Competition Law of The European Community, Chapter 4: Horizontal Agreements: Cartels

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Competition Law of the European Community, Chapter 4:
Publication Horizontal Agreements: Cartels
Competition Law of the Van Bael & Bellis
European Community (Fifth
Edition) Please note that since the appearance of the printed version of the book in November
2009, the Lisbon Treaty has entered into force. Its impact on competition law will
probably remain limited. However, a number of key changes merit attention and should
Jurisdiction be kept in mind when consulting the Fifth Edition of Van Bael & Bellis' Competition Law
of the European Community.
European Union
European Union 1. EC becomes EU — The European Union replaces and succeeds the European
Community. Consequently, all references to “Community” and “European Community” are
replaced by the word “Union” (except in relation to the Euratom Community).
Topics 2. EC Treaty becomes TFEU — The EC Treaty has been renamed the “Treaty on the
Functioning of the European Union” (TFEU) and its Articles have been re-numbered.
Cartels
3. Provisions on competition are re-numbered — Former Articles 81 to 89 EC become
Articles 101 to 109 TFEU. Please note in particular that Article 81 EC becomes Article 101
Bibliographic reference TFEU and Article 82 EC becomes Article 102 TFEU.
Van Bael & Bellis, 4. “Common” market becomes “internal” market — References to the common market
'Competition Law of the are replaced by references to the internal market throughout the TFEU, including within
European Community, the chapter on competition. This change in names should not have any legal
Chapter 4: Horizontal consequence.
Agreements: Cartels', in Van 5. EU Courts are Court of Justice, General Court and Specialised Courts — The Court of
Bael & Bellis (ed), Justice of the European Union is now composed of the Court of Justice, the General Court
Competition Law of the (formerly named the Court of First Instance), and Specialised Courts (currently, there is
European Community (Fifth only one Specialised Court, i.e. the European Union Civil Service Tribunal).
Edition), 5th edition (© Van
Bael & Bellis; Kluwer Law A more detailed analysis of the impact of the Lisbon Treaty on competition law is
International 2010) pp. 341 - available on the website of Van Bael & Bellis at:
416 http://www.vanbaelbellis.com/en/fiches/news/news-year/2009/2009-11-30-lisbon-
treaty-enters-into-forc...
Introduction
This chapter will deal with the types of horizontal agreements and concerted practices
among competitors that are considered to be the ‘classic’ infringements of EC competition
law: so-called cartels. The term ‘cartel’ is used to describe an arrangement or other form of
cooperation between two or more actual or potential competitors with the object or effect
of reducing competition between them with regard to prices, markets, customers and/or
products. Arrangements involving price-fixing, market-sharing, the exchange of
confidential information and/or collective boycotts are hardcore restrictions of
competition that are regarded as per se violations of Article 81(1) and that normally cannot
qualify for an exemption under Article 81(3).
To strengthen its efforts to uncover and take action against cartel activity, the Commission
created its first special cartel unit within the Directorate-General for Competition at the
end of 1998. In 2002, the gradual increase of resources devoted to cartels culminated in the
creation of a second cartel unit. (1) Whereas the fight against cartels was previously largely
centralized in these two cartel units (within Directorate E), on 1 July 2003, all anti-trust
units of Directorates C, D, E and F were given responsibility for cartel investigations. (2) In
2005, the Commission created a specific Directorate (i.e. Directorate F, now Directorate G)
entirely devoted to the fight against cartels, which is currently made up of 5 Units. In
addition, in the framework of the reform of the rules implementing Articles 81 and 82, the
Commission announced that the abolition of the notification system would allow it to
concentrate on combating the most serious restrictions of competition, and cartels in
particular. (3) The Commission thus continues to demonstrate its determination to fight
P 341 cartels, which it considers to have highly adverse effects on the European economy as a
P 342 whole. (4) The present Competition Commissioner pointed out from the outset of her
mandate that the Commission would dedicate substantial efforts to the fight against
cartels. (5)
The following sections will discuss the different types of cartel infringements in more detail
and illustrate how the Commission and the European Courts categorize different types of
cartel activity. (6) The chapter is structured as follows:
– the first section (pages 342–344) provides an overview of the application of Article
81(1) to cartels;
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– the second section (pages 344–405) examines how competition can be restricted
through cartels, in particular through (i) pricing practices, (ii) market sharing, (iii)
collective boycotts, (iv) exchange of information, and (v) trade associations, trade
fairs and exhibitions, exchanges and auctions;
– the third section (page 405) briefly examines the extent to which government
compulsion can be used as a defence for cartel activity; and
– the fourth section (pages 406–416) examines the extent to which special crisis
situations, including economic hardship and structural overcapacity, can justify
cartel agreements.
Application of Article 81(1) to Cartels

Article 81(1) prohibits all agreements and concerted practices between undertakings and
decisions by associations of undertakings which may affect trade between Member States
and which have as their object or effect ‘the prevention, restriction or distortion of
competition within the common market’. (7) This prohibition is formulated broadly in order
to cover all types of understandings and forms of cooperation between companies that are
aimed at or result in the limitation of competition between companies. The objective of
this central rule of EC competition law is to ensure that companies compete against each
other, rather than cooperate to influence market conditions to the detriment of consumers.
The EC competition rules are based on the premise that each economic operator must
independently determine the commercial policy that it intends to adopt on the market. (8)
This means that there must be no coordination between undertakings that eliminates
P 342 uncertainty surrounding the future conduct of competitors, which would reduce the risk of
P 343 taking commercial decisions in a competitive environment. The Commission's decision
in Organic peroxides shows that not only economic operators on the market, but also
companies assisting them, e.g., consultancy firms, must abstain from cartel activity. (9)
Article 81(1) aims to cover all forms of collusion between companies, whether the collusion
takes the form of an agreement or a concerted practice. The decisive factor is that there is
evidence of coordination between companies having the object or effect of restricting
competition. According to the Court of First Instance, ‘[t]he system of competition rules
established by Article [81] et seq. of the Treaty is concerned with the economic effects of
agreements or of any comparable form of concerted practice or coordination rather than
with their legal form’. (10)
Article 81(1) classifies forms of coordination into agreements and concerted practices, but
in complex cartel cases involving several different forms of collusion, it is not always
possible to make a clear-cut distinction between the two. The Commission's practice has
accordingly been that an infringement can be committed through a combination of
agreements and concerted practices. This practice has been endorsed by the Court of First
Instance, which found, in Rhône-Poulenc, that the infringement at issue consisted of ‘an
integrated set of schemes constituting a single infringement, which progressively
manifested itself in both unlawful agreements and unlawful concerted practices’. (11) The
P 343 Court of First Instance confirmed in this case that the Commission was entitled to
P 344 characterize the infringement as an agreement and a concerted practice, as the
infringement involved both factual elements constituting an agreement and factual
elements to be characterized as a concerted practice. (12)
The prohibition set forth in Article 81(1) must be given a wide interpretation and applies to
any form of economic activity. As the Court of First Instance has stated on various
occasions, ‘it concerns both the production sector and the distribution and service sector,
which, moreover, clearly follows from the reference to the various types of agreements,
decisions and concerted practices prohibited under Article [81(1)(b), (c) and (d)]’. (13)
In this context, it should be noted that the De Minimis Notice (14) does not apply to the
hardcore restrictions typically found in cartels. Indeed, these restrictions are considered
so inimical to consumer welfare that they cannot benefit from the De Minimis Notice and
are likely to fall within the scope of Article 81(1). (15) In this respect, in Luxembourg
Brewers, which concerned an agreement between brewers to partition the Luxembourg
market, the Commission found that ‘in the case of horizontal agreements which have the
object of sharing markets, the applicability of Article 81(1) cannot be ruled out even below
[the] thresholds [laid down in point 9 of the De Minimis Notice]’. (16)
Restriction of Competition Through Cartels

This section (pages 344–405) examines the ways and the extent to which competition can
be restricted through cartels, in particular through: (i) pricing practices; (ii) market sharing;
(iii) collective boycotts; (iv) exchange of information; and (v) trade associations, trade fairs
and exhibitions, exchanges, and auctions.
§4.1 Pricing practices

Pricing activity is competition ‘in one of its essential forms’. (17) Thus, the protection of
price competition is one of the cornerstones of European competition policy; and any
P 344 arrangement or concerted practice restricting this form of competition is generally
P 345 prohibited. The Commission has on several occasions stated that secret cartels,
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including those aimed at fixing prices, are among the most serious restrictions of
competition. (18) They are, in the words of the Commission, ‘by their nature very serious
violations of Article 81(1)’. (19) One of the Commission's main concerns is that cartels lead
to higher prices and less choice for customers. (20) Article 81(1) expressly refers to
agreements which ‘directly or indirectly fix purchase or selling prices or any other trading
conditions’. While this prohibition extends to both vertical and horizontal agreements, the
discussion in the present section deals only with the latter category. (21) Although there
exist no per se rules in EC competition law, horizontal price-fixing arrangements have
always been held incompatible with Article 81(1) and have generally been denied an
exemption under Article 81(3). This sub-section examines (1) different types of direct and
indirect horizontal price-fixing agreements, (2) agreements on price discrimination, (3)
ancillary agreements that are concluded to ensure the maximum effectiveness of a price-
fixing agreement, (4) parallel pricing behaviour, and (5) the application of Article 82 to
price-fixing cartels.
(1) Price-fixing agreements
The most obvious type of price-fixing is an agreement or concerted practice between
competitors whereby they fix their sale or resale prices. In Dyestuffs, (22) the Court of
Justice found that the concerted pricing behaviour of dyestuffs producers was designed to
P 345 replace the risk of competition by cooperation, which constituted a concerted practice
P 346 prohibited by Article 81(1). The Commission imposed large fines in Cartonboard, (23)
where the vast majority of European producers of cartonboard set up a cartel to fix prices.
In order to keep customers from looking for alternative sources of supply and taking
advantage of price differences between Member States, the cartonboard producers
intended to achieve a uniform price level across the Community. (24)
In 2001 and 2002 the priority given to tackling cartels resulted in a large increase in the
number of cases concerning price fixing agreements. (25) This approach was also pursued
in the following years, becoming a staple feature of the Commission's enforcement
P 346 activities: according to the official figures, in the period from 2000 to 2005, the Commission
P 347 adopted 38 infringement decisions in the field of cartels. This is an average of six
decisions per year, which is twice the annual average during the previous 30 years. (26)
In Graphite electrodes, (27) the Commission found that eight producers of graphite
electrodes, which together accounted for nearly the totality of worldwide production, had
agreed on concerted price increases, designating a producer to lead the price increases in
each national market, circulating lists of current and future target prices in order to
coordinate the price increases, devising and applying a reporting and monitoring system
to ensure the implementation of their agreements, participating in regular meetings, and
having other contacts in order to agree upon the above measures and to implement and
modify them as required.
Similarly, in Vitamins (II), (28) the Commission adopted a decision finding that eight
manufacturers of vitamins had participated in eight distinct cartels fixing the prices of
different vitamin products. Some of the principal aspects of the parties' agreements were
concerted price increases, the setting of target and minimum prices, and coordination on
the implementation of price increases in the different markets.
Likewise, in Carbonless paper, (29) the Commission discovered that the producers of
carbonless paper had participated in a secret, Europe-wide cartel aimed at improving the
participants' profitability through agreements regarding concerted price increases.
The Commission also imposed high fines in Plasterboard, (30) where four producers of
plasterboard exchanged information on their sales volumes so as to provide mutual
P 347 reassurance that a previous price war had ended, and repeatedly informed each other in
P 348 advance of price increases. (31)
P 348 The most recent practice offers further examples of large fines in price-fixing cartel cases.
P 349 In Hydrogen peroxide and perborate, (32) the Commission imposed fines for a total
amount of €388 million on several companies participating in a cartel in the markets of
hydrogen peroxide and its downstream product sodium perborate, covering the whole EEA
territory. According to the Commission, the parties to the cartel put in place a wide range
of anticompetitive practices, including the fixing and monitoring of (target) prices. In
Methacrylates, (33) the Commission fined several companies a total of €344.5 million for
having agreed prices for acrylic glass and exchanged commercially important and
confidential information in the EEA between 1997 and 2002. In Fittings, (34) the Commission
imposed fines totaling €314 million on 30 copper fittings producers for having participated
in a price-fixing cartel. Likewise, in Synthetic rubber, (35) the Commission imposed fines on
P 349 five groups of companies totaling €519 million for taking part in a cartel to fix prices and
P 350 share customers for certain categories of synthetic rubber. (36) In Gas insulated
P 351 switchgear, (37) the Commission sanctioned eleven groups of companies with fines
totaling approximately €750.7 million for running a complex a cartel regarding gas
insulated switchgear projects. (38) The companies were accused of a wide range of
restrictive practices, including geographic market sharing, allocation of quotas, bid rigging
and price fixing. A few weeks later, the Commission released another major cartel decision
marking a new fining record in Elevators and escalators. (39) In this case, the Commission
found that several companies operated cartels for the installation and maintenance of lifts
and escalators in Belgium, Germany, Luxembourg and the Netherlands in breach of Article
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81. The Commission found that the companies concerned had, inter alia, rigged bids, fixed
prices, shared projects among themselves, and exchanged competitively sensitive
information. As a result, a record fine of approximately €992 million was imposed.
Article 81(1) not only covers agreements between competitors to directly fix the sale or
P 351 resale prices of their products or services. (40) Several other forms of agreements have
P 352 been condemned under Article 81(1) as forms of price fixing:
(a) Agreements fixing target or minimum prices
Agreements which fix target or minimum prices enable the parties to predict the prices of
their competitors and are thus highly restrictive of competition. Accordingly, the Court of
Justice stated in Vereniging van Cementhandelaren: (41)
If a system of imposed selling prices is clearly in conflict with Art. [81(1)], the
system of target prices is equally so […] [i]t cannot […] be supposed that the
clauses of the agreement concerning the determination of ‘target prices’ are
P 352 meaningless. In fact, the fixing of a price, even one which merely constitutes a
P 353 target, affects competition because it enables all the participants to predict
with a reasonable degree of certainty what the pricing policy pursued by their
competitors will be. (42)
In ICI v. Commission, (43) the Court of First Instance classed a target price agreement as a
price-fixing agreement because it had the same anti-competitive object as the latter, i.e.,
to alter the normal evolution of market prices.
In Vitamins (II), (44) the Commission found that eight manufacturers of vitamins had
participated in eight distinct cartels by agreeing on target and minimum prices. Similarly,
in Sodium gluconate, (45) the Commission fined four companies for fixing minimum and
target prices on the market for sodium gluconate.
(b) Agreements on ‘recommended’ prices
The establishment, by competing undertakings, of a list of recommended prices may also
have the object or effect of replacing price competition with coordination. Thus, in Zinc
phosphate (46) the Commission fined British and Norwegian companies for fixing the prices
of zinc phosphate by circulating lists of ‘recommended’ prices. (47) In Belgian architects,
P 353 the Commission concluded that the scale of recommended minimum fees of the Belgian
P 354 Architects Association infringed Article 81(1). The Commission affirmed that, although
the fixing of recommended prices does not automatically infringe Article 81(1), in this case,
the decision of the Belgian Architects Association fixing the scale of recommended
minimum fees had the object of restricting competition. In reaching this conclusion, the
Commission took into account a number of factors, including the rule-making tone of the
title and of the recitals of the preamble of the decision, and the fact that the Association
issued and circulated a standard contract in which the only option for determining fees
was a reference to the scale. (48)
(c) Agreements to implement price increases
Agreements to implement certain price increases are also a form of illegal price fixing. In
Cast iron and steel rolls, (19) the parties agreed on index-linked general price increases for
iron and steel rolls. Not surprisingly, the Commission found this practice to infringe Article
81(1). In Rubber chemicals (50) the Commission condemned four undertakings for having
agreed price increases for certain rubber based chemical products (antioxidants,
antiozonants and primary accelerators). The coordination involved three distinct phases: a
preparatory phase, an implementation phase and a follow-up phase. During the
preparatory phase, the parties discussed a suggested price increase and collectively
determined its amount, identifying the products and territories involved as well as other
practical details. During the implementation phase, the price increases were announced to
clients and negotiated with the customers. The follow-up phase essentially involved the
exchange of detailed information about volumes and prices regarding specific customers.
(51)
(d) Fixing of purchase prices
P 354 In Raw tobacco Spain (52) and Raw tobacco Italy (53) the Commission fined several raw
P 355 tobacco processors for having agreed, among others, the average or maximum prices to
be paid to tobacco growers in Spain and Italy, respectively. The Commission noted that the
processors, by agreeing in such a way on the purchase prices that would be paid to
tobacco producers, managed to align as closely as possible their purchasing prices of
tobacco and to reduce them, to their own benefit. (54) The Commission emphasized that
the ‘purchase price is a fundamental aspect of the competitive conduct of any undertaking
operating in a processing business and is also, by definition, capable of affecting the
behaviour of the same companies in any other market in which they compete, including
downstream markets’. (55)
(e) Agreements to limit rebates and discounts
As rebates and discounts play an essential role in price competition, agreements to refrain
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from granting rebates and discounts or to limit them are prohibited by Article 81(1). In
Roofing felt, (56) the Commission imposed fines on Belasco, a Belgian association of
producers of roofing felt, and its members for agreeing to limit the discounts to be granted
to customers. Similarly, in FETTCSA, (57) the Commission imposed fines on shipping
companies for agreeing not to offer discounts on their published tariffs. It is nevertheless
worth noting that, for the purpose of determining the amount of the fines to be imposed for
the infringement, the agreement not to grant discounts was ultimately considered less
harmful than an agreement establishing a fixed price. (58)
Agreements to limit rebates and discounts often contain a provision stipulating a
maximum permitted level of discount or rebate. This was the case in Vimpoltu, (59) where
an organization of importers of agricultural machines decided to prohibit its members
from selling tractors to dealers at a total discount per tractor exceeding 25% of the
recommended retail price. The Commission found that the system of maximum discounts
had the effect of preventing importers from attracting new customers by offering higher
discounts. It also prevented dealers from obtaining the discounts they might have
P 355 obtained if no maximum level had been fixed, consequently preventing dealers from
P 356 passing on part of any such higher discount to their customers. (60)
(f) Agreements to refrain from advertising rebates
Agreements to refrain from advertising rebates have a restrictive effect on price
competition similar to that of agreements that directly limit rebates. Therefore, such
agreements are also prohibited under Article 81(1). In Papiers Peints, (61) the members of
the cartel undertook to standardize their general sales conditions and to include in them a
prohibition on announcing price reductions. The Court of Justice held that ‘if a system of
fixed selling prices is clearly in conflict with Art. [81(1)], a price-list system under which the
announcement of rebates on these prices is prohibited is equally so’. (62)
(g) Agreements to refrain from giving gifts to customers or from selling other products at a
loss
Like rebates and discounts, the possibility of granting gifts and similar advantages to
customers is part of price competition which must not be restricted. In Roofing felt (63) the
members of an organization of Belgian producers of roofing felt agreed not to offer
customers gifts or to sell them other products at a loss. This agreement, which was
intended to prevent the members from circumventing an agreed price list and agreed
minimum prices, was in itself found to infringe Article 81(1).
(h) Agreements to restrict credit terms
P 356 Terms of payment are another element of price competition. An agreement restricting
P 357 credit terms was condemned by the Commission in Fedetab. (64) The Commission found
that the decision of Fedetab, an association of Belgian and Luxembourgeoise producers of
manufactured tobacco, and its members to apply maximum credit terms to wholesalers
reinforced the anti-competitive effect of the other measures taken by them, notably a rule
against discounts and rebates. The Commission noted that the collective fixing of uniform
terms of payment to be accorded to wholesalers directly affected the profit margins of
manufacturers, wholesalers and retailers alike, since terms of payment are reflected in
profit margins. Moreover, terms of payment provide a significant opportunity for
competition among the various firms operating on a particular market. (65)
(i) Adoption of a common resale price policy
The Commission has also condemned agreements providing for the adoption of a common
resale price maintenance policy. In VBBB/VBVB, (66) an agreement between Dutch and
Belgian book associations contained a number of provisions designed to prevent books
published in one country from being sold in the other country at a retail price different
from that set by the publisher for the original country. The Commission found this
agreement to infringe Article 81. (67)
(j) Agreements imposing fixed trade and retail margins
Agreements imposing fixed trade and retail margins are similarly as restrictive of
competition as resale price fixing. Accordingly, in Fedetab (68) the Commission found that
the practice of dividing wholesalers and retailers into several categories and setting fixed
profit margins for each category constituted a restriction of competition among
manufacturers and among wholesalers. The manufacturers no longer had the opportunity
to compete against each other on mark-ups and the wholesalers no longer had the
possibility of competing with each other on resale prices to retailers. (69)
(k) Agreements to refrain from making ‘destructive sales below cost’, from engaging in
dumping or from selling below published prices
Agreements between competitors prohibiting sales below cost are a form of price fixing
and are therefore prohibited by Article 81(1). The same applies to reciprocal undertakings
P 357 to refrain from selling below published prices and from ‘dumping’. Thus, in IFTRA rules for
P 358 manufacturers of virgin aluminium, (70) the Commission stated:
– Regarding sales below cost: ‘The clause concerned with “destructive sales below cost”
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is alleged to have as its object “the protection and promotion of true competition”. In
the present case the principal object of [that clause] cannot reasonably be said to be
the “protection and promotion of true competition” […] [because it creates] a
framework which facilitates and encourages the suppression of commercial
initiatives which, whilst being inconvenient to the other parties to the agreement, are
not “destructive” in the reasonable sense of that term; i.e. such as to imperil the
existence of a competitor’.
– Regarding dumping: ‘It is […] difficult to predict whether a proposed sale will
constitute unlawful dumping, and in consequence a reciprocal undertaking to refrain
from dumping will necessarily discourage the parties from sales which may indeed
inconvenience other parties in their national markets, but which would not ultimately
be found contrary to the rules concerning dumping. Moreover, the threat of the
institution of “procedures” by a competitor and the imposition of contractual
penalties […] are further inducements not to disturb the markets of competitors by
any measures of price competition’.
– Regarding sales below published prices: ‘[The clause discouraging] the signatories
from selling at prices below those they have published […] under colour of protecting
customers against discrimination, provide[s] the parties with means of shelter from
competition to the extent that price stability is increased and that the parties are
enabled to predict each other's price policy with a reasonable degree of certainty’.
(l) Agreements to buy up excess quantity in return for a commitment to respect a certain
price level
The Commission imposed a high fine on the Belgian company Solvay for its participation in
the soda ash cartel. (71) In return for one of its competitors, CFK, adopting certain pricing
behaviour, Solvay guaranteed CFK an annual minimum sales tonnage in Germany by buying
the shortfall from CFK if its sales fell below the guaranteed minimum.
(m) Agreements on delivery charges
Not only the price of a product, but also the fee charged for its delivery is an important
P 358 element of price competition. Accordingly, the Commission has condemned a system of
P 359 uniform delivery prices set up by manufacturers of glass containers: (72)
The system of prices free at ultimate destination […] consists in applying […]
uniform delivered prices which in providing for an averaged freight charge do
not reflect the actual cost of transport of goods from place of origin to
destination. This system […] has the object of nullifying any competitive
advantage which a producer of glass containers might gain from the proximity
to his customers. It favours distant customers at the expense of those who are
near. (73)
(n) Agreements on environmental charges
The members of an association of companies offering tank storage facilities, VOTOB, (74)
decided to increase their prices to customers by a uniform ‘environmental charge’. This
charge was to partially cover the costs of investment required to reduce vapour emissions
from the members' storage tanks. The decision to increase prices was taken after VOTOB
had concluded a covenant with the Dutch Government to improve environmental
standards. The covenant, however, did not cover the fixing of price increases or
environmental charges. The Commission condemned VOTOB's decision and pointed out
that, although it was in favour of an improvement of the environmental conditions of a
given sector, it has to ensure that such an improvement did not take place at the expense
of competition.
(o) Agreements on special schemes to influence prices
Even more sophisticated pricing arrangements have not escaped the scrutiny of the
Commission. A special scheme was set up in Zinc producers' group (75) where an
organization composed of nearly all Western zinc mining and smelting companies decided
to fix a common price, the so-called ‘producer price’, for zinc. The organization substituted
this price for the price quoted on the London Metal Exchange (LME), the world-wide
commodities exchange for metals. To this end, the members of the zinc producers
organization undertook an obligation not to sell zinc on the LME, and, in certain
circumstances, to buy up zinc before it reached the LME and to engage in purchases in
order to support the price quoted on the LME. The Commission found that the agreement
on a producer price had the effect of, at least indirectly, influencing the producers' pricing
behaviour. (76)
(2) Price discrimination
Article 81(1)(d) expressly prohibits agreements or concerted practices between
undertakings which ‘apply dissimilar conditions to equivalent transactions with other
P 359 trading parties, thereby placing them at a competitive disadvantage’. Thus, an agreement
P 360 whereby competitors undertake to discriminate against certain customers as regards
pricing or other terms constitutes a prohibited form of agreement. Although neither the
Commission nor the European Courts have frequently based their decisions on an
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infringement of Article 81(1)(d), discriminatory pricing has been consistently condemned,
especially when it has the object or effect of partitioning markets within the Community.
A special kind of discrimination is involved in aggregated rebate systems where competing
suppliers agree among themselves to grant more favourable purchase terms, e.g., rebates
or discounts, to customers who buy the products they need from the cartel instead of from
an independent supplier. The Commission has found such systems to be in violation of
Article 81(1).
For example, in Papiers peints de Belgique, (77) it condemned an aggregated rebate system
set up by Belgian wallpaper manufacturers who were members of a trade association
called ‘Groupement des Fabricants de papiers peints de Belgique’. The association had
adopted general sales conditions containing a scaled system of rebates, whereby an
increasing percentage of rebate was granted depending on the total volume of purchases
made from the association. The Commission found this system to restrict competition from
other wallpaper producers who were not members of the Groupement. It noted:
The aggregated rebate system leads to a concentration of orders with members
of the Groupement. The fact that the rate of rebate varies with quantities
purchased encourages those who have already covered part of their
requirements from members of the Groupement to buy their entire
requirements from those members, in order to obtain the highest possible
rebate […] The scale of aggregated rebates thus applies dissimilar conditions to
similar transactions with other trading parties.
In Industrieverband, (78) the Commission also found that a collective grant of an aggregated
sales bonus for Belgian and French customers was caught by the prohibition of Article 81(1).
In order to obtain the maximum bonus, customers were required to place all their
purchase orders with members of the association in question and to refrain from buying
from non-members, even when the latter offered more favourable terms. The Commission
considered that such a discount system placed other suppliers at a competitive
P 360 disadvantage since they had to surmount an artificial, collectively erected barrier when
P 361 supplying members' customers. (79)
The Court of Justice confirmed the Commission's position that aggregated rebate systems
are prohibited under Article 81(1) in Nederlandse Sigarenwinkeliers Organisatie v.
Commission. (80) However, the Court of Justice avoided the question of whether such
systems are discriminatory in the sense of Article (81) (1)(d). While the Commission
explicitly relied on this provision, the Court stated that, given the anti-competitive effect
of the bonus scheme concerned, there was no need to examine this question.81 In CEWAL
(82) the Commission examined loyalty contracts established between transport users and
Cewal, one of the shipping conferences operating between Europe and west and central
Africa, and found that the establishment of loyalty contracts infringed Article 81 as well as
Article 82. The Court of First Instance stated:
In the first place, the Court considers that, as the Commission has pointed out,
the fact that the members of Cewal, which at the material time had more than
90% of the market, offered shippers only 100% loyalty contracts left no choice
between obtaining a rebate in the event that the shipper agreed to ship all its
goods by Cewal or no rebate in all other cases, and was in fact tantamount to
imposing such contracts. The applicants cannot effectively claim that such a
practice is exempt as regards Art. [81] of the Treaty. (83)
Again, the Court avoided the question of whether the loyalty rebate system was
discriminatory in the sense of Article 81(1)(d).
In Bitumen Netherlands, the Commission characterized the agreements among producers of
bitumen to apply lower rebates to certain large customers of road bitumen in the
Netherlands than to other road builders as discriminatory. The Commission reasoned that
this practice resulted in the application of dissimilar conditions to equivalent
transactions, placing some road builders at a competitive disadvantage. (84)
(3) Ancillary agreements
The parties to a price-fixing agreement may be tempted to conclude additional
agreements to ensure the maximum effectiveness of their price-fixing arrangement. The
obvious purpose of such ancillary agreements is to supplement the main agreement. As
P 361 shown in various decisions, (85) an ancillary agreement in support of a price-fixing
P 362 agreement is no less illegal than the price-fixing agreement itself.
In Zinc producer group, (86) the price of zinc was, until 1964, determined on a daily basis
according to supply and demand on the market. This price was quoted on the London
Metals Exchange (LME) as the ‘producer price’. Because the LME producer price was
subject to daily fluctuations, price quotations under long-term contracts were rendered
uncertain. To reduce this uncertainty, the major western zinc mining and smelting
companies, members of the Zinc Producer Group (ZPG), agreed to introduce a common
producer price to replace that quoted on the LME. The common producer price was
substantially lower than the one quoted on the LME. The parties supported their common
producer price in a number of ways: (i) they engaged in collective abstention from selling
7
zinc on the LME; (ii) they engaged in intervention buying if the LME producer price fell
below a predetermined level; and (iii) they agreed to curtail zinc production. The
Commission condemned each of these practices and considered that the object and effect
of these agreements were ‘to influence the LME zinc price so that it did not diverge too far
from the producer price and so to relieve market pressures on ZPG members to change the
producer price’. (87) Regarding the agreed production curtailments, the Commission
concluded that the ‘agreement on […] production restrictions […] is likely to have inhibited
the firms' commercial and competitive independence, since they would have to answer for
any breaches of the agreements to the ZPG’. (88)
In TACA, (89) the Commission also opposed an ancillary agreement. In 1994, the members of
the Trans-Atlantic Conference Agreement (TACA), who had a joint market share in excess of
60%, applied for an exemption of their main agreement pursuant to Article 81(3). However,
P 362 the Commission found that the TACA parties had also concluded a number of
P 363 supplementary agreements which fell within the scope of the prohibition on anti-
competitive agreements set out in Article 81(1). In these agreements the TACA parties fixed
the prices they charged for the provision of maritime transport services. Furthermore, the
parties placed restrictions on the conditions under which individual service contracts
could be entered into (such as restrictions as to duration and bans on contingency clauses
and multiple contracts). The Commission noted:
The TACA parties have an agreement between themselves to impose a number
of restrictions on the contents of the service contracts and, in the past, have
agreed that they will not enter into individual service contracts. One of the
purposes, of imposing these restrictions has been to prevent price competition.
(90)
The undertakings were thus found to have infringed Article 81(1) by concluding ancillary
agreements on the terms and conditions under which they were allowed to enter into
service contracts with shippers. These ancillary agreements did not fulfil the conditions of
Article 81(3). (91)
The Commission imposed fines on ten companies in Pre-insulated pipe (92) for market-
sharing, bid-rigging and price-fixing. The companies also agreed on total market quotas for
each producer. The Commission found that the fundamental aim of this quota scheme was
to raise price levels, and that the quota scheme was an aspect of a single continuing
infringement of Article 81. (93)
Ancillary agreements may also consist of compensatory mechanisms intended to support
those undertakings which have sold less than the amount guaranteed in the framework of
the collusive agreement. In MCAA, (94) the Commission established that four undertakings
operated a cartel in the market for mono-chloroacetic acid (MCAA). The parties'
arrangements also included a compensation mechanism the aim of which was to make
sure that the agreed volume quotas were respected. Under this mechanism, a company
which had sold more than its allocated quota bought products from companies which had
sold less than their allocated quota. As an alternative, the parties devised customer-
specific remedies, pursuant to which a party that oversold would offer, for the following
quarter, to sell less to a specific customer account or give up such customer to a company
that had undersold. (95) Similar arrangements were also agreed in Raw tobacco Spain
where the tobacco processors involved in a purchasing cartel set up compensation
P 363 mechanisms in cases of purchases exceeding the allotted quotas. In such cases, the
P 364 processor which had over-purchased tobacco during a given period had to compensate
the processor who had purchased less than the agreed volume, either by paying monetary
compensation or by selling to the latter the tobacco bought in excess of his quota. (96)
In Choline chloride, the cartel members considered that, in order for the cartel to work
effectively, it was necessary to control the behaviour of converters and distributors in the
choline chloride market. In this respect, it was agreed at the worldwide level that each
producer would be responsible in his home market for controlling the behaviour of
converters and distributors. At the European level, the control of distributors was pursued
by agreeing not to sell to them at preferential prices, while the control over converters was
pursued either by ensuring that they purchased their raw materials from the cartel
members, under the right conditions, or by informing them of the price levels agreed
among the three producers, on the assumption that they would follow them, or, if
necessary, by establishing exclusive corporate ties with downstream operators. (97)
(4) Parallel pricing behaviour
When a company adjusts its prices, its competitors will usually follow suit. Price uniformity
among competitors, short of a price-fixing agreement or concerted practice, does not
normally give rise to problems under Article 81(1). Where, however, such objective parallel-
pricing behaviour is based on a concerted practice between competitors, it violates Article
81(1). (98)
(5) Cartels and Article 82
In addition to infringing Article 81, a cartel agreement may also amount to an abuse of a
dominant position by one or more of the cartel participants and thus infringe Article 82. By
the same token, an agreement which fulfils the conditions of Article 81(3) can still infringe
8
Article 82. In Hoffmann-La Roche, (99) the Court of Justice observed, with regard to the
relationship between Article 81 and Article 82, that the fact that an agreement:
[M]ight fall within Art. [81] and in particular within paragraph 3 thereof does not
preclude the application of Art. [82], since this latter article is expressly aimed
in fact at situations which clearly originate in contractual relations so that in
such cases the Commission is entitled, taking into account the nature of the
reciprocal undertakings entered into and to the competitive position of the
P 364 various contracting parties on the market or markets in which they operate, to
P 365 proceed on the basis of Art. [81] or Art. [82].
Subsequently, in Flat glass, (100) the Commission found a horizontal cartel not only to be in
violation of Article 81(1), but also to infringe Article 82. The Commission found the existence
of an abuse of a dominant position by reference to the same facts which it had already
used in its assessment of the cartel under Article 81(1). Whilst the Court of First Instance
annulled the Commission decision with regard to Article 82 because the Commission had
not properly established the market share of the companies and had adduced insufficient
proof of the abuse, (101) the Court did not exclude the possibility that conduct which
constituted a violation of Article 81(1) might also ‘have effects which are incompatible with
Art. [82] of the Treaty’. (102)
In Tetra Pak, (103) the Court of First Instance confirmed that Articles 81 and 82 are
independent, complementary provisions designed, in general, to regulate distinct
situations. Further, the Court stated that the grant of exemptions, whether individual or
block exemptions, under Article 81(3) cannot be such as to render the prohibition set out in
Article 82 inapplicable. (104)
§4.2 Market-sharing agreements

