General Court dismisses appeals against sodium chlorate cartel decision

The General Court has dismissed appeals by Elf Aquitaine SA (and its subsidiary, Arkema France) against a Commission decision that imposed a fine for price-fixing and market-sharing in relation to sodium chlorate paper bleach. The Commission fined eight producers a total of EUR79 million in June 2008 for their involvement in a price-fixing cartel that lasted over six years. The companies, which were part of four corporate groups, swapped sales and price information and held meetings between 1994 and 2000.

In its appeal, Elf Aquitaine complained that it was not in control of its subsidiary Arkema for the purposes of attributing liability under Article 101(1) of the TFEU, and, even if it was, the fine was calculated incorrectly and unfairly. During the time of the infringement Elf Aquitaine owned 97% of the shares in Arkema. The General Court held that there was insufficient evidence to support Elf Aquitaine’s complaint that Arkema was not under the decisive influence of its parent company. The Court also dismissed Elf Aquitaine’s pleas that, by imposing a separate fine of EUR15,890,000 on Elf Aquitaine as a deterrent, the Commission had breached the Article 23(2) of Regulation 1/2003 and the Commission’s 2006 Fining Guidelines and that the Commission had erred, or breached legal principles, in increasing the basic fine by 90% to punish Arkema for recidivism. Cases T-299-08 and T-343/08, 17 May 2011


UK High Court rejects use of competition law defence in contract dispute

Bach Flower Remedies Ltd made a claim against its Italian distributor, Guna SPA, in a dispute about the transfer of product registrations. Guna (the defendant) argued as part of its defence, amongst other things, that the contract contained a restriction on parallel trade between Member States, thereby infringing Article 101 of the TFEU, and rendering the contract void and unenforceable. The High Court held that a party that wishes to rely on a competition law defence against a contract claim must plead the case in detail and not make assertions without reliance on primary facts.

Judge Mackie found that the evidence to support the competition defence was “general” and “sketchy” and required the Court to make important decisions based on “off the cuff” witness evidence. In particular, Mackie J noted that, in complex exercises such as identifying the relevant market, it was helpful (though not a requirement) to receive expert evidence from economists (no such evidence had been provided). It was also held that competition issues needed to be evaluated by the Court early in proceedings, and therefore that statements of case must clearly communicate each party’s position. [2011] EWHC 1202, 16 May 2011