EU Competition Law: Consultants Complicit in Cartel Case

July 9, 2008

Trade associations need to take care. There has been a long history of the European Commission fining trade associations as well as their members where an infringement of EC competition law has been found. In order to make this bite, fines of up to 10% are levied not on the turnover of the trade association but on the combined turnover of all its members — which can be jointly liable for the fines.

The net seems to have widened. On 8 July 2008, the European Court of First Instance confirmed that a consultancy firm which has contributed to the implementation of a cartel may be fined for complicity. The Court also confirmed that the fact a consultancy firm is not active on the market on which the restriction of competition materialises does not rule out its liability for the infringement as a whole.

Origins of the Case

The case concerned an appeal against the Commission’s 2003 Organic Peroxides decision which imposed total fines of over €70 million, including a fine of €1,000 on a consultancy firm called AC-Treuhand AG. The Commission found that the consultancy firm had provided the cartel members with various services and had played an essential role in the cartel by organising meetings and covering up evidence of the infringement. Its activities included the compilation of market statistics including recorded deliveries in order to calculate the total market volume, the sending to the cartel members of aggregated (i.e. anonymised) market statistics, the organisation of an annual meeting and the provision of administrative services, such as storage of documents. 

AC-Treuhand brought an action for annulment of the Commission’s decision claiming, amongst other things, that it could not be held liable since it was not a contracting party to the cartel. 

The Court of First Instance found that the mere fact that an undertaking has participated in a cartel only in a subsidiary, accessory or passive way is not sufficient to rule out its liability for the entire infringement. The scale of that contribution may none the less be taken into consideration for the purposes of determining the severity of the penalty. The Court went on to find that AC-Treuhand’s activities of organising meetings and covering up traces of the infringement had actively contributed to the implementation of the cartel and there was a sufficiently definite and decisive causal link between its activity and the restriction of competition on the relevant market. 

Comment

Trade bodies and trade associations often provide very useful services to their members and to the economy generally by sharing best practices, by facilitating market entry and by informing and aiding the regulatory process. The legal form and structure of how these services are provided to their members should not be relevant to the antitrust analysis. This case is a useful reminder that information exchange within an industry will almost always raise sufficient issues to require a more or less thorough examination as to whether, in competition terms, any harmful effects outweigh the benefits. As the Court points out, it is reasonably foreseeable for all parties engaged in such activities that EU competition rules may apply.

The judgment clarifies the notion of ‘restriction’ in EU competition law in a number of important respects. The ‘agreement’ does not need to be between undertakings active on the same horizontal market or on a vertically related market. A party does not need to restrict its commercial freedom to restrict competition. Tacit approval, passive acceptance, lack of opposition are not sufficient to preclude liability — though they may affect the severity of the punishment.

AC-Treuhand has announced that it is considering an appeal and has pointed out that, should the Court of First Justice’s judgment stand, all of those involved in the information exchange will need to review their conduct to ensure that they are not a party — even in a very limited sense — to an agreement or arrangement which restricts competition. They do not have to be active on the markets affected, do not need to benefit directly from the restriction of competition and do not need to have altered their behaviour. This will potentially include all manner of professional advisers including economists, accountants, lawyers etc.