In 2014 Joaquin Almunia's time in office as commissioner in charge of competition law enforcement ended. The year closed with fines of €1.7 billion for cartel activities. This amount was largely in line with the figures for the two preceding years; although the European Commission decided 10 cartel cases in 2014, but only four cases in 2013 and five cases in 2012. The 2014 total is due largely to the penalties imposed in the automotive bearings cartel (approximately €950 million) – the fourth-highest cartel fine ever imposed at EU level.
While Almunia and his successor Margrethe Vestager have routinely emphasised that cartel prosecution remains high on the commission's agenda, cartel cases did not attract the level of public attention that they used to in the past. In 2014 it was the Google investigation and the scrutiny of member states' tax practices under state aid aspects that grabbed the headlines.
In terms of substance, the trend to settle decisions prevailed in most of 2014's cartel decisions. The commission showed that it is willing to fine private equity funds for the cartel participation of a portfolio company (eg, the high-voltage power cable cartel), and it continues to target facilitators of cartel behaviour (eg, the statement of objections in the yen interest rate derivatives cartel). In line with previous years, many 2014 cases were decided based on immunity applications (the envelope cartel being one of the few exceptions).
Settlement – introduced in 2008 – was the procedure of choice for cartel investigations in 2014. Of the 10 decisions issued, eight included settlements with some or all participants. Even though the term 'settlement' is a misnomer, in the sense that – unlike plea bargaining under US antitrust law – the settlement procedure does not include discussions about the level of fines, the procedure is popular with companies under investigation. In addition to the 10% fine reduction, there is usually some leeway to argue the cartel's scope and duration and thus influence the magnitude of the fine. Companies value the fact that settlement decisions contain less detail about the infringement than fully fledged prohibition decisions. From the commission's perspective, simplification of the procedural steps in a settlement and the reduced likelihood of decisions being challenged in court are worth granting a 10% fine reduction (the appeal lodged by Société Générale in relation to the EURIBOR cartel concerns only the calculation of the fine, not the settlement procedure).
The commission is prepared to pursue hybrid settlements (ie, to settle with some companies, but continue the standard procedure for others – for example, the steel abrasives and canned mushroom cartels). However, it is unwilling to settle under all circumstances. In the smart-card chip cartel, the commission aborted settlement discussions due to lack of progress and reverted to the standard procedure. Another development was the conclusion of a settlement in the power exchange cartel, which concerned a non-compete clause and was the first case settled outside the Cartel Directorate of the Directorate General for Competition.
The decisions issued in 2014 were based on substantive concepts well established in the commission's decisional practice. The extension of responsibility for cartel infringements based on parental liability or single and continuous infringement is part of the commission's toolbox and has been confirmed as such by the European courts. The high-voltage power cable cartel further expanded the concept of parental liability. The commission is increasingly likely to hold not only jointly controlling parents of a joint venture responsible (eg, the chloroprene rubber cartel, upheld on appeal in Dow, ECLI:EU:C:2013:605), but also financial investors with a controlling stake in a portfolio company.
Substantial fines for standalone information exchange practices have highlighted the commission's rigorous stance on collusion falling short of a hardcore cartel. In the smart-card chip cartel, the commission imposed a fine of nearly €140 million for collusion through a network of bilateral contacts. The companies concerned discussed and exchanged sensitive commercial information on:
- contract negotiations;
- production capacity;
- capacity utilisation; and
- future market conduct.
In the Swiss franc LIBOR cartel, JPMorgan was fined almost €62 million for bilaterally discussing future Swiss franc LIBOR rate submissions and exchanging information concerning trading positions and intended prices.
The commission suffered some substantial defeats before the EU courts in 2014 (eg, YKK, ECLI:EU:C:2014:2153 and Sasol, ECLI:EU:T:2014:628). In general, the defeats were not due to departures from previous case law; rather, the courts disagreed with the application of the law to the facts of a particular case (eg, Soliver, ECLI:EU:T:2014:867 (single and continuous infringement) and Sasol, ECLI:EU:T:2014:628 (parental liability for a joint venture)).
Overall, the General Court is increasingly living up to the standard of review laid down by European Court of Justice (ECJ) decisions KME (ECLI:EU:C:2011:810) and Chalkor (ECLI:EU:C:2011:815), and assessing evidence and the commission's conclusions on the facts carefully. In addition, the ECJ has not shied away from disagreeing with the General Court and reversing judgments upholding commission decisions (eg, YKK, ECLI:EU:C:2014:2153 and Guardian, ECLI:EU:C:2014:2363).
Clarification on substantive points was rendered in Siemens AG Österreich (ECLI:EU:C:2014:256). The ECJ ruled that the commission is empowered to determine the joint and several liability of companies, but may not determine the shares to be paid by those held jointly and severally liable.
The most significant judgment was rendered in Groupement des cartes bancaires (ECLI:EU:C:2014:2204), where the ECJ made important statements on when a violation of Article 101 on the Treaty on the Functioning of the European Union can be qualified as an infringement of competition 'by object' – a classification which carries with it a presumption of unlawfulness. The court clarified that the finding of a 'by object' restriction must be restricted to conduct that reveals a sufficient degree of harm to competition. This judgment will likely require the commission to assess more closely conduct that does not amount to a hardcore cartel (eg, information exchange among competitors).
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