Posted by Chantal Lavoie on 23 October 2015
In an important judgment which departs from the opinion of Advocate General Wahl, the Court of Justice of the European Union (the Court) confirms the General Court's finding that a consultancy firm can be liable for infringing Article 101(1) TFEU as a result of its contribution to a cartel.
This is the first time that the Court itself rules on this important question of principle, namely whether a facilitator which does not operate on the same market as the cartel participants to whom it lends its services can be liable under Article 101(1) TFEU. The case concerns the consultancy firm AC-Treuhand which had provided professional services to cartel participants in the tin stabilisers sector and the epoxidised soybean oil and esters sector. The services consisted in organising meetings which it attended and actively participated in, collecting and supplying sales data to cartel participants and acting as moderator between the cartel participants with a view to finding compromises when tensions arose. AC-Treuhand was found to have played an essential role in this cartel.
In its analysis, the Court reiterates that there is nothing in the wording of Article 101(1) TFEU which "indicates that the prohibition laid down is directed only at the parties to such agreements or concerted practices who are active on the markets affected by those agreements or practices". Of particular interest are the following conclusions of the Court:
- In order to find that an undertaking participated in an anti-competitive agreement or concerted practice, it is necessary to show as determined in previous case-law that "the undertaking intended to contribute by its own conduct to the common objectives pursued by all the participants and that it was aware of the actual conduct planned or put into effect by other undertakings in pursuit of the same objectives or that it could reasonably have foreseen it and that it was prepared to take the risk". The Court notes that AC-Treuhand played an essential role in the cartel and its conduct was directly linked to the efforts of the cartel participants. The fact that AC-Treuhand is a consultancy firm which provided service contracts separately from the commitments entered into by the cartel participants and their economic activity does not imply that these were peripheral services unconnected to the cartel.
- The Court clarifies that Article 101(1) TFEU should not be interpreted as applying only to undertakings operating on the same market affected by the cartel (or upstream/downstream/neighboring markets) or to undertakings which restrict their conduct on a specific market. On the contrary, Article 101(1) TFEU should apply to all agreements and concerted practices "irrespective of the market on which the parties operate, and that only the commercial conduct of one of the parties need be affected by the terms of the arrangements in question".
- The Court departs from the opinion of Advocate General Wahl who was of the view that AC-Treuhand could not be considered a full member of the cartel because the services it supplied were connected with the implementation of the cartel but separate from the illegal conduct. According to the Advocate General, it was not proven that AC-Treuhand exerted a competitive constraint on the cartel members. As a result, even if AC-Treuhand's conduct did contribute to making the cartel more effective or helping to conceal it, the Advocate General concluded that this did not have the effect of restricting competition as the restriction on competition resulted exclusively from the conduct of the cartel members. In the Advocate General's view, AC-Treuhand did not constitute a competitive constraint on the cartel members and therefore its actions could not give rise to a restriction on competition.
- The Court rejected the argument that it was not foreseeable that the conduct of the consultancy firm could be caught by Article 101(1) TFEU. Even though the courts of the European Union had not ruled yet at the time of the infringements on this issue, AC-Treuhand should have sought legal advice and as a result expected its conduct to be potentially anti-competitive. Consultancy firms and other professional services providers are "expected to take special care in evaluating the risk that such an activity entails".
- The Commission was entitled to set the fine as a lump sum rather than on the basis of the fees charged by AC-Treuhand for the services it provided to the relevant producers. In this case, it was understood that the fees charged to the cartel members would not have reflected the economic significance of the infringement and AC-Treuhand's individual participation in the infringements since the firm was not active in the market where the cartel operated.
The judgment provides the Court with an opportunity to reiterate its case-law supporting a wide application of Article 101(1) TFEU and the concepts of "agreements" and "concerted practice". The Court makes clear that Article 101(1) TFEU cannot be interpreted so narrowly as to exclude from its scope the active contribution of an undertaking to a cartel simply because it does not operate on the market in which the restriction arises.
Contrary to Advocate General Wahl, the Court takes a less teleological approach to Article 101(1) TFEU and does not undertake a detailed assessment of the effects on competition of AC-Treuhand's actions. According to the Advocate General, AC-Treuhand did not have the capacity to impose a restriction on competition on the relevant producers and therefore the services it provided to the cartel members were not connected to the actual restriction on competition which resulted from the actions of the cartel. For the Court however, it suffices that AC-Treuhand contributed actively through the services it provided to the attainment of the anti-competitive objectives of the cartel and in full knowledge of these objectives. Whether AC-Treuhand's actions were capable of exerting competitive pressure on the cartel members in the market and the effect on such competition of AC-Treuhand's services was not explicitly discussed. The Court adopts a more holistic stance regarding the effects on competition with regard to the entire cartel arrangements.
The judgment is a confirmation from the highest court in the European Union that consultancy firms can be liable under Article 101(1) TFEU in the same way as full cartel members for their contribution to a cartel. By extension, the judgment opens the possibility for consultancy firms and other professional services providers to be liable under Article 101(1) TFEU for contributing to other types of anti-competitive horizontal arrangements or vertical arrangements.
Looking ahead, the judgment does put into question whether other professional services advisers will be subject to closer scrutiny from the European Commission for their role in advising or assisting in drafting and implementing arrangements which could have a potentially anti-competitive object or effect. This is particularly true of cases where the arrangements do not have an anti-competitive object but their effect could be contrary to Article 101(1) TFEU. In this context, professional services advisers are likely to pay closer attention to the risks which their advice and actions could pose and the consequences on the markets in which their clients are active. However, in our view, this case does not open the floodgates to bringing professional services providers under the scope of Article 101(1) TFEU for their role in advising undertakings under investigation. It is important to keep this case in perspective. AC-Treuhand was found to have played an 'essential' role by being 'directly linked' and 'connected' to the actions of the cartel in full knowledge of its anti-competitive objectives, namely by organising, attending and monitoring meetings and the anti-competitive arrangements of the cartel.
Interestingly this case is one of two decisions in which AC-Treuhand was found liable under Article 101(1) TFEU. The other decision related to services contracts provided by AC-Treuhand to cartel members in the organic peroxides market. The Commission imposed a symbolic fine of 1000 EUR in this latter case as it was the first time that a consultancy firm providing services to a cartel was found liable under Article 101(1) TFEU. On appeal, the General Court upheld the Commission's decision. However, as the General Court's judgment was not appealed, the Court had not had the opportunity until now to rule on this issue.