Civil Procedure Code and the nature of the procedure followed by the French Competition Authority. The Competition Authority’s mission is to ensure the economic protection of consumers and it has the power to impose criminal penalties in the exercise of this mission. Consequently, the provisions of the Civil Procedure Code do not apply to its conduct and the Authority enjoys procedural autonomy.

The admissibility of a piece of evidence must therefore, according to the Court of Appeal, be assessed in relation to the objectives pursued and the rights of parties against whom the evidence is brought. Evidence obtained illegally should be disallowed only if it specifically violates the right to a fair trial, the adversarial principle or the rights of defence of those against whom the evidence is brought.

However, in the present case, the Court of Appeal underlined that those whose words were secretly recorded did not protest for reasons of undue process of law, nor did they express any doubts as to the authenticity of the records or contest the content of the recorded conversations. They did not even deny what they said, nor did they imply that they would have said different things if they had been aware that their conversations were being recorded. On the contrary, the persons in question confirmed and clarified the recorded evidence by providing additional evidence. Furthermore, all the recorded discussions related to professional topics, without any reference to privacy.
Interestingly, the Court also pointed out that the principle that guarantees every person the right against self-incrimination is not applicable to companies where the words recorded are not those of their representatives.

In addition to this, since the parties were aware of the evidence in question and were able to make known their views on both the form and the content of this evidence in the context of an adversarial procedure, they can not establish any specific violation of the right to a fair trial, the adversarial principle or the rights of defence.

The Court of Appeal has confirmed the Authority’s decision not to disallow the recordings in question purely on the basis that they were obtained illegally and has ruled that they are admissible because they were examined in the context of an adversarial procedure. It also established the fact that the Authority is the sole body competent to assess the recordings’ probative value. Although the recordings were produced by the claimant and not by the investigators or the court reporter, the Authority’s mission of ensuring consumers’ economic protection justifies their admissibility.

Moreover, according to the Paris Court of Appeal, the particular context of cartels should justify the admissibility of audio recordings obtained without the knowledge of the person being recorded. In cartel cases, victims usually do not have the economic power and market knowledge of their trading partners. Thus, the use of evidence obtained illegally is not disproportionate to the pursued goal, particularly when it comes to proving a practice which is itself illegal.

The Court of Appeal therefore rejected the Supreme Court’s interpretation of Article 6 § 1 ECHR, maintaining a position sensitive to the situation of victims of anti-competitive practices.