Liability for engaging in anti-competitive practices

Article 101 of the Treaty on the Functioning of the European Union prohibits anti-competitive 'agreements between undertakings, decisions by associations of undertakings, and concerted practices'. Agreements prohibited by article 101 are automatically void. Under Council Regulation (EC) 1/2003, the European commission may impose fines on undertakings which 'intentionally or negligently… infringe' article 101.

This penal sanction applies to the members of a cartel. But can it apply also to an undertaking that is not a participant in a cartel, but assists it? This was the issue raised by Case C-194/14P, AC-Treuhand AG v Commission.

In 2009, the commission found that a number of undertakings had engaged in a range of anti-competitive agreements and practices in the markets for various products used in food packaging. AC-Treuhand, a Swiss company, did not manufacture or purchase such products. It was a consultancy firm, and its role in relation to the cartel had been as a coordinator: collecting statistics about what the cartel participants were up to, monitoring their compliance with the arrangements, arranging meetings, and mediating disputes. For this it was paid.

The commission found that in acting as a paid coordinator for the cartel's activities, it had participated in the cartel, and imposed fines upon it. AC-Treuhand contested that decision in the General Court, which dismissed its appeal. It appealed to the Court of Justice (CJEU), which, differing from the opinion of Advocate General Wahl, upheld the decision.

Implicit limitation?

Article 101 itself does not focus on conduct but on the result of that conduct: the existence of anti-competitive agreements or concerted practices. It is those that are prohibited. The touchstone for liability for fines, in the court's view, was whether the undertaking in question had 'contributed by its conduct to the common objectives pursued by all participants', and whether it had done so knowingly and intentionally. The court characterised AC-Treuhand's argument as an attempt to read into article 101 and regulation 1/2003 a requirement that was not expressly stated, namely that the only 'infringers' are those active in the relevant market or upstream or downstream markets, or those that themselves restrict their freedom of action.

In Advocate General Wahl's view, article 101 should be understood as directed only at those whose conduct does or might constitute some sort of competitive restraint on other undertakings. But the CJEU found no such implicit limitation. Instead, it directed attention simply to two factual questions: had the undertaking actively or passively assisted the participants to achieve their intended aim? And had it done so deliberately, knowing the facts? The court thought that the limitation for which AC-Treuhand contended would 'be liable to negate the full effectiveness of the prohibition'. To ensure such effectiveness, any sort of 'active contribution' must be penalised.

This seems sensible. Article 101 is broad: it covers not merely agreements, in relation to which the idea of 'parties' may seem sensible, but 'concerted practices', in which it does not. The rather nebulous limitation sought by AC-Treuhand would not add materially to legal certainty, but would make it harder to enforce competition law.

Extent of the decision

The court thought that this was sufficiently clear in 2009 to justify the application of a penalty, despite the requirements of legal certainty. This may be open to question, and some competent lawyers (such as the court's own advocate general) would not have advised that it was correct. But if no undertaking could be fined unless its liability was clear beyond argument, competition enforcement would become very difficult. The court was entitled to think that an undertaking which decided to provide active assistance to a clear cartel should have known that it risked a fine.

How far does the decision go? Could any lawyer who assists in drafting an anti-competitive agreement be fined? Could an arbitrator who upheld an anti-competitive agreement? It seems unlikely that the court intended to go so far. It emphasised that its decision concerned an undertaking which 'actively contributes, in full knowledge of the relevant facts, to the implementation and continuation of a cartel'. It pointed out that AC-Treuhand's activities were 'directly linked to the efforts made' to implement the cartel, and were not 'mere peripheral services'. And it repeatedly emphasised that AC-Treuhand acted 'with full knowledge of the facts'.

Nevertheless, those who provide services which might assist a cartel should be concerned. The line between the peripheral and the 'direct', and between suspicion and 'full knowledge' is not sharp. But perhaps, from the perspective of preventing anti-competitive agreements, that is how it should be. We want to make it hard for cartels to flourish, and depriving them of the oxygen of the professional services they need may help. SJ

Paul Stanley QC is a barrister practising from Essex Court Chambers