Like price-fixing agreements, market-sharing in its various forms is prohibited by the EC
competition rules. Article 81(1)(c) expressly mentions the sharing of markets or sources of
supply as an anti-competitive practice, and Article 81(1)(b) condemns, inter alia, the
limitation or control of production.
In their most typical form, market-sharing arrangements provide for mutual respect of
different markets, usually determined along geographic borders, with the result that each
market remains insulated from the others. Given that the main goal of the EC Treaty is
market integration, it is not surprising that the Commission has taken a particularly strict
view of such arrangements. As early as in its First Report on Competition Policy, the
P 365 Commission noted that ‘restrictions on competition and practices which jeopardize the
P 366 unity of the Common Market are proceeded against with special vigour’. (105)
This sub-section will discuss (1) geographical market allocation; (2) arrangements
restricting production or sources of supply; (3) limitation or control of investment; (4)
arrangements allocating customers or products to the different participants; (5)
arrangements combining product and geographic market sharing; and (6) bid-rigging.
(1) Geographical market-sharing
Both direct geographic market-allocation (i.e., allocation of markets and territories) and
indirect market-allocation (i.e., purchase of competitors' quantities to protect home
markets and imposition of sales, export and delivery quotas) have been found to infringe
Article 81(1).
(a) Allocation of markets and territories
Early Commission interventions in the context of market sharing dealt with territorial
divisions. Characterizing this type of agreement as ‘so obviously contrary to the Community
rules of competition’, the Commission noted that every investigation it undertook resulted
in the offending agreements being terminated without the necessity of a formal decision
being taken. (106)
Quinine (107) was the first case in which a formal decision was issued. The parties had
concluded a ‘gentlemen's agreement’ by which their respective national markets remained
the ‘reserved’ territory of each local producer. This agreement was combined with an
additional agreement allocating export quotas and fixing prices so as to discourage sales
between Member States. The Commission found that the agreements on prices, protection
of national markets and export quotas complemented each other and constituted such a
serious violation that, for the first time, it decided to impose fines. On appeal, the Court of
P 366 Justice concluded that the agreements guaranteed protection of each domestic market
P 367 for the producers in the various Member States and confirmed the Commission's decision
to a large extent. (108)
In Peroxygen (109) the investigations carried out by the Commission showed that producers
of hydrogen peroxide and sodium perborate conducted their commercial operations in the
Community on the basis of an agreement or understanding that each national market was
to be reserved for those producers that manufactured inside the territory in question (the
‘home market rule’). Furthermore, three producers divided the French market among
themselves in equal shares. The Benelux countries and Germany were also divided among
9
the producers. The Commission considered that the market-sharing agreements
constituted infringements of Article 81(1). (110)
In 1994 the Commission imposed heavy fines in two cartel cases where the participants had
agreed to stay out of each other's markets. First, in Cartonboard, (111) where in the period
from 1986 to 1991 virtually all Community cartonboard producers had participated in
agreements and concerted practices by which they fixed prices and reached an
understanding on maintaining the market shares of the major producers at constant levels,
the Commission stated, with regard to market sharing:
It is not decisive for the application of Art. [81] that in freezing market shares
and controlling output the producers in this case did not allocate particular
national markets to particular producers. The very existence of production
control measures would operate to restrict the opportunities open to a
producer. Arrangements like the ‘freeze’ on market shares were clearly intended
to prevent new trade relationships developing. (112)
P 367 Second, in Cement, (113) the European cement producers and their trade organizations
P 368 agreed on a common rule on non-transhipment to home markets (according to the rule,
each member should sell in its home market and only export its excess production into
other members' markets on certain agreed terms). The division of markets was reinforced
by the practice of channelling for export outside the Community that part of production
which was not necessary to satisfy demand in the countries in which each member was
established. The Commission found that the whole of the arrangements bilaterally and
multilaterally adopted by the parties constituted a single and continuous agreement and
stated that ‘the concerted practice and agreement, which have as their object and effect
the protection of national markets, are expressly prohibited by Art. [81(1)(c)]. Such
protection is contrary to one of the fundamental objectives of the Treaty, namely the
establishment of a common market’. (114)
In Seamless steel tubes, (115) the Commission imposed substantial fines on eight steel tube
producers. The producers had agreed to limit the supply of seamless steel tubes to a
Member State where one of the producers was established by refraining from delivering
tubes to that market.
A market sharing cartel was also discovered by the Commission in SAS Maersk Air, (116)
where the Commission fined SAS and Maersk Air for allocating routes on the air transport
market. The parties also concluded an overall market-sharing agreement, according to
which SAS would not operate on Maersk Air's routes to and from Jutland and Maersk Air
would not launch competing services from Copenhagen on the routes which SAS operated
or wished to operate. Additionally, the parties concluded specific market-sharing
agreements regarding individual routes. In particular, the parties agreed that Maersk Air
would cease flying between Copenhagen and Stockholm, and that SAS would stop
operating between Copenhagen and Venice and between Billund and Frankfurt. The
Commission stated that the market-sharing agreements by their very nature had as their
P 368 object the restriction of competition and were caught by the prohibition in Article 81(1).
P 369 (117)
In Choline chloride, (118) the largest choline chloride producers were condemned for their
participation in a market sharing cartel. In particular, the Commission found that the main
North American and European producers of choline chloride met secretly in order to raise
worldwide prices, allocate markets and monitor competitors. The market allocation was
undertaken at both the worldwide and European levels. At the worldwide level, the parties
agreed that the North American producers would withdraw from Europe, whereas the
European producers would withdraw from North America. Moreover, the parties reached
specific agreements for the allocation of other geographical areas. At the European level,
the European producers set prices, agreed price increases, shared customers and
allocated EEA-wide market shares.
A similar cartel structure was condemned in Gas insulated switchgear. In this case, the
Commission found the existence of a common understanding among the parties that the
Japanese producers of gas insulated switchgear would not sell in Europe and vice-versa.
Moreover, projects outside the European and Japanese areas were allocated on the basis
of fixed global quotas. In addition, European companies agreed to allocate European
projects between them, following the principle of ‘home country control’ in certain
European countries, according to which these countries were left to the home producer.
(119)
(b) Purchasing competitors' quantities to protect home markets
Besides direct export and import bans, geographical market-sharing can be achieved by
more subtle means, such as those used in European sugar industry. (120) The European
sugar industry had traditionally been characterized by close cooperation between
quasigovernmental national market associations and domestic producers and by strict
compartmentalization. From 1 July 1968, when the various national market organizations
were replaced by a common market organization, several sugar producers engaged in
concerted practices designed to control the sugar trade between Member States so as to
guarantee each producer the protection of its respective national market. However,
P 369
10
P 369 because certain areas of the Community were faced with sugar shortages, a number of
P 370
intra-Community sales were necessary. To avoid the competition created by trade
between Member States, the producers agreed to make deliveries in other Member States
only through local producers in the importing country. (121) The effect of this agreement
was to allow the importing producer to sell the purchased sugar at the same price, on the
same conditions, and under the same trademark as its own sugar. Because the parties
knew or should have known that the measures taken were ‘obviously contrary’ to the aims
of market integration, the Commission imposed substantial fines.
On appeal, the Court of Justice largely upheld the Commission's finding that the
arrangement was contrary to Article 81(1), but annulled part of the Commission's decision
on other grounds. In particular, the Court of Justice held that the national regulation that
existed on the Italian market alongside the Community regime eliminated any room for
competition, thus excluding any possible infringement of Article 81(1) by private parties.
Similar forms of market-sharing arrangements have been condemned in a number of
decisions. In Vegetable parchment, (122) the only British producer of vegetable parchment
wished to reserve the entire British and Irish markets for itself. To this end, it engaged in a
concerted practice with continental manufacturers whereby it purchased from those
manufacturers the quantity needed to fill the gap between its own production and demand
on the UK market. In turn, continental manufacturers refrained from directly supplying
customers on this market. In line with its strict approach to any arrangements designed to
P 370 isolate national markets in the Community, the Commission condemned the practice
P 371 without a more detailed analysis of its anti-competitive effects. (123)
(c) Sales, export and delivery quotas
In addition to the more typical ‘you-take-France-and-I-take-Germany’ type of agreement,
geographical market-sharing may also be accomplished by means of sales quotas or
export or delivery quotas. (124) In Cementregeling voor Nederland, (125) Dutch, Belgian and
German cement manufacturers agreed to divide the supply of the Dutch market among
them. Based on annual cement consumption, a delivery quota was established for each
manufacturer. If one of the parties exceeded its quota, it was obliged to take whatever
measures were necessary to correct the imbalance. The Commission found that the system
of delivery quotas ‘does not allow the parties to freely determine the quantity of cement
they sell in the Netherlands’. (126) The system ‘impairs the freedom to export Belgian and
German cement to the Netherlands and the freedom of international trade in cement
between Belgium and the Federal Republic of Germany on the one hand and the
Netherlands on the other, in such a way as to jeopardize the realization of the objective of
a single market between states’. (127)
In Graphite electrodes, (128) the graphite electrode producers agreed upon the allocation
of markets and market share quotas in each market. The Commission found that the
P 371 existence of a quota mechanism ‘must have resulted, or was likely to result, in the
P 372 automatic diversion of trade patterns from the course they would otherwise have
followed’. (129) Similarly, in MCAA, (130) the Commission found that the undertakings
participating in the cartel had concluded market sharing agreements which included the
allocation of sales volumes quotas.
(2) limitation of production or sources of supply
Article 81(1)(b) expressly prohibits agreements and concerted practices that limit or
control production. Thus, the Commission and the European Courts have repeatedly found
the allocation of production quotas between competitors to constitute an infringement of
the EC competition rules. In Quinine, (131) a series of gentlemen's agreements among Dutch,
German, French and British producers prohibited the French and British parties from
manufacturing quinidine without the approval of the other parties, in exchange for
territorial protection of their respective home markets. The Commission found Article 81(1)
to be infringed and rejected the parties' contention that the French and British companies
were, in any event, unable to manufacture quinidine because of their lack of technical
experience. (132) On appeal, the Court of Justice confirmed the Commission's findings. (133)
In Italian cast glass, (134) the Commission condemned a system of production quotas
established by Italian glass manufacturers, finding that the quotas were intended to
preserve each company's respective market share. By limiting their production, the parties
‘no longer had any incentive to reduce their prices to win a larger market share as, if they
P 372 had done so, they would have forfeited the opportunity of drawing the maximum benefit
P 373 from their production quotas’. (135)
Production quotas were also condemned by the Commission in Zinc producers group, (136)
where an organization composed of zinc mining and smelting companies decided to fix a
common price for zinc and to substitute this price for that quoted on the London Metal
Exchange (LME). To support this price-fixing scheme the organization set up a committee
to fix the amounts (quotas) of zinc that each member was to buy on the LME. Instead of
buying up zinc on the LME, members had the option of limiting their production in line
with the quota, of transferring an equivalent tonnage of their production to their stocks, or
of not placing it on the market.
The Commission, in Graphite electrodes (137) and Citric acid, (138) characterized agreements
11
concerning the freezing, limitation or closing down of production capacity as a restriction
of competition.
In line with its generally negative view of market-sharing agreements, the Commission has
usually refused to grant an exemption under Article 81(3) to agreements containing
provisions limiting production or sources of supply. In some cases, exemptions were
granted after the parties had removed the provisions fixing production quotas. Thus, in
Synthetic fibres (II), (139) the Commission only granted an individual exemption to a so-
called ‘crisis cartel’ (140) intended to reduce overcapacities after the allocation of
production quotas had been dropped. (141) In Fine paper, (142) the Commission objected to
production quotas in the context of a specialization agreement among the principal French
manufacturers of fine paper, granting an exemption only after the parties had terminated
the part of the agreement establishing quotas.
A market-sharing agreement often has the effect of cutting off sources of supply available
to customers. In Cewal, Cowac and Ukwal, (143) several liner conferences which held a
dominant position on their respective markets agreed not to operate in each other's areas.
The Commission found that these classical territorial market-sharing agreements also had
the effect of cutting off ‘the supply of transport services available to shippers from each
conference area’. (144) By controlling the supply of available transport services, the
members of the liner conference were able to maintain their market-sharing agreement.
A similar cartel was operated in TACA (I), (145) which concerned an agreement among
P 373 shipping companies on scheduled transatlantic container transport between northern
P 374 Europe and the United States (the ‘TAA’). The Commission found that the shipping
companies had entered into capacity non-utilization agreements which allowed the
limitation or control of production within the meaning of Article 81(1)(b). These agreements
allowed the members of the TAA to substantially restrict the competitive capacity of each
member vis-à-vis the others by limiting the volume that each one could offer on the
market.
Market sharing may occur also in respect of sources of supply when competing
undertakings agree among themselves the quantities that each of them is entitled to buy
from suppliers of raw materials or of a certain production input. In Raw tobacco Spain,
(146) certain tobacco processors shared the quantities of raw tobacco that each processor
was allowed to buy from tobacco growers. In Raw tobacco Italy, (147) raw tobacco
processors allocated suppliers among themselves and agreed on the quantities that each
of them would undertake to buy from allotted suppliers.
(3) limitation or control of investment
In French beer, (148) the Commission fined the two main beer producers in France for
having concluded an ‘armistice’ agreement with the aim of establishing an equilibrium in
the away-from-home (or ‘horeca’) market between the two groups. This agreement followed
the so-called ‘acquisition war’, during which each group of producers had competed
fiercely to acquire a large number of drinks wholesalers in a short period of time, thereby
causing an escalation in the acquisition costs of these distributors. With the armistice
agreement, the parties intended, in the first place, to stop the rapid increase of
acquisition costs of wholesalers caused by the acquisition period and, secondly, to balance
their integrated distribution networks so that no group could dominate the other. (149)
When setting the fine, the Commission took into account the fact that the agreement was
never implemented.
(4) Allocation of customers and/or products
Market-sharing may result not only from geographical market divisions and production
restrictions, but also from the allocation of customers or certain products.
(a) Customer allocation
P 374 The Commission has, on several occasions, condemned schemes whereby competitors
P 375 allocate customers to each other. In BP Kemi-DDSF, (150) BP Kemi supplied DDSF with
ethanol for resale to customers. The parties agreed that DDSF would enjoy the exclusive
right to sell ethanol in Denmark, except to those customers whose annual consumption
exceeded 100,000 litres. BP Kemi would sell directly to these large customers, but its
direct sales were limited to 25% of the combined annual sales of the two parties. The
scheme was found to be unacceptable by the Commission because it allocated the
customers to be supplied by each party and removed BP Kemi's incentive to sell ethanol
to new customers.
In Building and construction in the Netherlands, (151) a system was set up to regulate and
monitor prices and tenders in the Dutch construction sector. According to the Commission,
the predetermination among the bidders of an ‘entitled bidder’ or a ‘preferred bidder’
having the exclusive right to negotiate the terms of the contract with the customer
amounted to an impermissible sharing of customers. Indeed, this predetermination
prevented the bidders from competing for the bid.
The main aim of the cartel in Food flavour enhancers (152) was to share customers in the
market for nucleotides. The European market was largely made up of three large industrial
users, which together accounted for around 50% of nucleotide demand in Europe. Two of
12
these customers were traditionally supplied by Takeda, whereas another was normally
supplied by Ajinomoto. Takeda and Ajinomoto had agreed not to sell to each other's
respective European customers. In order to protect their sales to these European
customers, Takeda and Ajinomoto also entered into agreements with their main
competitors under which Takeda and Ajinomoto committed to purchase product from their
competitors, in exchange for which the competitors agreed to limit their sales to the three
main European customers. The Commission found that this scheme led to an illegal
allocation of customers and markets.
In Choline chloride, (153) the Commission fined choline chloride producers for having
agreed to allocate customers in Europe. In particular, the companies involved
systematically allocated customers in specific national markets by agreeing that other
participants would offer higher prices than the undertaking to which the customer was
assigned.
The sharing of supply to a single customer has equally been found to violate Article 81(1).
P 375 Thus, in Flat glass, (154) two producers, SIV and FP, decided to equally share the supply of
P 376 flat glass to a large customer, Piaggio. In order to achieve their goal, they agreed on the
prices to be charged to Piaggio and on the quantities and items which each of them would
supply, which resulted in a reduced supply quota for FP and an increased supply quota for
SIV. The Commission found that ‘through these agreements and practices, which constitute
clear infringements, the two producers developed a long-term strategy designed to get the
customer in question to apportion its order in accordance with what they had decided,
thus depriving Piaggio, through the system of differentiated prices, of any economic scope
for choosing its own sources of supply’. (155) The Court of First Instance characterized the
agreements as both price-fixing and market-sharing, caught by Article 81(1)(a) and (c) with
clear anti-competitive objectives. (156)
In Vitamins (II), (157) four producers of vitamin C conceived a sophisticated system for
handling ‘key accounts’. The producers estimated the total annual demand of each ‘key
customer’, reported the price it was currently paying and agreed who would supply what
tonnage to the customer concerned. For one of the largest customers worldwide, Coca-Cola,
the vitamin producers agreed how to share business with Coca-Cola between them and
which prices to quote. In its decisions the Commission found that the producers had
restricted competition by, among other things, dividing the business of specific customers.
(158)
In the Car glass decision, the Commission imposed a record fine of more than €1.3 billion
on four undertakings for illegal market-sharing, and exchange of commercially sensitive
information regaring the sale of car glass in the EEA. According to the Commission's press
release on this decision, the undertakings concerned held regular meetings to discuss the
allocation between them of car glass supplies to car manufacturers in response to their
tenders and agreed on methods to keep their market shares stable. (159) The fines
imposed in this decision are, at the time of writing, the highest total fines ever imposed by
the Commission on a cartel.
The allocation of individual customers between competitors for the purpose of ‘winning
back’ customers lost to non-European competitors has also been regarded by the
Commission as an infringement of Article 81(1). In Citric acid, (160) customers which had
been lost to Chinese producers were identified by name and were allocated to individual
participants, who were to make the necessary offers to win the customers back. The
P 376 Commission found this form of cooperation between the competitors to infringe Article
P 377 81(1).
(b) Product allocation
The allocation, between competitors, of certain products or product ranges also infringes
Article 81(1). Thus, in Italian cast glass (161) the Commission objected to an agreement
between cast glass manufacturers fixing a quota for sales on the Italian market for each
participant and specifying the kinds of cast glass that each manufacturer could sell within
its quota.
In Tréfileurope v. Commission, (162) three producers of welded steel mesh concluded a
gentlemen's agreement according to which two of the producers would not produce
catalogue mesh and one of the producers would not produce standard mesh. The Court of
First Instance found that this ‘specialization agreement’ infringed Article 81(1) and in
particular subparagraph (c).
(5) Product and geographic market sharing combined
In Needles, (163) the Commission fined three companies for having concluded a series of
formally bilateral written agreements which in reality amounted to a tripartite product
and geographic market sharing agreement. The Commission found that, in order to prevent
Entaco from growing and becoming an effective competitor on the hard haberdashery
market, the companies Entaco, Prym and Coats signed a number of interdependent
bilateral agreements, respectively, between Entaco and Prym on the one hand and Entaco
and Coats on the other. Pursuant to these agreements, Entaco undertook to restrict its
business activities in the haberdashery sector to hand sewing needles and special needles
and not to supply needles markets in the Continental Europe. At the same time, Entaco
13
signed an exclusive supply agreement with Coats in the UK and Italy and Prym undertook
to source all its requirements for various varieties of needles from Entaco. (164)
(6) Bid rigging
P 377 Bid rigging occurs when competing suppliers collude on the bids to submit in tenders
P 378 organized for the adjudication of contracts. By rigging their bids, competing bidders
decide beforehand who should win the tender instead of striving to submit the most
competitive offer. Bid rigging may be viewed, depending on the circumstances and the
terms of the collusive arrangement, as a form of price fixing, production limitation or
market sharing agreement. Bid rigging is invariably considered one of the most serious
infringements of competition law. (165) In Pre-insulated pipe (166) the Commission fined ten
companies for their participation in a market sharing, price-fixing and bid-rigging cartel
covering the European pre-insulated pipes market. In Raw tobacco Italy (167) several
tobacco processors agreed on the bids to submit in public auctions for the purchase of raw
tobacco from public authorities in 1995 and 1998. In Elevators and escalators (168) the
Commission fined four companies for running a series of cartels in which they rigged bids
in respect of public tenders for the sale, installation and maintenance of lifts and
escalators.
§4.3 Collective Boycotts

