Cartel Decisions Research Articles

An Empirical Assessment of the European Commission’s Cartel Prosecutions, 2010–2019

This is a quantitative analysis of the European Commission’s cartel decisions in the 2010–2019 decade. It assesses the way the Commission’s 2006 guidelines on fines were applied in practice and the operation of the leniency and settlement procedures. It also provides an overview of the types of cartels prosecuted, how they were detected, and how long the Commission took to investigate a cartel. It looks at rends in the Commission’s enforcement activity and assesses some frequently made claims such as whether recidivism is rife; whether the Commission’s leniency program is excessively generous and disproportionately benefits larger, more culpable firms; how much the settlements procedure reduces the length of the Commission’s investigations; and why the Commission takes so long to conclude its investigations.

Turkish Competition Authority’s First Hub-and-Spoke Cartel Decision

Turkish Competition Authority’s First Hub-and-Spoke Cartel Decision

The Road Ahead for Liability in Damages Actions: Case C-882/19 Sumal

Judgment of 6 October 2021, Sumal SL v Commission, C-882/19, ECLI:EU:C:2021:800. The Court of Justice of the EU ruled that a subsidiary company of an addressee of a Commission cartel decision was part of the undertaking that infringed competition law and could therefore be held liable for damages. On 6 October 2021, the CJEU ruled on preliminary questions referred to it by the Provincial Court of Barcelona in a trucks cartel damages case filed by the transport company Sumal. The preliminary reference concerned the relevance and scope of the concept of ‘undertaking’ under Article 101 TFEU for purposes of establishing liability in follow-on damages litigation before national courts. Between 1996 and 1999, Sumal purchased two trucks from Mercedes Benz Trucks España SL, a Spanish subsidiary of Daimler AG. In 2016, Daimler AG was an addressee of a Commission Settlement Decision establishing that Daimler AG participated in a cartel among European truck manufacturers. Sumal filed a damages claim against Mercedes Benz Trucks España SL despite the fact that the subsidiary was not itself an addressee of the Settlement Decision. Sumal claimed to have paid overcharges for the trucks it purchased because of the cartel.

European Union Competition Law Developments in the Aviation Sector: July to December 2021

The second half of 2021 has seen the aviation industry continue to grapple with the impact of the on-going Coronavirus (COVID-19) pandemic, as travel restrictions and similar adjustments have been required in a number of jurisdictions. Key developments included in this article include: – A number of addressees of the European Commission’s (the ‘Commission’) air cargo cartel case, which imposed significant fines on participating airlines, have lodged claims against the Commission seeking compensation as a result of the latter’s refusal to pay interest on fines imposed which the Commission repaid to airlines following the EU court’s annulment of the original cartel decision. – The Commission has closed its investigation into Amadeus and Sabre over their contractual terms governing the distribution of airline tickets in agreements between airlines and travel agents, citing insufficient evidence that the arrangement had restricted competition; and – The seismic impact of the on-going pandemic continues to give rise to a great number of State Aid notifications to various beneficiaries in the aviation sector, with a commensurate uptick in the number of legal challenges before EU courts. As with 2020, Ryanair has continued to be particularly active in challenging these measures. This article summarizes the main developments over the past 6 months and aims to provide the reader with an overview of each of these developments. aviation, airline, regulation, competition and anti-trust

What Did the Turkish Competition Authority Ignore in Its First Hub-Andspoke Cartel Decision?

What Did the Turkish Competition Authority Ignore in Its First Hub-Andspoke Cartel Decision?

