In a series of some twenty judgments of April 12, 2013, the General Court clarified competition authorities’ obligation of proof under EU law when recognizing and sanctioning anti-competitive agreements between undertakings in the form of “concerted practices”.
EU competition law prohibits not only anti-competitive agreements, in the form of agreements between undertakings or decisions of undertakings’ associations, but also concerted practices. According to case law, this latter notion refers to “a form of coordination between undertakings which, without having reached the stage where an agreement properly so-called has been concluded, knowingly substitutes practical cooperation between them for the risks of competition”.
In a decision adopted on July 16, 2008, la Commission relied on that notion of concerted practice to find that 24 authors’ and composers’ collecting societies had infringed competition law. It had therefore ordered them to put an end to the reported practice. According to the Commission, the concerted practice consisted of national territorial limitations where each collecting society limited the geographic scope of the license to use its repertoire which it granted to another collecting society to the territory where this other society was established, thereby preventing the granting of multi-territory licenses. According to the Commission, the fact that these national territorial restrictions were applied in parallel by the various collection societies could only be explained as a concerted practice. The collecting societies on their side asserted that the national territorial delineations were the result of individual, carefully considered and rational decisions and could be explained particularly by the necessity to successfully fight against the unauthorized use of musical works.
The General Court answered these arguments by distinguishing two situations. When the Commission establishes the existence of a concerted practice based on documentary evidence (exhibits such as emails, letters or minutes of meetings), which reveals that the practices resulted from concertation, it is not sufficient for the implicated undertakings to merely submit another explanation for the facts found by the Commission. They have to challenge the existence of those facts. On the other hand, when the Commission relies solely on the recognition of parallel conduct without having any documentary evidence, it is sufficient for the undertakings to prove circumstances which cast the facts established by the Commission in a different light and thus allow another explanation of the facts to be substituted for the one adopted by the Commission.
In the present case, the General Court observed that the Commission did not have any documentary evidence of the national territorial limitations. It also considered that the Commission had not provided sufficient evidence to render implausible the alternative explanation put forward by the societies that their parallel conduct did not result from concertation but from the necessity to successfully fight against the unauthorized use of musical works. The General Court therefore concluded that the Commission had not established the existence of a concerted practice to the requisite legal standard and annulled the decision on this point.
This General Court judgment is a serious warning for the Commission and clearly restricts the power of competition authorities to rely exclusively on parallel conduct to establish and sanction an anti-competitive agreement.