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Cooperation with national courts (Antitrust)

Commission observations to National Courts (Amicus curiae observations, Article 15(3))

Pursuant to Article 15(3) of Regulation 1/2003, the Commission, acting on its own initiative, may submit written observations ("amicus curiae" observations) to courts of the Member States where the coherent application of Article 101 or 102 TFEU so requires. With the permission of the court in question, it may also make oral observations.

In its Notice on the co-operation between the Commission and the courts of the EU Member States in the application of [Articles 101 and 102 TFEU], the Commission has explained its policy regarding the application of Article 15(3) of Regulation 1/2003.

The competent national court gave permission to publish the following amicus curiae observations:

 

2014

 

Case:

National Court:

Commission observation:

National Court judgment:

Morgan Advanced Materials v. Deutsche Bahn

Supreme Court of the United Kingdom

18/02/2014 pdf

09/04/2014 pdf

 

Summary and background: The Commission submitted amicus curiae observations to the Supreme Court of the United Kingdom in the context of a case concerning the question when the limitation period for follow-on actions for damages before the CAT begins to run. This case raised the issue of when a Commission decision becomes final against a certain addressee of that decision.

The observations submitted by the Commission concern the interpretation of the concept of a Commission decision and the interpretation of the case-law as regards when such decision becomes final. The Commission held that a Commission decision should be considered as a group of individual decisions establishing, in relation to each of the addressees the breach or breaches which that undertaking has been found to have committed. In line with the case-law of the ECJ in Case C-310/97P AssiDomän, the Commission then went on to conclude that there is no such thing as a "base decision" that finds, in abstracto, that there is an "infringement situation". An appeal against a Commission decision should thus be considered as an appeal against a decision addressed to a particular party, and not as an appeal to annul the contested "base decision". An appeal can thus not have as a result that "no infringement situation existed at all". If a certain addressee did not appeal the decision, the decision becomes definitive against this addressee upon expiry of the deadline to institute appeal.

Furthermore, the ECJ has ruled in Case C-199/11 Otis that the binding effect of Commission decisions as laid down by Article 16 of Regulation 1/2003 also applies to actions for damages before national courts. If there is a final Commission decision establishing that a certain addressee has committed an infringement of the EU competition rules, the national court is required to accept that this prohibited agreement or practice exists. This requirement flows from the need to ensure the coherent and uniform application and practical effect of EU law, and is a specific expression of the division of powers within the EU legal order between, on the one hand, national courts and, on the other, the Commission and the European Courts.

The Commission held that this interpretation of the concept of decision and as to when such decision becomes final, should also be applied for the purpose of establishing when the limitation period for a follow-on action for damages starts to run.

In its judgment of 9 April 2014, the Supreme Court of the United Kingdom follows the AssiDomän case-law and holds that even if the appeals against the infringement by alleged cartel members other than the appellant had succeeded, that would in European law have made no difference to the findings as to the existence and scope of the "complex of agreements and concerted practices" in the relevant sector to which the Commission Decision found the appellant to have been party. In an action for damages, the national court is bound by this finding of infringement. The provisions in the UK legislation as to when the limitation period for follow-on actions for damages start to run should be interpreted in line with this case-law.

2012

 

 


 

Case:

National Court:

Commission observation:

National Court judgment:

Tessenderlo Chemie vs Belgische Staat

Grondwettelijk Hof (Belgian Constitutional Court)

08/03/2012 nl - en pdf

20/12/2012 nl - fr pdf

 

Summary and background: The Commission submitted amicus curiae observations to the Belgian Constitutional Court in the context of a case concerning the question whether or not fines imposed by the Commission can be wholly or partially deductible from taxes.

The Commission observations refer to the judgment of the ECJ of 11/06/2009 in Case C-429/07, Inspecteur van de Belastingdienst v. X B.V. In that case, the ECJ interpreted Article 15(3) of Council Regulation 1/2003 as meaning that it permits the Commission to submit amicus curiae observations in a case relating to the tax deductibility of fines imposed by the Commission for infringements of Articles 101 or 102 TFEU.