A collective boycott is considered to be one of the most pernicious violations of
competition law. It consists of a concerted refusal by a group of competitors to deal with
one or more customers or suppliers or with a competitor which is not part of the ‘club’.
Collective boycotts include, for example, the refusal to supply certain customers or to
conclude transactions with certain sub-contractors. (169) The aim of such boycotts is
usually to punish a ‘troublemaking’ customer, supplier or competitor for its trading
practice (a defensive boycott) or to force a trader to adopt a certain course of conduct (a
predatory boycott). Such practices constitute a deliberate violation of Article 81(1). There
are, however, relatively few reported cases involving collective boycotts. (170)
Collective boycotts may either be part of an individual agreement between two or more
producers or be the result of trade associations' rules, regulations or by-laws. Indeed,
trade associations' rules sometimes impede the entry of competitors into the market or
require their members to deal only with certain parties or under certain terms determined
by the association. With respect to the latter form of restriction, there is rarely any
reasonable and objective justification for such rules that could qualify the agreement for
exemption under Article 81(3). For example, in Netherlands insurers, (171) an association of
P 378 the major transport insurers in the Netherlands had a rule prohibiting its members from
P 379 concluding re-insurance contracts with non-members. The Commission asked the
association to change the rule because it found it to be ‘a restriction of competition […]
which serves to intensify the continuing isolation of national markets’. In Centraal Bureau
voor de Rijwielhandel, (172) the Commission struck down the clauses of a regulation enacted
by an association of bicycle traders preventing its members from trading in bicycles and
related goods with non-recognized undertakings. The Commission found that this
restriction denied non-recognized firms access to the majority of bicycle traders in the
Netherlands market. In Sarabex, (173) the British Bankers' Association (BBA) and the Foreign
Exchange and Currency Deposit Brokers' Association (FECDBA) had to amend their
agreement under which approved banks using services of FECDBA's members in the London
foreign exchange market were not to use the services of other brokers. To overcome the
Commission's objections, a system was established pursuant to which brokers who met
certain objective criteria could become ‘recognized brokers’ with whom banks could deal.
A collective refusal to deal may also be found to exist where members of a trade
association force out of the market a customer or a supplier who does not comply with the
association's trade policy. In Papiers peints de Belgique, (174) Belgian wallpaper
manufacturers had established a trade association that regulated resale price ranges. An
independent wholesaler refused to comply with the price levels imposed by the
association and refused to ensure that these prices were applied by his customer, a chain
of self-service discount stores. The association and its members decided to no longer
supply the wholesaler. The Commission found this boycott to infringe Article 81(1).
In Pre-insulated pipe, (175) the Commission censured ten companies that had been engaged
in a clandestine market-sharing, bid-rigging and price-fixing cartel covering the European
market for pre-insulated pipes. The only producer not involved in the cartel, Powerpipe,
had suffered systematic reprisals from the others as a result of its refusal to join the cartel.
When Powerpipe won a large contract in Germany against the cartel, the other producers
decided to force it out of business by organizing a boycott of its contractors and suppliers.
The Commission found this boycott to be part of a network of agreements restricting
competition.
It is noteworthy that, once several undertakings have agreed upon boycott measures
against certain customers or suppliers, they may be held liable for infringing Article 81(1)
even though they have not participated in implementing the measures. In Preinsulated
pipe, some pipe manufacturers argued before the Court of First Instance that they had not
P 379 implemented the boycott measures that had been decided upon and that they should
P 380 therefore not be held liable. The Court of First Instance, however, stated that ‘a boycott
14
may be attributed to an undertaking without there being any need for it actually to
participate, or even be capable of participating, in its implementation. Where that is not
so, an undertaking which approved a boycott but did not have the opportunity to adopt a
measure to implement it would avoid any form of liability for its participation in the
agreement’. (176)
§4.4 Exchange of Information

This sub-section examines (1) the application of Article 81 to information exchange
arrangements, (2) the relevance of market structure in the assessment of such
arrangements, (3) the relevance of the nature of the information exchanged in the
assessment of such arrangements, (4) the exchange of price information, (5) the exchange
of information on production and sales, (6) the exchange of information on costs,
investments and capacities, (7) the exchange of information between distributors, (8) the
exchange of confidential information concerning the identity and solvency of customers,
and (8) the exchange of information through B2B marketplaces. Finally, the Commission's
approach in practice to information exchange agreements is examined by reference to UK
Tractor, (177) the leading case in this field.
(1) Application of Article 81(1)
The Commission has always been suspicious of the exchange of commercial information
between competitors. The exchange of such information increases transparency in the
market, which may eliminate or reduce the normal uncertainty regarding the conduct of
competitors and thus produce anti-competitive effects. (178) In particular, exchanges of
information that allow the identification of an undertaking's individual figures, and thus its
P 380 competitive behaviour, are likely to infringe Article 81(1). (179) An information exchange
P 381 system can appreciably reduce the decision-making independence of the participating
producers by substituting practical cooperation for the normal risks of competition. (180)
As a general rule, the periodic communication of business information concerning
individual undertakings is likely to infringe the EC competition rules, since that type of
information normally constitutes a trade secret and is not required for the preparation of
periodical statistics. (181)
However, the exchange of information may also produce beneficial effects if it contributes
to improvements in production and distribution of goods or furthers technical and
economic progress. For instance, agreements the sole object of which is the joint exchange
of opinion or experience, joint market research, jointly conducted studies of undertakings
or industries or the joint preparation of statistics are generally unlikely to infringe Article
81(1). (182)
The main problem is distinguishing permissible exchanges of information from exchanges
that are contrary to Article 81(1). Given the wide variety of exchanges, each individual case
has to be considered on its own merits, taking into account all relevant circumstances.
(183)
Generally, exchanges of information can be divided into two broad categories:
– The first category concerns exchanges of information that support or form an integral
part of collusive practices such as, for example, price fixing or market allocation. In
these circumstances, the exchanges will also be caught by Article 81(1). (184) Indeed,
the most significant cartels have engaged in far-reaching exchanges of sensitive
P 381 information, (185) and it is thus not surprising that the Commission considers
P 382 exchanges of information between competitors to be suspicious.
– The second category concerns exchanges of information that are not coupled with
other collusive behaviour. This type of exchange will infringe Article 81(1) if it is
capable of producing anti-competitive effects. (186)
Anti-competitive effects are more likely to occur when the exchange of information
concerns homogenous products in a concentrated market, (187) in particular when the
information is limited to the undertakings involved. (188) In its assessment, the
Commission will therefore focus particularly on the market structure and the nature of the
information exchanged. (189) The importance of the market structure and the nature of the
information for assessing the legality of the information exchange as well as the most
common types of information exchanges are discussed below.
(2) Market structure
In general, the higher the market concentration and the more homogeneous the product
concerned, the more likely the exchange of information is to restrict competition, since the
inclination for undertakings to fall in line with the behaviour of their competitors is
particularly strong in such markets. (190) In Wirtschaftsvereinigung Stahl, the Commission
explained that increased transparency in such oligopolistic markets dissuades
independent competitive action because it will immediately be noticed by competitors
who are able to take retaliatory measures. (191)
The Commission will look at the degree of market concentration, the number of producers
and the structural links between them, the combined market share of the participants in
the information exchange, and the barriers to market entry. (192) The Commission has not
15
defined a concentration threshold above which information exchanges will generally be
P 382 regarded as having anti-competitive effects, but has found such effects to exist in markets
P 383 with varying degrees of concentration. (193) If the Commission concludes that the
market is highly concentrated, it will be particularly wary of any exchange of sensitive
information between the competitors. Under such market conditions, the exchange of
information may restrict competition on two levels.
First, competition may be distorted vis-à-vis competitors that are not parties to the
exchange. Since they do not benefit from the information exchanged, non-participating
actual competitors may be put at a competitive disadvantage as compared to the
members of the exchange, and potential competitors may suffer higher barriers to entry,
irrespective of whether they choose to become members of the exchange. (194) If they
choose not to participate, they will not be able to compete on an equal footing with the
members of the exchange who can act on the basis of more detailed and more accurate
information. (195) On the other hand, if they choose to become members of the exchange,
they will have to reveal their own confidential information, on the basis of which the
established competitors can take immediate action.
Second, competition may be restricted between the members of the exchange by
‘replacing the risks of competition and the hazards of competitors' spontaneous reactions
by cooperation’. (196) In this connection, the Commission has stated that ‘active
competition in these market conditions becomes possible only if each competitor can
keep its actions secret or even succeeds in misleading its rivals’. (197) The lack of external
competitive pressures will, given the high barriers to entry, preserve market stability and
remove the possibilities for competition.
(3) Nature of the information exchanged
P 383 The Commission will analyse the information exchanged to determine whether it reveals
P 384 individual strategies or market positions of undertakings, in which case the EC
competition rules may be infringed. (198) In this regard, an exchange of information will be
considered from a number of perspectives.
First, as a general rule, exchange of information that is usually kept confidential will
infringe Article 81(1). (199) Such information may include, for example, individual
information on prices, quantities, costs, capacities and output levels, all of which would
normally be kept strictly confidential and would not be disclosed to competitors. The
Commission is generally more lenient towards the exchange of non-confidential
information that can also be obtained from other sources (such as market research). The
exchange of this type of information is less likely to have an adverse effect on competition
because competitors can always obtain the same information from other sources. However,
the sole fact that information might also be obtainable from other sources, albeit not as
quickly, does not necessarily mean that the information exchange falls outside the scope
of Article 81. (200)
Second, the Commission is more likely to find a breach of Article 81(1) where the
information exchanged is limited to, and the increased transparency and knowledge only
benefits, the parties to the exchange to the exclusion of customers and other competitors.
(201) The Commission has stated on several occasions that such exchanges of information
between competitors in highly concentrated markets only benefit the producers and
deprive consumers of any benefit of hidden competition. (202)
Third, the level of detail of the exchanged information is of particular importance. The
Commission has explained, in UK Tractors, that the regular exchange of information that is
P 384 up-to-date, detailed and accurate are more likely to infringe Article 81(1) since they reveal
P 385 more precisely a rival's strategies and enable immediate targeted responses. (203) The
more precise the information exchanged, the greater the impact on the undertakings'
future market behaviour. (204) In Wirtschaftsvereinigung Stahl, (205) the Court of First
Instance annulled the Commission's decision because it was based on the erroneous
finding that certain detailed data would be exchanged. The Court noted that, without this
detailed data, the parties would in fact only have been able to calculate approximate
market shares, which could have resulted in a different Commission assessment of the
permissibility of the information exchange. The Court went on to clarify that the exchanged
information in this case was not as detailed as that in UK Tractors since, in that case, the
information was very precise and allowed the participants to determine every individual
sale by competitors. (206)
Fourth, an important distinction must be made between exchanges of aggregated data and
individual data. (207) Aggregated data that does not identify the figures of individual
undertakings is generally unobjectionable. (208) Conversely, data identifying individual
P 385 undertakings in a concentrated market is more likely to violate Article 81(1). (209) In this
P 386 regard, the Commission has stated ‘[there is] no fundamental objection to the exchange
of statistical information through trade associations or reporting agencies even when they
provide a breakdown of the figures, e.g. by country or product, as long as the information
exchanged does not enable the identification of individual businesses’. (210) For example,
in CEPI-Cartonboard, (211) the Commission authorized an information exchange system,
which replaced the one found to have infringed the competition rules in Cartonboard. The
Commission accepted the new system in particular because it covered information only in
aggregated format.
16
An exchange of individualized data is only permissible if the data is sufficiently historic to
not have any real impact on the future behaviour of the companies receiving the data.
(212) The Commission has generally found the exchange of individualized data on
transactions more than twelve months old to be harmless to competition. (213) For
example, in its 1999 approval of an information exchange system between Community
tractor suppliers, the Commission established the following important principles: (214)
– individual data may not be exchanged until a period of twelve months has elapsed
between the date of the event constituting the subject of the exchange and the date
of the exchange; and
– aggregate market data, which may be less than twelve months old, may be
exchanged if the data are supplied by at least three dealers belonging to different
industrial or financial groupings. If there are fewer than three dealers, data may be
exchanged only if the figure being exchanged concerns ten tractor units. (215)
Thus, in the Commission's view, exchanges of at least one-year-old individual information,
or more recent aggregate information comprising data from at least three independent
undertakings, are generally unobjectionable. The Commission has stated that these
principles should serve as guidelines for any similar exchanges of information in other
highly concentrated sectors.
Nevertheless, undertakings should remain cautious even when exchanging historical data.
In its Cement judgment, the Court of Justice held that, in specific circumstances, even the
P 386 exchange of historical and purely statistic data could lead to an infringement of Article
P 387 81(1). The Court stated that:
[E]ven though the information exchanged was in the public domain or related to
historical and purely statistical prices, its exchange infringes Article [81(1)] of
the Treaty where it underpins another anti-competitive arrangement. (216)
(4) Exchange of price information
The exchange of price information between competitors will generally in itself be
considered to be an infringement of Article 81(1) if it reveals competitors' future or recent
pricing policies and is withheld from customers. (217) For example, in Glass containers,
(218) the Commission condemned an agreement between competitors to communicate to
each other the essential elements of their pricing policies such as price lists, discounts and
terms of trade, the rates and date of any change to the prices and special exceptions
granted to specific customers. (219) A different assessment was applied in the IBOS case
concerning an association comprised of eight banks from eight different Member States
using IBOS (Inter-Bank Online System) to link their computer systems and account bases,
which facilitated the members' offer of a core range of products. Members had to disclose
to each other the charges they applied to their customers. The disclosure of the charges
applying to customers was nevertheless not seen as a restriction of competition as the
members were not competing for customers with each other but with other banks and
other systems. Each member had the freedom to set its prices independently. Without this
disclosure, members could not inform the initiating customer of the total price of the
transaction. (220)
(5) Exchange of information on production and sales
The exchange of aggregated information on production and sales is generally
P 387 unobjectionable, provided no figures of individual undertakings are disclosed. (221) There
P 388 is also no objection to making information on production and sales of particular
undertakings publicly available, as long as the information is sufficiently historic to have
no real impact on future behaviour. However, the exchange of more recent detailed
information on individual undertakings which is not shared with customers is likely to
infringe Article 81(1), in particular if done in conjunction with other anti-competitive
conduct such as, for example, market-sharing or price-fixing. (222)
(6) Exchange of information on costs, investments and capacities
The exchange of information on costs in a highly concentrated market may reduce the
P 388 degree of price competition and accommodate price coordination and is therefore likely
P 389 to infringe Article 81(1). (223)
Further, an exchange of information on investments between competitors in a highly
concentrated market is likely to reduce the intensity of competition, since it reveals plans
on future strategies and may also increase barriers to entry. (224) Disclosure of information
on capacities in highly concentrated markets may have similar effects by revealing the
capabilities of individual undertakings to react to market conditions. In Cimbel, (225) the
Commission objected to an obligation placed on the members of a trade association to
inform each other of plans for projected increases in industrial capacity. Such information
could restrict competition by dissuading individual undertakings from increasing capacity
and responding to increased demand. (226)
(7) Exchange of information on or between distributors
Exchanges of information between distributors are treated in the same way as information
17
exchanges between suppliers. (227) The disclosure of information on distributor sales is
unobjectionable, as long as sales figures of individual competitors are not revealed and
the information is not used to obstruct parallel trade. (228)
(8) Information exchange between financial institutions concerning the identity and
solvency of their customers
Systems for the exchange, between financial institutions, of solvency and credit
information of actual and potential borrowers exist in several Member States. These
systems are aimed at providing financial institutions with information allowing them to
evaluate with greater precision the risk connected with the grant of a loan. The Court of
Justice has addressed the compatibility of this exchange of information with Article 81 in
the context of a preliminary ruling proceeding. (229) In this regard, the Court has affirmed
that:
[A] system for the exchange of information on credit between financial
institutions, such as the register of information on customer solvency […], does
not, in principle, have as its effect the restriction of competition within the
P 389 meaning of that provision, provided that the relevant market or markets are not
P 390 highly concentrated, that that system does not permit lenders to be
identified and that the conditions of access and use by financial institutions are
not discriminatory, in law or in fact. (230)
In the event that they are found to be contrary to Article 81(1), the Court has acknowledged
that these systems are in principle capable of improving the functioning of the supply of
credit by leading to higher transparency in the market and allowing financial institutions
to better assess the likelihood of loan restitution and the risk of a borrower's default. This
could justify the applicability of the exemption provided for in Article 81(3) EC. In this
regard, the Court has specified that, in order for the condition that consumers be allowed a
fair share of the benefit to be satisfied, it is not necessary, in principle, for each consumer
individually to derive a benefit from an agreement, a decision or a concerted practice as
long as the overall effect on consumers in the relevant markets is favourable. (231)
(9) Business-to-business electronic marketplaces
In recent years, the development of business-to-business (B2B) electronic marketplaces
has generated a large amount of interest. (232) B2B marketplaces are systems that allow
(industrial) buyers and sellers to transact business over the Internet through a central
node. B2B market places are in general expected to have pro-competitive effects: they can
create market efficiencies by reducing search and information costs and increase
transparency, thereby helping to integrate markets. However, B2B markets can also raise
competition concerns, such as the possibility of users exchanging or accessing sensitive
information.
The Commission has dealt with a number of B2B marketplaces both under Article 81 and
under the Merger Regulation. (233) In general, the Commission takes a quite permissive
approach to B2B marketplaces. (234) Nevertheless, a number of guidelines will have to be
followed when establishing B2B marketplaces. (235) First, only non-sensitive data should
be exchanged. (236) Second, joint purchasing or commercialization within a B2B should
P 390 comply with the rules on horizontal agreements. (237) Third, technical safeguards (e.g.,
P 391 firewalls, password access control, and encryption) should be established to prevent
the exchange of sensitive information. Fourth, the B2B marketplace should be open to all
interested buyers and sellers on a non-discriminatory basis. Finally, rules that require the
exclusive use of a B2B marketplace should be avoided.
(10) UK Agricultural Tractor Registration Exchange
UK Tractor (238) provides a good example of the Commission's approach to information
exchange agreements in practice. The case was the first in which an exchange of
information in itself was found to infringe Article 81(1), without any other violation of the
competition rules, such as price-fixing or market sharing, having been established. Both
European Courts subsequently confirmed the Commission's findings. (239) The case
concerned an information exchange organized under the umbrella of a trade association.
The participants in the exchange were all the major suppliers of tractors in the UK.
Together they held some 88% of the UK tractor market. Several smaller manufacturers who
were not members of the exchange held the remaining 12% of the market. The information
exchange made available aggregate industry data, data identifying the sales of individual
manufacturers and data on sales made by a manufacturer's own dealers.
The Commission did not object to aggregate industry data being made available to the
members of the exchange. It did not matter that the data was broken down by horsepower
groupings, drive line or different geographic areas (e.g., the UK, counties, dealer territories,
and postcode areas) and that it was made available for yearly, quarterly, monthly and
weekly time periods. The sole concern raised by the Commission with regard to the
aggregate industry data was that it should not enable a party to infer the retail sales of the
individual members of the exchange. Therefore, the Commission objected to the exchange
of the aggregate industry data to the extent that the reports contained less than ten
tractor units for any specific breakdown by territory, product or time period.
18
However, the Commission applied a much stricter line towards the exchange of the
individual data. Particular account was taken of the fact that the market was highly
concentrated, that there were high barriers to entry and that the information exchanged
identified exact retail sales and market share figures by product and geographic area on a
very frequent basis. The Commission concluded that, by means of this exchange of
information, the members were able to follow the sales performance and market
penetration of each competitor on a yearly, quarterly, monthly and daily basis with
respect to all relevant products and even within the smallest geographic areas. On the
basis of these factors, the Commission arrived at the conclusion that the exchange of
information on individual competitors' sales amounted to a restriction of competition for
two reasons:
P 391 – It prevented hidden competition in a highly concentrated market by creating a
P 392 degree of market transparency between the suppliers. Each participant was able
to establish its competitors' positions on the market and immediately identify any
changes in market shares. Consequently, price competition was unlikely since
competitors would be able to respond almost instantly to any change in market
positions. Thus, there was little incentive for the undertakings to try to improve their
positions.
– It increased barriers to entry for non-members. The members of the exchange would
know directly of any attempts to enter the market and be able to react quickly.
Apart from condemning this exchange, the Commission also suggested at least two
instances where the exchange of individual information could receive more favourable
treatment. The first instance occurs where the market concerned is competitive and
presents a low degree of concentration and the transparency resulting from the exchange
of information is directed towards or of benefit to consumers. The second instance occurs
where truly historic data is exchanged which no longer has any real impact on future
behaviour.
§4.5 Trade associations, trade fairs and exhibitions, exchanges and auctions
This sub-section examines the application of Article 81 to (1) trade associations, (2) trade
fairs and exhibitions, (3) commodity exchanges, and (4) auctions.
(1) Trade associations
A trade association is an organization that works for the common good of a given industry
or economic sector and is typically composed of undertakings operating at the same level
of production or distribution. (240) Normally, undertakings come together in the form of a
trade association to share experiences and ideas that may contribute to the general
improvement of the industry and generate increased demand for the products or services
concerned. For this purpose, trade associations represent the interests of an industry vis-à-
vis other industries, the public and governmental authorities.
However, given that trade associations generally involve competitors acting together, they
may give rise to competition law concerns. Indeed, cartels have frequently used trade
associations to disguise their illegal activities, seeking to provide a legitimate excuse for
competitors to meet. (241) This section examines (a) the general application of Article 81(1)
to trade associations, as well as the particular competition law concerns that may arise
P 392 from (b) an association's membership rules, (c) an association's code of conduct, and (d)
P 393 uniform sales conditions drawn up by a trade association. This section does not cover
other issues such as standardization, joint commercialization, R&D or environmental
agreements between competitors that are discussed at length elsewhere. (242)
(a) Trade associations under Article 81(1)
Article 81(1) applies not only to agreements between undertakings but also to decisions by
associations of undertakings. As a general rule, any activity that is illegal when engaged in
by two or more undertakings acting in concert is also illegal when engaged in by a trade
association. It is therefore not possible for undertakings to escape the application of
Article 81(1) by acting through the intermediary of an association.
The legal form of the ‘association’ is irrelevant, (243) and the term has been interpreted to
include associations without legal personality, (244) non-profit-making associations, (245)
associations of associations of undertakings, (246) and agricultural cooperatives. (247) The
fact that an association is entrusted with public functions does not prevent it from being
regarded as an association within the meaning of Article 81(1). (248)
The term ‘decision’ has also been given a wide interpretation. The legal status of a decision
is not important; what matters is whether the association or its affiliated undertakings
engage in activities producing anti-competitive effects, in which case Article 81(1) applies.
(249) In fact, any action by an association, designed to coordinate the conduct of its
member undertakings constitutes a decision within the meaning of Article 81(1). (250) The
constitution of a trade association has been considered an agreement, (251) in addition to
P 393 regulations governing the operation of an association. (252) An agreement made by an
P 394 association may also be considered a decision of the association or an agreement
between undertakings or associations. (253) It is not necessary for a ‘decision’ to be binding
on the members for Article 81(1) to apply. An informal decision or even a decision made by
19
a body that does not normally have the power to adopt decisions may be sufficient for the
application of Article 81(1). Decisions in the form of recommendations of a non-binding
character are also caught by Article 81(1) where such measures have an appreciable
influence on competition. (254) In Van Landewyck & Others v. Commission, the Court of
Justice considered certain undertakings to be parties to a recommendation issued by their
association because they had informed the Commission that they wanted to be a party to
the notification of the recommendation to the Commission and had adhered to the
recommendation for several years. (255) Thus, the Court of Justice held that the
recommendation was a ‘faithful expression of the applicants’ intention to conduct
themselves' in a certain way on the cigarette market. The recommendation also produced
appreciable effects on competition in this market because it was implemented by seven
undertakings which controlled a substantial part of the market.
By being a member of an association, an undertaking is deemed to have accepted its
constitution and to have empowered the association to undertake obligations on its
behalf. Consequently, even where a member has not expressly approved an
anticompetitive agreement concluded by the association, but has not expressly opposed
it, the member may be held to have acquiesced in the agreement. (256)
Since associations are subject to the competition rules, they may be fined for any
infringements they commit, even where fines are also imposed on their members on an
individual basis. Depending on the facts of the case, liability for anti-competitive conduct
may be ascribed to the association itself, its members or both. (257) In deciding whether to
impose a separate fine on an association, the decisive factor is whether it has played a
separate role in carrying out the infringement of competition law. (258) For example, in
P 394 Cartonboard, the Commission held the Finnish association Finnboard separately
P 395 responsible, alongside its members, for its participation in a price-fixing and market-
sharing cartel. (259) Further, in FEG & TU, both the FEG association and its largest member
TU were separately fined, since TU was the most powerful member of the association and
had played a specific role in the infringements. (260) However, if the Commission intends
to impose a fine on the association as well as on its members, this has to be made clear in
the statement of objections. (261) Associations that did not actively participate in the
infringement will generally not be fined, even in cases where the members used the
association to give a stronger and wider impact to a restrictive agreement. (262) In Belgian
architects, (263) the Commission considered that the Association was entirely responsible
for the infringement (i.e., the adoption of a scale of recommended minimum fees) and
imposed a fine only on the professional body.
(b) Membership
Trade association membership should be voluntary. In other words, undertakings that are
not affiliated with the association should not be compelled to join in order to be able to
enter a market and trade with the members of the association. (264)
Since a trade association represents industry-wide interests, trade association
membership should also be open to any interested party in that industry. To maintain
professional standards, however, trade associations may establish rules governing
admission which deal with such matters as the requirements for admission, the body
entitled to decide on admission, (265) appeal procedures and the right to resign from the
association.
The right to become a member of an association may be critical to operating on a
P 395 particular market. In Cauliflowers, (266) a refusal of admission to a trade association of
P 396 dealers in vegetable products was regarded as particularly restrictive of competition as
practically all of the vegetables concerned were sold through auctions to which only the
members of the trade association had access.
Membership rules should be based on reasonable, objective standards (267) and, in the
event of refusal of admission, there should be an appropriate appeal procedure. (268) In
Retel 1988, (269) the Commission determined that a set of rules established by two Dutch
trade associations for the purpose of enabling installers of telematics equipment to obtain
the status of ‘recognized’ installer did not infringe Article 81(1). The Commission
emphasized that the requirements for obtaining recognition were based on objective,
qualitative criteria relating mainly to the applicant's technical aptitude, and that non-
discriminatory treatment was ensured by an elaborate appeals procedure. The
Commission also noted that an installer did not need to be ‘recognized’ to carry out his
business or obtain supplies of equipment, that installers from other Member States could
obtain this status and that the fee for association membership did not constitute a barrier
to market entry. (270) In Metropole Télévision, (271) the Court of First Instance clarified the
standard of legality of membership rules. In that case, the Court annulled a Commission
decision exempting the membership rules of a trade association of television and radio
organizations. The Court of First Instance explained that, in order for the Commission to be
able to assess whether the rules are indispensable for the purpose of Article 81(3), the rules
P 396 need to be objective and sufficiently determinative so as to enable them to be applied
P 397 uniformly and in a non-discriminatory manner vis-à-vis all potential members. (272)
Membership rules of trade associations and, in particular, requirements for admission,
have been found unlawful where they are designed in such a way that access to the
association is made more difficult for certain undertakings. In Centraal Bureau voor de
20
Rijwielhandel, (273) the Commission condemned a regulation enacted by a trade
association which set up a system organizing the market for the distribution and servicing
of bicycles and related goods. The network established by the association was open to all
undertakings which obtained the status of ‘recognized dealer’. The Commission found that
some of the requirements for recognition were unlawful. In particular, it objected to the
requirement that dealers do business from premises in the Netherlands because this
requirement put firms not established in the Netherlands at a competitive disadvantage.
(274) The Commission also found that the requirements as to stocks, premises and
presentation restricted competition because they substantially reduced the ability of
members to compete with firms that did not meet or did not wish to meet these
requirements. (275)
In FEG & TU, (276) the Commission found the membership criteria of the FEG illegal since
they made it considerably more difficult for foreign wholesalers to extend their field of
operations to the Dutch wholesale market. One admission criterion related to the turnover
achieved in the Netherlands, which the FEG argued was designed to ensure that the
undertaking had ‘proved itself on the Dutch market’. However, the Commission considered
that a firm having acquired a good reputation in another Member State had already
‘proved itself’ even though it did not achieve a high turnover on the Dutch market.
Furthermore, the Commission found that the turnover requirement was, in practice, not the
only criterion used by the FEG to turn down applications for membership.
In Morgan Stanley/Visa (277) the Commission fined Visa, the European payment card
system which is owned and governed by its 4,500 European member banks, a total of €10.2
million for refusing to admit Morgan Stanley as a member in breach of Article 81. Morgan
Stanley applied to be a member of the Visa network in 2000, following the incorporation of
the Morgan Stanley Bank in the UK. The Commission's investigation found that Visa's
refusal to admit Morgan Stanley as a member had prevented the bank from providing
P 397 services to retailers, as retailers expect banks to offer card acceptance contracts as a
P 398
package providing both Visa and MasterCard services. Visa argued that its internal rules, a
copy of which had been notified to the Commission under former Regulation 17/62,
provided that it would not accept as member any applicant deemed to be a competitor by
its board of directors. It argued that Morgan Stanley was a competitor as it ran the
Discover card network in North America. The Commission rejected this argument, stating
that Morgan Stanley was not a viable competitor of Visa as there was no realistic
possibility of the Discover card network expanding into the European Economic Area in the
near future. Furthermore, the Commission found that Visa's refusal of Morgan Stanley as a
member was discriminatory, as it had already accepted other network card operators in
the past, such as Citigroup (the owner of the Diners' Club card). (278)
Lastly, membership rules governing discontinuance of membership can also be capable of
restricting competition. (279) While members may be required to pay a resignation fee, the
financial cost of this obligation should not represent a substantial barrier for members
P 398 wishing to leave the association (280) and must be limited to what is required to ensure
P 399 the proper functioning of the association, such as in the case of a cooperative. (281)
(c) Codes of conduct
Trade associations are sometimes tempted to draft codes of conduct outlining rules of
‘acceptable’ behaviour for association members, such as a rule not to undercut the prices
of other members. In a number of decisions, the Commission has found such ‘codes of
conduct’ to be restrictive of competition. (282) Such rules have often been coupled with
illegal exchanges of information on the participants' prices (283) or costs. (284)
Furthermore, where the rules provide for the imposition of fines or other sanctions to
enforce the desired conduct, this will aggravate the violation of Article 81(1). (285) However,
in the context of a computerized reservation system (CRS) for the car rental industry, the
Commission took a favourable position with regard to a code of conduct for car rental
companies operating through CRS vendors. (286)
(d) Uniform sales conditions
P 399 The Commission has noted that the application of uniform sales conditions by a group of
P 400 undertakings may constitute a concerted practice in violation of the Community
competition rules. (287) Nevertheless, the use of standardized printed forms will generally
not be objectionable so long as it is not combined with an understanding or tacit
agreement between the undertakings concerned to apply uniform prices, rebates or sales
conditions. (288) Thus, a trade association may prepare and disseminate standard sales
conditions, provided that members remain free to adopt different sales conditions. If a
trade association attempts to force its members to use specific sales conditions, however,
the practice is likely to be found to violate EC competition rules.
(2) Trade fairs and exhibitions
By bringing together manufacturers, distributors and importers from a given industrial
sector, trade fairs and exhibitions benefit both the industry and its customers. Companies
obtain an opportunity to promote a wide range of products in a relatively short period of
time and with minimal efforts. These exhibitions also offer manufacturers (especially small
and medium-sized enterprises) an effective means of marketing their products in other
21
Member States, thus facilitating the achievement of the single European market. Trade
fairs also give customers, at a glance, a view of the competing products in the industry and
may thereby enhance competition. However, certain rules governing trade fairs and
exhibitions, such as (a) restraint periods, (b) admission rules, and (c) other regulations,
may also restrict competition.
(a) Restraint periods
‘Restraint periods’ (i.e., periods, generally before and after a trade fair, during which
participants are prohibited from exhibiting at other trade fairs) may restrict competition
between manufacturers, importers and distributors. Restraint periods may also restrict
P 400 competition between organizers of exhibitions by preventing organizers of one trade show
P 401 from securing the participation of exhibitors in another trade show during the restraint
period. The Commission has therefore intervened in several cases involving such
restrictions. (289)
Nevertheless, the Commission has found that rules imposing restraint periods on
participants can qualify for exemption under Article 81(3), though often only after requiring
the organizers to amend these rules. An exemption under Article 81(3) can be justified by
the rationalization and cost saving aspects for the producers as well as the advantages for
consumers. Indeed, getting all competitors to exhibit at the same fair helps to ensure that
a full range of products will be displayed and is likely to generate livelier competition in
the exhibition hall. It may also lead to lower distribution costs that can be passed on to
consumers because manufacturers need to participate only in those exhibitions which
attract the largest number of customers. The consumer is also allowed a fair share of the
benefit by gaining a comprehensive view of the range of products available without having
to travel from one place to the other before making a choice.
However, the restraint period should not be so long as to totally prevent exhibitors from
participating in rival trade fairs. As a general rule, the restraint period should not be
P 401 longer than the ‘open’ period during which exhibitors are free to participate in other fairs.
P 402 (290)
(b) Admission rules
Admission rules may restrict competition by limiting the number of exhibitors of a given
product. (291) However, the Commission has been willing to exempt certain selective
admission procedures under Article 81(3). (292) In 1997, the Commission sent the British
Dental Trade Association (BTDA) a comfort letter regarding the Association's rules and
regulations on fairs and exhibitions since the Commission had ascertained that there was
no provision or practice which discriminated against undertakings from third countries
wishing to display equipment at the fairs organized by the BDTA. (293) The Commission
recognizes that organizers of trade fairs may be bound by certain space limitations, which
necessitate a restriction on the number of participants. In fact, such limitations may be
desirable in that they enable the organizers to rationalize costs for the benefit of
consumers. A selective admission policy may not only reduce costs but may also help
ensure that the range of articles on display is as extensive as the space limitations permit.
Specifically, a selective policy ensures that multiple displays of the same article do not
prevent a complete range of articles from being displayed.
The selection procedure itself must be based on objective criteria. In Internationale
Dentalschau, (294) the Commission exempted an admission procedure where applications
were considered based on the following order of priority: manufacturers, importers or
dealers appointed by manufacturers, and other importers or dealers. In the Commission's
view, it is appropriate for the manufacturer to be given priority over the dealer because
the manufacturer is in the best position to present his products. Likewise, if it is necessary
to choose among several dealers, the dealer appointed by the manufacturer should be
given priority because this dealer may be assumed to enjoy the confidence of the
manufacturer. In Sippa, (295) the selection procedure was even more refined in that it gave
priority to dealers intending to display products not already being displayed by a
manufacturer or its primary authorized dealer over dealers who had a secondary
delegation of authority from the manufacturer, but who intended to display products
already being displayed by others. In exempting this procedure, the Commission again
highlighted its interest in allowing the widest range of products possible to be on display.
(c) Other regulations
While admission procedures and restraint periods have received the most attention, other
aspects of trade fair regulations have also raised competition law concerns. In Sippa, (296)
P 402 a rule that required participants in the trade fair to display documents and prices and
P 403 actively approach visitors only with respect to products actually shown on the stand
was found to infringe Article 81(1). The Commission nevertheless granted an exemption
under Article 81(3) on the grounds that this rule simply forced exhibitors to focus on the
primary purpose of the trade fair — informing buyers about the products on display —
rather than on other matters such as competing for orders for other products, an activity
which was more appropriate outside the fair. Also, the rule did not prevent competitors
from engaging in ‘passive’ canvassing as they could answer questions from customers
concerning products not on display. The Commission's position would seem at odds with its
22
concern over making the most efficient use of the available space.
Participation in trade fairs must be open to companies from throughout the Community on
a non-discriminatory basis. In EUMAPRINT, (297) the Commission condemned an attempt to
reserve participation in so-called ‘national’ exhibitions to local companies and to
companies from other Member States with a local presence (e.g., a subsidiary, distributor
or agent). Companies from other Member States without a local presence could only
participate in ‘international’ exhibitions. In the Commission's view, such a system
penalized companies which were not large enough to have a presence abroad by
preventing them from exhibiting their products abroad and meeting prospective agents or
distributors. The Commission adopted the same position in British Dental Trade
Association. (298)
(3) Exchanges
In several cases, the Commission has decided that Article 81(1) was not infringed by the
rules and regulations of institutions establishing commodity exchanges, i.e., organizations
which provide and administer premises in which individual terminal market associations
conduct dealings in the commodities with which they are connected. (299) These decisions
elaborate on a position previously adopted by the Commission in Sarabex. (300)
The establishment of such exchanges is generally regarded favourably by the Commission
since they provide a market floor for trading and price-making in the market concerned.
P 403 Moreover, the commodity exchanges considered by the Commission provided, in most
P 404 cases, a mechanism by which the principal global markets of the products in question
operated and contributed to ‘the stability and smooth operation of world trade and to
world pricing mechanisms’. (301)
However, in these cases, the Commission only decided that the rules in question did not
restrict competition after the original rules and regulations had been modified in what the
Commission considered to be two key areas:
– Prices: the original rules generally amounted to a form of price-fixing in that they
established minimum net rates of commission that could be charged by floor
members, which varied according to who was paying and who was receiving. The
highest rate of commission applied where the buyer was a non-member. The new
rules cleared by the Commission mostly required that a commission be charged but
that the rates be freely negotiable. (302)
– Membership rules: the Commission considered that the existence of different classes
of members is not inconsistent with Article 81(1) as long as the criteria for access to
the different classes are fully objective. (303) The number of the class of full floor
members may be limited. The modified rules cleared by the Commission typically
required that a refusal of an application for membership state reasons and be
susceptible to challenge in an appeal procedure. Some exchanges provided for final
recourse to an ordinary civil court. (304)
Apart from these two areas, the organization running the market appears to have some
leeway to determine what the Commission calls ‘various technical questions’, such as
standard contract terms (not involving any price terms) and quality specifications as to the
product traded. Moreover, it is permissible for such organizations to procure the provision
of clearing and settlement facilities.
(4) Auctions
P 404 Arrangements relating to the operation of auctions have been found capable of infringing
P 405 Article 81(1) where they require exclusive dealing through the auction or restricted
access to the auction. (305) In its Frubo decision, the Commission found a requirement on
Dutch fruit and vegetable wholesalers to deal exclusively through Dutch auctions to
infringe Article 81(1), as this restricted their freedom to import directly and also forced
importers in other Member States to deliver exclusively through an import auction. (306)
Similarly, in VBA/Bloemenveilingen Aalsmeer, the Commission condemned agreements
under which a cooperative organizing flower auctions required wholesalers to sell only
products purchased at its auction. (307) Likewise, the Commission condemned an
agreement requiring the members of a Danish fur breeder association to sell their furs
exclusively through its branch's auctions. (308) The Commission also fined Christie's and
Sotheby's, two leading fine art auction houses, for having colluded to fix commission fees
and other trading terms between 1993 and 2000. (309)
State Compulsion as a Defence for Cartel Activity

