Consultancy Firms Can Be Held Liable For Facilitating Cartels

On 22 October 2015, the Court of Justice (the “Court”) held for the first time a consultancy firm liable for facilitating a cartel. The Court upheld the earlier judgment of the General Court of 6 February 2014 (T-27/10) and the decision of the European Commission of 11 November 2009 and disagreed with the Opinion of Advocate General Wahl (“AG Wahl”).

1. Facts of The Case

In 2009, the European Commission (the “Commission”) found that AC Treuhand AG (“AC Treuhand”) participated in a set of anticompetitive agreements and concerted practices relating to the tin stabiliser sector and the epoxidised soybean oil and esters (“ESBO/esters) sectors between 1993 and 2000. According to the Commission, the agreements and concerted practices consisted of price fixing, the allocation of customers and markets through sales quota and the exchange of commercially sensitive information.

AC Treuhand is a Swiss consultancy firm who was remunerated by the members of the cartel for organising cartel meetings, collecting and supplying sales data and monitoring the implementation of the cartel agreement. AC Treuhand also offered to act as a moderator in case of tensions between the participants and encouraged the parties to find compromises. Although AC Treuhand was not active on the tin stabiliser and the ESBO/esters markets, the Commission imposed two fines on AC Treuhand, each for EUR 174, 000, for its participation in both cartels. The General Court rejected the arguments of AC Treuhand and upheld the decision of the Commission.

2. Main Legal Questions Of The Judgment

Two main issues are being dealt with in the judgment: whether cartel facilitators can be held liable on the basis of Article 101 TFEU and, if so, how to calculate their fine. In setting the two fines as a lump sum on the basis of point 37 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 of 1 September 2006 (“2006 Fining Guidelines”), the Commission did not take into account the value of sales, which is the ordinary starting point for fine calculation.

3. Opinion of AG Wahl

AG Wahl argued that there is no legal basis for proceedings against facilitators of cartels, such as AC Treuhand.

In order to infringe Article 101 TFEU, an undertaking must have the capacity of restricting competition. The undertaking must therefore be able, under normal market circumstances, to constitute a competitive constraint which can be eliminated or reduced by colluding. AC Treuhand is not even potentially active on the cartelised market. If the firm is not in competition with the cartel members, how can it then restrict competition by entering into a cartel agreement?

AG Wahl identifies two separate conducts: first, the agreements between the cartelists and, second, a service supply agreement concluded between the cartelists and AC Treuhand. The latter is connected with the implementation of the cartel, but is separate from the conduct of the cartelists. Whilst AC Treuhand facilitated the conduct of the cartel members, the restrictive effects on competition stemmed only out of the conduct of the cartelists. The intention of an undertaking to restrict competition is not sufficient if that undertaking cannot impose a restriction.

4. Highlights of The Court’s Judgment

A. Cartel Facilitators Can Be Held Liable on The Basis of Article 101 TFEU

The Court ruled that Article 101 TFEU does not provide any wording that its scope is limited to the parties of the restrictive agreement who are active on the markets affected by the agreement. Article 101 TFEU aims at all agreements or concerted practices which distort competition, irrespective of the markets on which the parties operate. In order to warrant the full effectiveness of Article 101 TFEU, the Court deems it necessary to put a hold to active contributions of undertakings to restrictions of competition, even if the contribution does not relate to the economic activity forming part of the relevant market on which the restriction occurs. In doing so, the scope of Article 101 TFEU encompasses facilitators. The conduct of AC Treuhand was directly linked to the cartel as AC Treuhand had full knowledge of the anticompetitive conduct of the cartelist.

AC Treuhand also played an essential role in the cartel by facilitating the cartel. The service contracts between the cartelists and AC Treuhand were separately concluded from the commitments of the cartelists, but this does not change the view of the Court. The argument of AC Treuhand that expanding the scope would be an infringement of the principle of legality, as enacted in article 49 of the Charter of Fundamental Rights, was rejected by the Court.

AC Treuhand argued that extending the scope of Article 101 TFEU to it was not reasonably foreseeable at the time of the infringement and consequently disregards the principle that offences and penalties must be defined by law and the principle of legal certainty. The Court disagreed. That the scope of article 101 TFEU encompasses cartel facilitators was reasonably foreseeable on the basis of the broad notion of agreement and concerted practices, even if this may require legal advice. This is certainly so for people carrying out professional activities. In that case, there is an elevated standard of care when evaluating the risks of certain behaviour. Moreover, in the past, the Commission already decided that the consultancy firm AC Treuhand infringed Article 101(1) TFEU (Decision 80/1334/EEC, which concerns organic peroxyde).

Based on the considerations above, an expansive interpretation of Article 101 TFEU could potentially also target other consultants, such as lawyers, in the event that they would perform their duties improperly. Whilst it is true that such qualification might create legal uncertainty, it is understandable that the organisation and the implementation of a cartel does not remain unchallenged either

B. Lump Sum Instead of Value of Sales

Because the infringement was foreseeable, the claim of AC Treuhand to impose a symbolic fine was denied by the Court which upheld the fine imposed by the Commission.

Given that AC Treuhand was not active on the cartelised markets, the fines could not be based on the value of sales on that market. The Commission therefore used its discretion and imposed a lump sum on the basis of point 37 of the 2006 Fining Guidelines.

The Court upholds this decision arguing that the main purpose of point 13 of the 2006 Fining Guidelines, which refers to the value of sales, is to reflect the economic significance of the infringement and the relative size of the undertaking’s contribution to these infringements. A fine based on the fees charged by AC Treuhand for the delivered services would not reflect the economic significance or the extent of its individual behaviour. Therefore, the Court confirmed the lump sum fine imposed by the Commission on AC Treuhand.