IB v R [2009] EWCA Crim 2575

[2009] EWCA Crim 2575

Case No 200904010 B5

IN THE COURT OF APPEAL (CRIMINAL DIVISION)

ON APPEAL FROM SOUTHWARK CROWN

MR JUSTICE OWEN

T20080944

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 09/12/2009

Before

LORD JUSTICE HUGHES VICE PRESIDENT OF THE COURT OF APPEAL CRIMINAL DIVISION

MR JUSTICE DAVID CLARKE

HIS HONOUR JUDGE MORRIS QC

Between

IBAppellant

The QueenRespondent

Mr N Purnell QC Mr J Flynn QC and Mr A Darbishire (instructed by Peters and Peters) for Appellant

Mr J Turner Q.C. Mr R Latham QC Mr M Lucraft QC Mr T Payne

and Ms A Howard (instructed by the Office of Fair Trading) for Respondent

Hearing Hearing dates : 7 th and 8 th October 2009

Judgment

Lord Justice Hughes :

[1]This interlocutory appeal raises a jurisdictional issue connected with the relatively new “cartel” offence created by section 188 Enterprise Act 2002. The defendant, with others, is charged with the offence of dishonestly agreeing to effect a price fixing arrangement between two companies. All the defendants were senior executives in one of the two companies. On the Crown case executives of the other company were also involved but they have been granted immunity from prosecution and it is the intention that they shall be called as Crown witnesses.

[2]The defendants contended that although the statute creates a new criminal offence triable on indictment and punishable by up to five years’ imprisonment, nevertheless the effect of European legislation, namely Council Regulation (EC) No 1/2003 (“the Modernisation Regulation”), is that the Crown Court has no jurisdiction to try the present indictment alleging that offence or to impose punishment if it be proved to have been committed. It is said that if the cartel in question bears on trade within the EU (which this one does) only the Competition Authority duly designated by the UK Government under that Regulation (of which the one relevant to this case is the Office of Fair Trading) has any powers of enforcement. At a preparatory hearing held pursuant to section 29 Criminal Procedure and Investigations Act 1996 the Judge ruled against that contention. This defendant appeals.

The European legislation

[3]The basic Community rules against anti-competitive behaviour are long standing. At the material time they were contained in Articles 81-83 of the Treaty of Rome (formerly Articles 85-86). Although those articles have now been replaced by Articles 101 and 102 of the Treaty on the Functioning of the European Union (the Treaty of Lisbon), we refer throughout, for ease of exposition, to Articles 81-83.

[4]Article 81(1) and (2) provide:

“(1) The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market and in particular those which: (a) directly or indirectly fix purchase or selling prices or any other trading conditions; (b) limit or control production, markets, technical information or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. (2) Any agreements or decisions prohibited pursuant to this Article shall be automatically void”

[5]Article 81(3) provides for exemptions. An agreement etc which would otherwise infringe Article 81(1) may be permitted if it satisfies certain conditions. We need not set out the conditions for exemption, which are detailed. Broadly, exemption may apply if the agreement etc improves production, distribution or technical/economic progress, does not go further than necessary, and, crucially, benefits consumers.

[6]Article 82, not in question here, prohibits the different anti-competitive practices which may result from abuse of a dominant economic position, whether by a single undertaking or a combination of more than one.

[7]Article 83 then creates a rule-making power to deal with implementation. So far as material, it provides:

“(1) The appropriate regulations or directives to give effect to the principles set out in Articles 81 and 82 shall be laid down by the Council….. (2) The regulations or directives referred to in paragraph 1 shall be designed in particular: (a) to ensure compliance with the prohibitions laid down in Article 81(1) and in Article 82 by making provision for fines and periodic penalty payments; (b) to lay down detailed rules for the application of Article 81(3)….. ….. (e) to determine the relationship between national laws and the provisions contained in this section or adopted pursuant to this Article.”

