European Union: European Competition Law Newsletter – November 2015

Last Updated: November 20 2015
Article by Matthew Hall

Cartel Facilitation is as Bad as Cartel Participation

A company that helps with or facilitates a cartel is at just as much risk of sanctions and penalties as are the actual cartelists. This was confirmed by the EU's highest court (the European Court of Justice (ECJ)) on 22 October 2015 in a case involving AC Treuhand, which upheld a 2009 fining decision by the European Commission (EC).

The judgment was the first time the ECJ has ruled on the so-called "facilitation" of cartels – such as the organisation of a cartel by a consultancy firm. The ruling is important for two main reasons.

First, the ECJ confirmed that the service agreement between AC Treuhand and suppliers of heat stabilisers (the actual cartelists) constituted an illegal agreement under EU competition rules. The court held that the effectiveness of Article 101 Treaty on the Functioning of the European Union (TFEU), which prohibits anti-competitive business practices, would be endangered if facilitators, such as AC Treuhand, could escape liability.

Second, the ECJ confirmed that the EC was entitled to fix the fine as a lump sum instead of using value of sales as a basis for setting the fine (the normal methodology for cartelists). AC Treuhand, as a consultancy firm, was not active on the markets in question (for tin stabilisers and ESBO/esters), and therefore did not have any sales in those markets.

AC Treuhand was considered by the EC in its original decision to have played an essential role in the cartel infringements and was remunerated by suppliers inter alia for organising regular cartel meetings at its Zurich premises. It attended and actively participated in the meetings, collected and supplied sales data to the participants, monitored the implementation of the agreements, offered to act as a moderator in case of disagreements between them and encouraged them to find compromises.

In a separate development, the UK Competition and Markets Authority (CMA) took the opportunity afforded by this judgment, as well as its recent decision in relation to a property sales and lettings cartel (which included a facilitator), specifically to remind companies of the risk for facilitators. It recommended that: "Firms that are approached to facilitate or give effect to anti-competitive arrangements should assess whether they are complying with competition law."

The case also underlines that any company, even a pure consultancy, should have a suitable competition compliance programme in place. In addition, although unsaid by the CMA, it's clear that facilitators can protect themselves through whistleblowing, just like any other cartelist.

European Commission Strikes Against Tax Avoidance

On 21 October 2015, the EC used EU State aid law to find against tax rulings implemented in favour of Fiat and Starbucks by Luxembourg and the Netherlands, respectively.

The EC concluded that Luxembourg had granted selective tax advantages to Fiat's financing company, and the Netherlands to Starbucks' coffee-roasting company. In both cases, a tax ruling issued by the respective national tax authority artificially lowered the tax paid by the company, according to the EC.

The EC was at pains to point out that tax rulings as such are perfectly legal (these are comfort letters issued by tax authorities to give companies clarity on how their corporate taxes will be calculated or on the use of special tax provisions). However, the two tax rulings under investigation endorsed, in the EC's view, artificial and complex methods to establish taxable profits for the companies. The EC indicated that they did not reflect economic reality or market conditions.

According to the EC, this was done, in particular, by setting prices for goods and services sold between companies of the Fiat and Starbucks groups (so-called "transfer prices") that did not correspond to market conditions. As a result, said the EC, most of the profits of Starbucks' coffee-roasting company were shifted abroad, where they were also not taxed, and Fiat's financing company only paid taxes on underestimated profits.

The EC took the view that that this is illegal under EU state aid rules: Tax rulings cannot use methodologies to establish transfer prices with no economic justification and which unduly shift profits to reduce the taxes paid by the company. This is considered by the EC to give that company an unfair competitive advantage over other companies (typically SMEs) that are taxed on their actual profits because they pay market prices for the goods and services they use.

The EC has ordered Luxembourg and the Netherlands to recover the unpaid tax from Fiat and Starbucks, respectively. The amounts to recover are, according to the EC, €20 million - €30 million for both companies. Further, neither can continue to benefit from the advantageous tax treatment granted by these tax rulings.

The EC's legal analysis is complex and these cases will without doubt be appealed. The companies and the governments will no doubt argue that in fact proper, internationally accepted methodologies had been used. Further, they might argue that the proper comparison is not with SMEs but with other similar multinational companies. Multinationals are different since they can, by definition, organise their affairs to take advantage of the various jurisdictions in which they operate.