Undertakings that have engaged in cartel activity have sometimes sought to defend
themselves by claiming that their conduct was imposed, or at least encouraged, by
government authorities or national rules and regulations, and that they therefore did not
infringe Article 81(1). An infringement of Article 81(1) through a restrictive agreement or
concerted practice between undertakings presupposes a certain degree of freedom to act
on the part of the undertakings concerned. However, the Commission and European Courts
have only accepted this defence of ‘government compulsion’ in exceptional circumstances
where it was established that the government measures concerned had either already
eliminated any scope for competitive activity on the relevant market, or specifically
23
P 405 required the undertakings to engage in the collusive agreements or practices. The state
P 406 compulsion defence under Article 81 is discussed in more detail at pages 47–53.
Exemption of Cartels in Crisis Situations

§4.6 Introduction
Cartels are regarded as the most harmful type of anti-competitive practices and as such
they will almost always be ineligible for individual exemption under Article 81(3). (310) This
is because they are very rarely capable of producing appreciable objective benefits for
consumers of such a character as to compensate for their competitive disadvantages. What
is more, under the former procedural regime of Regulation 17, (311) most cartels had not
been notified to the Commission, so that their exemption by the Commission was not
possible in any event. (312) Even where notification under Regulation 17 had taken place,
the Commission generally summarily stated that the conditions for an exemption under
Article 81(3) were not met. (313) Justifications for price-fixing that have been put forward by
undertakings have continually been rejected. For example, in its AROW/BNIC decision
concerning price-fixing, the Commission refused to accept the argument that the fixing of
minimum prices was necessary in order to guarantee the quality and characteristics of the
product. (314) Similarly, in Building and construction industry in the Netherlands, the
Commission rejected an argument that an agreement organizing price tendering, which
included elements of price-fixing, was justified because it served ‘to promote and
administer orderly competition, to prevent improper conduct in tendering and to promote
the formation of economically justified prices’. (315)
It was only with respect to so-called ‘crisis cartels’ that the Commission was willing to grant
exemptions under Regulation 17 in order to solve industry-wide structural overcapacity.
P 406 Under the self-assessment regime of the Regulation on Procedure, (316) it is no longer
P 407 possible to notify agreements to the Commission for individual exemption. This means
that companies are faced with considerable uncertainty and risk in assessing the potential
application of Article 81(3) to a ‘crisis cartel’ agreement.
Similarly, the Commission has refused to condone market-sharing agreements unless there
are exceptional circumstances. (317) Accordingly, the Community authorities have rejected
alleged justifications for market-sharing, such as the alleviation of shortages of raw
materials (318) or the maintenance or improvement of adequate production and supply.
(319) However, there are limited possibilities for market-sharing under the Specialisation
Agreements Block Exemption, the R&D Agreements Block Exemption and in the context of
intellectual property rights. (320) Also, time-limited market-sharing may be accepted to
protect a seller in the case of concentrations. (321)
It should be noted that the Commission has taken a somewhat more liberal approach
regarding horizontal agreements in a limited number of specific service sectors: banking,
insurance, postal services, maritime transport, and air transport. Notably, the Commission
has acknowledged that, given the special circumstances pertaining to those sectors,
P 407 otherwise prohibited forms of cooperation may be justified and warrant exemption. (322)
P 408
§4.7 Assessment of crisis cartels
In times of general economic recession and stagnant or declining demand, industries may
suffer economic hardship through overcapacity and higher costs of production, with
reduced profits or losses as a result. In a market economy, undertakings are expected to
adapt to such situations on their own. It follows that overcapacity is generally not an
excuse for forming cartels to reduce capacity, production or investment. It has, however,
been recognized that overcapacity of a structural nature may sometimes be best solved
through measures that market forces alone may be insufficient or too slow to appropriately
provide. Under such circumstances, a ‘crisis cartel’, by which competitors cooperate to
remedy structural overcapacity, may be justified. Until the entry into force of the
Regulation on Procedure, which abolished the notification system, such cooperation
needed to be notified to the Commission to obtain an individual exemption under Article
81(3), thus avoiding the risk of the finding of an infringement of Article 81(1) and a possible
fine. (323) Since the entry into force of the Regulation on Procedure, such notifications are
no longer possible, giving rise to further uncertainty as to the application of Article 81(3) to
‘crisis cartels’.
The Commission has been willing to grant exemptions to a few crisis cartels, but only under
strict conditions. The Commission's exemption decisions show that it is necessary to
demonstrate a real prima facie ability to reduce structural overcapacity, whereby a healthy
industry can be created and sufficient competition maintained. In addition, the
Commission's practice shows that arrangements that also produce benefits in a broader
social context, such as the limitation of layoffs or the facilitation of a redeployment of
employees, are more likely to qualify for an exemption.
‘Crisis cartels’ often contain serious restrictions of competition that are considered ‘hard-
core’, such as those limiting capacity, output or investments. For an agreement to qualify
for an exemption under Article 81(3), it is therefore necessary to establish that the industry
concerned suffers from true structural overcapacity and is not only in a cyclical downturn.
24
For this purpose, the Commission has stated that a situation of structural overcapacity
exists where, over a prolonged period, an entire industry sector has been experiencing a
significant reduction in its rates of capacity utilization and a drop in output accompanied
P 408 by substantial operating losses and where the information available does not indicate that
P 409 any lasting improvement of this situation can be expected in the medium-term. (324)
Industries finding themselves in such a situation of structural overcapacity typically
manufacture mature products in obsolete or inefficient production facilities and are
generally characterized by high fixed costs of production that require a high rate of
capacity utilization. Notwithstanding structural overcapacity, however, any arrangement
that covers the fixing of prices, sales and production quotas, market partitioning and the
like is extremely unlikely to qualify for exemption, regardless of its proclaimed aim of
solving overcapacity. This is because such restrictions are generally not necessary to
restructure an industry and do not normally facilitate capacity reductions. (325)
There are two broad categories of agreements that can be used to reduce structural
overcapacity. (326) The first is sectoral restructuring, relating to agreements that involve
all or most of the undertakings in a given industry. The second is bilateral restructuring,
relating to agreements concluded between two undertakings. Sectoral agreements
generally aim to reduce capacity throughout an entire industry, whereas bilateral
agreements generally concern reciprocal specialization that enables the parties to cut
capacity and increase capacity utilization rates. Whatever the category, it will have to be
ensured that effective competition is not eliminated, that consumers still have a sufficient
choice of suppliers and that there are no unacceptable restrictions on competition such as
price- and quota-fixing or market partitioning. (327) These two categories of crisis cartels
are examined in more detail below.
(1) Sectoral restructuring agreements
Crisis cartels which provide for participation of the majority of the undertakings of an
entire sector will only be eligible for an exemption under Article 81(3) if they are aimed
solely at achieving a coordinated reduction of overcapacity without otherwise restricting
P 409 the commercial autonomy of the undertakings involved. (328) According to the
P 410 Commission, a sectoral crisis cartel cannot be exempted where it provides for a strict
code of internal discipline covering all economic activities of the parties and protection
against competition by outsiders. (329) In fact, the Commission will only find the
requirements of Article 81(3) to be met if the agreement satisfies the following conditions:
(330)
– the agreement must contain a detailed and binding programme of closures for each
production centre which ensures, on the one hand, that overcapacity is irreversibly
dismantled and, on the other, that while the programme is in operation, no new
capacity is created, except for replacement capacities provided for in the
reorganization programme;
– consumers must not be deprived of the freedom of choice between competitors or
the benefits of continued competition between the participating companies;
– any information exchange arrangement must be with a view solely to supervising
capacity reductions, and may not serve to coordinate policy on the use of remaining
capacity or to align sales conditions;
– the participants in the agreement must not give up all their individual freedom of
action; and
– the agreement must be for a specifically stated limited period.
In Italian cast glass, (331) the Commission expressed a rather unfavourable opinion with
regard to a sectoral crisis cartel. The Commission noted that the agreements had not been
notified and that, in any event, the conditions of Article 81(3) were not met, as the
agreements shielded more than half of the Italian production in question from
competition, thereby eliminating competition for a substantial part of the products
concerned. (332) Addressing the parties' defence that the agreements were exemptable
due to the existence of a sectoral crisis in the industry, the Commission stated:
On the one hand, [Article 81(3)] makes no reference to such a situation and, on
the other, no decision to genuinely reduce the productive capacities of the
undertakings which took part in the practice in question (which might have been
appropriate to the structural crisis situation) was taken; it was merely decided
unilaterally to set quantitative shares for sales of cast glass on the Italian
market, to the benefit exclusively of the manufacturers, without any advantage
for consumers. It is therefore not possible to allow, in guise of a crisis cartel,
restrictions of competition which are not indispensable. (333)
In subsequent cases, however, the Commission was willing to exempt notified crisis cartel
agreements despite the lack of an express reference to a sectoral crisis in Article 81(3), but
P 410 then only insofar as the agreements were genuinely intended to effectively reduce
P 411 structural overcapacity.
In Zinc shutdown agreement, (334) the six largest Community zinc producers, faced with
substantial worldwide overcapacity and heavy financial losses, notified to the Commission
an agreement whereby each company would reduce capacity as it considered appropriate
25
and not create any new capacity. Each company that actually cut capacity was to be
compensated by the others, particularly for social costs. The Commission proposed to
exempt the agreement ‘in view of the heavy financial losses in the European zinc industry
and the fact that the agreement was to last for a fixed period’, but the zinc market
improved before a formal decision could be issued, and the agreement was terminated by
the parties. (335)
In Synthetic fibres (II), the parties first notified a restructuring agreement in 1972, which
could not be exempted and was therefore withdrawn. When a new agreement was notified
in 1978, it had to be modified and re-submitted numerous times before the Commission
finally granted an exemption in 1984. (336) The original agreement of 1972 was ‘designed to
ensure coordination of investment and rationalization of production with a view to
eliminating or preventing excess capacity in this industry’. (337) However, the Commission
found that the agreement ‘failed to meet the conditions set down in Article [81(3)], since it
covered a wider area and extended to the participants' production and selling policies’.
(338) The second agreement was notified in 1978 after a further worsening of the situation
of the industry. Although its declared purpose was an orderly reduction in production
capacities, the agreement could not be exempted as it also covered sales and production
quotas. (339)
Eventually, the Commission exempted a modified version of the agreement in 1984.
Acknowledging that market forces had failed and worked too slowly to achieve the
necessary capacity reductions, the Commission concluded that concerted action was
justified, noting that the parties would not have taken the risk of acting on their own. The
agreement allowed the undertakings to achieve higher capacity utilization rates and
better individual specialization, and to restructure in ‘socially acceptable’ ways (i.e., it was
made easier to redeploy and retrain employees). (340) The Commission found that the
restructuring would provide customers with a healthy and competitive industry consisting
of a sufficient number of suppliers with secure supplies of quality products due to the
increased specialization. At the same time, competition was not eliminated and there
existed other producers and imports from third countries as well as substitutable
products. The undertakings also undertook, among other things, to provide all relevant
P 411 information to a trustee, to accept inspections of their plants by independent experts, to
P 412 jointly find appropriate solutions in case of important changes on the market, and not
to sell any of the dismantled plants in Western Europe. (341) Under these conditions, the
Commission concluded that the agreement qualified for an exemption under Article 81(3)
which was limited in time, noting that the agreement restricted the parties' commercial
freedom only with respect to capacity and that competition would remain strong. This was
the first time the Commission adopted a formal decision expressing its acceptance of
concerted efforts to solve a structural crisis.
In contrast to previous exemptions of sectoral restructuring agreements, in Stichting
Baksteen (342) the Commission exempted a restructuring agreement that was limited in
scope to only one Member State, the Netherlands. During the economic slowdown of the
early 1990s, Dutch brick producers were under pressure from structural changes in demand,
increasing competition from substitutable building materials (e.g., concrete, aluminium
and steel), as well as technological progress in production. Since market forces had failed
to achieve the capacity reductions necessary to re-establish effective competition,
cooperation between the undertakings on the market was considered justified. The
purpose of the agreement between the producers, representing 90% of the market, was to
rid the industry of the most inefficient capacity, thereby allowing the most modern
production plants to operate at higher capacity utilization rates. Since most of the
producers involved only had one plant and therefore could not reduce capacity, those with
multiple plants received compensation for closing down plants; this was funded by all the
other producers. However, at the time of its original notification in 1991, the agreement
also included provisions fixing production quotas coupled with fines for exceeding the
quotas, thus creating a share-out of almost the entire output of bricks on the Dutch market.
These conditions went well beyond what was strictly necessary to attain the restructuring
objectives, but, as they were dropped, the Commission was able to grant an exemption
under Article 81(3). (343)
(2) Bilateral restructuring agreements
In Rovin, (344) the Commission took a similar position towards bilateral agreements as it
had taken for sectoral agreements. In the face of overcapacity in the petrochemical
market, Shell and Akzo concluded a restructuring agreement whereby they created a joint
venture company, Rovin, for the manufacture of polyvinylchloride (PVC), a product derived
in part from vinylchloride monomers (VCM). Shell placed its PVC plant at the exclusive
disposal of Rovin, and Akzo did likewise with its VCM plant. Production capacity was
placed under Rovin's exclusive control. The agreement became effective on 1 October 1982
P 412 and was to last for an indefinite period. Both parties agreed not to engage in the
P 413 production of PVC or VCM except through the joint venture. The Commission mission
noted that the European PVC and VCM markets were served by companies having vertically
integrated production and marketing operations and that, prior to the agreement, neither
Shell nor Akzo possessed such integrated operations. Since neither party was able to
produce PVC and VCM independently, their agreement allowed them to integrate the
vertical production process and marketing of the products, thereby achieving a better
26
match between supply and demand of prime materials, a better utilization rate for their
facilities, and the maintenance of constant quality specifications. Finding that the
agreement led to an improvement in capacity utilization and thus to a healthier structural
situation in the sector, the Commission issued a comfort letter expressing the view that the
agreement did not infringe Article 81.
In BPCL/ICI, (345) two British companies, BPCL and ICI, concluded an agreement for the
restructuring of the petrochemical industry in the UK. In the face of severe overcapacity on
the UK petrochemical markets, ICI had developed a long-term strategy in which it
considered itself to have a competitive advantage in the production of PVC and a
disadvantage in low-density polyethylene (LdPE) production. BPCL had developed the
same type of long-term strategy but, conversely, it considered its advantages to lie in LdPE
production and its disadvantages in PVC production. In this context, the Commission found
that market forces were too slow to bring about restructuring changes on an individual
basis and that only an arrangement between the parties could result in the reciprocal
specialization of their production which was needed to cut capacity.
The agreement provided for the reciprocal sale of the parties' businesses, including
goodwill, on the respective markets. ICI sold its most modern LdPE plant to BPCL and BPCL
sold its most modern PVC plant to ICI. Although capacity cuts were not part of the
agreement, they were an inevitable consequence of its application. Thus, as a result of the
agreement, ICI abandoned its production of LdPE in the UK (while it kept two LdPE plants
on the continent) and BPCL ceased its PVC production altogether.
While the agreement was clearly caught by Article 81(1), the Commission felt that an
exemption was warranted since it led to a reduction in capacity, improved the parties'
production efficiency and released resources for investment that would promote technical
progress. The planned transfer of the respective businesses and the nature of the plant
closures were also seen to benefit consumers, who otherwise would have faced a
disruption in supplies. By permitting each party to withdraw (for ICI at least partially) from
a loss-making product line, the agreement also permitted consumers to benefit in the long
run by allowing the parties to free resources to finance long-term investments and
research and development rather than to cover operating costs. To ensure that the
restructuring did not unduly restrict competition, the Commission made the exemption
subject to conditions by requiring the parties to regularly submit reports on sales,
P 413 production, and any changes to the agreements. The Commission also reserved the right to
P 414 require any other information it considered necessary.
In Bayer/BP Chemicals, (346) BPCL entered into a second round of restructuring, (347) which
the Commission assessed favourably. The Commission noted that the agreements between
Bayer and BPCL concerning EC, a company jointly owned by the parties, were intended to
reorganize and rationalize the parties' respective petrochemical businesses, particularly
in the polyethylene sector, which was suffering from structural overcapacity. As a result of
these agreements, each party would be able to increase capacity in more modern plants,
thus reducing manufacturing unit costs for the products in which it would specialize. The
agreements further provided for the exchange of technical information, technical
cooperation and a restructuring of distribution systems.
The Commission decided that the measures would help bring about both a healthier
industrial structure and more efficient production by replacing old and inefficient
capacity with modern capacity. An obligation was imposed on the parties to inform the
Commission on a regular basis about any changes in their agreements, variations in their
respective capacities, and to send reports concerning the implementation of the
operations approved by the Commission. In contrast to earlier exemptions of bilateral
restructuring agreements, the Commission decided that, in addition to the reporting
obligations, the validity of the exemption depended on the further development of the
market. (348) The parties were also obliged to open a new plant before June 1991 and to
close down two facilities by the end of 1991. Fulfilment of the latter condition could,
however, be postponed upon a finding by the Commission that a postponement was
objectively justified by the situation in the polyethylene sector at that time.
In ENI/Montedison, (349) a set of agreements for the restructuring of the Italian
petrochemical industry, which suffered from structural overcapacity, was exempted under
Article 81(3). The agreements provided for reciprocal transfers of entire product lines,
notably cracking products, thermoplastics and certain rubbers, and for the closure of some
old plants. In order to deal with the situation of dual ownership of integrated plants in
which both parties became owners, the agreements also covered supply and plant
management. Similar to the situation in BPCL/ICI, (350) the agreements achieved the
parties' strategies to move away from certain products and to specialize in others, thereby
exploiting their respective relative strengths. By reducing each party's product range,
which would no longer overlap after the restructuring, the agreements were clearly
restrictive of competition within the meaning of Article 81(1). Notwithstanding these anti-
competitive effects, the Commission felt that an exemption was warranted since the
P 414 agreements allowed the parties to jointly rationalize and reduce excess capacity more
P 415 quickly and radically than would have been possible individually. Consumers would
also receive a fair share of the benefits by gaining access to secure supplies and by sharing
in cost savings resulting from the rationalization, while competition would remain at a
workable level.
27
Further restructuring of the petrochemical sector took place in Enichem/ICI, (351) this time
between Enichem (Italy) and ICI (UK). Following their initial respective swap deals with
Montedison and BP, the operation provided the parties with a second round of
opportunities to continue and complete their strategies to rationalize their respective
VCM/PVC businesses.
The agreements set up a jointly owned company, EVC, to operate in the VCM and PVC
sectors and also provided that the parents would shut down, cut capacity in or convert
certain plants. EVC would undertake R&D, production and marketing of VCM/PVC and, for
that purpose, the parties made all necessary technology, facilities and personnel available
to EVC. In addition, EVC was to be responsible for all marketing and selling activities,
including technical services, and Enichem and ICI undertook to exclusively supply EVC with
its raw material requirements. However, as there was no transfer of assets, EVC remained
wholly dependent on the parent companies for services, raw materials, technology,
patents and personnel. As a result, the Commission found that the agreements infringed
Article 81(1), in particular through the reduction of capacity and the continued cooperation
between the parties, who remained potential, and to some extent actual, competitors in
relation to each other and to EVC. Notwithstanding the restrictive effects of the
agreements, an exemption under Article 81(3) was deemed justified.
Similar to the previous petrochemical restructuring cases, the agreements allowed the
parties to make significant progress in the rationalization of their businesses more rapidly
than would have been possible individually in an industry with severe structural
overcapacity. In reaching its favourable decision, the Commission noted that the
companies could maintain their current range of types, qualities and grades of products
offered to customers, and that a reallocation of production units closer to their natural
markets would be concomitant. In addition to the obligations to submit sales, production
and capacity reports and to notify any changes to the agreements, the Commission also
required the parties to refrain from maintaining any interests in competing production or
distribution companies in the Community, unless such participation was of a purely
financial nature.
The PRB/Shell (352) exemption concerned a three-way deal between the two Belgian
companies PRB and Solvay and the Dutch-UK company Shell, whose purpose was to
rationalize and restructure the polyurethane foam sector through a joint venture. However,
Solvay withdrew from the operation as concerns were raised that the operation would
confer on the parties a collective dominant position in the relevant market (Benelux,
P 415 Northern France and Western Germany) with a combined post-transaction market share of
P 416 45%. Following the exit of Solvay, the Commission expressed its willingness to exempt
the agreement. (353) It noted that the agreement was caught by Article 81(1) but, since it
concerned a sector with serious structural overcapacity and provided the parties an
opportunity to rationalize and make significant cost savings, an exemption under Article
81(3) could be granted. However, after having received a number of third party objections
P 416 to the deal, the Commission imposed additional conditions that, together with other non-
specified difficulties, caused the parties to eventually abandon their plans.
References
1) Thirty-second Report on Competition Policy, point 38.
2) The criterion for allocating cartel cases between the different Directorates and units
is the economic sector to which the product or service concerned belongs.
3) Press Release IP(00)1064 of 27 September 2000.
4) In its Press Release IP(98)1060 of 3 December 1998 announcing the creation of its new
anticartel unit, the Commission justified its political will to increase its fight against
cartels by stating that:
Everyone knows the extent to which cartels, i.e., mostly secret agreements
between companies to fix or increase prices, partition markets, allocate
sales quota or restrict output, run against the interests of consumers.
Cartels therefore generate monopoly rents for the most powerful
companies, since they need not make an effort either to improve the
quality of their products or to improve productivity. At the same time,
however, cartels artificially keep the least efficient companies in the
market, weaken the productive apparatus and thus inflict considerable
damage on the economy in general and eventually also on EU jobs.
5) See Kroes, ‘Introduction by Commissioner Kroes’, (2005 Number 1 Spring) Competition
Policy Newsletter, p. 1; Neelie Kroes, ‘Building a Competitive Europe — Competition
Policy and the Relaunch of the Lisbon Strategy’, speech delivered at the Bocconi
University, Milan, 7 February 2005.
6) See also Chapter 10 (for the rules on procedure and the calculation of fines in cartel
cases, including the possibility of obtaining immunity from fines under the
Commission's leniency programme).
28
7) The terms ‘agreement’, ‘concerted practice’ and ‘unilateral measures’, including the
standard of proof with regard to these terms, are discussed at pp. 27–47.
8) Suiker Unie and Others v. Commission, [1975] ECR 1663 (para. 288); Rhône-Poulenc v.
Commission, [1991] ECR II-867 (para. 103); John Deere v. Commission, [1998] ECR I-3111
(para. 86).
9) Organic peroxides, Case COMP/E-2/37.857 (decision available on the Commission's
website; a summary version of the decision is also available at OJ 2005 L110/44). (The
Commission fined a consultancy firm for its key role in the cartel, organizing meetings
and reimbursing the travel expenses of participants to avoid leaving traces of the
illegal meetings); on appeal: Peróxidos Orgánicos v. Commission, [2006] ECR II-4441
(appeal dismissed); Treuhand v. Commission, [2008] ECR II-1501 (appeal dismissed). In
the latter case, Treuhand, the consultancy firm fined by the Commission, appealed
the decision on the ground that, inter alia, the Commission infringed the principle of
nullum crimen, nulla poena sine lege. The applicant claimed that its relationship with
the cartel members was merely one of non-punishable complicity and that therefore
it was not caught by the prohibition set out in Article 81(1). The CFI dismissed the
appeal in its entirety. The CFI held, in particular, that neither a literal, nor a
contextual or teleological interpretation of Article 81 requires that the relevant
market on which the undertaking which is the ‘perpetrator’ of the restriction of
competition is active is exactly the same as the one on which that restriction is
deemed to materialise. Moreover, in connection with the alleged breach of the
principle of nullum crimen, nulla poena sine lege, the CFI declared that ‘any
undertaking which has adopted collusive conduct, including consultancy firms which
are not active on the market affected by the restriction of competition, could
reasonably have foreseen that the prohibition laid down in Article 81(1) EC was
applicable to it in principle’ (see paras 112–159, in particular paras 122 and 150 of the
judgment).
10) SCA v. Commission, [1998] ECR II-1373 (para. 95); on appeal: SCA v. Commission, [2000]
ECR I-1010. See also Binon & Cie v. Agence et Messageries de la Presse, [1985] ECR 2015
(para. 17).
11) Rhône-Poulenc v. Commission, fn.8 (para. 126).
12) ibid, (para. 127).
13) Herlitz v. Commission, [1994] ECR II-531 (para. 32).
14) Notice on agreements of minor importance which do not appreciably restrict
competition under Article 81(1) of the EC Treaty, OJ 2001 C368/13 (the ‘De Minimis
Notice’).
15) The Court of Justice has held that hardcore restrictions may escape the prohibition
contained in Article 81(1) where the agreement does not affect trade between
Member States because the parties only have a weak position on the markets
concerned. See Völk v. Vervaecke, [1969] ECR 295; Cadillon v. Höss, [1971] ECR 351; Miller
v. Commission, [1978] ECR 131; BMW v. ALD Auto-Leasing, [1995] ECR I-3439; Javico
International and Javico v. Yves Saint Laurent, [1998] ECR I-1983.
16) Luxembourg brewers, OJ 2002 L253/21, recital 83; on appeal: Brasserie Nationale and
Others v. Commission, [2005] ECR II-3033 (appeals dismissed).
17) Wood pulp, OJ 1985 L85/1, recital 114; on appeal: Ahlström Osakeyhtiö and Others v.
Commission (I), [1988] ECR 5193 (ruling on jurisdictional aspects); Ahlström Osakeyhtiö
and Others v. Commission (II), [1993] ECR I-1307. See also Vitamins (II), OJ 2003 L6/1,
recital 589; on appeal: BASF v. Commission (II), [2006] ECR II-497; Daiichi
Pharmaceutical v. Commission, [2006] ECR II-713; Sumitomo Chemical and Sumika Fine
Chemicals v. Commission, [2005] ECR II-4065.
18) See, e.g., Guidelines on the applicability of Article 81 to horizontal cooperation
agreements, OJ 2001 C3/2 (the ‘Horizontal Guidelines’), para. 25:
Another category of agreements can be assessed from the outset as
normally falling under Article 81(1). This concerns cooperation agreements
that have the object to restrict competition by means of price fixing,
output limitation or sharing of markets or customers. These restrictions are
considered to be the most harmful, because they directly interfere with
the outcome of the competitive process. Price fixing and output limitation
directly lead to customers paying higher prices or not receiving the
desired quantities […] It can therefore be presumed that these restrictions
have negative market effects. They are therefore almost always
prohibited.
See also Thirty-first Report on Competition Policy, point 31 (‘Secret cartels are among
the most serious restrictions of competition’); Thirty-second Report on Competition
Policy, point 26 (‘Hardcore cartels are among the most serious violations of
competition rules […] they are considered “cardinal sins”’).
19) Vitamins (II), fn.17, recital 663.
20) see, e.g., Thirty-first Report on Competition Policy, point 31.
21) See also pp. 193–196 (discussing vertical price-fixing agreements).
22) ICI v. Commission (I), [1972] ECR 619 (para. 119).
29
23) Cartonboard, OJ 1994 L243/1; on appeal: Buchmann v. Commission, [1998] ECR II-813;
Finnboard v. Commission, [1998] ECR II-1617; Metsä-Serla and Others v. Commission,
[1998] ECR II-1727; Europa Carton v. Commission, [1998] ECR II-869; Cascades v.
Commission (II), [1998] ECR II-925; Enso Gutzeit v. Commission, [1998] ECR II-1571;
Fiskeby v. Commission, [1998] ECR II-1331; Gruber v. Commission, [1998] ECR II-1043; BPB
de Eendracht v. Commission, [1998] ECR II-1129; Koninklijk KNP v. Commission, [1998]