[8]The current Regulation made under Article 83 is Council Regulation (EC) No 1/2003 (known as the ‘Modernisation Regulation’). It superseded Regulation 17/1962. It is necessary to refer in detail only to some parts of the Modernisation Regulation. Articles 3, 5 and 6 provide, so far as material, as follows: “3(1) Where the competition authorities of the Member States or national courts apply national competition law to agreements, decisions by associations of undertakings or concerted practices within the meaning of Article 81(1) of the treaty which may affect trade between Member States within the meaning of that provision, they shall also apply Article 81 of the Treaty… [and there follows an equivalent provision for cases within Article 82]. (2) The application of national competition law may not lead to the prohibition of agreements, decisions by associations of undertakings or concerted practices which may affect trade between Member States but which do not restrict competition within the meaning of Article 81 of the Treaty, or which fulfil the conditions of Article 81(3) of the Treaty or which are covered by a Regulation for the application of Article 81(3) of the Treaty. Member States shall not under this Regulation be precluded from adopting and applying on their territory stricter national laws which prohibit or sanction unilateral conduct engaged in by undertakings. (3) Without prejudice to general principles and other provisions of Community law, paragraphs 1 and 2 do not apply when the competition authorities and the courts of the Member States apply national merger control laws nor do they preclude the application of provisions of national law that predominantly pursue an objective different from that pursued by Articles 81 and 82 of the Treaty. 5. The competition authorities of the Member States shall have the power to apply Articles 81 and 82 of the Treaty in individual cases. For this purpose, acting on their own initiative or on a complaint, they may take the following decisions: - requiring that an infringement be brought to an end, - ordering interim measures, - accepting commitments, - imposing fines, periodic penalty payments or any other penalty provided for in their national law. … 6. National courts shall have the power to apply Articles 81 and 82 of the Treaty.

[9]Chapters III (Articles 7 to 10) and IV (Articles 11 to 16) then provide for parallel application of Articles 81 and 82 by the Commission centrally and national competition authorities locally.

[10]It is plain from the recitals to the Regulation, and is not in question before us, that a principal purpose of the Modernisation Regulation was to devolve part of the responsibility for determining exemptions under Article 81(3) away from the Commission, which previously had sole jurisdiction under EC 17/1962, towards national competition authorities: see in particular Recitals 2, 3 and 4. Recital 4 is as follows:

“The present system should therefore be replaced by a directly applicable exception system in which the competition authorities and courts of the Member states have the power to apply not only Article 81 and 28 of the Treaty, which have direct applicability by virtue of the case-law of the Court of Justice of the European Communities, but also article 81(3) of the Treaty.”

That, as we have seen, is accomplished by the Regulation. However, the Commission is provided by it with a power to call in and take over any particular case being dealt with by a national competition authority.

[11]Accordingly, Chapter III deals with proceedings by the Commission to apply and enforce Articles 81 and 82, including the determination of exemptions under Article 81(3), whilst Chapter IV deals with co-operation between the Commission and national authorities. Within the latter chapter appears Article 11, which contains the power of the Commission to call in a case. Article 11 provides, so far as material:

“11(1) The Commission and the competition authorities of the Member States shall apply the Community competition rules in close co-operation. …… (6) The initiation by the Commission of proceedings for the adoption of a decision under Chapter III shall relieve the competition authorities of the Member States of their competence to apply Articles 81 and 82 of the Treaty. If a competition authority of a Member State is already acting on a case, the Commission shall only initiate proceedings after consulting with that national competition authority.”

