A draft law to empower the Estonian Competition Authority has drawn sharp criticism from business organizations and legal experts. The Justice Ministry has promised to review the law's most problematic aspect of the privilege against self-incrimination.
While Evelin Pärn-Lee, director general of the Competition Authority, believes that the passing of the amendment and adoption of the EU's ECN+ directive has been stuck behind lack of political will and corporate interests in Estonia, legal experts and entrepreneurs say the current form of the law would harm business environment and rule of law.
Allar Jõks, sworn lawyer at law firm Sorainen, agrees that the competition directive needs to be adopted but finds the legal form proposed by the Ministry of Justice to be unsuitable.
"The amendment has taken so long because the Justice Ministry has ignored the opinion of most legal experts and is trying to invent a new type of administrative proceedings instead of using misdemeanor proceedings to investigate competition violations. The bill aims to create a new form of proceedings where administrative process would be used to order considerable fines characteristic of penal law, and where persons would be obligated to produce proof to condemn themselves under pain of fines. There are justified doubts as to whether such proceedings would be constitutional," Jõks said.
"Preferring administrative proceedings over misdemeanor proceedings is justified by suggesting that this makes it easier for officials to process competition violations and punish entrepreneurs. As a result, the bill confuses the constitutional right to refuse giving statements and the duty of cooperating with public investigations," the lawyer added.
"No law should be aimed at making it easier to punish entrepreneurs in a state based on the rule of law. That is why Justice Chancellor Ülle Madise has warned that she may turn to the Supreme Court if a form of proceedings is created where the constitutional safeguards of the privilege against self-discrimination and secrecy of messages are reduced. The fundamental rights committee of the Estonian Bar Association has repeatedly criticized the bill for the same reasons, finding that Estonia cannot create administrative fine proceedings aimed at watering down procedural guarantees meant to protect fundamental rights."
Jõks said that University of Tartu law professors Jaan Ginter and Anneli Soo turned to the ministry again in early June to explain why creating a separate form of proceeding just for competition violations is insensible and might inadvertently lead to unintended future developments.
"Legal experts find it to be unreasonable and uneconomical to use misdemeanor proceedings in certain cases and administrative fine proceedings in others for the purposes of similar punitive measures, whereas the latter should ensure the same procedural guarantees as misdemeanor proceedings. Developing these for the purposes of administrative fine proceedings would require a lot of additional resources that could be put to much better use for achieving other important goals," the Sorainen partner suggested.
Jõks also said that while Justice Ministry officials have claimed they have thoroughly analyzed the pros and cons of continuing to process competition violations in misdemeanor process versus creating a new form of proceedings, this crucial analysis has not been shared with the law community despite promises to do so. "This raises the question of whether the ministry has lied to the legal public," he remarked.
The sworn lawyer stressed that Estonian misdemeanor proceedings have been adjusted to accommodate EU administrative fine regulations. "Therefore, it is possible to make swift progress with amendments to the Competition Act if such violations would continue to be processed as misdemeanors," he said.
Estonia's Chancellor of Justice Ülle Madise has indeed vowed to challenge the law in the Supreme Court should it be passed in its current form.
"The final judgment on whether these provisions are constitutional can only come from the Supreme Court. First, the top court can evaluate whether the directive requires these specific provisions to be adopted in this particular form, for which it can also turn to the European Court of Justice for a preliminary ruling," Madise said.
The justice chancellor added that the Supreme Court can also decide to what extend legal persons could rely on the privilege against self-incrimination, including regarding situations outside the scope of competition regulation, as well as the scope of the right to secrecy of messages, including outside of criminal proceedings.
Madise added that it is regrettable that Estonia has participated in shaping a directive the adoption of which raises such sharp issues in the first place, and that relevant issues should have been resolved during directive negotiations.
Chamber of Commerce: Computers can be confiscated for years
The planned amendments have also angered business organizations in Estonia. For example, the Estonian Chamber of Commerce and Industry is not happy with several aspects of the legislative project.
While the chamber agrees that the creation of an entirely new form of proceedings is the most problematic aspect of the law, another problem is that the bill would authorize the competition watchdog to confiscate all of a company's data carriers that might include information on competition violations.
"What this basically means is that the Competition Authority will be given the right to take away all data carriers belonging to a company, whether we're talking about computers, flash drives or other types of devices. The bill also allows the authority to keep hold of the devices until such time they are no longer needed. This could mean the watchdog confiscating devices for months or even years," Kaspar Jeerup, legal counsel for the chamber, told ERR.
Arto Aas, head of the Estonian Employers Confederation, said that the bill also introduces an extensive cooperation obligation, which, while stopping short of forcing businesses to plead guilty, still constitutes a breach of basic rights. It would make it much easier for the Competition Authority to order hefty fines compared to the current situation, Aas wrote in a letter to the ministry.
Ministry pledges to improve the bill
The Ministry of Justice told ERR that they have consulted with interest groups while working on the bill, including other ministries, business organizations, the justice chancellor, Estonian Bar Association etc. The ministry has used feedback received over the years to improve the bill.
"We are currently processing recent feedback [from May] and staying in touch with the sides to try and solve concerns," said Heddi Lutterus, Ministry of Justice undersecretary for legal policy.
Lutterus said that businesses and lawyers are most concerned about the privilege against self-incrimination. "We will be revising this part of the bill, and it is possible further adjustments are needed there," the undersecretary said.
Editor: Marcus Turovski