Amsterdam 29 January 2015 Information exchange under Article 101 TFEU Article 101 TFEU Agreements Concerted practices Decisions of association of undertakings By object By effect 2 Concerted practices ID: 190646
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Slide1
Cyril Ritter, DG COMP, Unit A1Amsterdam, 29 January 2015
Information
exchange
under Article 101 TFEUSlide2
Article 101 TFEUAgreements
Concerted practices
Decisions of association of undertakingsBy objectBy effect
2Slide3
Concerted practicesType 1 (e.g.
Polypropylene
)Evidence of communication (intelligent adaptation = OK)N
o evidence of conduct
Legal test:"Influence or disclose" (Sugar)"Substantially reduce uncertainty" (Cement)Anic presumption (never rebutted so far; see Solvay)Information presumed taken into accountCausal link presumedType 2 (e.g. Woodpulp)No evidence of communicationEvidence of conduct"No other plausible explanation"
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Type 1 concerted practices(i.e. evidence of
communication)
Key definitions in the case-law:
Dyestuffs
para 64: "coordination which, without having reached the stage where an agreement properly so-called has been concluded, knowingly substitutes practical cooperation between them for the risks of competition"Sugar para 174: Article 101 "strictly precludes any direct or indirect contact between such operators, the object or effect whereof is either to influence the conduct on the market of an actual or potential competitor or to disclose to such a competitor the course of conduct which they themselves have decided to adopt or contemplate adopting on the market"Polypropylene (Anic) paras 118-121: "a concerted practice implies, besides undertakings' concerting together, conduct on the market pursuant to those collusive practices, and a relationship of cause and effect between the two. … Subject to proof to the contrary, which it is for the economic operators concerned to adduce, there must be a presumption that the undertakings participating in concerting arrangements and remaining active on the market take account of the information exchanged with their competitors when determining their conduct on that market, particularly when they concert together on a regular basis over a long period …""Removing uncertainty", "lessening uncertainty", "reducing uncertainty", "substantially reducing uncer-tainty": Woodpulp para 64;
John Deere
para 90; Cement para 1852; Asnef para 51; T-Mobile para 35
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Type 2 concerted practices(evidence of conduct/"only plausible explanation")
Key definitions in the case-law:
Dyestuffs
paras 65-66: "By its very nature, then, a concerted practice does not have all the elements of a contract but may inter alia arise out of coordination which becomes apparent from the behaviour of the participants. Although parallel behaviour may not by itself be identified with a concerted practice, it may however amount to strong evidence of such a practice if it leads to conditions of competition which do not correspond to the normal conditions of the market …"Sugar para 301: "it is necessary to consider whether the conduct which the Commission alleges … can only reasonably be explained by the existence of a concerted action"CRAM and Rheinzink para 16: "it is sufficient for the applicants to prove circumstances which cast the facts established by the Commission in a different light and which thus allow another explanation of the facts to be substituted for the one adopted by the contested decision"Tournier para 24: a concerted practice "cannot be presumed where the parallel behaviour can be accounted for by reasons other than the existence of concerted action"Woodpulp
para 71:
"parallel conduct cannot be regarded as furnishing proof of concertation unless concertation constitutes the only plausible explanation for such conduct"
CISAC
para 161: the Commission has the burden of showing that the adduced explanation is implausible
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Case study on both types of CPs: Woodpulp
There were
two aspects in WoodpulpType 1 CP, i.e.
e
vidence of communicationCommission's theory of harm: signalling through the pressAnnulled because not through the press, only to customersParas. 64 together with 87Type 2 CP, i.e. evidence of conductCommission's TOH: "no other plausible explanation"Annulled because there was another plausible explanationPara. 1266Slide7
Type 1 concerted practices(i.e. evidence of communication
): key factors
Nature of the information"Commercially sensitive" = significant enough?Public/non-public (see TACA
,
John Deere, but HG paras. 92-93)About the past/about the futureStructured (very few EU cases)/unstructuredPublic/private exchangeOne-way/two-way (Cement, Tate & Lyle, T-Mobile)Standalone/in combination with other conductBy object/by effectCartel?7Slide8
Example #1: John Deere (1998)
Commercially sensitive information about the past
StructuredPrivateStandalone
By effect
Market characteristicsCharacteristics of the information:agefrequencylevel of aggregationNot a cartel8Slide9
Example #2: T-Mobile (2009)
Commercially sensitive information about the
futureUnstructuredPrivateStandalone
By object
One meeting enoughOne-way communication enoughWhat's the difference with a cartel? Not much9Slide10
Example #3: Bananas (2013)
Commercially sensitive information
mostly about the future
n
ot publicUnstructured, private, standaloneBy object, regardless ofRegulatory frameworkMarket structureCartel: yes!Leniency10Slide11
Example #4: Signalling
Unstructured,
standaloneAdvance price announcementsNot firm/not immediate
Public exchange, i.e. customers get the info as well
Assessment:Not an "only plausible explanation" caseBy object? Horizontal guidelines paras. 63 and 74Intentions?Distancing?Article 101(3) benefits?Precedents: ATP (FTC 1993), Mobiles (ACM 2014)11Slide12
Example #5: Hub and spokeInformation goes from A to B to C
With vertical element or not – makes a difference
Examples:EU cases: E-books,
Bananas
UK cases: Dairy, Replica kit, Hasbro Toys, Private SchoolsDifferent approaches:check "state of mind" and "use of the information" as in the UK case-lawapply the standard case-law on "single and continuous infringement" ("awareness")Apply the AC Treuhand case-law12Slide13
Key sourcesHorizontal Guidelines 2010
Maritime Guidelines (2008-2013)
OECD paper on unilateral announcements (2012)OECD paper on information exchange (2010)
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Questions?
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Backup slides
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Concerted practices: several cycles over the last 40 years
1970s
/early 1980s: weak investigative tools, several CP cases (Dyestuffs, Sugar, Zinc,
Woodpulp
)1980s/early 2000s: better investigative tools, more straightforward "agreement" cases (starting with PVC, LDPE, PP, etc, and even more so from the 1996 Leniency Notice)Early 2000s until now: trend towards less straightforward collusion, i.e. more CP cases (Water management products, Bananas, Container shipping, and more)16Slide17
Concerted practices
compared to agreements
CPs and agreements are similar:
object/effect
vertical/horizontal101(3)"Agreements and CPs "are intended to catch forms of collusion having the same nature and are only distinguishable from each other by their intensity and the forms in which they manifest themselves". Is that really true?CPs and agreements are different:101(2)standard
of proof
the Anic presumption is rebuttable
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Concerted practices = cartels?
The
"cartel" label has serious consequences
No
Article 9Immunity/leniencySettlementProcedural consequences (see Best Practices)Only some CPs are cartels: i.e. only ifHorizontalBy objectSecret
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