A decision issued by the Supreme Administrative Court (the "Court") on 31 October 2013 (recently published) considered a telephone conversation between two individuals - the manager of an outdoor equipment producer and a representative of its distributor - as legitimate evidence in administrative proceedings. The decision confirmed the precedent decision of the Regional Court in Brno ("the Regional Court") which upheld the original decision of the Czech Competition Authority (The Office for the Protection of Competition, "CCA").
Background of the case
By the decision dated 11 May 2009 ("the
Decision"), the CCA fined a producer of
outdoor equipment (the "Producer") for
illegally setting resale prices ("resale price
maintenance", RPM). The Producer appealed against the
Decision. The Chairman of the CCA, however, confirmed the Decision.
The Chairman's appeal decision was consequently confirmed by
the Regional Court in the following court proceedings. After that,
the Producer challenged the Regional Court's decision and
submitted the cassation to the Court.
One of the main objections of the Producer was allegedly illegally
obtained evidence, i.e. a recorded telephone conversation between
the Producer and one of its distributors, even without any
authorisation from the Producer or the CCA or any other respective
state authority.
Judgment
The Court firstly pointed out that the principles of the
administrative proceedings come out of criminal proceedings'
rules. However, it is not possible to use such an analogy without
any limits. On the contrary, the rules of criminal procedure can be
used only in cases when (i) respective rules are missing in the
administrative law, (ii) such interpretation does not negatively
affect any party to the proceedings, and (iii) does not have any
negative impact on values of public interest.
Conversation between two individuals focused solely on
business lack private character
With regard to other case law, the Court stated that
conversation between two individuals as a part of commercial or
public activity does not fall within the scope of personal acts. In
this case, the dialogue (i) happened in a producer-distributor
relationship, and (ii) focused on matters of sale and consumption
of the goods in question. Therefore, this dialogue lacked any
private character, and its recording did not breach the
Producer's fundamental right to personal data protection.
Difference between recordings made by individuals and public
authorities
Further, the Court pointed out that it is always required to
strictly distinguish between recordings provided by individuals and
those made by public authorities. Evidence in the form of
audiovisual recordings made secretly by the public authority is
basically inadmissible. On the contrary, evidence in the form of
audiovisual recordings made by individuals (e.g. journalists) to
support the credibility of published media (articles, television
reports, etc.) is generally permissible.
The recording in question was made by an individual, private
physical person and their decision to record their conversation
with the Producer was taken on their own initiative. The CCA did
not authorise, nor encourage the distributor's representative
to do so. In the administrative file, there was no evidence of any
such activity of the CCA. The Court concluded that the recording
had not been made by the public authority, i.e. by the CCA during
its operative activity in investigating the by that time alleged,
restrictive behaviour of the Producer. Therefore, since the
recording was made by an individual – the distributor - the
CCA was entitled to use the recording as submitted relevant
evidence.
The fact that the conversation was recorded before the initiation
of the administrative proceedings does not mean that the recordings
are of no use in the proceedings. Once again, rules of criminal
procedure are not always applied in cases of
individual-to-individual recordings. The provider of such
recordings is not obliged to follow strict criminal procedure rules
when submitting the recordings as evidence.
Permission of the recorded person
Regarding the necessity of obtaining permission of the
recorded person, the Court stated as follows: In administrative
proceedings, it is not possible to exclude en block all
audio recordings made by individuals without the permission of
other participants of the conversation. Whether these recordings
are admissible always depends on the individual character of the
recordings and possible breaches of fundamental human rights
concerning individual integrity and privacy. Such rights can hardly
be breached in the case of a recording of a conversation regarding
routine commercial activity.
Supportive character of the evidence in form of
recordings
Last, but not least, the Court added that the recordings in
question were only supportive evidence. Electronic communication
was the main and direct evidence of the resale price maintenance.
Information produced by the recordings only supported the
information contained in email communications between the Producer
and its customers. Moreover, the Court confirmed that in obtaining
the recordings the representative did not provoke any
anticompetitive behaviour, the information obtained was not used
for any purposes other than protecting competition, and the
recordings have not been made public and therefore could not harm
the Producer's public standing.
Conclusion
This judgment is especially innovative and might help companies abused by competitors to persuade the CCA about their competitors' anticompetitive behaviour. However, it must be borne in mind that every single recording will be subject to different rules about how it can (or cannot) be used as evidence in the administrative proceedings; those rules will always depend on various conditions of the particular case and the character of the specific administrative proceedings.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
