Government-Sponsored Exchange of Information Frédéric Puel Information exchange in Competition law FEB-BSC 22 June 2011
Plan State Action Defence 1. Situations where exchange of information between 2. undertakings may be prompted by a legal framework i. i. REACH Regulation REACH Regulation ii. Standardisation iii. Examples of State Action Defence in the EU case-law FIDAL 2 22 June 2011
1. State Action Defence FIDAL 3 22 June 2011
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 FIDAL 4 22 June 2011
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 other: � � “ 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 � FIDAL 5 22 June 2011
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; � or where the national legal framework itself eliminated any possibility of competitive activity on its part FIDAL 6 22 June 2011
« 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 FIDAL 7 22 June 2011
2. Situations where exchange of information between undertakings may be prompted by a legal framework FIDAL 8 22 June 2011
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 FIDAL 9 22 June 2011
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 � 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 FIDAL 10 22 June 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 FIDAL 11 22 June 2011
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 � 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 FIDAL 12 22 June 2011
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 FIDAL 13 22 June 2011
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