[12]Article 35 deals with the designation by States of their national competition authorities for the purposes of the foregoing provisions. So far as material it provides:

“35(1) The Member States shall designate the competition authority or authorities responsible for the application of Articles 81 and 82 of the Treaty in such a way that the provisions of this regulation are effectively complied with. … The authorities designated may include courts.” (2) When enforcement of Community competition law is entrusted to national administrative and judicial authorities, the Member States may allocate different powers and functions to those different national authorities, whether administrative or judicial. (3) The effects of Article 11(6) apply to the authorities designated by Member States including courts that exercise functions regarding the preparation and the adoption of the types of decisions foreseen in Article 5. The effects of article 11(6) do not extend to courts insofar as they act as review courts in respect of the types of decision foreseen in Article 5. (4) Notwithstanding paragraph 3, in the Member States where, for the adoption of certain types of decision foreseen in Article 5, an authority brings an action before a judicial authority that is separate and different from the prosecuting authority and provided that the terms of this paragraph are complied with, the effects of Article 11(6) shall be limited to the authority prosecuting the case which shall withdraw its claim before the judicial authority when the Commission opens proceedings and this withdrawal shall bring the national proceedings effectively to an end.”

It is common ground that the relevant national competition authority nominated by the UK under Article 35 is the Office of Fair Trading (“OFT”); utility regulators are also designated in respect of their areas of responsibility.

Section 2 Competition Act 1998

[13]By section 2 Competition Act 1998 the United Kingdom enacted provisions modelled on, and broadly equivalent to, Article 81(1) for agreements (etc) which have effect within the jurisdiction of the UK. The agreements to which it applies are rendered unlawful and void, but they are not criminalised. The Act contains provision for exemption broadly comparable to that found in Article 81(3).

Part 6, Enterprise Act 2002

[14]Section 188 creates a new criminal offence (“the cartel offence”). It can be committed by individuals only and not by undertakings, but the acts criminalised are things done by individuals in relation to undertakings. So far as material, the section provides:

“(1) An individual is guilty of an offence if he dishonestly agrees with one or more other persons to make or implement…arrangements of the following kind relating to at least two undertakings (A and B). (2) The arrangements must be ones which, if operating as the parties to the agreement intend, would – (a) directly or indirectly fix a price for the supply by A in the UK (otherwise than to B)of a product or service, (b) limit or prevent supply by A in the United Kingdom of a product, (c) limit or prevent production by A in the United Kingdom or of a product, (d) divide between A and B the supply in the United Kingdom of a product or service to a customer or customers, (e) divide between A and B customers for the supply in the United Kingdom of a product or service, or (f) be bid rigging arrangements.” (3) Unless [exceptions provided for]……the arrangements must also be ones which if operating as the parties to the agreement intend, would – (a) directly or indirectly fix a price for the supply by B in the UK (otherwise than to A) of a product or service. …..”

[15]It should be noted that the arrangements caught by section 188(2) and (3) are within but narrower in scope than those caught by Article 81. They broadly mirror the specific examples of anti-competitive behaviour proscribed by Article 81(1) (a) to (c), appear not to cover those proscribed by subparagraphs (d) and (e) but in any event are not as extensive as the general prohibition in the Article on agreements (etc) “which have as their object or effect the prevention, restriction or distortion of competition”. Bid rigging, which appears specifically in section 188(2)(f), is not separately identified in Article 81(1) but is likely, as it seems to us, to be within that general prohibition.

[16]By section 190(1) the penalty is a maximum of five years imprisonment on conviction on indictment, together with an unlimited fine. By section 190(2) a prosecution may be brought only either by the Director of the Serious Fraud Office or by or with the consent of the OFT.

[17]Although enacted in 2002, this provision was not brought into force until the Modernisation Regulation, which had been some time in preparation, became effective.

[18]This cartel offence may of course be committed in relation to an agreement (etc) which has no European dimension at all. That might be true if, for example, the trade concerned were confined to English shores, or related exclusively to business done between England/Wales and a country which is not a member of the EU. In such cases, the Treaty of the EC, and the Modernisation Regulation made under it, would not always be engaged, although the parallel provisions of s 2 Competition Act would. In the present case, however, it is common ground that the cartel agreement which the defendants are alleged to have agreed to cause their company and the other company to make was one which could affect trade within the EU: thus this case does have a European dimension.

