Case C‑27/22

Volkswagen Group Italia SpA
and
Volkswagen Aktiengesellschaft

v

Autorità Garante della Concorrenza e del Mercato

(Request for a preliminary ruling from the Consiglio di Stato)

Judgment of the Court (First Chamber), 14 September 2023

(Reference for a preliminary ruling – Article 50 of the Charter of Fundamental Rights of the European Union – Principle ne bis in idem – Penalty imposed concerning unfair commercial practices – Criminal nature of the penalty – Criminal penalty imposed in a Member State after the adoption of a penalty concerning unfair commercial practices in another Member State but which became final before the latter penalty – Article 52(1) – Limitations to the principle ne bis in idem – Conditions – Coordination of proceedings and penalties)

1. Fundamental rights – Principle ne bis in idem – Conditions under which applicable – Duplication of proceedings and penalties of a criminal nature – Criteria for assessment of the criminal nature – Legal classification of the offence under national law, nature of the offence and degree of severity of the penalty incurred – Application to an administrative fine imposed by a national authority for unfair commercial practices – Conditions – Pursuit of a punitive purpose and high degree of severity

   (Charter of Fundamental Rights of the European Union, Art. 50)

   (see paragraphs 44-46, 48, 53-55, operative part 1)

2. Fundamental rights – Principle ne bis in idem – Limitation – Legal person convicted in criminal proceedings in a Member State – National legislation of another Member State allowing a fine of a criminal nature imposed on the same person in respect of the same facts to be maintained – Unlawful – Conviction in question subsequent to the date of the decision imposing that fine but became final before the judgment in the judicial proceedings brought against that decision acquired the force of res judicata – Irrelevant

   (Charter of Fundamental Rights of the European Union, Art. 50)

   (see paragraphs 57-59, 63, 64, 66, 67, 76, 77, operative part 2)

3. Fundamental rights – Charter of Fundamental Rights – Limitation on the exercise of the rights and freedoms enshrined in the Charter – Limitation of the principle ne bis in idem – Conditions – Respect for the essence of that principle – Assessment

   (Charter of Fundamental Rights of the European Union, Arts 50 and 52)

   (see paragraph 90)

4. Fundamental rights – Charter of Fundamental Rights – Limitation on the exercise of the rights and freedoms enshrined in the Charter – Limitation of the principle ne bis in idem – Conditions – Pursuit of an objective of general interest – Duplication of proceedings and penalties under the law on administrative offences and consumer law – Legislation pursuing distinct legitimate objectives

   (Charter of Fundamental Rights of the European Union, Arts 50 and 52(1))

   (see paragraphs 91, 92)

5. Fundamental rights – Charter of Fundamental Rights – Limitation on the exercise of the rights and freedoms enshrined in the Charter – Limitation of the principle ne bis in idem – Conditions – Observance of the principle of proportionality – Duplication of proceedings and penalties under the law on administrative offences and consumer law – Whether the duplication of proceedings and penalties is appropriate, not disproportionate and strictly necessary – Assessment – Criteria

   (Charter of Fundamental Rights of the European Union, Arts 50 and 52(1))

   (see paragraphs 93-96, 103, 104, 106, operative part 3)

Résumé

In August 2016, the Italian competition authority imposed a fine of EUR 5 million on Volkswagen Group Italia SpA and Volkswagen Aktiengesellschaft (respectively, ‘VWGI’ and ‘VWAG’) for having implemented unfair commercial practices for the purposes of the Consumer Code. The infringements in question consisted, first, in the marketing in Italy, from 2009, of diesel vehicles equipped with systems intended to distort the measurement of pollutant emissions and, second, in the dissemination of advertising messages which emphasised the compliance of those vehicles with the criteria provided for under environmental legislation. VWGI and VWAG challenged the decision of the Italian competition authority before the Tribunale amministrativo regionale per il Lazio (Regional Administrative Court, Lazio, Italy).

In June 2018, before that court delivered its judgment, the public prosecutor’s office before which the case had been brought in Germany imposed a fine of EUR 1 billion on VWAG, in accordance with the Law on administrative offences. That fine related, inter alia, to the marketing of diesel vehicles equipped with systems intended to distort the measurement of pollutant emissions and the dissemination of advertising messages which emphasised the compliance of those vehicles with the criteria provided for under environmental legislation. The decision of that public prosecutor’s office became final on 13 June 2018, since VWAG waived its right to challenge it and, moreover, paid the fine prescribed therein.

In April 2019, the Regional Administrative Court, Lazio, dismissed the action brought by VWGI and VWAG on the ground, inter alia, that the principle ne bis in idem does not preclude the fine prescribed by the decision of the Italian competition authority from being maintained.

The Consiglio di Stato (Council of State, Italy), before which VWGI and VWAG brought an appeal against that judgment, decided to ask the Court of Justice to clarify the conditions under which, in a situation where there is a duplication of proceedings in which a penalty is imposed in two Member States, conducted by competent authorities in different sectors of activity, limitations may be made to the principle ne bis in idem, as enshrined in Article 50 of the Charter of Fundamental Rights of the European Union (‘the Charter’). ( 1 )

By its judgment, the Court states, first of all, that an administrative fine provided for under national legislation, which is imposed on a company by the competent national consumer protection authority for unfair commercial practices, although classified as an administrative penalty under national legislation, constitutes a criminal penalty, for the purposes of Article 50 of the Charter, where it has a punitive purpose and has a high degree of severity.

