Key antitrust developments have marked the second quarter of 2014, including:
- The availability of “umbrella pricing” theories to claimants seeking compensation for damages from cartel members in civil damage actions
- The boundaries of the European Commission’s (EC) investigative powers when conducting dawn raids at companies’ premises
- The enlarged scope for criminal prosecution in the UK and the possibility for the US authorities to seek extradition of foreign nationals facing cartel charges in US courts
In the area of EU cartel enforcement, the European Courts in Luxembourg have delivered the following important judgments:
- Nexans set a relatively low bar for the EC to delimit in inspection decisions the market(s) forming the subject matter of its investigation. As a result, even vague and ambiguous indications of the relevant product and geographic market(s) will be deemed adequate, as long as they enable companies to assess and understand the boundaries of their duty to cooperate with the inspectors.
- Kone AG and Others v ÖBB Infrastruktur broke new ground in allowing victims of cartel / price-fixing behavior to seek compensation against cartel participants for loss caused by so-called “umbrella pricing,” namely prices charged by competing suppliers who were not members of the cartel and which were higher than they would have been in the absence of the cartel.
Concerning criminal cartel enforcement in the US and the UK:
- The US Department of Justice (DOJ) undertook a “first of its kind extradition on an antitrust charge,” involving an Italian national who was allegedly at the center of the global conspiracy to fix prices in the marine hose market. The case raises the question of what a more aggressive approach toward extradition for criminal antitrust offenses would mean for international companies and their non-US executives caught in the crosshair of a criminal antitrust investigation in the US.
- The newly established UK Competition and Markets Authority (CMA) and the UK Serious Fraud Office (SFO), the UK’s lead agency for the investigation and prosecution of serious or complex fraud, published a Memorandum of Understanding, which defines the basis on which the CMA and the SFO will co-operate in the investigation and / or prosecution of individuals in respect of criminal cartel offences, where serious or complex fraud is suspected, including price-fixing, limitation of production or supply, market-sharing, and bid-rigging.
Restrictions of Competition by Object
LexisNexis interviewed Yves Botteman and Laura Atlee on the increasingly blurred distinction between restriction by object and restriction by effect in EU antitrust proceedings. The interview discusses at length the opinion of Advocate General Wahl in Case C- 67/13 Groupement des Cartes Bancaires (CB) v Commission.
In this regard, the EC recently published a Staff Guidance document on restrictions of competition by object. The document sets out the situations where restrictions by object may nevertheless benefit from the safe harbor of the newly adopted De Minimis Notice. It explains when what would otherwise be considered as price-fixing, market allocation and output restrictions among competitors may be safe-harbored on the ground that such practices are part of a wider cooperation agreement between two or more companies, such as R&D, specialization and licensing agreements.
Commitments to Settle Antitrust Proceedings
Steptoe continues to be very active in the debate on the EC’s heavy reliance on commitment proceedings to dispose of antitrust cases. Most recently, we took part in a half-day conference sponsored by the Brussels School of Competition and the Université de Liège on “Commitments in EU Competition Policy.” The panel discussions focused on the widespread use of commitment decisions, and the practical and theoretical implications of this trend.
Steptoe Contributes to LexisNexis
Steptoe's antitrust practice has been selected by LexisNexis to provide in-depth analysis on key antitrust issues. Over the past few months, we have contributed practice notes on:
- Parental liability for antitrust violations committed by subsidiaries
- The scope of EC investigative powers in the conduct of surprise inspections (upcoming)
The notes provide in-house counsel and practitioners with up-to-date and practical antitrust analysis on topical issues.
The EC published the white paper “Towards More Effective EU Merger Control” in which it proposes to reform the EU Merger Regulation. This reform seeks to give the EC the power to vet non-controlling minority shareholdings that may be harmful to competition. The package also includes proposals to make the merger case referrals between the Member States authorities and the EC simpler and faster. The paper launches a consultation period that will end on October 3, 2014. Steptoe's EU competition team will provide comments shortly.