Court of First Instance Upholds Fine against Third Party in Cartel Case - International Law Office

Facts
Decision
Comment


In an unprecedented ruling issued on July 8 2008(1) the European Court of First Instance (CFI) upheld a fine against a consultancy firm, AC-Treuhand AG. This was the first time ever that the European Commission had fined a third party regarding alleged cartel activity. The commission described the investigation of a consultancy firm as a "reorientation of its former decision-making policy". In upholding the fine, the CFI stated that "a consultancy firm is liable for an infringement of Article 81(1) of the EC Treaty where it contributes actively and intentionally to a cartel" operating in a different market from the consultancy firm.

Facts

AC-Treuhand provided administrative services to firms that the commission found were participating in a cartel. The services included:

• reserving a meeting room for four meetings while being unaware of what was to be discussed at the meetings;
• reimbursing representatives' travel expenses;
• gathering market statistics;
• storing documents; and
• organizing several meetings and attending the official part of these meetings, but never as chairman or moderator.

The commission imposed a symbolic fine of €1,000 on AC-Treuhand after finding that it had infringed Article 81 of the EC Treaty and "played an essential role in the cartel". However, the commission waited three years before informing AC-Treuhand of the investigation and the reasons for the accusations against it. It was not until shortly before the formal investigation that the commission considered notifying AC-Treuhand. The commission claimed that it did not notify AC-Treuhand about the investigation because the decision to do so was a "reorientation of its former decision-making policy and, consequently, the applicant [AC-Treuhand] could not necessarily expect to be directly concerned".

The main issue before the CFI was whether the commission exceeded its decision-making powers under Article 15(2) of Regulation 17 when it held AC-Treuhand liable for an infringement of Article 81 of the EC Treaty.

Decision

The CFI dismissed the action for annulment. The CFI found that the contested decision was within the limits of the prohibition in Article 81(1) of the EC Treaty and that the fine ordered by the commission was within the powers conferred under Article 15(2) of Regulation 17.

AC-Treuhand argued that its role was one of non-punishable complicity, and therefore that it could not be an undertaking or association of undertakings which was the 'perpetrator' of an infringement of Article 81(1).

The CFI stated that an undertaking is liable for an infringement of Article 81(1) where it contributes actively and intentionally to a cartel between undertakings which are active on a market other than that on which the respective undertaking operates. The CFI held that it was reasonably foreseeable that the prohibition under Article 81(1) applies to firms, including consultancy firms, that engage in collusive conduct but are inactive in the market restricted by competition. The CFI claimed that the former decision-making practice of the commission and existing EU case law provide a clear basis for this view.

The CFI considered two key factors to determine whether AC-Treuhand was a co-perpetrator. First, was there a sufficiently definite and decisive causal link between that activity and the restriction of competition in the market? AC-Treuhand did not dispute the existence of a causal link, but rather challenged the legal classification of its contribution. The CFI consequently considered it irrelevant that AC-Treuhand was not a contracting party to the cartel.

Second, did AC-Treuhand act intentionally and in full knowledge of the facts in order to benefit, at least indirectly, from the cartel? The CFI found that AC-Treuhand must have been aware that the cartel's objective was anti-competitive and unlawful. The CFI therefore upheld the fine against AC-Treuhand, despite the firm's role being merely administrative.

The CFI found that the commission's infringement of AC-Treuhand's right to a fair trial by informing AC-Treuhand late was an insufficient reason to annul the contested decision because AC-Treuhand did not provide evidence that its possibility of defence was thereby restricted. The CFI consequently upheld the commission's fine against AC-Treuhand and dismissed the action for annulment.

Comment

The CFI's enforcement of the fine against AC-Treuhand represents a heavy-handed approach towards firms that provide services to cartels. The judgment is not necessarily final, as AC-Treuhand may choose to appeal to the European Court of Justice.

For further information on this topic please contact Christian Haellmigk at CMS Hasche Sigle by telephone (+49 711 97 640) or by fax (+49 711 97 64 900) or by email (christian.haellmigk@cms-hs.com).

Endnotes

(1) Case T-99/04.