Notices of the Commission are not binding for national courtsThursday, 27 September 2012
On 6 september 2012 AG Kokott issued her Opinion in case C-226/11. In this case the European Court of Justice (‘ECJ’) has to decide if notices of the European Commission in the field of competition law are binding on the national competition authorities and national courts. AG Kokott concludes that those notices are not binding. National competition authorities and courts can therefore act against cartel agreements between undertakings with a market share of less than 10% if they show that the competition is appreciably distorted.
The ECJ has to decide on the abovementioned issue because the French Cour de cassation asked preliminary questions with regard to this issue. The French Cour de cassation is dealing with a dispute between Expedia, an on-line travel agency, and the French Competition Authority (hereinafter: “Authority”).
Expedia formed a joint venture with the French State railway company Société nationale des chemins de fer (‘SNCF’) for the sale of rail tickets and other travel services. Through this collaboration Expedia obtained privileged access to the ‘voyages-sncf.com’ website created by SNCF. Thereby Expedia enjoys preferential treatment for its services which was withheld from other travel agencies. The Authority regarded this as a prohibited restriction of competition and imposed fines on Expedia and SNCF. The Authority takes the view that there was an infringement of Article 81 EC (now: article 101 TFEU) and the corresponding provision of national competition law.
The parties disagree mainly as to whether the agreement between Expedia and SNCF appreciably restricted competition within the meaning of Article 81 EC. Expedia alleges that the market share threshold of 10% laid down by the Commission in the de minimis notice was not attained in the present case. This is why, in Expedia’s opinion, the Authority should not have found that there was an appreciable restriction of competition. Having regard to this the Cour de cassation asks whether national authorities are permitted to presume an appreciable restriction of competition even below the market share of 10%. The Cour de cassation also emphasises that the agreement between Expedia and SNCF had not only an anti-competitive effect, but also an anti-competitive object.
Opinion AG Kokott
Article 3 of Regulation No 1/2003 states that where national antitrust law is applied to an agreement between undertakings which may affect trade between Member States, article 101 TFEU must also be applied in parallel. Article 2 of this Regulation states also that agreements between undertakings can only be prohibited under national competition law if they are also prohibited under EU law. This means that national competition law must not lead to more stringent results than article 101 TFEU. Consequently, the criterion of appreciable effect should be taken in account when national and EU competition law are applicable.
Applicability of de minimis notice
First of all, it should be noted that according to the ECJ Commission notices in the field of EU competition law do not have binding legal effect for national authorities and courts. This point of view is also applicable to the de minimis notice and the market share thresholds which it contains. This follows also from the wordings, from its purpose and the context in which it was adopted. Although de minimis notice has no binding legal effects, it does have importance in law proceedings concerning cartels. With regard to proceedings concerning competition law at EU level, it is recognised in case law that the Commission binds itself by issuing notices relating to its administrative practice. With regard to competition-law proceedings at Member Statelevel, the de minimis notice expressly claims that ‘although not binding on them’, this notice intends to give guidance to the courts and authorities of the Member States in their application of Article 101 TFEU. Such guidance is of decisive importance for the functioning of the decentralised system for the enforcement of competition law established by Regulation No 1/2003.
This means that national authorities and courts must consider the de minimis notice with regard to what constitutes an appreciable restriction of competition and must give reasons which can be judicially reviewed for any divergences. But, this does not mean that national competition authorities and courts are absolutely prohibited from proceeding against agreements between undertakings below the de minimis market-share thresholds specified by the Commission. First, market share is only one of a number of different quantitative and qualitative criteria for determining whether an agreement between undertakings appreciably restricts competition. Secondly, there may be special national or regional competition problems in the various markets in the Member States to which respective authority or court must be able to react effectively.
It follows from the above that national competition authorities and courts are free to proceed against agreements between undertakings below the thresholds of the de minimis notice. From importance is that the authority or the court have taken account of the Commission’s guidance in the notice. They also have to take in account, in a particular case, the evidence - other than the market shares - which suggests that the effect on competition is appreciable.
An infringement of competition law can have an anti-competitive object or an anti-competitive effect. The question is whether which significance could be given to the market share thresholds of the de minimis notice as guidance for national authorities and courts in a case where an agreement has an anti-competitive object, but the market share thresholds of the de minimis notice are not reached. It is necessary to ascertain whether or not an appreciable effect on competition may be presumed in that case.
AG Kokott considers that the market share thresholds included in thede minimis notice are irrelevant in the case it is necessary to determine whether the restrictions of competition arising from agreements between undertakings with an anti-competitive object are appreciable.
AG Kokott determines this because of the different requirements regarding proof which arise from the nature of the two types of infringements. Restrictions of competitions by object are regarded as being injurious to the proper functioning of normal competition. They can hardly be regarded as de minimis infringements. It must be presumed that undertakings which enter into an agreement with an anit-competitive object always intend an appreciable effect on competition, irrespective of the size of their market shares and turnover. Besides this, the market share thresholds in the de minimisnotice should be a safe harbour and are intended to provide legal certainty for undertakings which are parties in an agreement. This preferential treatment can hardly be given to undertakings that enter into agreements with an anti-competitive object.
So, if it is established that an agreement between undertakings with an anti-competitive object is capable of appreciably affecting trade between Member States, it may readily be inferred that the agreement is also capable of appreciably restricting, distorting or even preventing competition within the internal market.