On 15 December 2016, the EU’s second-highest court (the General Court, or GC) handed down its judgment in appeals relating to a cartel in smart card chips. The four members of the cartel had been fined a total of around EUR138 million in 2014 by the European Commission (EC).

The cartel functioned through a network of bilateral contacts and exchanges of commercially sensitive information relating in particular to prices. Two of the parties appealed the EC’s decision, arguing that these activities did not amount to a cartel.

In an important judgment confirming the very wide scope of EU competition law when it comes to exchange of confidential business information, the GC agreed with the EC and therefore rejected the appeals.

The GC confirmed past case law which has held that certain types of coordination between companies give rise to a presumption of an infringement of competition law. This was the case in the smart card chips cartel. The information exchange on prices was aimed, in essence, at slowing down the price decreases on the smart card chip market. This gave rise to a cartel and there was no need for the EC to analyse the effects (if any) of the practices in question on the market.

EU competition law compliance programmes need to take into account the rules on illegal information exchange under EU law. An infringement can give rise to very significant fines and private claims for damages.