European Union Competition Law Developments in the Aviation Sector: July to December 2019

The second half of 2019 continues to highlight the rapidly-changing aviation sector, with a number of key developments. This article summarizes the main developments over the past six months and provides the reader with greater detail of each of these developments. The Competition and Markets Authority (the ‘CMA’) in the United Kingdom has launched an in-depth Phase 2 investigation into the proposed acquisition of Farelogix by Sabre, after rejecting the parties’ initial remedies. As part of the Phase 2 review, the CMA inquiry group has stated that it intends to review whether the CMA has jurisdiction to investigate the transaction. This type of jurisdictional assessment is not commonly undertaken during Phase 2 investigations. The Parties are accusing the CMA of merging the substantive assessment of whether the transaction would lead to a substantial lessening of competition, with the jurisdictional issue of whether the transaction is one which qualifies for review by the CMA. A number of the airline addressees of the European Commission’s (the ‘Commission’) air cargo cartel decision have argued their respective appeals against the re-adopted 2017 decision. This marks the latest development in the long-running saga, which started with the Commission carrying out a number of unannounced inspections in 2006 (so-called dawn raids) before reaching its first decision in 2010. Following a successful appeal of the 2010 decision, the Commission re-adopted its decision in 2017, which is the focus of the current appeals. The airlines have raised arguments based on, inter alia, lack of evidence, statute of limitation, equality of treatment, the role played by regulators outside of the European Economic Area (‘EEA’), etc. The recent collapse of the Thomas Cook Group has spurned a number of competitionrelated developments. The German competition regulator has cleared an acquisition by Signa of 106 branches as well as the online travel business of Thomas Cook. The German regulator similarly cleared a separate transaction by Anex Tour of the Bucher Reisen & Öger Tours business. The collapse also caused financial difficulties for Condor Airlines (part of the Thomas Cook Group), as it was forced to write off a number of claims against other group companies. This led Germany to grant temporary rescue aid of EUR 380m to the airline, which has subsequently been approved by the Commission. Aviation, airline, regulation, competition and anti-trust

Printeos: Obligation to Pay Default Interest When Repaying a Fine after Annulment

Abstract The General Court ruled that, in case of annulment of a cartel decision based on an inadequate statement of reasons, in addition to repaying the fine amount received, the Commission must pay default interests at the ECB refinancing rate increased by 3.5 percentage points since the date on which the applicant unduly made provisional payment of the fine in accordance with the principle of restitutio in integrum.

Skanska: are jurisdiction challenges now an impossible undertaking?

Claimants in private damages actions following on from European Commission cartel decisions are often faced with a choice of jurisdiction in which to pursue their claims. However, seising jurisdiction in the national court of a desired Member State can require the claim to be pursued against an anchor defendant that is not an addressee of a Commission decision. This may, in the English courts, give rise to various disputes as to the role of that non-addressee defendant in the cartel and, accordingly, whether a claim can in fact be sustained as against that defendant. The Court of Justice's recent judgment in Vantaan Kaupunki v Skanska Industrial Solutions potentially relieves claimants from the burden of having to establish that the non-addressee defendant participated in, or implemented, the cartel in order to sustain a claim against it, by holding that it is entire undertakings that are liable for compensation in private damages actions. The Skanska judgment harmonizes the scope of liability under the public and private spheres of EU competition law enforcement and has potentially significant ramifications for competition litigation in the English courts.

Crédit Agricole: rejection of attempt to (further) delay publication of Commission cartel decision

<i>Crédit Agricole</i>: rejection of attempt to (further) delay publication of Commission cartel decision

Toshiba v European Commission: Re-adopting Cartel Decisions for Error in Calculating Fines

Toshiba v European Commission: Re-adopting Cartel Decisions for Error in Calculating Fines

EU Competition Law Developments in the Aviation Sector: January to June 2017

The first half of 2017 continues to highlight the significant impact of competition law in the aviation sector. This article summarizes the main competition law developments over the past six months and then provides the reader with greater detail of each of these developments. The European Commission (‘Commission’) has cleared a number of mergers and taken a significant number of State aid decisions. It has also re-adopted its 2010 Air Cargo Cartel decision imposing fines on 11 airlines, all of whom are appealing this new decision. In addition, the National Competition Authorities in Italy, Germany and the UK have been involved in merger cases and investigations in the aviation sector. The Commission has also approved new State aid rules applicable to airports and published a draft Regulation which will potentially enable it to challenge anti-competitive behaviour occurring in markets beyond the EU but affecting EU carriers.