The arguments

[19]For the appellant Mr Purnell QC submits, as he submitted below, that the Crown Court has no jurisdiction to try any offence charged under section 188 which has a European dimension. That, he says, is because the Crown Court is not a national competition authority designated under Article 35 of the Modernisation Regulation (EC 1/2003). He suggests that that conclusion is arrived at by the following route: i) the conduct alleged in the offence charged involves the appellant agreeing to cause to be made between his company and another company a price fixing agreement which would appear to engage Article 81(1)(a) of the Treaty; ii) the section 188 offence is a “national competition law” within the meaning of the Modernisation Regulation: see in particular Article 3; that is so, he contends, because its predominant objective is the same as that pursued by Articles 81 and 82 of the Treaty, namely the prevention of anti-competitive practices; he relies upon the closing words of Article 3(3) of the Modernisation Regulation (“nor do they preclude….”) as an indication of the scope of the expression “national competition law”; iii) the combined effect of Articles 3, 5 and 35 of the Modernisation Regulation is that only a designated national competition authority has the power to impose a fine or other penalty, but the Crown Court is not a designated competition authority.

[20]For the Crown, Mr Turner QC submits that this analysis is wrong for two reasons. First, he says that section 188 is not a “national competition law” within the meaning of the Modernisation Regulation. Second, he says that even if it is, there is nothing in the Regulation to prevent national courts from applying it, whether designated under Article 35 or not. He further contends that section 188 is aimed not at an infringement of Article 81 or 82, but at dishonesty. He relies upon the decision of this court in R v GG

[2007] EWCA Crim 2659

. In essence, he says that the Modernisation Regulation is targeted upon decisions which directly rule upon the validity of agreements (etc) between undertakings – ie whether or not they infringe Article 81 or 82 of the Treaty; it is only such decisions which are entrusted to national competition authorities.

Discussion

[21]The extensive travaux preparatoires behind section 188, to which Mr Purnell took us, plainly show two things. The first, which he strongly relies upon, is that the creation of the new offence was designed by its framers to strengthen this country’s armoury against anti-competitive practices. The second is that the Government believed that it was framing a law which was(a) independent of the enforcement of Articles 81 and 82 but

(b) ought not to catch conduct where the agreement (etc) between undertakings which was its aim would fail to infringe one or other of those articles. As to the first, the travaux are of course admissible to demonstrate the mischief in contemplation. As to the second, they are of very limited help in construing the domestic legislation, never mind the European legislation; the question is whether the framers of the Act achieved their goal.

[22]There is not the slightest doubt that what motivated the framers of section 188 was a desire to strengthen English law against anti-competitive behaviour. That ultimate purpose is transparently demonstrated by numerous statements made before and at the time of its creation. The White Paper which preceded the Enterprise Act was entitled “A World Class Competition Regime”. In its foreword, the Secretary of State made special mention of the proposal to introduce strong deterrents to anti-competitive behaviour by introducing a new criminal offence for individuals engaged in cartels. The Paper’s summary referred explicitly to the intention that the OFT should be able to bring a criminal case against an individual whenever a cartel is implemented in the UK, including those where the case against the undertaking is pursued by the European Commission. Subsequently the OFT commissioned a report (‘Proposed criminalisation of cartels in the UK’, Hammond and Penrose, November 2001). That report, which was substantially accepted by the Government, discussed in detail the inter-relationship between the proposed new criminal offence, which became section 188, and the civil liability of the undertakings under European law, viz Articles 81 and 82. It clearly envisaged that both procedures were likely to arise in relation to the same cartel agreement. An example of the connection between the two processes is provided by what is referred to as the ‘leniency policy’ operated by the OFT. That Office has power to grant immunity from civil penalty for infringement of Articles 81 or 82 and uses it to encourage early revelation of such activity. It has very largely transposed that leniency policy to criminal prosecutions under section 188, albeit with slight modifications, and section 190(4) explicitly contemplates this course by giving the OFT a statutory power to grant such immunity.