ECR II-1007; Mayr-Melnhof Kartongesellschaft v. Commission, [1998] ECR II-1751; Mo Och
v. Commission, [1998] ECR II-1989; Sarrió v. Commission, [1998] ECR II-1439; SCA v.
Commission (CFI), fn.10; Stora Kopparbergs v. Commission, [1998] ECR II-2111; Moritz v.
Commission, [1998] ECR II-1235; on further appeal: Koninklijke KNP v. Commission,
[2000] ECR I-9641; Metsä-Serla Sales v. Commission, [2000] ECR I-10157; Metsä-Serla
and Others v. Commission, [2000] ECR I-10065; Cascades v. Commission, [2000] ECR I-
9693; Koninklijke KNP v. Commission, [2000] ECR I-9641; Mo Och v. Commission, [2000]
ECR I-9855; Sarrió v. Commission, [2000] ECR I-9991; SCA v. Commission (ECJ), fn.10;
Stora Kopparbergs Bergslags v. Commission, [2000] ECR I-9925; Moritz v. Commission,
[2000] ECR I-9757. The CFI broadly upheld the Commission's decision. The fines were
reduced by the ECJ in part and two cases were referred back to the CFI.
24) See also, e.g., Building and construction industry in the Netherlands, OJ 1992 L92/1
(price-fixing on the Dutch building and construction market); on appeal: SPO and
Others v. Commission, [1995] ECR II-289 (upheld by CFI); on further appeal: SPO and
Others v. Commission, [1996] ECR I-1611 (upheld by ECJ); Scottish Salmon Board, OJ 1992
L246/37 (minimum price fixing agreement between Norwegian and Scottish
organizations representing producers of farmed salmon); Steel beams, OJ 1994 L116/1
(decision under the ECSC Treaty prohibiting producers of steel beams and their
associations from participating in price-fixing agreements and concerted practices);
substantially upheld on appeal: Thyssen Stahl v. Commission, [1999] ECR II-347; upheld
on appeal to the ECJ except as regards two companies: Thyssen Stahl v. Commission,
[2003] ECR I-10821; readopted: Case COMP/38.907 (decision available on the
Commission's website; a summary version of the decision is also available at OJ 2008
C235/4); on appeal: Arcelor Mittal Luxembourg v. Commission, Case T-405/06, not yet
published (appeal partially upheld and decision annulled); Pre-insulated pipe, OJ 1999
L24/1 (concerted price increases, use of common price lists, stipulation of discounts
that were to be permitted, allocating individual projects subject to competitive
tendering procedures to a particular ‘favourite’ and fixing the price that the
‘favourite’ was to quote in order to win the business); on appeal: HFB v. Commission,
[2002] ECR II-1487; LR AF 1998 v. Commission, [2002] ECR II-1705; Lögstör Rör v.
Commission, [2002] ECR II-1633; Dansk Rørindustri v. Commission, [2002] ECR II-1681;
ABB v. Commission, [2002] ECR II-1881; Brugg Røhrsysteme v. Commission, [2002] ECR
II-1613; Ke Kelit v. Commission, [2002] ECR II-1647; on further appeal: Dansk Rørindustri
and Others v. Commission, [2005] ECR I-5425. The substantive assessment was affirmed
on appeal, but the decision annulled with regard to two companies.
25) See Thirty-first Report on Competition Policy, point 30.
26) Neelie Kroes, ‘Delivering on the crackdown: recent developments in the European
Commission's campaign against cartels’, speech delivered at the 10th Annual
Competition Conference at the European Institute, Fiesole (Italy), 13th October 2006.
27) Graphite electrodes, OJ 2002 L100/1; on appeal: Tokai Carbon and Others v. Commission
(I), [2004] ECR II-1181 (fines reduced by CFI); on further appeal: SGL Carbon v.
Commission (I), [2006] ECR I-5977 (appeal dismissed); Commission v. SGL Carbon,
[2006] ECR I-5915 (appeal upheld and fine increased); Showa Denko v. Commission,
[2006] ECR I-5859 (appeal dismissed).
28) Vitamins (II), fn.17.
29) Carbonless paper, OJ 2004 L115/1; on appeal: Bolloré and Others v. Commission, [2007]
ECR II-947; Carrs Paper v. Commission, Case T-123/02, not reported; on further appeal:
Papierfabrik August Koehler v. Commission, Case C-322/07P, not yet decided; Bolloré v.
Commission, Case C-327/07P, not yet decided; Distribuidora VizcaÍna de Papeles v.
Commission, Case C-338/07P, not yet decided.
30) Plasterboard, Case COMP/E-1/37.152 (decision available on the Commission's website;
a summary version of the decision is also available at OJ 2005 L166/8); on appeal:
Saint-Gobain Gyproc Belgium v. Commission, Case T-50/03, not yet published; Knauf
Gips v. Commission, [2008] ECR II-115; Lafarge v. Commission, [2008] ECR II-120
(summary only); BPB v. Commission, Case T-53/03, not yet published; on further
appeal: Knauf Gips v. Commission, Case C-407/08, not yet decided (fine on the
applicant reduced).
30
31) See also, e.g., Amino acids, OJ 2001 L152/24 (the Commission's investigation found that
companies in the USA, Japan and Korea fixed lysine prices worldwide, including in the
European Economic Area); on appeal: Cheil Jedang v. Commission, [2003] ECR II-2473;
Kyowa Hakko Kogyo v. Commission, [2003] ECR II-2553; Archer Daniels Midland and
Archer Daniels Midland Ingredients v. Commission, [2003] ECR II-2597; Daesang
Corporation and Sewon Europe v. Commission, [2003] ECR II-2733 (the CFI reduced the
fines in three out of the four cases on appeal); on further appeal: Archer Daniels
Midland and Archer Daniels Midland Ingredients v. Commission, [2006] ECR I-4429
(appeal dismissed); Sodium gluconate, Case COMP/36.756 (decision currently only
available on the Commission's website) (price-fixing in the market for sodium
gluconate); on appeal: Avebe v. Commission, [2006] ECR II-3085; Archer Daniels Midland
v. Commission (I), [2006] ECR II-3255; AKZO Nobel v. Commission, [2006] ECR II-3389
(appeals dismissed); Roquette Frères v. Commission, [2006] ECR II-3137 (fine on the
applicant reduced); on further appeal: Archer Daniels Midland v. Commission (I), Case
C-510/06P, not yet published (appeal dismissed); Citric acid, OJ 2002 L239/18 (the
Commission found that five citric acid producers had operated a secret cartel of
world-wide scope which had enabled them to fix prices); on appeal: Jungbunzlauer v.
Commission, [2006] ECR II-3435 (appeal dismissed); Archer Daniels Midland v.
Commission (II), [2006] ECR II-3627 (fines confirmed by the CFI); on further appeal:
Archer Daniels Midland v. Commission (III), Case C-511/06P, not yet published;
Interbrew and Alken-Maes, OJ 2003 L200/1 (the Commission fined Interbrew, Danone,
Alken-Maes, Haacht and Martens for participating in a cartel on the Belgian beer
market. The cartel included a price fixing agreement for the retail sector); on appeal:
Groupe Danone v. Commission, [2005] ECR II-4407 (fines reduced); Brouwerij Haacht v.
Commission, [2005] ECR II-5259 (appeal dismissed); on further appeal: Groupe Danone
v. Commission (II), [2007] ECR I-1331 (appeal dismissed by the ECJ); Methionine, OJ 2003
L255/1 (price-fixing in the market for methionine); on appeal: Degussa v. Commission,
[2006] ECR II-897 (fines reduced); on further appeal: Evonik Degussa v. Commission,
Case C-266/06P, not yet published (appeal dismissed); Specialty graphite, Case
COMP/E-2/37.667 (decision available on the Commission's website; a summary
version of the decision is also available at OJ 2006 L180/20), (the Commission fined
several companies for price-fixing on the market of specialty graphite); on appeal:
Tokai Carbon and Others v. Commission (II), [2005] ECR II-10 (fines reduced for two of
the applicants, SGL and Intech EDM AG); Toyo Tanso v. Commission, Case T-72/03, not
yet decided; on further appeal: SGL Carbon v. Commission (II), [2007] ECR I-3921;
Sorbates, Case COMP/E-1/37.370 (decision available on the Commission's website; a
summary version of the decision is also available at OJ 2005 L182/20); on appeal:
Hoechst v. Commission (III), Case T-410/03 (fines reduced by the CFI); Carbon and
graphite products, OJ 2004 L125/45 (price-fixing in the sector for carbon and graphite
products); on appeal: SGL Carbon v. Commission, Case T-68/04, not yet published;
Schunk v. Commission, Case T-69/04, not yet published; Le Carbone-Lorraine v.
Commission, Case T-73/04, not yet published (appeals dismissed); on further appeal:
Le Carbone-Lorraine v. Commission, Case C-554/08, not yet decided; Organic peroxides,
fn.9 (the Commission fined the main producers for their participation in the longest
lasting cartel ever uncovered by the Commission at that time); Industrial tubes, OJ
2004 L125/50 (price-fixing between the main copper tube producers in Europe); on
appeal: Wieland Werke v. Commission, Case T-116/04, not yet published; Outokumpu
and Luvata v. Commission, Case T-122/04, not yet published; KME Germany and Others
v. Commission, Case T-127/04, not yet published (appeals dismissed).
32) Hydrogen peroxide and perborate, Case COMP/F/38.620 (decision available on the
L353/54); on appeal: FMC v. Commission, Case T-197/06, not yet decided; Edison v.
Commission, Case T-196/06, not yet decided; SNIA v. Commission, Case T-194/06, not
yet decided; Caffaro v. Commission, Case T-192/06, not yet decided; FMC Foret v.
Commission, Case T-191/06, not yet decided; Arkema France v. Commission, Case T-
189/06, not yet decided; L'Air Liquide v. Commission, Case T-185/06, not yet decided.
33) Methacrylates, Case COMP/F/38.645 (decision available on the Commission's website;
a summary version of the decision is also available at OJ 2006 L322/20); on appeal:
Total and Elf Aquitaine v. Commission, Case T-206/06, not yet decided; Arkema and
Others v. Commission, Case T-217/06, not yet decided; Lucite International and Lucite
International UK v. Commission, Case T-216/06, not yet decided; Quinn Barlo and
Others v. Commission, Case T-208/06, not yet decided; Imperial Chemical Industries v.
Commission, Case T-214/06, not yet decided.
34) Fittings, COMP/F/38.121 (decision available on the Commission's website; a summary
version of the decision is also available at OJ 2007 L283/63); on appeal: IMI and Others
v. Commission (I), Case T-378/06, not yet decided; IBP and IBP France v. Commission,
Case T-384/06, not yet decided; Aalberts Industries and Others v. Commission, Case T-
385/06, not yet decided; Pegler v. Commission, Case T-386/06, not yet decided; Viega
v. Commission, Case T-375/06, not yet decided; Legris Industries v. Commission, Case T-
376/06, not yet decided; Comap v. Commission, Case T-377/06, not yet decided;
Kaimer and Others v. Commission, Case T-379/06, not yet decided; FRA.BO v.
Commission, Case T-381/06, not yet decided; Tomkins v. Commission, Case T-382/06,
not yet decided.
31
35) Synthetic rubber BR/ESBR, Case COMP/F/38.638 (decision available on the
C7/11); on appeal: Polimeri Europa v. Commission, Case T-59/07, not yet decided;
Trade-Stomil v. Commission, Case T-53/07, not yet decided; Unipetrol v. Commission,
Case T-45/07, not yet decided; Kaučuk v. Commission, Case T-44/07, not yet decided;
Dow Chemical and Others v. Commission, Case T-42/07, not yet decided; Shell
Petroleum and Others v. Commission, Case T-38/07, not yet decided.
36) For other recent price-fixing cases, see, e.g., Copper plumbing tubes, Case COMP/E-
1/38.069 (decision available on the Commission's website; a summary version of the
decision is also available at OJ 2006 L192/21); on appeal: IMI and Others v.
Commission (II), Case T-18/05, not yet decided; Boliden and Others v. Commission,
Case T-19/05, not yet decided; Outokumpu v. Commission, Case T-20/05, not yet
decided; Halcor Metal Works v. Commission, Case T-21/05, not yet decided; KME Metal
and Others v. Commission, Case T-25/05, not yet decided; Wieland Werke and Others v.
Commission, Case T-11/05, not yet decided; Choline chloride, Case COMP/E-2/37.533
(decision available on the Commission's website; a summary version of the decision
is also available at OJ 2005 L190/22) (price fixing and market sharing agreements); on
appeal: BASF and UCB v. Commission, [2007] ECR II-4949 (fines reduced for one
applicant (UCB) and increased for the other one (BASF)); Akzo Nobel and Others v.
Commission, [2007] ECR II-5049 (appeal dismissed); on further appeal: Akzo Nobel and
Others v. Commission, Case C-97/08, not yet decided; MCAA, Case COMP/E-1/37.773
(decision available on the Commission's website; a summary version of the decision
is also available at OJ 2006 L353/12) (cartel involving, among other things, the setting
of price increases); on appeal: Akzo Nobel Base Chemicals and Others v. Commission,
Case T-175/05, not yet decided; Industrial bags, Case COMP/38.354 (decision available
on the Commission's website; a summary version of the decision is also available at
OJ 2007 L282/41) (price-fixing and other restrictive practices in the market for plastic
industrial bags); on appeal: Kendrion v. Commission, Case T-54/06, not yet decided;
Fardem Packaging v. Commission, Case T-51/06, not yet decided; Trioplast Wittenheim
v. Commission, Case T-26/06, not yet decided; Low & Bonar and Bonar Technical
Fabrics v. Commission, Case T-59/06, not yet decided; UPM-Kymmene v. Commission,
Case T-53/06, not yet decided; RKW v. Commission, Case T-55/06, not yet decided; FLS
Plast v. Commission, Case T-64/06, not yet decided; FLSmidth v. Commission, Case T-
65/06, not yet decided; JM Gesellschaft für industrielle Beteiligungen v. Commission,
Case T-66/06, not yet decided; Stempher and Koninklijke Verpakkingsindustrie
Stempher v. Commission, Case T-68/06, not yet decided; Groupe Gascogne v.
Commission, Case T-72/06, not yet decided; Sachsa Verpackung v. Commission, Case T-
79/06, not yet decided; Aspla v. Commission, Case T-76/06, not yet decided; Armando
Álvarez v. Commission, Case T-78/06, not yet decided; Bitumen Netherlands, Case
COMP/F/38.456 (decision available on the Commission's website; a summary version
of the decision is also available at OJ 2007 L196/40) (price fixing cartel in the road
bitumen sector in The Netherlands); Koninklijke Wegenbouw Stevin v. Commission,
Case T-357/06, not yet decided; Dutch beer, Case COMP/B-2/37.766 (decision available
on the Commission's website; a summary version of the decision is also available at
OJ 2008 C122/1) (price coordination and price increases of beer in the Netherlands);
on appeal: Koninklijke Grolsch v. Commission, Case T-234/07, not yet decided; Bavaria
v. Commission, Case T-235/07, not yet decided; Heineken Nederland and Heineken v.
Commission, Case T-240/07, not yet decided; Professional videotapes, Case
COMP/38.432 (decision available on the Commission's website; a summary version of
the decision is also available at OJ 2008 C57/10) (price fixing in the market for
professional videotapes); Flat glass (II), Case COMP/39.165 (decision available on the
C127/9) (price fixing in the market for flat glass, commonly used for windows, glass
doors and mirrors); on appeal: Guardian Industries and Guardian Europe v.
Commission, Case T-82/08, not yet decided.
37) Gas insulated switchgear, Case COMP/F/38.899 (decision available on the
C5/7); on appeal: Siemens Transmission & Distribution and Nuova Magrini Galileo v.
Commission, Case T-124/07, not yet decided; Fuji Electric Holdings and Fuji Electric
Systems v. Commission, Case T-132/07, not yet decided; Mitsubishi Electric v.
Commission, Case T-133/07, not yet decided; Hitachi and Others v. Commission, Case T-
112/07, not yet decided; Siemens v. Commission, Case T-110/07, not yet decided;
Toshiba v. Commission, Case T-113/07, not yet decided; Areva & Others v. Commission,
Case T-117/07, not yet decided; Alstom v. Commission, Case T-121/07, not yet decided;
Siemens and VA TECH Transmission & Distribution v. Commission, Case T-122/07, not yet
decided; Siemens Transmission & Distribution v. Commission, Case T-123/07, not yet
decided.
38) One of the companies involved was fined €396,562,500.
32
39) Elevators and escalators, Case COMP/E-1/38.823 (decision available on the
C75/19); on appeal: General Technic-Otis v. Commission, Case T-141/07, not yet
decided; General Technic v. Commission, Case T-142/07, not yet decided; Schindler
Holding and Others v. Commission, Case T-138/07, not yet decided; ThyssenKrupp Liften
Ascenseurs v. Commission, Case T-144/07, not yet decided; OTIS and Others v.
Commission, Case T-145/07, not yet decided; United Technologies v. Commission, Case
T-146/07, not yet decided; ThyssenKrupp Aufzüge and ThyssenKrupp Fahrtreppen v.
Commission, Case T-147/07, not yet decided; ThyssenKrupp Ascenseurs Luxembourg v.
Commission, Case T-148/07, not yet decided; ThyssenKrupp Elevator v. Commission,
Case T-149/07, not yet decided; ThyssenKrupp v. Commission, Case T-150/07, not yet
decided; KONE and Others v. Commission, Case T-151/07, not yet decided;
ThyssenKrupp Liften v. Commission, Case T-154/07, not yet decided.
40) For cartel cases relating to services, see, e.g., Banking services: Uniform Eurocheques
(I), OJ 1985 L35/43; Belgische Vereniging der Banken/Association Belge des Banques, OJ
1987 L7/27; ABI, OJ 1987 L43/51; Dutch banks (I), OJ 1989 L253/1; on appeal: Nederlandse
Bankiersvereniging and Nederlandse Vereniging van Banken v. Commission, [1992] ECR
II-2181; Eurocheque Helsinki Agreement, OJ 1992 L95/50 (the Commission found that an
agreement on uniform charges for different banking services (credit cards and
Eurocheques) violated Article 81(1) because it impeded the development of
Eurocheques as a means of domestic payment, to the detriment of the users of this
system); the CFI partly annulled the Commission's decision and the fines were
reduced on appeal: Groupement des Cartes Bancaires and Europay International v.
Commission, [1994] ECR II-49; German bank charges, OJ 2003 L15/1 (the Commission
fined five German banks for concluding an agreement which had as its object a
harmonization of the banks' future pricing policies and the alignment of prices in the
buying and selling of incurrency banknotes); the decision was annulled by the CFI as
the Commission did not provide sufficient proof of the existence of the agreement
(the judgments concerned were delivered by default in accordance with Article 122(1)
of the CFI's Rules of Procedure because the Commission had failed to lodge a timely
defence): Dresdner Bank v. Commission, Case T-44/02, not reported; Vereins-und
Westbank v. Commission, Case T-54/02, not reported; Bayerische Hypo-und
Vereinsbank v. Commission, [2004] II-3495; Deutsche Verkehrsbank v. Commission, Case
T-60/02, not reported; Commerzbank v. Commission, Case T-61/02, not reported; the
Commission applied to the CFI to set aside the judgments by default in accordance
with Article 122(4) of the CFI's Rules of Procedure: Dresdner Bank and Others v.
Commission, [2006] ECR II-3567 (applications dismissed); Austrian banks, OJ 2004
L56/1 (the Commission imposed fines on eight Austrian Banks for their participation
in a wide-ranging price cartel); on appeal: Raiffeisen Zentralbank Österreich and
Others v. Commission, [2006] ECR II-5169 (decision largely upheld by the CFI but fines
reduced for one of the applicants); on further appeal: Erste Bank der Österreichischen
Sparkassen v. Commission, Case C-125/07P, not yet decided; Raiffeisen Zentralbank
Österreich v. Commission, Case C-133/07P, not yet decided; Bank Austria Creditanstalt
v. Commission, Case C-135/07P, not yet decided; Österreichische Volksbanken v.
Commission, Case C-137/07P, not yet decided. Insurance services: Nuovo CEGAM, OJ
1984 L99/29; Fire insurance (D), OJ 1985 L35/20; on appeal: Verband der Sachversicherer
v. Commission, [1987] ECR 405. Pricing agreements may be an infringement even where
suppliers can or do vary from the agreed upon prices from time to time. For instance,
in TEKO, OJ 1990 L13/34; Concordato Incendio, OJ 1990 L15/25; and Assurpol, OJ 1992
L37/16, the fact that the insurers were not under a strict obligation to apply the
uniform premiums did not influence the Commission's finding of a violation of Article
81(1). Transport services: Greek ferries, OJ 1999 L109/24 (price fixing in ferry services
between Italy and Greece); the CFI confirmed the Commission's findings of fact:
Marlines v. Commission, [2003] ECR II-5225; Ventouris Group v. Commission, [2003] ECR
II-5257; Adriatica di Navigazione v. Commission, [2003] ECR II-5349; Strintzis Lines
Shipping v. Commission, [2003] ECR II-5433; Minoan Lines v. Commission, [2003] ECR II-
5515; on further appeal: Adriatica di Navigazione v. Commission, [2006] ECR I-22;
Strintzis Lines Shipping v. Commission, [2006] ECR I-44 (appeals dismissed); FETTCSA,
OJ 2000 L268/1 (agreement concerning the fixing of rates and conditions for inland
transport); the decision was upheld on appeal in all material aspects, but annulled
with regard to the fines imposed, since they were imposed after the five-year
limitation period laid down in Council Regulation 2988/74; CMA CGM and Others v.
Commission, [2003] ECR II-913; on further appeal: Commission v. CMA CGM and Others,
Case C-236/03P, not reported (dismissed).
41) Vereniging van Cementhandelaren v. Commission, [1972] ECR 977.
42) ibid (paras 19–21).
43) ICI v. Commission (I), [1992] ECR II-1021 (paras 310–311); on appeal: ICI v. Commission
(II), [1999] ECR I-4399 (upheld by ECJ). See also PVC (I), OJ 1989 L74/1; on appeal: BASF
and Others v. Commission (I), [1992] ECR II-315; on further appeal: Commission v. BASF
and Others, [1994] ECR I-2555 (the Commission's decision annulled on purely
procedural grounds); PVC (II), OJ 1994 L239/14; on appeal: Limburgse Vinyl
Maatschappij and Others v. Commission, [1999] ECR II-931 (substantially upheld);
Limburgse Vinyl Maatschappij and Others v. Commission, [2002] ECR I-8375
(substantially upheld); LdPE, OJ 1989 L74/21; on appeal: BASF and Others v.
Commission (II), [1995] ECR II-729 (annulled on procedural grounds).
33
45) Sodium gluconate, fn.31. See also Copper plumbing tubes, fn.36; Industrial thread, Case
COMP/E-1/38.337 (decision available on the Commission's website; a summary
version of the decision is also available at OJ 2008 C21/10); on appeal: Zwicky v.
Commission, Case T-457/05, not yet decided; Gütermann v. Commission, Case T-
456/05, not yet decided; Belgian Sewing Thread v. Commission, Case T-452/05, not yet
decided; Aman & Söhne and Cousin Filterie v. Commission, Case T-446/05, not yet
decided; Oxley Threads v. Commission, Case T-448/05, not yet decided; Hydrogen
peroxide and perborate, fn.32.
46) Zinc phosphate, OJ 2003 L153/1; on appeal: Britannia Alloys & Chemicals v. Commission,
[2005] ECR II-4973; SNCZ v. Commission, [2005] ECR II-5005; Union Pigments v.
Commission, [2005] ECR II-5057; Dr. Hans Heubach v. Commission, [2005] ECR II-5137
(appeals dismissed); on further appeal: Britannia Alloys v. Commission, [2007] ECR I-
4405 (appeal dismissed).
47) See also, e.g., Vimpoltu, OJ 1983 L200/44 (published lists of trade-in prices for second-
hand tractors); Wood pulp, fn.17 (the producers met from time to time in order to
agree to a recommended price); Fenex, OJ 1996 L181/28 (a trade association, Fenex,
had for very many years regularly and consistently engaged in the horizontal practice
of drawing up and circulating recommended tariffs).
48) Belgian architects, Case COMP/38.549 (decision available on the Commission's
website; a summary version of the decision is also available at OJ 2005 L4/10),
recitals 75–96.
19) Cast iron and steel rolls, OJ 1983 L317/1.
50) Rubber chemicals, Case COMP/F/38.443 (decision available on the Commission's
website; a summary version of the decision is also available at OJ 2006 L353/50); on
appeal: General Quimica and Others v. Commission, Case T-85/06, not yet published
(appeal rejected).
51) See also, for instance, Choline chloride, fn.36; Copper plumbing tubes, fn.36; MCAA, fn.36
(cartel involving, among other things, the setting of price increases); Industrial thread,
fn.45.
52) Raw tobacco Spain, Case COMP/B-2/38.248 (decision available on the Commission's
appeal: Compañía Española de Tabaco en Rama v. Commission, Case T-33/05, not yet
decided; Dimon v. Commision, Case T-41/05, not yet decided; Standard Commercial
and Others v. Commission, Case T-24/05, not yet decided; Deltafina v. Commission (I),
Case T-29/05, not yet decided; Worldwide Tobacco España v. Commission, Case T-
37/05, not yet decided.
53) Raw tobacco Italy, Case COMP/B-2/38.281 (decision available on the Commission's
appeal: Mindo v. Commission, Case T-19/06, not yet decided; Alliance One
International v. Commission, Case T-25/06, not yet decided; Universal v. Commission,
Case T-34/06, not yet decided; Deltafina v. Commission (II), Case T-12/06, not yet
decided; see also Bitumen Netherlands, fn.36, also partly involving collective fixing of
purchase prices.
54) Raw tobacco Spain, fn.52, recital 301.
55) Raw tobacco Italy, fn.53, recital 280.
56) Roofing felt, OJ 1986 L232/15; on appeal: Belasco and Others v. Commission, [1989] ECR
2117 (upheld by ECJ).
57) FETTCSA, fn.40.
58) ibid, recital 181.
59) Vimpoltu, fn.47.
60) see, e.g., German ceramic tile manufactures, OJ 1971 L10/15; Fedetab, OJ 1978 L224/29;
on appeal: Van Landewyck and Others v. Commission, [1980] ECR 3125 (an agreement
not to give reductions or discounts); SSI, OJ 1982 L232/1; on appeal: Stichting
Sigarettenindustrie and Others v. Commission, [1985] ECR 3831; Flat glass Benelux, OJ
1984 L212/13 (maximum discount reduced from 25% to 15%); Lloyd's Underwriters
Association and The Institute of London Underwriters, OJ 1993 L4/26 (negative
clearance of two agreements relating to marine hull and machinery insurance after
clauses fixing rebates and minimum premium increases were deleted and a market-
sharing agreement was abandoned by the parties); FEG & TU, OJ 2000 L39/1 (the
Commission found evidence that the Dutch association of wholesalers of electrical
equipment, FEG, had recourse to discussions on prices and discounts during FEG
meetings); on appeal: FEG & TU v. Commission, [2003] ECR II-5761 (upheld by CFI); on
further appeal: FEG v. Commission, [2006] ECR I-8725; Technische Unie v. Commission,
[2006] ECR I-8831 (substantially upheld by the ECJ); Citric acid, fn.31 (it was agreed
that no customers would be granted discounts and all would be expected to pay the
list price. This was designed to prevent any participant from selling below the agreed
prices. An exception was made for the five major consumers of citric acid since it was
unrealistic to expect them to pay the published list price. It was accepted that these
customers could be offered a discount of up to 3% off the list price). See also
Vereniging van Vlaamse Reisbureaus v. Sociale Dienst van de Plaatselijke en
Gewestelijke Overheidsdiensten, [1987] ECR 3801; Industrial thread, fn.45 (agreement on
maximum rebates).
34
61) Groupement des fabricants de papiers peints de Belgique and Others v. Commission,
[1975] ECR 1491 (para. 10).
62) see, e.g., FEG & TU, fn.60 (a binding decision by the Dutch association of wholesalers of
electrical equipment, FEG, prohibiting its members from advertising using specially
reduced prices).
63) Roofing felt, fn.56.
64) Fedetab, fn.60.
65) see, e.g., Vimpoltu, fn.47.
66) VBBB/VBVB, OJ 1982 L54/36; on appeal: VBVB and VBBB v. Commission, [1984] ECR 19.
67) see, e.g., Groupement des fabricants de papiers peints de Belgique and Others v.
Commission, fn.61; Fedetab, fn.60 (an agreement to prevent competition from arising
between manufacturers and importers with regard to the resale prices of their
products).
68) Fedetab, fn.60, recital 81(a).
69) See also Cimbel, OJ 1972 L303/24.
70) IFTRA rules for manufacturers of virgin aluminium, OJ 1975 L228/3.
71) Soda-ash — Solvay/CFK (readopted), OJ 2003 L10/10. The original decision imposing a
fine on Solvay and CFK was adopted in December 1990: Soda-ash — Solvay/CFK, OJ
1991 L152/16; but was, as regards Solvay, struck down by the CFI on purely procedural
grounds: Solvay v. Commission (III), [1995] ECR II-1821; appeal dismissed by the ECJ:
Commission v. Solvay, [2000] ECR I-2391.
72) Glass containers, OJ 1974 L160/1.
74) VOTOB, Twenty-second Report on Competition Policy, points 177–186.
75) Zinc producer group, OJ 1984 L220/27.
76) See also Belgian agreement on industrial timber, Fifth Report on Competition Policy,
point 36.
77) Papiers peints de Belgique, OJ 1974 L237/3; on appeal: Groupement des fabricants de
papiers peints de Belgique and Others v. Commission, fn.61.
78) Industrieverband, OJ 1980 L318/32.
79) See also German ceramic tile manufactures, fn.60; Gas water-heaters and bath-heaters,
OJ 1973 L217/34 (the aggregated rebate system included purchases from suppliers who
were not party to the agreement. In the Commission's view, such a system could
infringe Article 81(1) where it concerned a substantial proportion of the suppliers
(70%) and purchasers on the market in question); SSI, fn.60 (the rebate was based
solely on the retailer's aggregate annual turnover from all suppliers, whether parties
to the relevant agreements or wholesalers. Thus, the retailer had no incentive to
concentrate his business on one or more suppliers or render them special services in
order to earn an extra discount); Dutch manufacturers of liquorice, Second Report on
Competition Policy, point 34.
80) Nederlandse Sigarenwinkeliers Organisatie v. Commission, [1985] ECR 3801.
81) ibid (para. 43).
82) Cewal, Cowac and Ukwal, OJ 1993 L34/20; on appeal: Compagnie Maritime Belge
Transports and Others v. Commission (I), [1996] ECR II-1201; on further appeal:
Compagnie Maritime Belge Transports and Others v. Commission, [2000] ECR I-1365.
83) Compagnie Maritime Belge Transports and Others v. Commission, fn.82 (para. 183).
84) Bitumen Netherlands, fn.36, recital 156.
85) White lead, OJ 1979 L21/16 (delivery quotas); Zinc producer group, fn.75; Polypropylene,
OJ 1986 L230/1; substantially upheld on appeal: Enichem v. Commission, [1991] ECR II-
1623; Atochem v. Commission, [1991] ECR II-1177; DSM v. Commission, [1992] ECR II-
02399; Hercules v. Commission, [1991] ECR II-1711; Hoechst v. Commission (I), [1992] ECR
II-629; Hüls v. Commission, [1992] ECR II-499; Petrofina v. Commission, [1991] ECR II-
1087; Rhône-Poulenc v. Commission, fn.8; BASF v. Commission (I), [1991] ECR II-1523; ICI
v. Commission (I), fn.43 (paras 310–311) (restriction of production and/or sales, control
of stock and diversion of supplies to overseas markets found to be intended to secure
favourable climate for price increases); on further appeal: Hercules v. Commission,
[1999] ECR I-4235; Hoechst v. Commission (IV), [1999] ECR I-4443; P Hüls v. Commission,
[1999] ECR I-4287; Roofing felt, fn.56 (seven manufacturers of roofing felt undertook,
inter alia, not to sell, assign, lease or loan their production plants or equipment to
third parties without the prior consent of the cartel members); TACA (II), OJ 1999 L95/1
(restrictions on the availability and content of service contracts); on appeal: Atlantic
Container Line and Others v. Commission (II), [2002] ECR II-875 (CFI upheld the
Commission's refusal to grant exemption under Article 81(3)); Europe Asia Trades
Agreement (EATA), OJ 1999 L193/23 (the non-utilization of capacity under the EATA was
intended to have an effect on prices by reducing the supply of transport services to
the market. This had to be viewed in combination with the price restrictions and in
the light of the very high market shares of the parties).
86) Zinc producer group, fn.75.
89) TACA II, fn.85 (restrictions on the availability and content of service contracts).
35
91) The Commission, however, imposed fines only with regard to the infringements of
Article 82. On 14 November 2002, the Commission adopted a decision granting an
exemption from Article 81(1) to TACA. The decision came after the TACA members
agreed to make substantial concessions: TACA (revised), OJ 2003 L26/53; on appeal:
Atlantic Container Line and Others v. Commission (III), [2003] ECR II-3275.
92) Pre-insulated pipe, fn.24.
93) ibid, recitals 57–58.
94) MCAA, fn.36.
96) Raw tobacco Spain, fn.52, recital 162.
97) Choline chloride, fn.36, recitals 69 and 99.
98) For further details on parallel conduct, see also pp. 41–44.
99) Hoffmann-La Roche v. Commission, [1979] ECR 461 (para. 116).
100) Flat glass, OJ 1989 L33/44; on appeal: SIV and Others v. Commission, [1992] ECR II-1403.
101) SIV and Others v. Commission, fn.100 (para. 360).
102) ibid (para. 359). In two subsequent decisions, Cewal, Cowac and Ukwal, fn.82; and
Warner-Lambert/Gilette and BIC/Gillette, OJ 1993 L116/21, the Commission made
separate analyses under Articles 81(1) and 82, presumably in an effort to avoid the
problems in Flat glass, fn.100.
103) Tetra Pak Rausing v. Commission, [1990] ECR II-309 (paras 20–22).
104) See also Ahmed Saeed Flugreisen & Silver Line Reisebiiro v. Zentrale zur Bekämpfung
unlauteren Wettbewerbs, [1989] ECR 803.
105) The Commission's emphasis on market integration is further shown by the following
paragraph on market-sharing arrangements, taken from its First Report on
Competition Policy:
Market-sharing agreements are particularly restrictive of competition and
contrary to the achievement of a single market. Agreements or concerted
practices for the purpose of market-sharing are generally based on the
principle of mutual respect of the national markets of each Member State
for the benefit of producers resident there. The direct object and result of
their implementation is to eliminate the exchange of goods between the
Member States concerned. The protection of their home market allows
producers to pursue a commercial policy — particularly a pricing policy —
in that market which is insulated from the competition of other parties to
the agreement in other Member States, and which can sometimes only be
maintained because they have no fear of competition from that direction.
The fixing of delivery quotas in relation to total sales, combined in some
cases with a compensation scheme to ensure that the quotas are
respected, means that the members of the group give up any possibility of
obtaining an advantage over their competitors by applying an individual
sales policy. Maintenance of the equilibrium as fixed by the quotas
directly endangers intra-Community trade as soon as the sales quotas are
applied to one or more markets within the Community. (First Report on
Competition Policy, point 2).
The importance of the integration of the EC market and the harmful effects of market-
sharing agreements were reiterated by the Commission in its Twenty-ninth Report on
Competition Policy, point 3. See also Horizontal Guidelines, para. 25: ‘The sharing of
markets or customers reduces the choice available to customers and therefore also
leads to higher prices or reduced output’.
106) First Report on Competition Policy, points 3–4.