As to the substance, the Commission follows the line set out in the X B.V. cases concerning the same issue in which it intervened before the Amsterdam Court of Appeal and the Hoge Raad der Nederlanden (see Commission observations of 24/09/2009 and of 16/12/2010 on this page). The Commission holds that the tax deductibility of fines imposed by the Commission for infringements of Articles 101 and 102 TFEU, whether in full or in part, endangers the objectives of the Union and is contrary to the principle of loyal cooperation as laid down in Article 4(3) TEU. Tax deductibility provides for a considerable advantage for the infringer, in the sense that a part of the fine is "repaid" by the State. Given that fines, on the basis of Regulation 1/2003, should have an element of punishment as well as a deterrent character, the tax deductibility of the fine would undermine the deterrent character of such fine. Tax deductibility of cartel fines of the Commission is therefore considered contrary to EU law. In the concrete case, as the interpretation of the national law is unclear, it is suggested to apply an interpretation of the Belgian national law which is in conformity with EU law.

In its judgment of 20 December 2012, the Belgian Constitutional Court held that allowing tax deductibility for fines imposed for the infringement of the EU competition rules would affect the effectiveness and the consistent application of the competition rules. The possibility of having such fines deducted for tax purposes would jeopardise the attainment of the Union's objectives and would therefore run counter to Art 4(3) TEU (see paragraphs B.13 to B.15 of the judgment). The Constitutional Court thus followed the reasoning of the ECJ in Case X BV (C-429/07) and, because of the reasoning contained in that ECJ judgment, did not consider it necessary to refer the question to the ECJ.

2011

 

 

 

Case:

National Court:

Commission observation:

National Court judgment:

National Grid

United Kingdom High Court

03/11/2011 pdf

04/04/2012 pdf


 

Summary and background: The Commission sent an amicus curiae observation to the UK High Court in the context of a damages action brought by National Grid, a UK utility company, against a number of companies that were held liable by the Commission in 2007 for their participation in the Gas Insulated Switchgear cartel.

The amicus observations were made in response to the High Court's invitation to submit observations in light of the recent Pfleiderer judgment of the Court of Justice of the EU about the possible inter partes disclosure of various documents, some of them containing information specifically prepared for the purpose of an application under the Commission's leniency programme.

In the Pfleiderer judgment, the ECJ held that it is for the national judge to determine the conditions under which access to leniency material can be granted to a person seeking to obtain damages. Such decision needs to take into account and weigh the interests protected by European Union law, namely the need to ensure the effectiveness both of leniency programmes and of antitrust damages actions. In weighing these interests account must be taken of the fact that, while leniency documents may contain information that is necessary to obtain compensation, the disclosure of these documents could compromise leniency programmes.

In its judgment of 4 April 2012, the High Court refers to the balancing test of the Pfleiderer judgment and applies a proportionality test ("is the information available from other sources and what is the relevance of the information"). The High Court concludes that certain limited parts of the confidential version of the Commission Decision and of one answer to an information request from the Commission should be disclosed. As regards all other documents, the High Court concludes that they are not of such relevance to the proceedings and that the interest of protecting information supplied under the leniency programme outweighs the interest of disclosure in an action for damages.

2011

Case:

National Court:

Commission observation:

National Court judgment:

Orange Caraïbe

Cour de Cassation (French Supreme Court)

13/10/2011 pdf

31.01.2012 pdf

 

Summary and background: The Commission submitted amicus curiae observations to the French Cour de Cassation in the context of a case concerning infringements of Articles 101 and 102 TFEU and French national competition law on the market for mobile telephony in French overseas territories. The Paris Appeal Court had only confirmed the infringement of French national competition law and held that – by reason of a narrow interpretation of the notion of "appreciable effect on trade between Member States" – the infringement of Articles 101 and 102 could not be upheld.

The observations submitted by the Commission concerned the interpretation of the notion of "appreciable effect on trade between Member States". The Commission states that, as established by the Guidelines on the effect on trade concept contained in Articles 81 and 82 [now 101 and 102] of the Treaty (OJ C 101/81, 27.4.2004), the "appreciable effect between Member States" will depend on the specific circumstances of each case, particularly the nature of the agreement or concerted practice or the nature of the abuse, the nature of the products concerned and the position and importance of the undertakings involved.