[23]Accordingly we are entirely satisfied that in a broad sense the offence created by section 188 is one arrow in the UK legislative quiver designed to prevent anti-competitive practices, and in particular those which infringe Articles 81 or 82 of the Treaty. There is no doubt whatever that it was created because it was thought to provide a stronger deterrent to such practices to threaten executives with imprisonment than was achieved by threatening undertakings with civil financial penalties, heavy as the latter may often be.

[24]That, however, does not conclude the question whether for the purposes of the Modernisation Regulation section 188 is part of what that Regulation calls “national competition law”. Nor, if it is correctly so described, does it conclude the question whether the effect of the Regulation is that only the OFT can impose a sanction for such an offence.

[25]Much of the debate before us centred on the role of the element of dishonesty in the section 188 offence together with Mr Turner’s contentions that its presence concludes the vital question in his favour and that such was decided by R v GG. We do not agree that R v GG goes so far. In that case the defendants were charged with conspiracy to defraud. The allegations against them included several of deception. True, the context was a price-fixing arrangement, but the essence of the crime alleged was not price fixing but a conspiracy to defraud associated with it. The decision of this court was, inter alia, that there was nothing in either the common law or the Modernisation Regulation which precluded the possibility that the well established offence of conspiracy to defraud might be committed in the course of making a price fixing arrangement. As to the common law, this court held that the fact that a price fixing arrangement was (then) not criminal per se did not mean that in the course of it a crime such as conspiracy to defraud might not be committed. In that, this court acted consistently with what the House of Lords later decided in Norris v Government of the USA

[2008] UKHL 16

; [2008 1 AC 920 – see in particular paragraphs 17, 19, 49 and 63 of the latter decision. [Insofar as this court in GG may have treated mere secrecy of cartel arrangements, without deception or other fraud, as sufficiently establishing conspiracy to defraud, it was corrected by Norris – see paragraphs 59-63.] As to the Modernisation Regulation, this court similarly decided that Article 3 had no impact on a prosecution for an established criminal offence – there conspiracy to defraud - and that the fact that the offence was alleged to have taken place in the course of a price fixing arrangement did not mean otherwise. Moses LJ said this at paragraph 80:

“Even if it be assumed that the agreements and arrangements, the subject matter of the indictment, have a potential or actual effect on inter-state trade, and thus fall within the scope of Art 81, the Serious Fraud Office and the Crown Court are not seeking to apply competition rules at all. Both the eighth recital and Art 3.3 merely reaffirm that which is plain from the whole of Regulation 1, namely that it has no application to laws other than those which constitute the rules of competition within the Community. ”

With that we respectfully agree. But to say that a conspiracy to defraud which is an incident of a price-fixing arrangement is not part of competition rules or law does not answer the question whether the section 188 offence is, and this court was not there concerned with section 188. Unlike conspiracy to defraud, the section 188 offence is plainly targeted at anti-competitive behaviour.

[26]Insofar as it was suggested on behalf of the Crown that the section 188 offence is not part of national competition law because it contains the requirement of dishonesty, we do not agree. The section 188 offence does not criminalise dishonesty in the abstract, or in a vacuum. It makes it a criminal offence for an individual to agree to do something which will involve undertakings in some (but not all) anti-competitive behaviour, where, additionally, such an individual has behaved dishonestly. Mr Purnell aptly described it as making criminal a subset of anti-competitive behaviour by an individual, namely where(i) the arrangement if made will be within the restricted definitions of section 188(2) and

(ii) the individual is dishonest.