107) Quinine, OJ 1969 L192/5; on appeal: ACF Chemiefarma v. Commission, [1970] ECR 661;
Buchler v. Commission, [1970] ECR 733; Boehringer Mannheim v. Commission (I), [1970]
ECR 769.
108) ACF Chemiefarma v. Commission, fn.107; Buchler v. Commission, fn.107; Boehringer
Mannheim v. Commission (I), fn.107. The ECJ affirmed the Commission's findings as
concerns the undertakings' protection of domestic markets, but reversed the
Commission's findings as regards the duration of the joint determination of prices
and quotas, and consequently reduced the amount of fines.
109) Peroxygen, OJ 1985 L35/1.
110) See also Amino acids, fn.31 (agreements on sales quantities and in accordance with
the homemarket principle, i.e. that the local producer should sell as much as
possible in his own region); Graphite electrodes, fn.27 (a basic principle of the cartel
agreement was that non-home producers should not compete aggressively and that
market shares would be allocated with non-home producers being potentially
required to withdraw from the home markets of the others).
111) Cartonboard, fn.23.
36
113) Cement, OJ 1994 L343/1. The CFI broadly upheld the Commission's decision. However,
the fines were reduced substantially to reflect the gravity and duration of the
infringements. Moreover, the fines imposed on the associations of undertakings were
annulled since the Commission had not announced its intention to impose fines on
these associations: Cimenteries CBR and Others v. Commission, [2000] ECR II-491. The
ECJ broadly confirmed the CFI's judgment: Aalborg Portland and Others v. Commission,
[2004] ECR I-123.
114) ibid, recital 61(7).
115) Seamless steel tubes, OJ 2003 L140/1; on appeal: Mannesmannröhren-Werke v.
Commission (II), [2004] ECR II-2223; Corus UK v. Commission, [2004] ECR II-2325;
Dalmine v. Commission (II), [2004] ECR II-2395; JFE Engineering and Others v.
Commission, [2004] ECR II-2501 (fines reduced as the CFI found that the duration of
the infringement was shorter); on further appeal: Sumitomo Metal Industries and
Nippon Steel v. Commission, [2007] ECR I-729; Dalmine v. Commission, [2007] ECR I-829;
Salzgitter Mannesmann v. Commission, [2007] ECR I-959.
116) SAS Maersk Air and Sun-Air v. SAS and Maersk Air, OJ 2001 L265/15; on appeal: SAS v.
Commission, [2005] ECR II-2917 (appeal dismissed).
117) See also Julien/Van Katwijk, OJ 1970 L242/18 (a Dutch undertaking was banned from
selling in the Belgian market and a Belgian undertaking voluntarily limited its
exports to 20% of Dutch domestic consumption. A Dutch national court held that the
parties were obliged to comply with the terms of their contract. The Commission
found that the contract constituted an infringement of Article 81(1)); Ijsselcentrale, OJ
1991 L28/32 (the horizontal agreement on export and import bans was supplemented
by vertical agreements between producers, distributors and final customers), upheld
on appeal: Rendo and Others v. Commission (I), [1992] ECR II-2417. This CFI judgment
was partially overturned on further appeal and sent back to the CFI: Rendoand Others
v. Commission [1995] ECR I-3319. The CFI then conformed to the ECJ judgment and
partially annulled the Commission decision: Rendo and Others v. Commission (II),
[1996] ECR II-1827; Cewal, Cowac and Ukwal, fn.82 (agreements were made between
different liner conferences whereby they ‘[would] not compete with each other as
outsiders in their respective areas of operation’. The Commission found these
agreements to ‘partition the European Atlantic coast into several separate areas with
each area taking in one or more Member States, in breach of Art. [81(1)(c)]’).
118) Choline chloride, fn.36; on appeal, the CFI annulled the Commission decision insofar
as it found that the global and European arrangements constituted a single and
continuous infringement and not two separate infringements: BASF and UCB v.
Commission, fn. 36.
119) Gas insulated switchgear, fn.37.
120) European sugar industry, OJ 1973 L140/17; on appeal: Suiker Unie and Others v.
Commission, fn.8.
121) In its Second Report on Competition Policy, point 28, the Commission revealed further
details of the system:
[D]eliveries to dealers and customers of the country of destination were
refused, or bids were made only at higher prices, adapted to those being
charged on the market of the destinee country; restrictive clauses were
written into the contracts concluded with the national dealers and
customers, so as to prevent the latter from disturbing the sales policy
pursued by the producers concerned; and the bids made by the producers
— especially the French and Belgian producers — submitted for the
auctions organized by the Commission with a view to granting export
refunds on exports to non-member countries were concerted so that the
quantities of surplus sugar remaining within the Common Market could be
controlled and would exert no competitive pressure.
122) Vegetable parchment, OJ 1978 L70/54.