The Commission put forward that – on the basis of the Guidelines, the "appreciable effect" on trade between Member States should be assessed on the basis of all quantitative and qualitative factual and legal elements involved and not exclusively on the basis of one factor (in this case the sales volume as included in para. 90 of the Guidelines). If the appreciable effect on trade between Member States would be established on the basis of one factor alone, the result would be incompatible with the coherent and reasonable application of EU competition law.

The Supreme Court followed the interpretation put forward by the Commission in its amicus curiae observation. It annulled the decision of the Paris Appeal Court and sent it back to the Court for a second review.

2011

Case:

National Court:

Commission observation:

National Court judgment:

Bundeswettbewerbsbehörde v. 43 undertakings active in the transport sector (Austrian Freight Forwarding)

Oberster Gerichtshof als Kartellobergericht (Austrian Supreme Court as Cartel Appellate Court)

12/09/2011 pdf

 

Summary and background: The Commission submitted amicus curiae observations to the Oberster Gerichtshof (Austrian Supreme Court) in the context of a case concerning the potential imposition of fines for a cartel in the Austrian freight forwarding sector.

The observations of the Commission concern first of all the order of the first instance court (the Oberlandesgericht Wien, acting as Cartel Court) that the undertakings agreeing on prices within the framework of the cartel did not act culpably and that therefore no sanctions can be imposed on them. The first instance court had based this conclusion on the fact that the Cartel Court had established the compatibility of the cartel with the Austrian competition rules as de minimis cartel in a judgment of 1996. The Bundeswettbewerbsbehörde (national competition authority) and the Bundeskartellanwalt brought an appeal against that order to the Supreme Court. On 12 September 2011, the Commission submitted observations to the Supreme Court. In its observations, the Commission holds that this conclusion is contrary to the principle of effective enforcement of EU law. A court judgment that does not concern the application of the EU competition rules, cannot – according to the Commission – establish legitimate expectations that a serious infringement of Article 101 TFEU, namely a price cartel, is compatible with EU competition law. This would render the effective enforcement of EU competition law excessively difficult or practically impossible and would therefore be contrary to the principle of effectiveness. The Commission also holds that, as in 1996, national authorities were not compelled to apply EU competition law, as is the case nowadays on the basis of Regulation 1/2003, the court judgment from 1996 cannot be held to imply that the cartel did not affect trade between Member States.

Secondly, the Commission observations concern the question whether Articles 5, 7 and 10 of Regulation 1/2003 stand in the way of the competence of the national competition authorities to establish an infringement of competition law without imposing a fine vis-à-vis an undertaking which has participated in a leniency programme. The Commission states that the exclusive competence of the Commission as laid down in Article 10 of Regulation 1/2003 only concerns the competence to establish that no infringement of the EU competition rules has taken place. Nothing in Regulation 1/2003 stands in the way of a national competition authority establishing an infringement without imposing a fine vis-à-vis an undertaking which has participated in a leniency programme.

On 5 December 2011, the Austrian Supreme Cartel Court decided to stay proceedings and ask preliminary questions to the ECJ, which gave rise to an ECJ judgment of 18 June 2013 in case C-681/11. Those preliminary questions related to the two subjects on which the Commission commented in its amicus curiae observations. The ECJ concludes, in the first place, that an undertaking who has infringed Article 101 TFEU may not escape imposition of a fine where the infringement has resulted from that undertaking erring as to the lawfulness of its conduct on account of legal advice given by a lawyer and the terms of a decision of a national competition authority. As to the second subject, the ECJ states that the national competition authority may by way of exception confine itself to finding an infringement without imposing a fine where the undertaking concerned has participated in a national leniency programme.

2010

 

 


 

Case:

National Court:

Commission observation:

National Court judgment:

X B.V. case

Hoge Raad der Nederlanden (Supreme Court of the Netherlands)

16/12/2010 pdf

12/08/2011 pdf

 

Summary and background: See the related case before the Gerechtshof Amsterdam in 2009. The Supreme Court of the Netherlands confirmed the judgment of the Court of Appeal of Amsterdam.

