Following the judgment of the Court of Justice of the European Union ("ECJ") of 18 June 2013 on a preliminary reference, the Austrian Supreme Court ("Supreme Court") decided on 2 December 2013 that incorrect or incomplete legal advice given by a lawyer concerning the application of Article 101 TFEU cannot be considered as a mitigating circumstance in the calculation of a fine for an infringement of EU competition law. In the same vein, a previous decision by the Austrian Cartel Court finding that the infringement at stake was de minimis cannot be considered as a mitigating circumstance as, in this decision, the Cartel Court had applied Austrian competition law only.
In its preliminary ruling of 18 June 2013, the ECJ decided that a company may be held liable where it had erroneously relied on advice from legal counsel or a decision of a national competition authority about the lawfulness of its behaviour as regards EU competition law (see VBB on Competition Law, Volume 2013, No. 6, available at www.vbb.com).
The case concerned a request by the Austrian Federal Competition Authority ("FCA") to the Austrian Cartel Court to impose fines for infringements of EU competition law regarding a cartel on the market for forwarding services in Austria. The cartel had existed between 1994 and 2007.
In an opinion delivered in December 1994, the Joint Committee of Austria's Cartel Court had concluded that the cartel agreements in question did not affect trade between Member States and that therefore EU competition law was not applicable. Subsequently, in February 1996, the Austrian Cartel Court, applying Austrian competition law, considered that the cartel was de minimis (the combined market share of the participants was below the threshold of 5%) and could thus be implemented.
Legal counsel for the cartel participants subsequently confirmed in several letters that the cartel was in line with Austrian competition law. Those letters, however, did not address the compatibility of the agreements with EU competition law. Only when the European Commission in 2007 started investigations against several providers of international forwarding services did the cartel members realise, after consultation with their legal counsel, that the application of EU competition law could not be ruled out since the cartel could possibly affect trade between Member States. As a result, the cartel members decided to immediately terminate the cartel agreements.
For the Supreme Court, there was a presumption of affection of trade between Member States because the cartel agreements covered the entire Austrian territory and would thus strengthen the foreclosure of the Austrian market as well as prevent further market integration. This was supported by the fact that several cartel members were subsidiaries of companies established in other Member States, such as Germany, Belgium and Luxembourg. Furthermore, the investigation had not revealed facts that would have rebutted the presumption.
Against this background, the Supreme Court, relying on the preliminary ruling it had obtained from the ECJ, held that the cartel was in breach of Article 101 TFEU and the fact that the companies had erred as to the lawfulness of their conduct under EU competition law was irrelevant with regard to both the imposition of a fine and the calculation of the fine.
Since 1 March 2013, de minimis cartels are no longer exempted under Austrian competition law if they concern hard-core restrictions, e.g. agreements on prices or market sharing.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.