1. Facts
On 22 July 2010, the Luxembourg Competition Inspectorate ("Inspection de la concurrence")1 addressed to two Luxembourg notaries public a decision with a request for information within the meaning of Article 13(3) of the 2004 Competition Act ("loi du 17 mai 2004 relative à la concurrence "). Addressees of such request must provide the requested information. If not, fines can be imposed.
The Competition Inspectorate's request was made on a cooperation request of the Hungarian competition authority2. The latter needed information from the two Luxembourg notaries public in the framework of a cartel investigation on bid rigging practices in the Hungarian public transport sector.
The two notaries public challenged the request decision of the Luxembourg Competition Inspection before the Luxembourg Administrative Court of First Instance ("Tribunal administratif"). They argued that they were not to be considered as "undertakings" within the meaning of competition law so that such a request could not be addressed to them. Furthermore, they argued that the request of the Luxembourg Competition Inspection was in violation with the professional secrecy of notaries public in Luxembourg.
2. Judgment
The Luxembourg Administrative Court of First Instance considered in its two judgments of 5 October 2011 in the cases n° 27379 and n° 27389 that a decision with a request for information within the meaning of Article 13(3) of the 2004 Competition Act3 can only be addressed to undertakings or associations of undertakings.
The court further held that a notary public qualifies as an "undertaking" within the meaning of the 2004 Competition Act, i.e., "any entity engaged in an economic activity"4. It did so under reference to the preparatory works preceding the adoption of the 2004 Competition Act according to which a liberal profession also constitutes in principle an "undertaking". Turning more particularly to notaries public, the administrative court of first instance followed the reasoning of the European Court of Justice ("ECJ") in its judgment of 24 May 2011 in case C-51/08 Commission v. Luxembourg. In this case the ECJ did not accept that notarial activities in Luxembourg are related to the exercise of official authority: "[Luxembourg] notaries practise their profession, [...], in conditions of competition, which is not characteristic of the exercise of official authority". Therefore, the qualification of the notaries public as "undertakings" could not be excluded on "official authority" related grounds.
With respect to the notaries public's defence that the request of the Competition Inspection violates their professional secrecy, the Administrative Court of First Instance held that some information communicated to notaries public might be covered by Article 458 of the Luxembourg Criminal code, which lays down the principle of professional secrecy for all professions that imply the communication of secrets. Indeed, in the case at hand, the request for information addressed to the two notaries public concerned the beneficial ownership of companies that were established before them. This principle can only be derogated from if the notaries public had to be a witness in a court procedure, which was not the case here or if an explicit exception had been foreseen by law. The simple fact that Article 13 of the 2004 Competition Act allows the Competition Inspectorate to request for information and that Article 27 of the said Act allows the Competition Inspection to communicate information to the competition authorities of other EU Member State does not constitute an explicit exception to the professional secrecy of notaries public.
3. Comments
Given the judgment of the ECJ in the case C-51/08 Commission v. Luxembourg, the qualification of a notary public as "undertaking" by the Luxembourg administrative court of first instance is not surprising. This is also fully in line with the European Commission's 2004 Report on Competition in Professional Services5
The decision that the professional secrecy of notaries public is an obstacle to a request for information of the Competition Inspectorate is unlikely to be a precedent for some of the other professions that are covered by professional secrecy obligations, such as bankers and accountants, because the laws organising the professions covered by such obligations (see e.g., the 1993 Act on the financial sector or the 2009 on auditing activities) explicitly foresee that the professional secrecy obligations stemming from Article 458 of the Luxembourg Criminal code do not apply "where disclosure of information is authorised or required by or pursuant to any legislative provision ". Other professional secrecy obligations are considered to be absolute by the legal orders of most EU member states and could therefore probably not be set aside by an information injunction of the Luxembourg competition authorities: traditionally those are not only limited to notaries, but also concern medical practitioners, lawyers registered at a bar and clergymen.
Footnotes
1. The Competition Inspectorate is a service within the Ministry of Economic Affairs in charge for the investigation of competition cases in Luxembourg. As from 1 February 2011, the Competition Inspectorate will be integrated in the Competition Council. Until now, the latter can only decide a case when the Competition Inspectorate has finalised its investigation.
2. Within the meaning of Article 22 of Regulation (EC) 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJEU L 001 of 04/01/2003, p. 1 - 25).
3. The 2004 Competition Act has been replaced be the 2011 Competition Act of 23 October 2011, which enters into force on 1 February 2012.
4. Under reference to ECJ, Case C-244/94, Fédération française des sociétés d'assurance et autres / Ministre de l'agriculture [1995] ECR I-4013.
5. COM(2004) 83 final.
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