123) Soda-ash — Solvay/ICI, OJ 1991 L152/1, involved facts similar to Vegetable parchment.
In that case ICI (Imperial Chemical Industries) purchased a substantial amount of
soda-ash from Solvay to meet the demands of its customers in return for Solvay's
agreement to stay out of the UK market. The Commission noted that such an
arrangement does not always constitute a per se violation, but considered it as
evidence of a wider concertation to eliminate competition between the two
companies. On appeal, the CFI annulled the decision on procedural grounds: Solvay v.
Commission (II), [1995] ECR II-1775; ICI v. Commission (II), [1995] ECR II-1847; the ECJ
dismissed the Commission's further appeal: Commission v. ICI, [2000] ECR I-2341. In
another case decided on the same day, Soda-ash — Solvay/CFK, fn.71, the Commission
fined Solvay and CFK for a market sharing agreement whereby CFK was guaranteed a
minimum share of the German market. In that case the parties agreed that if CFK's
sales in Germany fell below a guaranteed minimum, Solvay would buy the shortfall
from CFK. In return, CFK would refrain from ‘disruptive’ pricing behaviour.
124) See, e.g., Centraal Stikstof Verkoopkantoor, OJ 1978 L242/15 (involving a joint sales
agency set up by two Dutch manufactures); French West African shipowners'
committees, OJ 1992 L134/1 (involving a ship owners' agreement which had the effect
of sharing among its members the market for cargoes carried by liner vessel between
France and eleven African states).
37
125) Cementregeling voor Nederland, OJ 1972 L303/7.
127) See also Cast iron and steel rolls, fn.49 (the Commission found that the members of the
cartel had operated an international market-sharing agreement involving an
allocation system for ‘home market’ orders through deliberate over-quoting by non-
traditional suppliers, which had as its object the division of what should be a single
market. The Commission also found that the French undertakings had entered into
and operated a market-sharing agreement for cast iron rolls, with quotas and
equalization payments, designed to preserve for the participants their traditional
market shares in France and the Saarland); Zinc producer group, fn.75 (all the
participants in the cartel were party to quota agreements restricting zinc shipments
between Community countries. Furthermore, quotas were agreed for zinc exports from
France, Belgium and the Netherlands to Germany, though it was made clear that the
bulk of the country's zinc requirements should be supplied by German producers. The
Commission held that these agreements constituted sales limitations and sharing of
markets within the meaning of Article 81(1)(c)); Pre-insulated pipe, fn.24 (percentage
quotas for the total market were agreed upon for each producer. The value of the
total market was calculated and the Europe-wide quotas of each producer were
translated into money terms. Individual national markets were then divided
accordingly. This was found by the Commission to be an infringement of Article 81(1)).
128) Graphite electrodes, fn.27.
129) ibid, recital 111. The same wording was used by the Commission in Vitamins (II), fn.17,
recital 601 (maintenance of the status quo in market shares); and in Citric acid, fn.31
(allocation of specific sales quotas for each member). All of these decisions refer to
the judgment of the ECJ in Van Landewyck and Others v. Commission (ECJ), fn.60 (para.
170).
130) MCAA, fn.36.
131) Quinine, fn.107.
133) ‘The fact relied upon that, when the gentlemen's agreement was concluded, the
French undertakings were not in a position to manufacture synthetic quinidine does
not render lawful such a restriction which entirely precluded them from taking up this
activity. That the French undertakings should accede to this restriction of their
freedom of action is explicable in terms of their interest — owing to the particularly
high prices which they maintained for their products in France — in preserving the
territorial protection which they enjoyed on their domestic markets’. ACF
Chemiefarma v. Commission, fn.107 (paras 156–157)). See also Agreements restricting
production and sale of fruit, Fifth Report on Competition Policy, point 38; Air-Forge,
Twelfth Report on Competition Policy, point 85.
134) Italian cast glass, OJ 1980 L383/19; for other cases of market sharing cases, see Copper
plumbing tubes, fn.36; Choline chloride, fn.36; Hydrogen peroxide and perborate, fn.32;
MCAA, fn.36; Industrial bags, fn.36.
135) Italian cast glass, fn.134, recital 4.
136) Zinc producer group, fn.75.
137) Graphite electrodes, fn.27.
138) Citric acid, fn.31.
139) Synthetic fibres (II), OJ 1984 L207/17.
140) See pp. 406–416.
141) See also Eleventh Report on Competition Policy, point 46.
142) Fine paper, OJ 1972 L182/24.
143) Cewal, Cowac and Ukwal, fn.82.
144) ibid, fn.82, recital 38.
145) TACA (I), OJ 1994 L376/1, recital 298; substantially upheld on appeal: Atlantic Container
Line and Others v. Commission (I), [1995] ECR II-2893; on further appeal: Atlantic
Container Line and Others v. Commission, [1995] ECR I-2165. See also French West
African shipowners' committees, fn.124, recital 41; Europe Asia Trades Agreement (EATA),
fn.85, recital 151.
146) Raw tobacco Spain, fn.52.
147) Raw tobacco Italy, fn.53.
148) French beer, COMP/B-2/37.750, OJ 2005 L184/57 (summary decision), recital 66.
149) To this end, the parties agreed on (1) the total volumes of beer distributed by each
group, and (2) the volumes of the other party's brands distributed by each group.
150) BP Kemi-DDSF, OJ 1979 L286/32.
151) Building and construction industry in the Netherlands, fn.24.
152) Food flavour enhancers, OJ 2004 L75/1.
153) Choline chloride, fn.36, recital 99; see also Hydrogen peroxide and perborate, fn.32;
MCAA, fn.36; Industrial thread, fn.45; Industrial bags, fn.36.
38
154) Flat glass, fn.100. See also Roofing felt, fn.56, where seven Belgian producers of roofing
felt agreed to supply their own customers. During the course of the investigation, the
parties admitted that the object was to prevent one member's customers from being
approached by other members. Moreover, in the face of the price-cutting policy
adopted by one competitor, the parties agreed to divide among themselves the
competitor's customers, making them offers with maximum discounts so as to take
business away from the competitor and induce it to abandon its price cutting. This
practice was condemned in the strongest terms by the Commission. See also Beecham
Pharma-Hoechst, Sixth Report on Competition Policy, points 129–133; Agreement
between manufacturers of nitrogenous fertilisers, Sixth Report on Competition Policy,
points 126–128.
155) Flat glass, fn.100, recital 68.
156) SIV and Others v. Commission, fn.100 (para. 336). It should be noted that the CFI
partially annulled the Commission's decision, but not with respect to the market-
sharing agreements discussed.
159) Car glass, Press Release IP(08)1685 of 12 November 2008; at the time of writing, the
full text of the Commission's decision has not been published yet.
160) Citric acid, fn.31, recital 119.
161) Italian cast glass, fn.134.
162) Tréfileurope v. Commission, [1995] ECR II-791 (para. 97).
163) Needles, Case COMP/F-1/38.338 (decision currently only available on the
Commission's website); on appeal: William Prym v. Commission, [2007] ECR II-107
(summary only) (fines reduced); Coats Holdings and J&P Coats v. Commission, [2007]
ECR II-110 (summary only) (fine reduced); the CFI found, inter alia, that the
Commission had not sufficiently demonstrated the purportedly tripartite character of
the agreements at stake in order to prove Coats' liability in relation to the
Prym/Entaco cartel. According to the CFI, Coats' contribution was rather limited to
facilitating the entry into force of the Heads of Agreement between Prym and Entaco
and, therefore, its role was more akin to that of a mediator than that of a full member
of the cartel; on further appeal: Coats Holdings and J&P Coats v. Commission, [2008]
ECR I-127 (summary only); William Prym v. Commission, Case C-534/07P, not yet
published.
164) See MEMO/07/353 of 12 September 2007.
165) See, e.g., European sugar industry, fn.120, p.28.
167) Raw tobacco Italy, fn.53.
168) Elevators and escalators, fn.39; see also Gas insulated switchgear, fn.37.
169) Pre-insulated pipe, fn.24, recitals 98–107.
170) On the other hand, purely unilateral refusals to deal that do not involve any
horizontal concertation are of less concern for competition law purposes. They may
nevertheless amount to a restrictive practice within the context of exclusive or
selective distribution systems or constitute an abuse of a dominant position.
171) Netherlands insurers, Sixth Report on Competition Policy, points 120–121.
172) Centraal Bureau voor de Rijwielhandel, OJ 1978 L20/18.
173) Sarabex, Eighth Report on Competition Policy, points 35–37.
174) Papiers peints de Belgique, fn.77. See also Fedetab, fn.60 (in response to a number of
large distribution firms reducing the number of cigarette brands they stocked,
tobacco manufacturers agreed together to withhold all supplies of cigarettes until
the firms reverted to their previous number of brands); Dutch cranes, OJ 1995 L312/79;
on appeal: SCK and FNK v. Commission, [1997] ECR II-1739.
176) HFB v. Commission, fn.24, (para. 280). See also Lögstör Rör v. Commission, fn.166 (para.
129); LR AF 1998 A/S v. Commission, fn.166, (para. 157).
177) UK Agricultural Tractor Registration Exchange, OJ 1992 L68/19; on appeal: John Deere v.
Commission, [1994] ECR II-957; Fiatagri UK and Holland Ford v. Commission, [1994] ECR
II-905; on further appeal: John Deere v. Commission, fn.8; New Holland Ford v.
Commission, [1998] ECR I-3175.
178) See, e.g., itWirtschaftsvereinigung Stahl, OJ 1998 L1/10, recital 45; on appeal:
Wirtschaftsvereinigung Stahl and Others v. Commission, [2001] ECR II-1217 (the CFI
annulled the Commission's decision for an error in assessing the scope of the notified
agreement); COBELPA/VNP, OJ 1977 L242/10, where the Commission stated with regard
to an information exchange arrangement on prices: ‘These concerted practices thus
resulted in the establishment of a system of solidarity and mutual influence designed
to coordinate business activities. They replaced the normal risks of competition by
practical cooperation, resulting in conditions of competition differing from those
obtaining in a normal market situation’. This view reflects the opinion of the ECJ in
respect of concerted practices in ICI v. Commission, fn.22, and in Suiker Unie and
Others v. Commission, fn.8.
179) Seventh Report on Competition Policy, point 8.
180) See, e.g., Amino acids, fn.31, recital 229.
39
181) See, e.g., Wirtschaftsvereinigung Stahl and Others v. Commission, fn.178; COBELPA/VNP,
fn.178; Vegetable parchment, fn.122; Hasselblad, OJ 1982 L161/18; on appeal: [1984] ECR
883; Fatty acids, fn.181; European Asia Trades Agreement (EATA), fn.85. See also Seventh
Report on Competition Policy, point 7.
182) See Commission Notice concerning agreements, decisions and concerted practices in
the field of cooperation between enterprises, OJ 1968 C75/3 (the ‘Former Cooperation
Notice’), which, although having been replaced by the Horizontal Guidelines, provides
some guidance on the Commission's attitude to information exchanges. However,
where such agreements include recommendations, or if the calculation models
contain specified rates of calculation, there may be a restraint on competition. See
IFTRA rules for manufacturers of virgin aluminium, fn.70.
183) Seventh Report on Competition Policy, point 7.
184) See, e.g., Cartonboard, fn.23; Cement, fn.113; Choline chloride, fn.36; MCAA, fn.36; Rubber
Chemicals, fn.50.
185) See, e.g., Amino acids, fn.31 (exchange of information on sales quantity); Cartonboard,
fn.23 (exchanges of prices and sales); Cement, fn.113 (exchange of information
concerning production capacities, output, domestic and export sales, domestic and
export prices concerning individual undertakings); Steel beams, fn.24 (exchanges of
information concerning prices and sales); Amino acids, fn.31 (exchanges of information
on sales and prices); Hydrogen peroxide and perborate, fn.32 (exchange of confidential
information relating to production volumes, sales volumes and price information);
MCAA, fn.36 (exchange of information on sales volumes, customers and prices).
186) See, e.g., UK Agricultural Tractor Registration Exchange, fn.177.
187) Wirtschaftsvereinigung Stahl, fn.178, where the Commission emphasized the difference
between exchanges of sensitive, recent and individualized information on a
concentrated market in homogenous products and exchanges of information relating
to a more fragmented market in more diverse products.
188) Seventh Report on Competition Policy, point 7(3); COBELPA/VNP, fn.178, recital 28; UK
Agricultural Tractor Registration Exchange, fn.177, recital 37; Steel beams, fn.24.
189) Seventh Report on Competition Policy, points 6–7; UK Agricultural Tractor Registration
Exchange, fn.177.
190) See Seventh Report on Competition Policy, point 7.
191) Wirtschaftsvereinigung Stahl, fn.178, recital 39. The CFI annulled the Commission
decision due to its erroneous assessment of the scope and detail of the exchanged
information: Wirtschaftsvereinigung Stahl and Others v. Commission, fn.178. The CFI
found that the exchanged information permitted the participants to calculate each
other's market shares only approximately.
192) See Wirtschaftsvereinigung Stahl, fn.178, recital 45; UK Agricultural Tractor Registration
Exchange, fn.177. See, generally, Former Cooperation Notice.
193) In Wirtschaftsvereinigung Stahl, fn.178, the Commission identified certain common
features of the various ‘highly concentrated’ markets examined: the number of
producers was less than twenty, the four main producers represented more than 50%
of production, there were high barriers to entry and structural links between
producers. Albeit imprecise, the analysis gives an indication of how the Commission
identifies a ‘highly concentrated market’ when assessing information exchanges. See
also Fatty acids, fn.181 (three parties exchanging information accounted for 60% of
total production); UK Agricultural Tractor Registration Exchange, fn.177 (the eight
parties to the exchange accounted for 88% of total production); Steel beams, fn.24
(the largest ten producers accounted for 65% of total production). However, in Eudim,
OJ 1996 C111/8, the Commission raised no objection to an exchange of confidential
and individualized information, noting that, given the fragmented nature of the
market and the size of the product range concerned, the exchange was unlikely to
have an appreciable effect on competition (the parties held a combined market
share of approximately 20%). Similarly, in Nuovo CEGAM, fn.40, the Commission found
that an information exchange agreement did not put the parties to the agreement in
a position to eliminate competition, because they held a combined market share on
the Italian engineering market of only 26%.
194) UK Agricultural Tractor Registration Exchange, fn.177, recitals 37–43.
196) See, e.g., ICI v. Commission (I), fn.22; Suiker Unie and Others v. Commission, fn.8.
197) UK Agricultural Tractor Registration Exchange, fn.177, recital 37.
198) Seventh Report on Competition Policy, points 5–8.
199) Wirtschaftsvereinigung Stahl and Others v. Commission, fn.178; COBELPA/VNP, fn.178;
Vegetable parchment, fn.122; Italian cast glass, fn.134; Hasselblad, fn.181; Fatty acids,
fn.181. In Europe Asia Trades Agreement (EATA), fn.85, in view of the parties' request for
confidentiality of their capacity figures vis-à-vis customers and other third parties,
the Commission pointed out that such information ought to be considered sensitive
in relation to competitors. See also Seventh Report on Competition Policy, points 5–8.
200) See, e.g., Vegetable parchment, fn.122; COBELPA/VNP, fn.178; Aalborg Portland and
Others v. Commission, fn.113.
201) Wirtschaftsvereinigung Stahl and Others v. Commission, fn.178; COBELPA/VNP, fn.178;
Vegetable parchment, fn.122; UK Agricultural Tractor Registration Exchange, fn.177;
Steel Beams, fn.24.
40
202) The Commission stated in its Seventh Report on Competition Policy, point 7(3): ‘[Such
an information arrangement] debars buyers from exploiting whatever concealed
competition subsists between sellers in oligopolistic markets’. See also UK
Agricultural Tractor Registration Exchange, fn.177; COBELPA/VNP, fn.178; Glass
containers, fn.72. In X/Open Group, OJ 1987 L35/36, the Commission cleared an
arrangement between software manufacturers and AT&T for exchanging market and
technical information in furtherance of an ‘open system’, an industry standard which
would allow consumers to combine hardware and software from different suppliers.
The Commission found the exchange acceptable as the information related to the
requirements of consumers, allowing the producers to determine and better react to
consumer needs and leading to an increase in rather than a restriction of
competition.
203) UK Agricultural Tractor Registration Exchange, fn.177. See also COBELPA/VNP, fn.178
(exchange of prices, mentioning the names of individual undertakings, their supply
terms, sales, payment terms including discounts, rebates, and changes in price
levels).
204) Wirtschaftsvereinigung Stahl, fn.178, recital 52; on appeal: Wirtschaftsvereinigung Stahl
and Others v. Commission, fn.178 (para. 29) (accepted in principle by CFI).
205) Wirtschaftsvereinigung Stahl and Others v. Commission, fn.178 (paras 44–45).
206) ibid (para. 44).
207) Information may be exchanged between undertakings themselves or through a body
acting as an intermediary, such as a trade association or another agency entrusted to
collect, aggregate and disseminate the data. If the information is collated by a trade
association, managed by representatives from the members of the exchange, there is
a risk that the individual members may gain access to the sensitive individual
information more easily than if an entirely independent agency collates the
information. See Twenty-fourth Report on Competition Policy, Annex IV, p. 642.
208) See, e.g., UK Agricultural Tractor Registration Exchange, fn.177; COBELPA/VNP, fn.178;
Vegetable parchment, fn.122. However, for aggregated data exchanges to be
permissible, it must also not be possible to infer individual figures. See, e.g., Seventh
Report on Competition Policy, point 7(1); Fatty acids, fn.181, recital 35. For instance, in
Peroxygen, fn.109, where three producers provided sales and production figures to a
statistical collecting body, it was very easy for each of them, due to the limited
number of participating producers, to deduce the market share of the others. Thus,
each of them could check whether the others were upholding the arrangement they
had made to share the French market. In European Wastepaper Information Service
(EWIS), OJ 1987 C339/7, the Commission declared its favourable attitude to a system to
exchange information in aggregated figures, noting that the EWIS confirmed that ‘no
figure may be given out which does not include aggregated data of a sufficient
number of members so that the competitive behaviour of any individual member
cannot be identified and this number may not, in any event, be less than four’.
209) See UK Agricultural Tractor Registration Exchange, fn.177; COBELPA/VNP, fn.178; Flat
glass Benelux, fn.60. See also Europe Asia Trades Agreement (EATA), fn.85, recitals 153–
155, where the Commission objected to the exchange of information regarding
capacity, utilization and forecasts of capacity in the maritime transport sector, in
particular given that the information was not aggregated but indicated the parties to
which it related. See also Steel beams, fn.24 (exchanges of individual information on
orders and deliveries).
210) Fatty acids, fn.181, recital 35. See also Seventh Report on Competition Policy, point 7.
211) Twenty-sixth Report on Competition Policy, pp. 127–128; CEPI-Cartonboard, OJ 1996
C310/3 (Article 19(3) Notice).
212) UK Agricultural Tractor Registration Exchange, fn.177, recital 50.
213) ibid, recital 50. In the Twenty-ninth Report on Competition Policy, pp. 156–158, the
Commission stated that this ‘twelve-month rule’ is to be a clear guide for cases
similar to UK Tractors. See also Wirtschaftsvereinigung Stahl, fn.178, recital 52 (where
the quarterly exchange of sensitive information was regarded as a violation of Article
81(1)). See also Fatty acids, fn.181; Flat glass Benelux, fn.60 (where the Commission
applied the ‘twelve-month’ rule).
214) Twenty-ninth Report on Competition Policy, pp. 156–158. See also Press Release
IP(99)699 of 20 September 1999.
215) The ten-unit rule is specific to the tractor industry.
216) Aalborg Portland and Others v. Commission, fn.113 (para. 281).
217) Twenty-fourth Report on Competition Policy, Annex IV, p. 642; Seventh Report on
Competition Policy, point 7.
218) Glass containers, fn.72, recital 43.
41
219) See also exchanges of price information as part of cartels in, e.g., Cartonboard, fn.23
(exchange of prices and sales); Cement, fn.113 (disclosure of price lists and forecast
price increases at the request of a competitor); Steel beams, fn 24 (exchange of
information concerning prices and sales); Amino acids, fn.31 (exchange of information
concerning sales and prices); Wood pulp, fn.17 (price announcements and exchange of
price information); Italian cast glass, fn.134; Vegetable parchment, fn.122 (exchange of
prices between manufacturers); COBELPA/VNP, fn.178 (exchange of information on
prices and business terms); IFTRA rules for manufacturers of virgin aluminium, fn.70
(information exchange on prices and cost calculation); Building and construction
industry in the Netherlands, fn.24 (exchange of information on prices in relation to
tenders in the Dutch building and construction industry).
220) IBOS, Twenty-sixth Report on competition policy, pp. 128–129.
221) See UK Agricultural Tractor Registration Exchange, fn.177. See also COBELPA/VNP,
fn.178; Vegetable parchment, fn.122.
222) See UK Agricultural Tractor Registration Exchange, fn.177. See also exchanges in
support of price-fixing, market-sharing or output limitation arrangements:
Cartonboard, fn.23 (exchange of prices and sales); Cement, fn.113; Welded steel mesh,
OJ 1989 L260/1; on appeal: Tréfilunion v. Commission, [1995] ECR II-1063; Société
Métallurgique de Normandie v. Commission, [1995] ECR II-1057; Société des Treillis et
Panneaux Soudés v. Commission, [1995] ECR II-1191; Sotralentz v. Commission, [1995]
ECR II-1127; Tréfileurope v. Commission, [1995] ECR II-791; Baustahlgewebe v.
Commission, [1995] ECR II-987; Martinelli v. Commission, [1995] ECR II-1165; Ferriere
Nord v. Commission (steel mesh), [1995] ECR II-917; on further appeal: Baustahlgewebe
v. Commission, [1998] ECR I-8417; Ferriere Nord v. Commission, [1997] ECR I-4411; LdPE,
fn.43; PVC, fn.43; Flat glass, fn.100. See also Fatty acids, fn.181 (exchange of global sales
volumes from which the parties' market shares could be deduced); Polypropylene,
fn.85; Peroxygen products, fn.85 (exchange of information on production and sales
figures); Zinc producer group, fn.75 (exchange of information on investment and
production cuts objectionable if approval is needed or recommendations are made);
Flat glass Benelux, fn.60 (quarterly exchange of sales figures in support of a market-
sharing arrangement); SSI, fn.60; Italian cast glass, fn.134 (information exchange on
sales and prices on each type of product); BP Kemi/DDSF, fn.150 (information
exchange on sales made to each customer); White lead, fn.85 (information exchange
on export figures); Vegetable parchment, fn.122 (information exchange on selling
prices and export figures); COBELPA/VNP, fn.178 (information exchange on sales and
output figures and on prices). The exchange of information as part of an arrangement
to implement and support measures to solve structural overcapacity may under strict
conditions be acceptable and warrant an exemption under Article 81(3). See, e.g.,
Stichting Baksteen, fn.223, where the Commission granted an exemption to a
structural arrangement between brick producers in the Netherlands to remedy
structural overcapacity in the industry, including the exchange of individual
information on deliveries and production. See also discussion of crisis cartels at pp.
406–416.
223) IFTRA rules for manufacturers of virgin aluminium, fn.70, where competitors shared
information on each other's costs, which enabled them to predict each other's price
policy with greater certainty, through which price competition was likely to be
diminished or eliminated and the information exchange was therefore regarded as
restrictive of competition; Glass containers, fn.72. See also Irish club rules, OJ 1991
C166/6 and OJ 1993 C263/6 (exchange of information on costs, rates and service
agreements). The Commission has further clarified its view of the common calculation
of basic premium rates, i.e., the average cost of risk coverage in the insurance sector,
on several occasions: Commission Regulation 3932/92, OJ 1992 L398/7; Assurpol, fn.40;
TEKO, fn.40; Concordato Incendio, fn.40; Nuovo CEGAM, fn.40.
224) Zinc producer group, fn.75 (competitors revealed information on investment plans).
225) Cimbel, fn.69.
226) See also Europe Asia Trades Agreement (EATA), fn.85, where the Commission
condemned exchanges of information on capacity utilization rates and forecast
capacity in the maritime transport sector.
227) Hasselblad, fn.181 (distributors exchanged information on prices and discounts).
However, in Eudim, fn.193, the Commission accepted an exchange of individualized
and confidential information on sales and market shares since the market was too
fragmented for the exchange to have an appreciable effect on competition.
228) UK Agricultural Tractor Registration Exchange, fn.177; Hasselblad, fn.181 (exchange of
information between a producer and its sole distributors objectionable under Article
81(1) if designed to prevent parallel trade). See also SABA (I), OJ 1976 L28/19
(obligation imposed on distributor to provide supplier with sales data acceptable if
not used to impede parallel trade).
229) Asnef Equifax v. Ausbanc, [2006] ECR I-11125.
230) ibid, para. 72.
231) ibid, para. 72.
232) See Communication from the Commission — Enhancing Trust and Confidence in
Business to Business Electronic Markets, COM(2004) 479 final.
233) Council Regulation 139/2004 on the control of concentrations between undertakings,
OJ 2004 L24/1 (the ‘Merger Regulation’).
42
234) Covisint, Press Release IP(01)1155 of 31 July 2001; Eutilia and Endorsia, Press Release
IP(01)1775 of 10 December 2001; Ondeo and Thames Water, Press Release IP(02)956 of
28 June 2002; Multi-bank trading platform, Press Release IP(02)943 of 27 June 2002.
235) See, e.g., http://www.europa.eu.int/comm/enterprise/ict/e-
marketplaces/workshop_final_re-port.pdf
236) See pp. 380–390.
237) See Chapter 5 below.
238) UK Agricultural Tractor Registration Exchange, fn.177.
239) John Deere v. Commission (CFI), fn.177.
240) Trade associations may also consist of firms operating at more than one level of the
supply chain or providing different services. See, e.g., Pabst & Richarz/BNIA, OJ 1976
