Signalling a new trend in antitrust enforcement


Two recent announcements by competition authorities provide a timely reminder of the wide application of competition law to communications that reduce uncertainty in the market place: a decision in January 2014 by the Netherlands competition authority to close an investigation into parallel price statements by the country’s mobile operators, and a statement in November 2013 by the European Commission that it has opened an investigation into price signalling by international shipping lines through press releases and press articles. These investigations highlight the risks that businesses must assess very carefully before making forward-looking statements about pricing and changes to other commercial terms, about general business strategy and about aspirations for market development.

Information exchange as unlawful coordination

It is well understood that the exchange between competitors of competitively-sensitive information – for example about proposed pricing and/or other key terms, targeted customers, or business and marketing strategies – will breach competition law and is likely to be prosecuted by the authorities with the same ferocity as cartel agreements. Generally, competition compliance training in this area will focus on the risk of such unlawful information exchanges occurring through private communications – for example, direct conversations between competitors at trade associations meetings, telephone calls and emails between sales managers in different companies. Training might also highlight cases where competition authorities have, in recent years, targeted one-off1 and unreciprocated communications2 between competitors, and indirect exchanges through third parties (so-called “hub-and-spoke” information exchange).3

A more complex question concerns whether press releases and other statements made to public audiences or through media channels might be viewed as attempts to signal competitively-sensitive information to competitors, and fall foul of competition law. Of course, for many goods and services, competing for customers in a transparent market place will inevitably lead to businesses learning about the pricing and other elements of a competitor’s offer, and this generally facilitates the process of rivalry that leads to lower prices and better deals for consumers. This is recognised by the competition authorities, but is subject to a warning that a pattern of parallel or reciprocated public statements could be sufficient to breach the rule against anti-competitive coordination. For example, the European Commission’s 2011 Guidelines on horizontal cooperation agreements (which are also informative of the approach taken by national competition authorities within the EU) state that “where a company makes a unilateral announcement that is… genuinely public, for example through a newspaper, this generally does not constitute” an infringement of the prohibition on anti-competitive agreements – although with a caveat that “where such an announcement was followed by public announcements by other competitors” the possibility of finding an infringement “cannot be excluded”.4

The Dutch and European Commission investigations demonstrate that this is a very real possibility, that the authorities will investigate public statements about future market behaviour and that the risk of an infringement finding is not merely theoretical.

The liner shipping investigation

In November 2013 the European Commission announced that it had opened formal proceedings against a number of container liner shipping companies concerning suspected infringement of the EU prohibition on anti-competitive agreements. The allegation under investigation is that, since 2009, the companies concerned had been making regular public announcements about their price increase intentions, through press releases on their websites and in the specialised trade press.5 The European Commission is concerned that this practice “may allow the companies to signal future price intentions to each other and may harm competition and customers by raising prices on the market for container liner shipping transport services on routes to and from Europe”.

The actions of the shipping lines, specifically the public announcement of price increase intentions a few weeks in advance of the implementation date, are reminiscent of the Wood Pulp case6 some thirty years ago, in which the Commission issued an infringement decision that a number of wood pulp producers had colluded by exchanging information and through price announcements. In Wood Pulp, the Commission found direct and indirect exchanges of information between the competitors that made the market artificially transparent, which included quarterly public price announcements made in advance which give other producers sufficient time to announce their own corresponding new prices before the start of the new quarter.

The EU Court of Justice ultimately overturned the Commission’s decision, finding that “price parallelism” could only breach competition laws if collusion was the only plausible explanation for parallel pricing behaviour.7 The difficulty the Commission faced was that the wood pulp producers could plausibly argue that the price announcements and transparency had the legitimate purpose of providing customers with relevant information. The Commission will no doubt need to assess this possibility in its new shipping investigation.

The Dutch mobile case

In January 2014, the Netherlands competition authority, the Autoriteit Consument en Markt (ACM), announced that it had closed an investigation into Dutch mobile operators and accepted commitments from the companies in question that they would cease making public statements that could lead to collusive behaviour.8 While the ACM found no evidence of express price-fixing agreements, the ACM concluded that public statements about planned price increases by the three mobile operators in question (KPN, T-Mobile and Vodafone) could infringe competition rules where there is evidence that competitors altered their behaviour following the statements.

What is particularly interesting about the Dutch case is that the ACM gave two specific examples of public statements that could have this effect: statements by a senior manager speaking on a conference panel, and statements made in an interview with a trade journal. This illustrates how even public statements made on an informal and ad hoc basis can carry the same risk of being characterised as anti-competitive signalling as a practice of regular and uniform price announcements.

Practical implications for compliance programmes

The signalling investigations illustrate the need for compliance programmes to address the full range of behaviours that competition authorities might characterise as unlawful information exchange between competitors.

This should include advice to business people (in particular senior executives, sales and marketing roles) that:

  • future price changes or other changes in key terms or strategy should not be announced any earlier than required under customer contracts or before otherwise commercially necessary;
  • the need for making such announcements in advance of their taking effect should be clearly justified and documented;
  • business people should avoid making statements to the press or at industry conferences – whether in a business or personal capacity – about the company’s strategy or about market aspirations (for example, “We would like to see prices stabilise around £X” or “We see pricing at Y point in the future being at the £X level”); and
  • the competition authorities will treat unlawful information exchanges, including through signalling, as seriously as naked cartel arrangements, and the risks of falling on the wrong side of the line are serious: fines and private damages actions for the company, and potentially also criminal prosecution for individuals.