Partial Cartels and Mergers with Heterogeneous Firms: Experimental Evidence

A usual assumption in the theory of collusion is that cartels are all-inclusive. In contrast, most real-world collusive agreements do not include all firms that are active in the relevant industry. This paper studies both theoretically and experimentally the formation and behavior of partial cartels. The theoretical model is a variation of Bos and Harrington’s (2010) model where firms are heterogeneous in terms of production capacities and individual cartel decisions are endogenized. The experimental study has two main objectives. The first goal is examine whether partial cartels emerge in the lab at all, and if so, which firms are part of it. The second aim of the experiment is to study the coordinated effects of a merger when partial cartels are likely to operate. The experimental results can be summarized as follows. We find that cartels are typically not all-inclusive and that various types of partial cartels emerge. We observe that market prices decrease by 20% on average after a merger. Our findings suggest that merger analysis that is based on the assumption that only full cartels forms produces misleading results. Our analysis also illustrates how merger simulations in the lab can be seen as a useful tool for competition authorities to back up merger decisions.

Evonik Degussa v Commission: Hearing Officer’s Review of Confidentiality Claims on Leniency Information in Public Versions of European Commission Cartel Decision

When deciding on the disclosure or publication of leniency information in public versions of Commission decisions, the hearing officer is obliged to examine any ground based on rules of EU law raised by the company concerned in order to justify the confidentiality of the contested information. Public versions of Commission decisions may not contain quotes from corporate statements of leniency applicants; however, they may contain quotes from other documents submitted in support of a leniency application subject to compliance with professional secrecy and the protection owed to business secrets and other confidential information.

DOES EU COMPETITION POLICY SUPPORT INCLUSIVE GROWTH?

This article proposes a novel methodology to strengthen the micro-foundations of a macroeconomic assessment of EU competition policy. A unique database containing case-specific information on merger and cartel decisions is exploited to conduct macroeconomic policy simulations using a Dynamic Stochastic General Equilibrium model. The model has been extended to allow investigating the effects of EU competition policy interventions not only on standard macroeconomic variables such as GDP and employment, but also on distributional outcomes across households with different skill levels and across different types of income earners (capital owners, wage earners, and benefit recipients). The policy simulations presented include both direct and indirect (deterrent) effects of competition policy interventions. They show that competition policy has a sizeable impact on GDP growth, job creation, and the distribution of consumption across different types of households.

The EU Competition Law Fining System: A Quantitative Review of the Commission Decisions between 2000 and 2017

There is a large amount of legal and economic literature on the fining policy of the European Commission for breaches of EU competition law. This paper takes a quantitative approach as it analyses the factors that have been considered by the Commission in establishing the level of the fine imposed on infringing undertakings in 110 cartel decisions, as well 11 abuse of dominance decisions, adopted between January 2000 and March 2017. The factors included in our analysis, which is summarized in two tables provided in an Annex, comprise inter alia the gravity of the infringement, the presence of aggravating and mitigating circumstances, the adoption of an entry fee, whether inability to pay was invoked, and in the case of cartels the presence of some form of leniency and/or the use of the settlement procedure. We also looked at whether these Commission decisions have been appealed to the General Court of the EU. Our analysis shows that the Commission has made significant use of the aggravating and mitigating circumstances listed in the Fining Guidelines to adjust the basic amount of the fine. It also shows that the vast majority of cartel decisions (i.e., 88%) adopted by the Commission during the period analysed involved some form of leniency (immunity from fines and/or fines reduction). Our analysis also shows that the cartel settlement procedure, even though it only provides for a 10% reduction of the level of the fines, has been a significant success with the Commission concluding 22 settlements since 2010. Despite the success of the leniency and cartel settlement procedures, which should in theory have a dampening effect on fines, the level of fines has massively increased over the past couple of decades. As recidivism is still prevalent, it is questionable whether increasingly high fines are an effective remedy to deter undertakings from breaching competition law. Alternative mechanisms, such as personal sanctions, should perhaps be contemplated.