[27]That does not mean that the presence in section 188 of the requirement of dishonesty is unimportant. On the contrary, it is plainly very significant. It is clear law that an infringement of Articles 81 or 82, including via an agreement within section 188(2) could easily occur without any hint of dishonesty. Whether the conduct of an individual will be regarded as dishonest is a matter of fact in each case and there is no occasion for us to attempt to anticipate that question either in this case or generally. In particular, dealing as we are with an interlocutory appeal where no evidence has yet been given, let alone facts established, we express no opinion as to the extent to which a defendant may or may not contend that he was not dishonest because any arrangement to which he was a party had, or was believed to have, public benefit. Nor do we attempt to foresee what is likely to be the impact of deliberate secrecy upon any such assertion.

[28]We come to the expression “national competition law” as used in Article 3 of the Modernisation Regulation. It is noticeable that in a Regulation dealing very largely with the relationship between Community and national enforcement this expression appears only rarely. Apart from Article 3, it appears in the body of the Regulation only in Article 12(2) in the context of the exchange of information between the Commission and national competition authorities. In the recitals, it appears in 8 and 16, which are related, respectively, to Articles 3 and 12. Elsewhere in the Regulation what is referred to is national competition authorities ‘applying Articles 81 or 82’, or cognate expressions.

[29]The Crown relies upon the terms of Recital 8, and in particular upon its concluding sentence. Recital 8 largely foreshadows the substantive legislation in Article 3, and to that extent need not be repeated. The concluding sentence of Recital 8 is, however, not directly repeated in Article 3. After dealing with the freedom of national laws to impose rules stricter than those of the Community on unilateral conduct by undertakings (which would be outwith section 188), the last sentence reads:

“Furthermore this Regulation does not apply to national laws which impose criminal sanctions on natural persons except to the extent that such sanctions are the means whereby competition rules applying to undertakings are enforced.”

We were told that in other language texts ‘the means’ appears as ‘a means’. The Crown does not ask us to attach importance to the use of the definite article in the English text.

[30]It may or may not have been thought in some circles that this sentence demonstrates that a national law such as section 188 is outside the scope of the Modernisation Regulation. Taken by itself, however, its meaning seems to us to be obscure. It begs the question whether section 188, which is transparently a new law designed to strengthen local prevention of anti-competitive behaviour, is a means of enforcing competition rules applying to undertakings or an ancillary law which bolsters the effectiveness of competition rules but is not concerned with directly enforcing them against undertakings. In order to answer that question it is necessary to read the Modernisation Regulation as a whole.

[31]It is certainly true that the Modernisation Regulation can be seen to contemplate that the national law of a Member State may include imprisonment of individuals amongst its sanctions for an infringement of Article 81 or 82. That appears from Article 12(3), which is concerned with the exchange of information and limits its use where custody is in question to exchange between systems both of which would invoke such a sanction. But once again that does not conclude the issue which we must decide. An individual may be an undertaking and some systems of law may provide for imprisonment for infringement of Articles 81 or 82. Alternatively some systems may provide for implicated individuals to be open to imprisonment as part of the process of ruling upon the invalidity under those Articles of an agreement (etc) made by an undertaking.

[32]Mr Purnell’s argument that the section 188 offence is part of national competition law for the purposes of the Modernisation Regulation rests substantially on the proposition that it has to be in order to achieve consistency between Articles 81/82 and the domestic offence. Critically he points to Article 11, and to its provisions for co-operative and consistent application of Articles 81/82 as between the Commission and national authorities. In particular he relies upon the power of the Commission under Article 11(6) to call in a case, which power, he contends, is plainly present in order to achieve consistency. These provisions for achieving consistency of operation would fail, he contends, unless the power to apply competition law is confined to the designated national competition authorities, which are bound by the co-operation provisions in chapter IV and which are susceptible to the power of call-in. Whilst this prosecution is undertaken by the OFT, the Enterprise Act provides in section 190(2) that the Serious Fraud Office has equal power to prosecute. A prosecution undertaken by the Serious Fraud Office would not be susceptible to these provisions. There might also be difficulties in applying them to a prosecution undertaken by the OFT, notwithstanding Article 35(4).