2010

Case:

National Court:

Commission observation:

National Court judgment:

Železničná spoločnosť Cargo Slovakia, a.s

Najvyšší súd Slovenskej Republiky (Supreme Court of Slovakia)

25/06/2010 pdf

31/01/2012 pdf

 

Summary and background: The Commission submitted amicus curiae observations to the Slovak Supreme Court in the context of a case concerning the application of the concept of economic continuity and the effectiveness of fines in relation thereto.

In the underlying case, the Slovak NCA found an infringement of Article 82 of the EC Treaty (now Article 102 TFEU) and imposed a fine on an undertaking that it considered to be the economic and legal successor to the original infringer. The appeal court acknowledged the economic and legal succession between the relevant undertakings and confirmed the infringement finding. The court, however, considered that the imposed fine was too high and reduced it by 88% on the ground, inter alia, that the repressive function of the fine with regard to the economic successor was questionable because the infringement was committed by the predecessor. The NCA brought the case before the Slovak Supreme Court.

The Commission emphasized in its observations that economic continuity is a concept of EU competition law which should be applied in a consistent manner throughout the EU. The aim of this concept is to avoid the effectiveness of EU competition rules being compromised by changes in the legal structure of undertakings. The application of this concept implies not only that the successor company is to be held responsible for the infringement but also that the successor company is liable for the penalty which would be otherwise imposed on its predecessor. Whereas there might be some differences in the possible fines of the predecessor and of the successor, the fact that the successor has to bear a fine for the infringement committed by the predecessor is not a factor that can be regarded as a mitigating circumstance in itself. Any reduction of the fine imposed on the successor company solely on the ground that the infringement was committed by its predecessor would be contrary to the concept of economic continuity under EU law.

The Commission expressed its concern that in the case at hand a distinction was made between the repressive function and the preventive function of the fine. By focussing on the repressive function of the fine in a case of economic continuity, where the successor company is fined for the behaviour of its predecessor, a wrong signal could be given to the economic successor and to undertakings in general by encouraging them to change their identity through restructurings, sales or other legal or organisational changes in order to avoid at least a part of the fine. To guarantee the effectiveness of a penalty both functions of the fine should be observed. The Commission referred in this context also to the judgment of 11/06/2009 in Case C-429/07, Inspecteur van de Belastingdienst v. X B.V., in which the Court of Justice emphasised the intrinsic link between the effectiveness of the penalties imposed by competition authorities and the coherent application of Articles 101 and 102 TFEU.

In its judgment of 31 January 2012, the Slovak Supreme Court held that the approach of the appeal court to the issue of fines and their functions was not compatible with the need to ensure effective enforcement of the Union competition rules. It therefore amended the appeal court's judgment, declaring the infringer's action against the NCA decision inadmissible. Thus, the original NCA decision was upheld in its entirety.

2010

Case:

National Court:

Commission observation:

National Court judgment:

Beef Industry Development Society Ltd (BIDS)

Irish High Court

30/03/2010 pdf


Case withdrawn

 

Summary and background: The Commission submitted amicus curiae observations to the Irish High Court in the context of judicial proceedings between the Irish Competition Authority and the Beef Industry Development Society Ltd ("BIDS", which is comprised of the 10 principal beef and veal processors in Ireland) and Barry Brothers (Carrigmore) Meats Ltd, regarding the decisions of BIDS rationalizing the beef and veal sector in Ireland through capacity-reducing restructuring agreements. These agreements were part of a plan designed to address over-capacity in the industry by ensuring the withdrawal of processors from the market in return for compensation paid by BIDS and funded by processors remaining in the sector.

