Application for leniency
The Competition Authority recently adopted a settlement decision concerning a cartel in river cruise services on the Upper Meuse and the navigable part of the Lesse in Belgium.
In 2014 the Competition Authority received an application for leniency from two river cruise operators that were part of the same group regarding their participation in a cartel; investigations were initiated thereafter. In April 2015 the remaining members of the cartel also applied for leniency and by November 2015 discussions regarding a settlement procedure had started. All parties to the cartel acknowledged their participation and accepted the fines that the Competition Authority imposed.
The river cruise cartel affected the market for short organised river cruises on the Upper Meuse and the navigable part of the Lesse. Several river cruise operators participated in the cartel, which consisted of two subsequent uninterrupted agreements that restricted competition by object.
The first agreement had been effective for 30 years from 1983 until the end of 2013. It consisted of systematic consultations between the undertakings regarding:
- joint decisions on pricing;
- the hiring and remuneration of staff;
- maintenance and other works;
- publicity; and
- commercial and accounting policies.
Further, the agreement included an allocation key to distribute the costs of production and income from ticket sales between the cartel participants. The second agreement, which followed the first agreement at the end of 2013, provided for a market allocation of the waterways by means of exclusive exploitation clauses.
Over the course of many years, the parties to the cartel had bought out the majority of their competitors on the relevant market, creating a beneficial competitive environment for their cartel.
The Competition Authority assessed the agreements and behaviour of the river cruise operators in light of Article IV.1 of the Competition Act and Article 101 of the Treaty on the Functioning of the European Union, which prohibit anti-competitive agreements. It had no difficulty in establishing that the agreements restricted competition and aimed to eliminate effective competition in the provision of organised river cruise services on the Upper Meuse and the navigable part of the Lesse.
The Competition Authority considered the agreements to be a single and continuous infringement because they had the same objective and aimed to remove all competition from the market. Taking into account the severe gravity of the established infringements, the Competition Authority saw no possible justification for the infringement.
The Competition Authority's fine-setting method follows the European Commission's approach. As a result, the total value of ticket sales for river cruises constituted the starting point for the calculation of fines. The basic amount of the fine was then set on the basis of the gravity and duration of the infringement. The fines were adjusted in light of:
- applications for leniency;
- the settlement procedure; and
- the 10% cap on fines.
The two parties that applied for leniency received full immunity and the three remaining parties received a leniency reduction of 45% and an additional reduction of 10% for settling. This resulted in joint and several liability for a fine of €64,100.
The modest level of the fine reflects the small size of the companies involved and the fact that even though the cartel lasted over 30 years, only a limited number of years were taken into account when the fine was calculated, as until October 2006 small enterprises could not be investigated and fined under the Competition Act.
Four individuals involved in the cartel applied for and obtained immunity from prosecution.