Use of Rebates by Dominant Companies

On 6 October 2015, in the Post Danmark II case, the ECJ handed down a very important judgment concerning the use of rebates by dominant companies in the EU. This will be of interest to companies with significant market positions in the EU and to purchasers from and competitors of such companies.

The ECJ identified three types of rebates for the purposes of EU competition law:

  • Quantity rebates linked solely to the volume of purchases from the manufacturer concerned (incremental volume-based schemes). These are usually legal.
  • Loyalty rebates, which by offering customers financial advantages tend to prevent them from obtaining all or most of their requirements from competing manufacturers. These are illegal as an abuse of a dominant position.
  • Other types of rebates ("third category") which cannot be regarded as a simple quantity rebate linked solely to the volume of purchases (e.g., because the rebates at issue are not granted in respect of each individual order, thus corresponding to the cost savings made by the supplier) and are not loyalty rebates since they are not coupled with an obligation for, or promise by, purchasers to obtain all or a given proportion of their supplies from the dominant supplier.

This is a helpful bird's-eye summary, but as usual, the devil is in the detail. A third-category rebate in particular must, according to the ECJ, be considered in the round in order to determine whether it is legal or an illegal abuse of a dominant position. It is necessary to consider all the circumstances, particularly the criteria and rules governing the grant of the rebate, the extent of the dominant position of the undertaking concerned and the particular conditions of competition prevailing on the relevant market. The fact that the rebate scheme covers the majority of customers on the market may constitute a useful indication as to the extent of that practice and its impact on the market, which may bear out the likelihood of an anti-competitive exclusionary effect.

The ECJ looked at the "as-efficient-competitor" test previously used by the EC and EU courts. This requires an examination of whether the pricing practices of a dominant undertaking would be likely to drive an equally efficient competitor from the market. It has been applied by the EU courts to abuses including selective price cuts, predatory pricing and margin squeezes. The court, however, found in Post Danmark II that it is not necessary to show that the test is failed in order to reach a finding that a rebate scheme is abusive.

Importantly, the ECJ also considered the threshold which must be reached for a rebate scheme to become abusive. It must be "probable" that there is an anti-competitive effect, but there is no need to show that the effect is "of a serious or appreciable nature".

Finally, the ECJ provided a reminder that a dominant undertaking may demonstrate that the exclusionary effect arising from its conduct may be counterbalanced, or outweighed, by advantages in terms of efficiency which also benefit the consumer (this would be an "objective justification"). It will continue to be difficult to use this, but it needs to be considered as part of any analysis of rebates or potential abuses of dominance generally.

EU Inquiries into E-Commerce

The EC is currently carrying out several inquiries into various e-commerce issues, from a competition law, and more general single EU market, point of view.

The EC is investigating geo-blocking and related issues in a competition sector inquiry on the application of competition law to e-commerce. In launching this inquiry, the EC indicated that there are indications that businesses establish barriers to cross-border online trade in the EU, with a view to fragmenting the EU's single market along national borders and preventing competition. Some of these barriers can be addressed by competition law, especially when they include contractual restrictions in distribution agreements that prevent retailers from selling goods or services purchased online to customers located in another EU country.

Separately, in September 2015 the EC announced two general single market consultations: one on geo-blocking and the other on platforms, online intermediaries, data, cloud computing and the collaborative economy.

The first consultation will help the EC prepare legislative proposals in the first half of 2016 to end what it considers to be unjustified geo-blocking. Information from the second consultation will form part of the EC's examination of the issues around platforms, and will feed into a comprehensive assessment on the role of platforms and intermediaries planned for the first part of 2016. Information gathered through questions on data and cloud in digital ecosystems will feed into the EC's 2016 initiative to tackle restrictions to the free movement of data within the EU and help the EC formulate its European Cloud initiative.

Finally, concerning the collaborative economy, the consultation seeks views on the role of platforms in the collaborative economy and their impact on rights and liabilities, existing suppliers, innovation and consumer choice. The EC is exploring this as part of its Digital Single Market Strategy and also more widely in the context of its Internal Market Strategy for Goods and Services, due in autumn 2015.

Additional European competition law news coverage can be found in our news section.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.