The purpose of the Commission's observations was to clarify the application of Article 101(3) TFEU to crisis cartels in general. The Commission submitted that agreements such as at issue in the BIDS case amount in principle to a restriction of competition by object, for which it will be difficult to succeed with a defence under Article 101(3) TFEU. Nevertheless, an exemption will be available if the four cumulative conditions of this provision are satisfied. In its observations, the Commission focused on the first three conditions of Article 101 (3) in relation to capacity-reducing restructuring agreements.
In relation to the first condition (the agreement must contribute to improving the production or distribution of goods or contribute to promoting technical or economic progress), the Commission held that efficiencies resulting from capacity-reducing restructuring agreements are either efficiencies resulting from the removal of inefficient capacity from the market or economic benefits through an increased capacity utilization rate by the remaining players. The Commission stressed that it should be established on a case-by-case basis whether the efficiencies outweigh the anti-competitive effects of the agreement.
As to the second condition (consumers must receive a fair share of the resulting benefits), the Commission indicated that the benefits for consumers must at least compensate for any negative impact caused by the restriction of competition. Further, the nature of cost-benefits for consumers caused by efficiencies needs to be established on a case-by-case basis. Account needs to be taken of the degree of competitive constraint in terms of actual and potential competition and buyer power, an essential element in the assessment of the pass on to consumers. As to the third condition (the restrictions in the agreement must be indispensable to the attainment of these objectives), the Commission held that this condition is only fulfilled where the market forces cannot remedy (structural) over-capacity problems. This will most likely be the case when giving up capacity is costly for the firms and the market is stable, transparent and symmetric.

In January 2011, BIDS withdrew its claim for exemption under Article 101(3) TFEU. See summary in ECN brief 01/2011 pdf

2009

 

 

 

Case:

National Court:

Commission observation:

National Court judgment:

X B.V. case

Gerechtshof Amsterdam (Court of Appeal of Amsterdam)

24/09/2009 pdf


11/03/2010 pdf

 

Summary and background: The Commission submitted amicus curiae observations to the Court of Appeal of Amsterdam in the context of a case concerning the question whether or not fines imposed by the Commission can be wholly or partially deductible from taxes. This case concerns an appeal against a judgment of the District Court of Haarlem, in which the District Court held that fines imposed by the Commission are (partially) deductible from taxes.

First, the Commission submitted observations relating to the nature of fines imposed by the Commission. The Commission indicated that although the fines are not imposed by a criminal court, they are considered as a "criminal charge" within the meaning of Article 6 ECHR. Further, the Commission submitted that although the advantage an undertaking enjoyed as a result of the infringement of EU law is taken into account when calculating the amount of the fine, this does not mean that the fine consists of a specific part which is related to taking away the advantage enjoyed as a result of the infringement and another part amounting to the punishment of the infringement. The Commission imposes one integral fine, of which the purpose is punishment and deterrence.

Moreover, contrary to the District Court of Haarlem, the Commission held that it would be contrary to EU law if fines imposed by it would be (wholly or partially) deductible from the taxes payable by the undertaking on which the fines are imposed. This is due to a breach of the principle of loyal cooperation laid down in ex Article 10 EC Treaty (now Article 4(3) TEU), as the tax deductibility of fines would undermine the punitive and deterrent character of the fines and would constitute an important advantage for the undertaking involved in a very serious breach of EU law. Further, the ECJ has also taken the view that fines of the Commission are not deductible from taxes. The fact that there is no EU harmonisation of deductions of income- or profit taxes does not change this conclusion, as the absence of harmonisation does not affect general obligations stemming directly from the Treaty. Finally, the Commission held that it would be contrary to the principle of non-discrimination (or equivalence) if Commission fines would be tax deductible, whereas fines imposed by the national competition authority would not be tax deductible.

In its judgment of 11 March 2010, the Court of Appeal of Amsterdam confirmed the line suggested by the observations submitted by the Commission and held that Commission fines are not tax deductible under Dutch law.

See further above the related case before the Hoge Raad der Nederlanden in 2010. This case gave rise to a preliminary judgment by the ECJ on the possibility for the Commission to make observations in this case: Judgment of the ECJ of 11/06/2009 in Case C-429/07, Inspecteur van de Belastingdienst v. X B.V.

2009

 

 

 

 

Case:

National Court:

Commission observation:

National Court judgment:

Pierre Fabre Dermo-Cosmétique

Cour d'Appel de Paris (Court of Appeal of Paris)

11/06/2009 pdf


29/10/2009 / 31/01/2013 pdf

 

Summary and background: The Commission submitted amicus curiae observations to the Paris Court of Appeal in the context of a case concerning a general prohibition on online sales imposed by the supplier on all distributors belonging to its selective distribution network.

