Government-Sponsored Exchange of Information Frdric Puel - - PowerPoint PPT Presentation

Government-Sponsored Exchange of Information

Frédéric Puel

Information exchange in Competition law FEB-BSC

22 June 2011

Plan

1.

State Action Defence

2.

Situations where exchange of information between undertakings may be prompted by a legal framework

i. REACH Regulation i. REACH Regulation ii. Standardisation iii. Examples of State Action Defence in the EU case-law

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• 1. State Action Defence

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Introduction

One undertaking shall conduct its commercial strategy on an

autonomous basis

The exchange of information under competition law

“Although (…) this requirement of independence does not deprive traders of the right to adapt themselves intelligently to the existing or anticipated the right to adapt themselves intelligently to the existing or anticipated conduct of their competitors, it does however strictly preclude any direct or indirect contact between such traders, the object or effect of which is to create conditions of competition which do not correspond to the normal conditions of the market in question” CJCE 28 May 1998 John Deere, C-7/95

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Articulation between art. 4(3) and

• art. 101 TFEU

CJCE 21 September Van Eycke case 267/86

• The art. 4(3) TFEU laying down a “duty of cooperation” incumbent upon

the Member States, read in conjunction with art. 101 TFEU which notably prohibits information sharing between undertakings competing with each

• ther:
• “require the Member States not to introduce or maintain in force
• “require the Member States not to introduce or maintain in force

measures, even of a legislative nature, which may render ineffective the competition rules applicable to undertakings”

Government-Sponsored exchange of information comprise situations

where information sharing is prompted or compelled by

• National laws
• Legal framework

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State Action and Competition law

The State Action Defence which derived from the US State Action

Antitrust Immunity Defense (Parker doctrine 1943) has been laid down in Ladbroke case (11 November 1997 joined cases C-359/95 P and C-379/95 P)

Under this principle, an alleged competition law infringer can claim

that its conduct falls outside the scope of the competition rules where:

it was required by national legislation;

• r where the national legal framework itself eliminated any possibility
• f competitive activity on its part

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« Ladbroke Test »: How far does the State Action Immunity stretch under EU law?

One undertaking benefits from a “legal shield” if a national law

precludes it from engaging in autonomous anti-competitive conduct

The liability of an undertaking may be mitigated if a The liability of an undertaking may be mitigated if a

national law merely encourages, or makes it easier for undertakings to engage in autonomous anti-competitive conduct

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• 2. Situations where exchange of information

between undertakings may be prompted by a legal framework

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• i. REACH Regulation

Under REACH Regulation, undertakings are required to exchange

technical information, but antitrust rules still apply

Exchange of information on

• Chemical substances and classification
• Inventory of data available
• Technical studies to be conducted
• Technical studies to be conducted

Organisational collaboration between competitors

• Organisation of Substance Information Exchange Forum (SIEF)
• What kind of information to be shared in order to allocate the costs (e.g.

volume of sales)

Nomination of an independent Trustee to aggregate sensitive

information

Regulation (EC) No 1907/2006 of 18 December 2006

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• ii. Standardisation

During the standardisation process, undertakings are required to

exchange technical information, but antitrust rules still apply

• Exchange of information on prices
• Control of access to technology/innovation and production
• New competitors are prevented from entering the market

Antitrust law applied to the European standardisation bodies

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Role of undertakings involved in the standardisation process

• Does an undertaking have a leading role in the process?
• Are there safeguards in place within the standardisation bodies?

Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements of 14 January 2011

• iii. Examples of State Action Defence in

the EU case-law

The State Action Defence has always been applied restrictively

• Legal shield never granted
• Reductions of fine possible but limited

John Deere Case (C-7/95) State Action Defence has not been accepted by the Court

because shared information were based on registration data made available by UK Department of Transport and therefore did not constitute trade secrets

Lombard Club Case (joined cases T-259/02 to T-264/02 and T-271/02) In a case

where public authorities participated to cartel round-tables and prompted the cartelists to reduce interest rates, the State Action Defence were set aside and thus didn’t entail a reduction of fine

Air Freight Case (COMP/39258 Nov. 2010, decision not published yet) penalties

inflicted to airlines companies were reduced (15%) on the ground of the “State Action Defence” since the Commission has been convinced that government action and overall regulatory framework have been conducive to or have promoted the formation of a price fixing cartel

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Conclusion

Sharing information is prohibited when:

competitors exchange sensible information (future price or

strategy, current or recent market shares, sales volume, trade secret...)

it artificially raises the transparency of an oligopolistic market a professional body publishes sensible data relating to one or

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a professional body publishes sensible data relating to one or

several members to the others without aggregating them

a third party (e.g. one distributor) intentionally gives an

undertaking confidential information relating to one of its competitors

Questions / Contact

Frédéric Puel

Partner Fidal Member of the Hauts-de-Seine and the Brussels Bars Tel : + 322 894 92 50 / + 33 1 55 68 16 13 Mob : + 32 475 48 23 02 / + 33 6 27 07 81 49 @ : fpuel@fidalinternational.com

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