L231/24, which concerned an association of producers, cooperatives, distillers, and
brokers of Armagnac.
241) See, e.g., Carbonless paper, fn.29; Citric acid, fn.31; Amino acids, fn.31; Pre-insulated
pipe, fn.24; Cartonboard, fn.23; Polypropylene, fn.85; Cement, fn.113.
242) See Chapter 5 (discussing cooperation agreements in further detail).
243) See, e.g., Milchförderungsfonds, OJ 1985 L35/35.
244) Emo, OJ 1979 L11/16; Assurpol, fn.40.
245) Van Landewyck and Others v. Commission, fn.60.
246) BPICA, OJ 1977 L299/18; Milchförderungsfonds, fn.243.
247) Coöperatieve Stremsel- en Kleurselfabriek v. Commission, [1981] ECR 851; MELDOC, OJ
1986 L348/50.
248) Pabst & Richarz/BNIA, fn.240; AROW/BNIC, OJ 1982 L379/1; on appeal: Bureau national
interprofessionnel du cognac (BNIC) v. Guy Clair, [1985] ECR 391; Bureau national
interprofessionnel du cognac (BNIC) v. Yves Aubert, [1987] ECR 4789; NAVEWA/ANSEAU,
OJ 1982 167/39; on appeal: IAZ International Belgium v. Commission, [1983] ECR 3369;
International Energy Agency, OJ 1983 L376/30; CO API, OJ 1995 L122/37; Pavel Pavlov v.
Stichting Pensioenfonds Medische Specialiteiten, [2000] ECR I-6451 (para. 85). However,
decisions of associations required to perform statutory functions may escape the
application of Article 81(1) if limited to what is required and not extended to the
pursuance of the commercial interests of the individual members. See also p. 20
below.
249) See Fedetab, fn.60; Frubo v. Commission, [1975] ECR 563; NAVEWA/ANSEAU, fn.248.
250) Verband der Sachversicherer v. Commission, fn.40 (para. 32); IAZ International Belgium
v. Commission, fn.248 (paras 19–21). See also Fedetab, fn.60; Frubo v. Commission,
fn.249.
251) See, e.g., National Sulphuric Acid Association, OJ 1980 L260/24.
252) See, e.g., Visa International — multilateral interchange fee, OJ 2002 L318/17.
253) See, e.g., Bureau national interprofessionel du cognac v. Guy Clair, fn.248; Frubo v.
Commission, fn.249; NAVEWA/ANSEAU, fn.248; Milchförderungsfonds, fn.243; EATE levy,
OJ 1985 L219/35; on appeal: ANTIB v. Commission, [1987] ECR 2201; Uniform
Eurocheques (II), OJ 1989 L36/16.
254) See Frubo v. Commission, fn.249; Fedetab, fn.60; IAZ International Belgium v.
Commission, fn.248; Vereniging van Cementhandelaren v. Commission, fn.41; Verband
der Sachversicherer v. Commission, fn.40. See, e.g., Belgian architects, fn.48, where the
Belgian Architects Association was fined for having adopted a recommended
minimum fee scale.
255) Van Landewyck and Others v. Commission, fn.60 (para. 88).
256) See Fedetab, fn.60.
257) Cimenteries CBR and Others v. Commission (II), fn.113 (paras 1322–1328); Roofing felt,
fn.56; NAVEWA/ANSEAU, fn.248.
258) Ahlström Osakeyhtiö and Others v. Commission (I), fn.17 (para. 27); Welded steel mesh,
fn.222; Hudson's Bay/Dansk Pelsdyravlerforening, OJ 1988 L316/43, recitals 14–15; on
appeal: Dansk Pelsdyravlerforening v. Commission, [1992] ECR II-1931;
NAVEWA/ANSEAU, fn.248, recital 45.
259) Cartonboard, fn.23. Finnboard and its members were jointly and severally fined; the
members were fined according to their shares of the sales made by Finnboard.
260) FEG & TU, fn.60.
261) Cimenteries CBR and Others v. Commission (II), fn.113, recital 485.
262) See Welded steel mesh, fn.222, recital 207.
263) Belgian architects, fn.48.
264) See PHC, Eighth Report on Competition Policy, points 81 to 82, where the Commission
considered that the rules of an association of pharmaceutical manufacturers,
importers and dealers infringed Article 81(1) because, inter alia, as a result of these
rules, manufacturers, importers and dealers not affiliated with the association were
compelled to become members and accept obligations deriving from membership if
they wanted to trade with the association members. See also EATE levy, fn.253.
265) See Cauliflowers, OJ 1978 L21/23, where the Commission held that the admission rules
of a trade association of vegetable dealers infringed Article 81(1) because they
required the decision of a majority of the board of directors. Since the board was
composed of competitors of the applicant, the Commission considered that it was
unlikely that the board would have voted for the admission of a new competitor. See
also Department stores, Ninth Report on Competition Policy, points 89–90.
266) See Cauliflowers, fn.265, recital II.3. See also Dansk Pelsedyravleringforening v.
Commission, fn.258.
43
267) See Cauliflowers, fn.265. See also Department Stores, Ninth Report on Competition
Policy, points 89–90.
268) See, e.g., Sarabex, fn.173. See also National British Cattle and Sheep Breeders'
Association, Twenty-second Report on Competition Policy, p. 416, where the
Commission objected to the rules and decisions of the association that effectively
prevented non-discriminatory access to the economic activities of its 200 affiliated
breeders' societies. Application for membership by a French breeder was rejected
without explanation. This barred the breeder from participating in the economic
activities organized by the societies, which were open only to members. In addition,
registered imported sheep could not be resold within a period of eighteen months
after registration. Following the Commission's intervention, the association undertook
to establish objective criteria for membership, to give reasons for their rejection
opinions, and to organize a non-discriminatory appellate procedure. See also
Centraal Bureau voor de Rijwielhandel, fn.172, recital 28, where the Commission
condemned the provisions of a regulation enacted by the Dutch trade association for
bicycles concerning appeal proceedings against decisions taken under the
regulation. These provisions did not provide the right to take action before the
ordinary courts. The Commission stated that ‘this ouster of the jurisdiction of the
ordinary courts relates to matters involving the application and scope of the
competition rules of the Treaty and therefore falls within Article [81(1)] and prevents
any competitive action which is permissible under these rules’.
269) Retel 1988, OJ 1991 C121/1.
270) National British Cattle and Sheep Breeders' Association, fn.268.
271) Metropole Télévision and Others v. Commission, [1996] ECR II-649.
272) ibid, (para. 102).
273) Centraal Bureau voor de Rijwielhandel, fn.172.
274) See also Papiers peints de Belgique, fn.77, where membership in the association was
restricted to wallpaper manufacturers established in Belgium. The Commission held
that this provision had the object of restricting competition because ‘undertakings
from other States which have no establishment in Belgium find difficulty of access to
the Belgian market’.
275) In Cauliflowers, fn.265, the Commission found that the obligation to have a packaging
centre, imposed on vegetable dealers by virtue of an agreement between an
agricultural cooperative and the dealers' association, restricted competition because
it made entry to the market more difficult for new dealers.
276) FEG & TU, fn.60.
277) Morgan Stanley/Visa International and Visa Europe, Case COMP/37.860 (decision
available on the Commission's website); on appeal: Visa Europe and Visa International
Service Association v. Commission, Case T-461/07, not yet decided.
278) Morgan Stanley was finally admitted as a member of the Visa network in 2006 and
withdrew its complaint. Nevertheless, the Commission decided to impose fines,
despite Visa's having previously notified its internal rules under Regulation 17/62,
which conveyed immunity from fines. The Commission considered that immunity from
fines no longer applied following its adoption of the Statement of Objections in 2004,
in which it had made clear that fines could be imposed. When calculating the fine,
however, the Commission only took into account the period as from the notification of
the Statement of Objections until Morgan Stanley's admission as a Visa member.
279) See, e.g., East African Conference, Twenty-third Report on Competition Policy, points
230–231, where the period of notice for leaving a shipping liner conference was
regarded as unreasonably long and constituted a restriction of competition by
creating an obstacle for members to become outsiders and to compete with the
conference.
280) See, e.g., Campina, Twenty-first Report on Competition Policy, at points 83 to 84, where
the Commission objected to the obligation imposed on the members of a cooperative
to pay 10% of the annual milk price obtained as a resignation fee. In Milk Marketing
Board, Twenty-second Report on Competition Policy, points 161–167, the Commission
decided that it would closely monitor the effects of the leaving terms of the new milk
marketing cooperative for England and Wales and, in particular, the 2% penalty
payable on three months notice. If real competition was prevented over an initial
period of two years, the Commission would decide whether or not the leaving terms
could be maintained. If, on the other hand, real competition emerged, the
Commission could decide to give the new cooperative more freedom in its choice of
contract terms.
281) See, e.g., Oude Luttikhuis v. Coberco, [1995] ECR I-4515. Regarding agricultural
cooperatives, it may be necessary to weigh the interests of smaller farmers, who often
legitimately rely on the cooperative to sell or purchase their products, against the
interests of larger farmers, who more often have an interest in competing individually
outside the cooperative. In Florimex and VGB v. Commission, [1997] ECR II-693, a
cooperative levied a fee on transactions between third parties, i.e., independent
wholesalers established on its premises and suppliers who were not members. The
CFI found that the fee could be excessively restrictive by dissuading members from
leaving the cooperative. The ECJ dismissed an appeal against the CFI judgment: VBA v.
Florimex and Others, [2000] ECR I-2061.
44
282) In EPI code of conduct, OJ 1999 L106/14, the Commission condemned a rule of conduct
that absolutely prohibited advertising that compared professional representatives,
finding that it fell within the scope of Article 81(1), although an exemption was
granted. On appeal, in Institute of Professional Representatives before the European
Patent Office v. Commission, [2001] ECR II-1087, the CFI upheld the Commission's
decision that the code of conduct, insofar as it prohibited any form of comparative
advertising outright, fell within the scope of Article 81(1). See also Glass containers,
fn.72 (agreement preventing participants from offering prices lower than those of
competitors when delivering in the competitor's territory); IFTRA rules for
manufacturers of virgin aluminium, fn.70 (agreement to halt ‘destructive sales below
costs’, ‘dumping’, and related practices); SSI, fn.60; Vimpoltu, fn.47 (decision
establishing ‘fair trading Rules’); Stichting Sigarettenindustrie and Others v.
Commission, fn.60 (‘rules of conduct’ for sales in the cigarette trade); Building and
construction industry in the Netherlands, fn.24.
283) See, e.g., Vimpoltu, fn.47 (exchange of price lists to monitor adherence to ‘fair trading
rules’); COBELPA/VNP, fn.178 (price notification between paper manufacturers). See
also Building and construction industry in the Netherlands, fn.24. For a more detailed
discussion on exchanges of information, see pp. 380–392.
284) See, e.g., IFTRA rules for manufacturers of virgin aluminium, fn.70; Glass containers,
fn.72.
285) Vimpoltu, fn.47. The ‘fair trading rules’ established by the Vimpoltu decision provided
that in the event of suspected breaches of the rules, importers were subject to
investigation by independent accountants or had to submit a report from their own
accountants. If a breach was established, substantial fines were to be imposed
depending on the gravity of the offence. The Commission considered ‘that the
procedure for dealing with suspected infringements […] and the provision for
imposing fines […] aggravate the restrictive effect of the Vimpoltu decision by
encouraging importers to comply with it strictly’. Ibid, recital 37. See also Building and
construction industry in the Netherlands, fn.24.
286) Acriss, OJ 1993 C149/9. See also pp. 1361–1368 (for a more detailed discussion on CRSs
in the air transport sector).
287) See Publishers' Association — Net Book Agreement, OJ 1989 L22/12; on appeal:
Publishers' Association v. Commission, [1992] ECR II-1995; on further appeal: Publishers'
Association v. Commission, [1995] ECR I-23 (uniform sale conditions on sales of books).
288) Although the Former Cooperation Notice has been replaced by the Horizontal
Guidelines, the Notice may still provide useful guidance: ‘Application of uniform
conditions by all participating firms may constitute a case of concerted practice […]
In this connection, no objection can be raised against the use of standardized printed
forms; their use must however not be combined with an understanding or tacit
agreement on uniform prices, rebates or conditions of sale’. See also Fire insurance
(D), fn.40; Nuovo CEGAM, fn.40 (exemption granted to agreements imposing a
standard basic tariff); Vimpoltu, fn.47 (maximum discounts, standard delivery and
payment terms, and rules on sales promotions); Fedetab, fn.60 (collective and uniform
fixing of payment terms); Papiers peints de Belgique, fn.77 (standardization of credit
terms, minimum purchases by customers, fixing of dates, prices and conditions for
clearance sales, and prohibition of cash discounts).
289) Press Release IP(99)672 of 10 September 1999 (International dental exhibition in
Cologne); British Dental Trade Association — BTDA, OJ 1988 L233/15 (dental supplies);
Internationale Dentalschau, OJ 1987 L293/58 (dental supplies); VIFKA, OJ 1986 L291/46
(office equipment); SMM&T, OJ 1983 L376/1 (motor vehicles); BPICA, fn.246; UNIDI, OJ
1975 L228/17, extended OJ 1983 L140/27 (textile machinery); on appeal: ANCIDES v.
Commission, [1987] ECR 3131; European Machine Tool Exhibition, OJ 1969 L69/13,
extended OJ 1979 L37/11 (machine tools); EUMAPRINT, Third Report on Competition
Policy, point 57 (printing and paper-marking machinery).
290) The ‘open period’ is the period during which the undertakings are free to join other
fairs; this should elapse from the end of the restraint period until the beginning of the
restraint period regarding the successive edition of the exhibition. With one
exception, the restraint periods exempted by the Commission have never been
longer than the ‘open’ period. See VIFKA, fn.289 (exhibition held every other year;
restraint period limited to exhibition year); SMM&T, fn.289 (exhibition held every
other year; restraint period limited to exhibition year); UNIDI, fn.289 (exhibition held
every eighteen months; restraint period limited to nine months prior to the
exhibition); CEMATEX, OJ 1971 L227/26, extended OJ 1983 L140/27 (exhibition held
every four years; restraint period limited to two years); European Machine Tool
Exhibition, fn.289 (exhibition held every other year; restraint period limited to year of
exhibition). In BPICA, fn.246, the Commission exempted a restraint period that
amounted to a permanent prohibition on participation in events not authorized by
the trade association. The Commission's attitude in this case may have been
influenced by the numerous exceptions to this prohibition; in particular, it only
applied to international exhibitions. Exhibitors remained free to participate in
national and regional exhibitions.
291) Internationale Dentalschau, fn.289; Sippa, OJ 1991 L60/19.
292) Internationale Dentalschau, fn.289; Sippa, fn.291.
293) Twenty-seventh Report on Competition Policy, point 54.
45
294) Internationale Dentalschau, fn.289.
295) Sippa, fn.291.
296) Sippa, fn.291.
297) EUMAPRINT, fn.289.
298) British Dental Trade Association — BTDA, fn.289.
299) London Sugar Futures Market, OJ 1985 L369/25; London Cocoa Terminal Market
Association, OJ 1985 L369/28; Coffee Terminal Market Association of London, OJ 1985
L369/31; London Rubber Terminal Market Association, OJ 1985 L369/34; Petroleum
Exchange of London, OJ 1987 L3/27; GAFTA Soya Bean Meal Futures Association, OJ 1987
L19/18; London Grain Futures Market, OJ 1987 L19/22; London Potato Futures
Association, OJ 1987 L19/26 (this decision does not involve a commodity market, but a
market dealing in standardized freight futures contracts for shipowners, charterers
and users of shipping transport in general). In Hudson's Bay/Dansk
Pelsdyravlerforening, fn.258; and VBA/Bloemenveilingen Aalsmeer, OJ 1988 L262/27, the
Commission refused to grant a negative clearance or an exemption.
300) See Eighth Report on Competition Policy, points 35–37.
301) See, e.g., London Sugar Futures Market, fn.299; Petroleum Exchange of London, fn.299;
GAFTA Soya Bean Meal Futures Association, fn.299.
302) In Sarabex, fn.173, which involved the British foreign exchange brokering market, the
Commission allowed both maximum and minimum rates for dealings in each
currency. No specific explanation was given. See Belgische Vereniging der
Banken/Association Belge des Banques, fn.40, where a convention between banks on
the collection of cheques and commercial bills originating abroad was held to be
contrary to Article 81(1) because it merely established the procedures for charging a
commission without setting any minimum or maximum tariffs.
303) The Commission decisions do not provide extensive details on the nature of such
criteria. However, the decisions indicate that the criteria in question may, for
instance, relate to the financial standing of prospective members and proof of a
continuous interest in the trade of the commodity concerned. See London Cocoa
Terminal Market Association, fn.299; Petroleum Exchange of London, fn.299, recital
11(3); London Grain Futures Market, fn.299, recital 19.
304) See, e.g., London Sugar Futures Market, fn.299, recital 11(3).
305) In Cauliflowers, fn.265, agreements which required vegetable producers' organizations
and dealers participating in auctions in Brittany to make all their purchases at those
auctions were found to restrict competition. Also regarded as restrictive of
competition was a requirement to have a ‘packing centre’ near the auction which
made entry to the market more difficult for new dealers. In addition, the fact that
access of new members to the auctions was, in effect, subject to a vote by existing
(competing) members also constituted a restriction of competition.
306) Frubo, OJ 1974 L237/16; on appeal: Frubo v. Commission, fn.249.
307) VBA/Bloemenveilingen Aalsmeer, fn.299. It should be noted that the decision was of a
mere declaratory nature, since the Commission had closed the file after the auction
organizer formally removed the purchase obligations, but at the same time
introduced a ‘user fee’. The Commission's consent regarding the user fee was
successfully challenged by wholesalers in Florimex and VGB v. Commission, fn.281. See
also VGB and Others v. Commission, [1997] ECR II-759; on appeal: VBA v. Florimex and
VGB, [2000] ECR I-2135 (appeal dismissed by ECJ).
308) Hudson's Bay-Dansk Pelsdyravlerforening, fn.258.
309) Fine art auction houses, Case COMP/E-2/37.784 (decision available on the
L200/92).
310) See Matra Hachette v. Commission, [1994] ECR II-595 (para. 85), where the CFI stated
that ‘in principle, no anti-competitive practice can exist which, whatever the extent
of its effects on a given market, cannot be exempted, provided that all the conditions
laid down in Article 81(3) of the Treaty are satisfied and the practice in question has
been properly notified to the Commission’. The CFI thus rejected the view that there
are agreements or practices which are inherently incapable of qualifying for an
exemption, clarifying that the applicability of competition law is subject to the
existence of a practice which is anti-competitive in intent or has an anti-competitive
effect on a given market.
311) Council Regulation 17/62 implementing Articles [81] and [82] of the Treaty, OJ 1962 p.
204 (‘Regulation 17’).
312) See, e.g., Peroxygen, fn.109; Roofing felt, fn.56, recital 97; Meldoc, fn.247, recital 50; Flat
glass, fn.100; SAS Maersk Air and Sun-Air v. SAS and Maersk Air, fn.116, recital 77.
313) See, e.g., Papiers peints de Belgique, fn.77; SSI, fn.60; Fire insurance (D), fn.40; Ansac, OJ
1991 L152/54.
314) AROW/BNIC, fn.248
315) Building and construction industry in the Netherlands, fn.24, recital 131. See also Dutch
cranes, fn.174 (internal rates set by organization of crane-hire companies with
objective to increase market prices).
316) Council Regulation 1/2003 on the implementation of the rules of competition laid
down in Articles 81 and 82 of the Treaty, OJ 2003 L1/1 (the ‘Regulation on Procedure’).
46
317) One occasion where the Commission exempted a major geographical market-sharing
arrangement is Transocean Marine Paint Association, OJ 1967 L163/10. The Commission
exceptionally agreed that market-sharing was justified between the eighteen
medium-sized marine paint producers in the association (including five Community
producers). Under the arrangement, each producer was to seek orders inside the
territory where it was established and, although sales outside the territory were
permitted, a commission had to be paid to the producer into whose territory paint
was sold and for some sales a permission had to be obtained. The producers would
also sell the paint under a uniform formula and under a common trademark.
Notwithstanding its restrictive effects, the Commission exempted the arrangement,
finding that it improved distribution and allowed the medium-sized producers to
compete more effectively with large international groups of marine paint producers.
The exemption, which must be seen as exceptional, was first renewed in 1973, OJ 1974
L19/18; on appeal: Transocean Marine Paint v. Commission, [1974] ECR 1063 (the ECJ
annulled one condition attached to the exemption), and thereafter renewed three
times: OJ 1975 L286/24, OJ 1980 L39/73, and OJ 1988 L351/40.
318) ACF Chemiefarma v. Commission, fn.107.
319) Cementregeling voor Nederland, fn.125; Roofing felt, fn.56.
320) Commission Regulation 2658/2000 on the application of Article 81 (3) of the Treaty,
categories of specialisation agreements, OJ 2000 L304/3 (the ‘Specialisation
Agreement Block Exemption’); Commission Regulation 2659/2000 on the application
of Article 81(3) of the Treaty, categories of research and development agreements, OJ
2000 L304/7 (the ‘R&D Agreements Block Exemption’). See also pp. 459–472
(specialisation block exemption), pp. 438–458 (research and development block
exemption) and Chapter 6 (intellectual property rights).
321) See Commission Notice on restrictions directly related and necessary to
concentrations (ancillary restraints), OJ 2001 C188/5 (the ‘Notice on Ancillary
Restraints’). For further discussion, see pp. 738–745.
322) See pp. 1453–1467 (insurance services), pp. 1467–1484 (banking), pp. 1385–1405 (postal
services), pp. 1342–1368 (air transport) and pp. 1369–1379 (maritime transport).
323) Montedipe v. Commission, [1992] ECR II-1155. The CFI stated that with respect to the
cartel agreement, which the parties had failed to notify, a decision granting
exemption was not possible. The parties also raised the argument that they were
entitled to take action by self-discipline in times of economic crisis, based on the
principle of solidarity and burden-sharing by analogy with Article 58 of the ECSC
Treaty. The CFI rejected this, noting that there was no counter-provision in the EC
Treaty to Article 58 in the ECSC Treaty, and that it was not for undertakings but for the
Community authorities alone to unite undertakings in time of economic crisis. See
also Zinc producer group, fn.75, recital 87, concerning agreements on production
quotas and restrictions on expanding capacity, where the Commission stated that,
‘the absence of a notification is in any event fatal and the case cannot be considered
on an ‘as if basis’.
324) Twelfth Report on Competition Policy, point 38.
325) See, e.g., Second Report on Competition Policy, point 31; Eighth Report on Competition
Policy, point 42; Ninth Report on Competition Policy, point 46; Twelfth Report on
Competition Policy, point 39; Thirteenth Report on Competition Policy, point 56; Twenty-
fourth Report on Competition Policy, point 180; Synthetic fibres (II), fn.139, recital 19;
Stichting Baksteen, fn.223, recital 6.
326) Intergovernmental agreements aimed at restricting imports into the Community are
not covered by these two categories since such agreements do not fall under Article
81(1). These types of agreements cannot be challenged under the competition rules
but may be addressed under EC trade regulations.
327) See, e.g., Second Report on Competition Policy, point 31; Eighth Report on Competition
Policy, point 42; Ninth Report of Competition Policy, point 46; Twelfth Report on
Competition Policy, point 39; Thirteenth Report on Competition Policy, point 56;
Fourteenth Report on Competition Policy, point 180; Twenty-fourth Report on
Competition Policy, point 180; Synthetic fibres (II), fn.139, recital 19; Stichting Baksteen,
fn.223, recital 6.
329) Eleventh Report on Competition Policy, point 46.
331) Italian cast glass, fn.134.
332) ibid, recital II.B.1.
333) ibid, recital II.B.3.
334) Zinc shutdown agreement, Thirteenth Report on Competition Policy, point 58.
335) ibid.
336) Synthetic fibres (II), fn.139.
337) Second Report on Competition Policy, point 31.
338) ibid.
339) Eighth Report on Competition Policy, point 42.
340) Synthetic fibres (II), fn.139, recital 37.
341) Fourteenth Report on Competition Policy, point 81.
342) Stichting Baksteen, fn.223.
343) Twenty-third Report on Competition Policy, point 89; Twenty-fourth Report on
Competition Policy, points 178–180.
47
344) Thirteenth Report on Competition Policy, point 60; Fourteenth Report on Competition
policy, point 85.
345) BPCL/ICI, OJ 1984 L212/1.
346) Bayer/BP Chemicals, OJ 1988 L150/35.
347) Following the restructuring in BPCL/ICI, fn.345.
348) Bayer/BP Chemicals, fn.346, recital 45. See also Zinc shutdown agreement, fn.334,
where, before the parties decided to abandon the agreement that the Commission
was preparing to exempt under Article 81(3), the Commission made clear that if a
sustained improvement of the economic situation in the zinc sector occurred, the
agreement could not be authorized.
349) ENI/Montedison, OJ 1987 L5/13.
350) BPCL/ICI, fn.345.
351) Enichem/ICI, OJ 1988 L50/18.
352) PRB/Shell, OJ 1984 C189/2.
353) Seventeenth Report on Competition Policy, point 74.
48
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Competition Law of The European Community, Chapter 4: Horizontal Agreements: Cartels

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Competition Law of The European Community, Chapter 4: Horizontal Agreements: Cartels

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Application of Article 81(1) to Cartels

Restriction of Competition Through Cartels

§4.1 Pricing practices

§4.2 Market-sharing agreements

§4.3 Collective Boycotts

§4.4 Exchange of Information

State Compulsion as a Defence for Cartel Activity

Exemption of Cartels in Crisis Situations

106) First Report on Competition Policy, points 3–4.

122) Vegetable parchment, OJ 1978 L70/54.

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