In its observations, the Commission put forward that it considers such a general prohibition of online sales to end users imposed by the supplier on all distributors belonging to its selective distribution network as a hardcore restriction of competition which cannot benefit from an exemption from the application of Article 101 TFEU on the basis of the Block Exemption Regulation normally applicable to selective distribution systems. Further, the possibility as foreseen in the Block Exemption Regulation to prohibit a distributor to open a place of business not authorised by the supplier does not apply to an prohibition of internet sales to end users. This hardcore restriction could potentially, in exceptional circumstances, benefit from an individual exemption under Article 101(3). The Commission finally suggested the national court to ask preliminary questions to the ECJ if it has (further) doubts as to the interpretation of EU law.

By judgment of 29/10/2009, the Court of Appeal of Paris asked a preliminary question to the ECJ on whether or not a general prohibition on online sales to end users imposed by the supplier on all distributors belonging to its selective distribution network should be seen as a hardcore restriction by object within the meaning of Article 81(1) EC (now: Article 101(1) TFEU), which does not fall within the scope of application of the Block Exemption Regulation but could potentially benefit from an individual exemption under Article 81(3) EC (now Article 101(3) TFEU). In a judgment of 13/10/2011 the ECJ ruled that such absolute ban on online sales constitutes a restriction by object, which is in the specific circumstances of the case not objectively justified. The ECJ judges that the Block Exemption Regulation does not apply to such restriction, but an individual exemption may apply if the conditions of Article 101(3) have been fulfilled.

On 31/01/2013, the Paris Court of Appeal rendered its final judgment, following the line set out by the ECJ. Hence, the decision of the French NCA is confirmed.

2006

Case:

National Court:

Commission observation:

National Court judgment:

Garage Grémeau

Cour d'Appel de Paris (Court of Appeal of Paris)

02/11/2006 pdf


07/06/2007 pdf

  Summary and background: The Commission submitted amicus curiae observations to the Paris Court of Appeal in the context of a case concerning the interpretation of Regulation 1400/2002 concerning vertical agreements in the motor vehicle sector. More specifically, the case concerned the differences between qualitative and quantitative selective distribution systems and the conditions for their exemption from the application of Article 81 EC (now Article 101 TFEU), as well as the possibility for the national court to issue an injunction forcing an undertaking to admit a certain distributor to its selective distribution system.

The Commission indicated that there are significant differences in the treatment of quantitative and qualitative selective distribution systems under Article 101 TFEU. Firstly, in relation to qualitative selective distribution systems, no market share threshold applied for exemption under the Block Exemption Regulation, while in relation to quantitative selective distribution systems, the threshold was 40%. Further, in the case of a qualitative selective distribution system, the supplier is obliged to set only qualitative criteria that are objective (i.e. required by the nature of the contract goods or services), in order to benefit from the exemption. In the case of a quantitative distribution system, exemption under the Regulation requires only that the criteria are quantitative in nature. There is no requirement of objectivity, nor an obligation to also set objective qualitative selection criteria (although setting qualitative criteria is possible in a quantitative selective distribution system). If the judge were to verify the objectivity of the criteria also in relation to quantitative selective distribution systems, the distinction between the two types would become blurred. This would be problematic in terms of the application of Regulation 1400/2002 and in respect of other types of products that fall under the general block exemption regulation (Regulation 2790/99 at the relevant time).

Further, the Commission held that it is not necessarily contrary to the conditions for exemption under the Regulation if a supplier which establishes a new quantitative selective distribution system allows distributors newly approved on the basis of quantitative criteria a certain transitional period after which they must (also) meet qualitative criteria.

As to the possibility for the national court to grant an injunction obliging a supplier to admit a specific distributor to its selective distribution system, the Commission stressed the principle of national procedural autonomy. Nevertheless, the Commission indicated that the mere fact of not respecting a condition in a block exemption regulation does not constitute a sufficient legal basis for such an injunction, as this does not necessarily mean that an infringement of competition law has taken place. If the infringement of competition law has been established, the agreement containing the infringement – the selective distribution system – will be declared null and void, either in its entirety (if the infringing provisions and the remainder of the agreement are not severable under the relevant national law), or only for the specific part violating competition law (if these are severable). Only in the latter case could the national court grant an injunction obliging a supplier to admit a specific distributor to the selective distribution system (assuming that such an injunction would be possible under national law at all).
  
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