Enforcement proceedings in dominance in Luxembourg

Enforcement proceedings

Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?

The Competition Council, a collegial body composed of four members, namely the President and three councillors, is responsible for enforcement of article 5 of the 2011 Law and article 102 of the TFEU. The councillor in charge of the investigation of a case is not entitled to take part in the deliberations and decisions of the Competition Council regarding that case. The members of the Competition Council are assisted by investigators in the performance of their duties.

The Competition Council can issue requests for information, interview natural or legal persons and conduct inspections as well as dawn raids. Failure to comply with a request for information made by decision pursuant to article 14(2) of the 2011 Law may lead to a fine of up to 5 per cent of the total turnover of the last financial year. The Competition Council may also impose periodic penalty payments per day of non-compliance of up to 5 per cent of the daily turnover of the last financial year.

What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?

If an abuse of dominant position by one or several undertakings has been ascertained, in accordance with Article 11 of the 2011 Law, the Competition Council may order the undertaking to stop the conduct by imposing any coercive measures proportionate to the infringement committed and necessary to stop the infringement. Given that the 2011 Law does not expressly provide for structural remedies, it is unclear whether the Competition Council has the power to impose such remedies. From our practice, it appears that the measures proposed by the Competition Council are in principle complied with by firms.

In case the practice could cause irreparable harm to the public economic order or to the plaintiff, article 12 of the 2011 Law allows the Chairman of the Competition Council to award interim injunctions and impose periodic penalty payments in order to compel the undertaking to comply.

Pursuant to article 20(2) of the 2011 Law, the Competition Council may fine undertakings that are in breach of the 2011 Law or of article 102 of the TFEU. The amounts of the fines are to be fixed on a case-by-case basis and will depend, inter alia, on the duration and the gravity of the infringement. The maximum fine shall not exceed 10 per cent of the highest worldwide turnover (excluding taxes) that has been realised during one of the full financial years since the financial year preceding the year during which the anticompetitive practices have been committed. In the case of consolidated accounts, the turnover to be considered is the turnover stated in the consolidated accounts of the mother company.

In 2014, the Competition Council imposed a fine of €2.52 million on a telecommunications service provider for abuse of dominance. This decision was, however, annulled (see question 15).

Pursuant to the 2011 Law, the fines and sanctions are imposed on the undertaking having committed the infringement. As undertakings, especially those with significant market power, are organised in the form of companies, individuals may not, in principle, be fined or sanctioned.

Can the competition enforcers impose sanctions directly or must they petition a court or other authority?

The Competition Council may directly impose sanctions.

What is the recent enforcement record in your jurisdiction?

In 2015 and 2016, the Competition Council rendered eight decisions regarding allegations of abuse of dominance. The Competition Council either dismissed the cases without further action or accepted the commitments offered by the undertaking. In 2017, one decision was rendered on an alleged abuse of dominance (see question 19). There was only one Competition Council decision regarding an alleged abuse of dominance in 2018 (decision 2018-FO-09 - POST Lxuembourg). Given the agreement concluded between POST Luxembourg and the complainant, a potential competitor on the market for the reception of parcels, the latter withdrew its complaint, and the case was closed without further action.

The length of dominance proceedings varies considerably, depending on the complexity of the case. A decision of the Competition Council may be rendered within less than a year from the referral of the case to the Competition Council, but it may also take several years.

In the case having led to the Entreprise des Postes et Télécommunications decision 2014-FO-07, it took more than seven years from the filing of the complaint to the decision by which the Competition Council imposed a fine of €2.52 million. This is the highest fine ever imposed by the Competition Council for an abuse of dominance. In its ruling of 21 November 2016, the administrative tribunal stressed that the proceedings exceeded a reasonable period and annulled the Competition Council’s decision for several procedural and substantive reasons. This judgment was confirmed on appeal (see question 15), the administrative court stressing in particular the unreasonable length of the administrative procedure as one of several determining factors justifying annulment.

Where a clause in a contract involving a dominant company is inconsistent with the legislation, is the clause (or the entire contract) invalidated?

The 2011 Law does not contain provisions concerning the consequences of infringements of article 5 of the 2011 Law or article 102 of the TFEU on the validity of contractual clauses. In principle, a clause that constitutes an abuse of dominance is void. In this case, the courts would consider the entire contract void only if the relevant clause is not separable from the remainder of the contract.

To what extent is private enforcement possible? Does the legislation provide a basis for a court or other authority to order a dominant firm to grant access, supply goods or services, conclude a contract or invalidate a provision or contract?

The 2011 law does not contain provisions on private enforcement. Ordinary courts are competent for the private enforcement of competition rules. Only courts have jurisdiction to invalidate a provision or contract and to grant damages. In this respect, the 2016 Law contains provisions aiming at facilitating actions for damages through the introduction of specific procedural rules before the court. The claimant may also seek interim relief before the summary judge in order to put an end to a prima facie unlawful situation if: the claim is urgent; the order is sought to avert a situation that would cause irreparable harm to the plaintiff; or the order is sought to remedy an unlawful situation that has already occurred.

In accordance with article 11 of the 2011 Law, the Competition Council may impose any remedy on an undertaking that has abused its dominant position that is proportional to the infringement and necessary to stop the infringement. Consequently, the Competition Council may, for example, grant access to essential facilities to a competitor of the dominant undertaking or order the dominant undertaking to supply goods and services.

Do companies harmed by abusive practices have a claim for damages? Who adjudicates claims and how are damages calculated or assessed?

Companies harmed by abusive practices have a claim before civil and commercial courts pursuant to Luxembourg tort law. Hence, the claimant will need to prove a fault, damage and a causal link between the two. The 2016 Law implementing Directive 2014/104/EU of 26 November 2014 on antitrust damages actions aims, however, at facilitating actions for damages and introduces a set of presumptions with respect to the existence of an infringement of competition law and its effects.

To our knowledge, Luxembourg courts have not yet ruled on actions for damages for abuse of dominance.

To what court may authority decisions finding an abuse be appealed?

Decisions of the Competition Council finding an abuse may be challenged before the administrative tribunal. An appeal against the judgment of the administrative tribunal may be lodged with the administrative court. Both the administrative tribunal and the administrative court review the facts and the law.