Polish Plant Protection Products: CJEU confirms Commission was right to reject investigation

In its judgment of earlier this year, the Court of Justice of the European Union (CJEU) upheld a decision of the European Commission to reject a case involving distributors and manufacturers of plant protection products (PPPs) on the grounds of insufficient EU interest. 

Facts

The facts in the case date back to the 2000s, when Agria Polska, a Polish company involved in the parallel importation of PPPs, claims it was subjected to a coordinated series of wrongful allegations which sought to impugn the legality of its PPPs.  Agria Polska characterised the statements made against it by its competitors (including DuPont, BASF and others) to national authorities and courts as “false” or “misleading”, and the resulting inspections and court cases as “vexatious proceedings” within the meaning of ITT Promedia v Commission.  

In 2010, it lodged a complaint with the European Commission, alleging that the entities referred to in the complaint, had engaged in practices that amounted to infringements of Articles 101 and 102 TFEU. The allegation encompassed the use of customs control procedures which the competitors used to seek to block the import of Agria Polska’s products into Poland.

The Commission declined to open an investigation, finding that that there was insufficient evidence in support of the complaint, and that the resources necessary for the investigation would be disproportionate in view of the limited likelihood of establishing the existence of an infringement. 

Agria Polska’s appeals

Agria Polska appealed the Commission’s refusal to open an investigation, seeking an annulment of the Commission’s decision on procedural and substantive grounds, also alleging that the Commission infringed its right to effective judicial protection under Article 13 of the Convention for the Protection of Human Rights and Article 47 of the Charter of Fundamental Rights.

The General Court (GC) rejected the appeal, finding that the Commission had not committed a manifest error of assessment when it declined to open the investigation. 

On a further appeal, in which judgment was given in September 2018, the CJEU upheld this finding.  According to the CJEU, the entities referred to in the complaint were entitled to inform national authorities of the alleged IP infringements committed by Agria Polska, and to cooperate with the authorities carrying out investigations into Agria Polska. The Court cited the Commission’s viewpoint that the principles on vexatious litigation drawn from ITT Promedia and on the provision of misleading statements from AstraZeneca were not intended to apply to situations in which undertakings informed the national authorities of allegedly unlawful conduct or actions by other undertakings.  The CJEU noted in particular that the administrative and judicial authorities involved in those cases “had no discretion as to whether or not it was appropriate to act on the applications made by those undertakings”; this was contrasted with the position of the relevant Polish authorities involved in the complaints lodged by Agria Polska’s competitors which were able to take decisions on the merits.   

The CJEU therefore upheld the GC’s judgment, declining to annul the Commission’s decision. The CJEU noted that “…it is for the Member States to provide remedies sufficient to ensure effective judicial protection for individual parties in the fields covered by EU law”, and that it is not the Commission’s responsibility to plug gaps in judicial protection left by national courts by opening an investigation where the likelihood of finding an infringement of Articles 101 and/or 102 is low.

Impact

As human rights and competition law continue to brush against each other in the EU courts, it is noteworthy that the CJEU was not convinced by Agria Polska’s arguments. The courts have established that a complainant does not have a fundamental right to a full Commission investigation, particularly in cases where it would not be in the interest of the EU to launch an investigation. 

The CJEU’s approach in Agria Polska also demonstrates the high hurdle that represented by the ITT Promedia line of cases.  It seems that it is particularly difficult to justify an investigation into “vexatious proceedings”; as previous case law has established, recourse to legal action will be considered abusive only in exceptional circumstances.  In the opinion of the authors, the case arguably overstates the distinction between the lack of discretion supposedly held by regulatory and patent authorities in AstraZeneca with the position in this case.  Such authorities are well able, and routinely do, ask questions and seek more information from applicants for patents or marketing authorisations.  Conversely, it understates the impact of multiple litigation proceedings on an undertaking whose competitors are undoubtedly better funded than it.  (There is no doubt either that the parallel trade carried out by Agria Polska represented a disruptive influence on the market, which the competitors would have had an interest in hindering.)  It cannot be excluded a different case could be pursued in future, if, for example, the foreclosure effects were clearer.  Indeed, the case must be seen for what it is – namely, an appeal against a Commission decision not to investigate.  Given the implications for public resources, it is unsurprising that such cases are only rarely overturned.

Case C-37/17 P Agria Polska v Commission, judgment of 20 September 2018.

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