[33]That argument, however, assumes what it seeks to prove. It is only if the section 188 offence is indeed a part of the national law by which Articles 81/82 are applied and enforced that there is any need for the co-operation provisions of Chapter IV to be applicable to it. The contrary argument of the Crown is that the section 188 offence is ancillary to the provisions of Articles 81/82 and supports competition law as a whole, but is not a/the means by which those provisions are directly enforced against undertakings.

[34]When one reads the Modernisation Regulation as a whole, it is plain that it is concerned with the direct enforcement of Articles 81 and 82, that is to say with decisions whether agreements (etc) are valid or rendered invalid for infringement of those articles. The concern of the EU, plainly and understandably, is with avoiding the risk of ‘limping’ agreements, which are enforceable in one jurisdiction and not in another, and with ensuring that the same standards are applied throughout Member States to the question whether there has or has not been an infringement. Such decisions may arise in the course of regulatory enforcement proceedings, or perhaps during civil proceedings between companies. But such a decision is not involved in a prosecution under section 188, although the state of mind of a defendant about the validity or otherwise of an arrangement might be.

[35]For the same reason, we do not agree with that part of Mr Purnell’s second proposition (paragraph 19(ii) above) that the test for what is “national competition law” is as broad as whether the law in question pursues the objective of preventing anti-competitive practices. The relevant objective is applying Articles 81 and 82, that is to say deciding whether there has or has not been an infringement of them.

[36]The risk of any inconsistency arising between a prosecution under section 188 and a decision on the validity of an agreement (etc) under Article 81/82 is likely to be small. First, in practice a prosecution under section 188 is unlikely without there being parallel regulatory proceedings against the undertaking(s), as there are in the present case. Second, it is very probable that an arrangement within section 188(2) would be regarded in European terms as an ‘object-based’ infringement, that is (broadly speaking) to say that the agreement is per se contrary to Article 81 (see for example Consten and Grundig v Commission [1966] ECR 299). Third, and vitally, Articles 81 and 82 are directly effective in English law, independently of the Modernisation Regulation, under decisions of the Court of Justice. To the extent that any residual risk remains, however, that is not, for the reasons we have given, the concern of the co-operation provisions of the Modernisation Regulation. It may fall for consideration in the criminal courts of England and Wales on a case by case basis, but we abstain for the reasons given from attempting any anticipatory ruling in relation to that matter.

[37]For these reasons we conclude that section 188 Enterprise Act 2002 is not within the expression “national competition law” in the particular sense in which that expression is used within the Modernisation Regulation.

[38]If we are wrong about that, we nevertheless see no basis for saying that the Modernisation Regulation, whether by Articles 3, 5, 35 or otherwise, makes the punishment of an offence which amounts to part of a national competition law the exclusive province of the designated national competition authority. None of those Articles says so. Article 3 merely says that where national competition authorities apply local law to agreements (etc) they shall apply Articles 81 and 82. Article 5 is similar. Article 35 enables States to designate an authority having the power to “apply Articles 81 and 82”. This Regulation is directly effective in local law. It makes excellent sense for it to enable States to provide for the making of decisions whether there has or has not been an infringement of Articles 81 and 82 without the necessity for domestic legislation. None of these Articles say anything at all about what may be done to give effect to local laws which are not concerned with decisions whether there has or has not been an infringement of Articles 81 and 82. If, therefore, section 188 is properly to be described as part of “national competition law” for the purposes of the Modernisation Regulation, it is a part of it which is not concerned with decisions on the validity of agreements (etc) and whether there has or has not been an infringement of Articles 81 and 82; it is not concerned with directly applying those Articles. In those circumstances, for all the reasons which we have given, we do not think such part of the law is subject to the call-in powers of the Commission.

[39]For those reasons we are satisfied that Owen J reached the correct conclusion on the preliminary issue of jurisdiction and this appeal against his ruling must be dismissed.