Next, the Court states that the principle ne bis in idem enshrined in that provision precludes national legislation which allows a fine of a criminal nature imposed on a legal person for such unfair commercial practices to be maintained where that person has been the subject of a criminal conviction in respect of the same facts in another Member State, even if that conviction is subsequent to the date of the decision imposing that fine but became final before the judgment in the judicial proceedings brought against that decision acquired the force of res judicata.

Lastly, the Court holds that Article 52(1) of the Charter ( 2 ) authorises the limitation of the application of the principle ne bis in idem, enshrined in Article 50 of the Charter, so as to permit a duplication of proceedings or penalties in respect of the same facts, provided that the conditions laid down in Article 52(1) of the Charter, as defined by the case-law, are satisfied. First, such duplication must not represent an excessive burden for the person concerned; second, there must be clear and precise rules making it possible to predict which acts or omissions are liable to be subject to a duplication; and, third, the sets of proceedings in question must have been conducted in a manner that is sufficiently coordinated and within a proximate timeframe.

Findings of the Court

In the first place, as regards the assessment as to whether the proceedings and penalties are criminal in nature, the Court recalls that the principle ne bis in idem, as enshrined in Article 50 of the Charter, prohibits a duplication both of proceedings and of penalties of a criminal nature, for the purposes of that article, for the same acts and against the same person. In order to carry out such an assessment, the Court relies on three relevant criteria derived from the case-law. The first is the legal classification of the offence under national law, the second is the intrinsic nature of the offence, and the third is the degree of severity of the penalty which the person concerned is liable to incur. As regards, in particular, the second criterion, the mere fact that a penalty also pursues a deterrent purpose does not mean that it cannot be characterised as a criminal penalty. It is of the very nature of criminal penalties that they seek both to punish and to deter unlawful conduct. As regards the third criterion, the Court notes that the degree of severity of the measures at issue is determined by reference to the maximum potential penalty for which the relevant provisions provide. Thus, a financial administrative penalty capable of reaching an amount of EUR 5 million has a degree of severity which is liable to support the view that that penalty is criminal in nature.

In the second place, in order to assess whether the Italian legislation at issue is in compliance with the principle ne bis in idem provided for in Article 50 of the Charter, the Court first of all provides clarification regarding the ‘bis’ condition. Thus, in order for a judicial decision to be regarded as having given a final ruling on the facts subject to a second set of proceedings, that decision must not only have become final but must also have been taken after a determination has been made as to the merits of the case. While it is true that the application of the principle ne bis in idem presupposes the existence of a prior final decision, it does not necessarily follow that the subsequent decisions precluded by that principle can only be those which were adopted after that prior final decision. Where a final decision exists, that principle precludes criminal proceedings in respect of the same facts from being initiated or maintained.

Next, as regards the ‘idem’ condition, the Court notes that, for the purposes of assessing the existence of the same offence, the relevant criterion is identity of the material facts, understood as the existence of a set of concrete circumstances which are inextricably linked together and which have resulted in the final acquittal or conviction of the person concerned. By contrast, the legal classification under national law of the facts and the legal interest protected are not relevant, in so far as the protection conferred by Article 50 of the Charter cannot vary from one Member State to another. Furthermore, it is not sufficient that the facts be merely similar, since the principle ne bis in idem may apply only where the facts to which the two sets of proceedings or the two penalties at issue relate are identical, which is a matter for the referring court to assess.

Lastly, as regards the conditions under which limitations on the principle ne bis in idem, enshrined in the Charter, may be justified, the Court notes that, under Article 52(1) of the Charter, such a limitation may be justified in so far as it is provided for by law and respects the essence of Article 50 of the Charter as well as the principle of proportionality. The possibility of a duplication of proceedings and penalties respects the essence of Article 50 of the Charter, provided that the pieces of national legislation concerned do not allow for proceedings and penalties in respect of the same facts on the basis of the same offence or in pursuit of the same objective, but provide only for the possibility of a duplication of proceedings and penalties under different legislation. As for the principle of proportionality, it requires that the duplication of proceedings and penalties provided for by the national legislation does not exceed what is appropriate and necessary in order to attain the objectives legitimately pursued by that legislation, it being understood that, when there is a choice between several appropriate measures, recourse must be had to the least onerous. In that regard, public authorities can legitimately choose complementary legal responses to certain conduct that is harmful to society, provided that the accumulated legal responses do not represent an excessive burden for the person concerned. Consequently, the fact that two sets of proceedings are pursuing distinct objectives of general interest which it is legitimate to protect cumulatively can be taken into account, in an analysis of the proportionality of the duplication of proceedings and penalties, as a factor that would justify that duplication, provided that those proceedings are complementary and that the additional burden which that duplication represents can accordingly be justified by the two objectives pursued. With regard to the strict necessity of the duplication of proceedings and penalties, it is necessary to assess whether there are clear and precise rules making it possible to predict which acts or omissions may be subject to such duplication, and also to predict that there will be coordination between the different authorities, whether the two sets of proceedings have been conducted in a manner that is sufficiently coordinated and within a proximate timeframe and whether any penalty that may have been imposed in the proceedings that were first in time was taken into account in the assessment of the second penalty, meaning that the resulting burden, for the persons concerned, of that duplication is limited to what is strictly necessary and the overall penalties imposed correspond to the seriousness of the offences committed.

( 1 ) Under that provision: ‘No one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law.’

( 2 ) According to that provision: ‘Any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.’