Requests for information or for an opinion; Amicus curiae

2011

Case:

National Court:

Commission observation:

National Court judgment:

National Grid

United Kingdom High Court

03/11/2011 

04/04/2012

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.

Case:

National Court:

Commission observation:

National Court judgment:

Orange Caraïbe

Cour de Cassation (French Supreme Court)

13/10/2011 

31.01.2012

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.

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

12/08/2011

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.

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 

[date] The judgment will be made available when rendered and cleared for publication by the competent national court

Summary and background: [will be provided as soon as possible]

Case:

National Court:

Commission observation:

National Court judgment:

Beef Industry Development Society Ltd (BIDS)

Irish High Court

30/03/2010

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

2009

Case:

National Court:

Commission observation:

National Court judgment:

X B.V. case

Gerechtshof Amsterdam (Court of Appeal of Amsterdam)

24/09/2009

11/03/2010

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

29/10/2009

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.

Case:

National Court:

Commission observation:

National Court judgment:

Garage Grémeau

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

02/11/2006

07/06/2007

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).