EC Advocate General Kokott recently gave her opinion on a reference for a preliminary ruling by the Dutch Trade and Industry Appeals Tribunal in the further appeal8 against fines imposed by the NMa for an alleged concerted practice between four Dutch mobile telephone operators.9 The Advocate General clarified, inter alia, the criteria for assessing the object of a concerted practice.

In a highly publicised case at the time, the NMa had imposed fines totalling EUR 52 million for the alleged coordinated behaviour between KPN, Orange, Telfort, T-Mobile and Vodafone following a meeting in which, inter alia, commercially sensitive information was exchanged on reductions in dealer bonuses for sales of post-paid mobile telephone subscriptions. The fine was based on a violation of Article 6 of the Dutch Competition Act and Article 81 EC.

In appeal, the Rotterdam District Court ordered the NMa to reconsider the fines imposed on the remaining operators, given the NMa’s inadequately substantiated disregard of the operators’ objections, particularly the operators’ evidence disproving the causal link between the meeting and the subsequent parallel behaviour.10

In further appeal, the Trade and Industry Appeals Tribunal requested a preliminary ruling in regard of some issues. These issues and the Advocate General’s response are as follows.

  • When applying Article 81(1) EC, which criteria must be applied when assessing whether a concerted practice has as its object the prevention, restriction or distortion of competition within the common market?

According to the Advocate General, a concerted practice pursues an anti-competitive object for the purposes of Article 81(1) EC where, according to its content and objectives and having regard to its legal and economic context, it is capable in an individual case of resulting in the restriction of competition. In that regard, neither the realisation of such restriction of competition nor a direct link between the concerted practice and retail prices is decisive.

An exchange of confidential information between competitors is tainted with an anti-competitive object if the exchange is capable of removing existing uncertainties concerning the intended market conduct of the participating undertakings.

  • Is Article 81 EC to be interpreted as meaning that, when a national court applies that provision, the evidence of a causal link between concerted practice and market conduct must be adduced and appraised in accordance with the rules of national law, provided that those rules are not less favourable than the rules governing similar domestic actions and they do not make the exercise of the rights granted by Community law in practice impossible or excessively difficult?

The Advocate General found that for the purposes of proving an infringement of Article 81 EC in proceedings before national courts it is for national law to determine the standard of proof required, subject to the proviso that the well-known principles of equivalence and effectiveness and other general principles of Community law must be observed.

Subject to proof to the contrary, which it is for the undertakings concerned to adduce, there must be a presumption before national courts, too, that undertakings participating in concerted actions and remaining active on the market take account of the information exchanged with their competitors when determining their conduct on that market.

  • When applying the concept of concerted practices in Article 81 EC, is there always a presumption of a causal link between concerted practice and market conduct even if the concerted practice is an isolated event and the undertaking which took part in the practice remains active on the market or only in those cases in which the concerted practice has taken place with a certain degree of regularity over a lengthy period?

According to the Advocate General, even an isolated event of information exchange between competitors which remain active on the market may lead to the rebuttable presumption that such exchange had an impact on their market conduct. In particular, such a presumption applies where the exchange took place merely on one parameter of competition.

This opinion is a warning to all undertakings that discussing commercially sensitive information can have serious consequences, even if it only happens once.

The Advocate General’s opinion also provides an interesting clarification of the reasoning by the Court of First Instance in GlaxoSmithKline11 on the necessity to consider the effects of an agreement having the object to restrict competition, by stating that the Court of First Instance would have erred in law if its ruling in GlaxoSmithKline were to mean that, for the presumption of an anti-competitive object, determination of an actual impact on competition is required in every case.