Access to File under European Competition Law

The present survey focuses on recent judgments that address the right of damage claimants to access the European Commission's (the ‘Commission’) file in antitrust cases and the type of information the Commission may include in the public version of its cartel decisions. In the cement cartel case,1 the Court of Justice overturned a General Court judgment that had found a Commission request for information as compatible with EU competition law despite the fact that the Commission request for information contained an ‘excessively succinct, vague and generic’ statement of reasons and despite the fact that the requested information expanded beyond the scope of the Commission's investigation. The Court of Justice reminded the Commission of its obligation to state the reasons for its requests for information, and it remains to be seen to what extent this will impact not only the form but also the scope of the Commission's investigatory measures in antitrust investigations in the future.

The First Bid Rigging Case in Slovakia after Years of Judicial Disputes

In 2006, the Antimonopoly Office of the Slovak Republic (hereafter, AMO) decided its first bid-rigging case concerning a cartel between six construction companies. According to the cartel decision, the six construction companies infringed the Act on the Protection of Competition as well as Article 101 TFEU.

Access to File under European Competition Law

The present survey focuses on recent judgments that deal with the right of damage claimants to access the Commission’s file in cartel cases and with the type of information the Commission may include in the public version of its cartel decisions. On the first point, access to the file through the EU Transparency Regulation remains an uphill battle for cartel damage claimants. The General Court confirmed the general presumption that access to the file would undermine the protection of commercial interests or the purpose of the Commission’s investigations and the Ombudsman found that refusing access to the file on that basis does not amount to maladministration on the part of the Commission. The EU Damages Directive that was adopted last year provides the most efficient and reliable avenue for cartel damage claimants to obtain access to the Commission’s file. On the second point, the General Court effectively legitimised the Commission’s new policy on publication of cartel decisions. Damage claimants should now expect longer and more detailed public versions of cartel decisions that should contain more information relating to the operation of the sanctioned cartel and serve as a better source of evidence in actions for damages before national courts.

Total SA and Elf Aquitaine SA: A Missed Opportunity to Shed More Light on Joint and Several Liability

By Judgment dated 29 April 2015, the General Court partially confirmed two Commission letters whereby the Commission requested from Total and Elf Aquitaine, on the basis of their joint and several liability with their former subsidiary Arkema, the payment of the difference between the initial fine imposed by the Commission on Arkema in its 2006 Methacrylates cartel decision and the amount of the fine, as reduced in 2011 by the General Court, paid by Arkema.

Access to Documents in Antitrust Litigation EU and Croatian Perspective

The paper analyses access to documents in cartel-based damages cases from the EU and Croatian perspective. It considers all relevant EU and Croatian legislation and case-law primarily focusing on the expected impact of the newly enacted Damages Directive. It is argued that the new rules on access to documents provided by the Directive will not necessarily have a significant impact on damages proceedings following cartel decisions issued by the Commission. This is due to the introduction of an absolute ban on the disclosure of leniency statements and settlement submissions via a ‘maximum harmonization’ rule. This conclusion is drawn from statistic figures showing that EU cartel enforcement rests solely on the leniency and settlement procedures. With that in mind, it is concluded that the Directive’s general, permissive rules on access to documents (other than leniency and settlement procedures) will not be applicable in most damages cases following the cartel infringement decision issued by the Commission. However, it is also observed that the Damages Directive’s new rules on access to documents may have the opposite impact on private enforcement in cases following infringement decisions issued by National Competition Authorities (NCAs) which do not rely as much on leniency in their fight against cartels as the Commission. The Directive’s general rule on access to documents will apply in jurisdictions such as Croatia, where all of its cartel decisions so far have been reached within the regular procedure. It is argued that the general access rule, coupled with other rules strengthening the position of claimants in antitrust damages proceedings, might actually be beneficial for both public and private enforcement in such jurisdictions.