On 6 September 2012, Advocate General Kokott handed down her opinion on a preliminary reference from the French Supreme Court on whether national competition authorities can institute proceedings against companies found to be in breach of Article 101 TFEU, but who fall below the market share thresholds mentioned in the European Commission’s Notice on agreements of minor importance (De Minimis Notice).
Before ruling on a dispute between Expedia, an online travel agent, the French state railway company SNCF, and competing travel agencies, the French Supreme Court referred a question to the EU Court of Justice on the binding nature of the De Minimis Notice for national competition authorities.
The De Minimis Notice issued by the Commission in 2001 states that the Commission will not institute proceedings either upon application or its own initiative, or impose a fine, where an agreement is covered by the Notice. The De Minimis Notice further adds that agreements between undertakings which affect trade between member states do no appreciably restrict competition within the meaning of Article 101(1) TFEU if the aggregate market share held by the parties in a horizontal agreement does not exceed 10% on any of the relevant markets.
In the case before the French Supreme Court, SNCF and Expedia, in order to improve rail ticket and travel sales over the internet, created a joint subsidiary, Agence Voyages-sncf.com (formerly GL Expedia). As a result, Expedia was given privileged access to voyages-sncf.com, a fact which was highlighted by several competitors as being anti-competitive and, as such, complaints were made to the French Competition Authority. The French Competition Authority subsequently fined Expedia € 500,000 and SNCF € 5 million, for what was considered by the French Authority to be anti-competitive practices contrary to EU and national competition law. Expedia contested the fine and took the position that national competition authorities cannot prosecute a breach of Article 101(1) TFEU where the conduct falls below the market share threshold as defined by the De Minimis Notice, regardless of whether the practices in question are anti-competitive.
In her opinion, AG Kokott disagreed with Expedia’s arguments, stating that while the Commission specifies in the De Minimis Notice that it will not institute proceedings either on demand or on its own initiative for agreements falling below the de minimis threshold, the Notice only serves to provide guidance as regards the application of Article 101 TFEU. As such, national competition authorities and courts are not prohibited from taking measures against agreements which fall below the de minimis thresholds.
The Advocate General went on to say that, in addition to the fact that the De Minimis Notice serves only as guidance which must be considered by national authorities and courts, where an agreement is deemed to have an anti-competitive object and it is capable of appreciably affecting trade between Member States (as the French Supreme Court had found in the present case), it may readily be inferred that the agreement in question is also capable of appreciably restricting competition.
AG Kokott concluded that Article 101(1) TFEU and Article 3(2) of Regulation 1/2003 – which provides that the application of national competition law must not lead to, inter alia, the prohibition of agreements which may affect trade between members states but which do not restrict competition within the meaning of Article 101(1) – should be interpreted as meaning that a national competition authority may institute proceedings and impose penalties in respect of an agreement on the grounds that it is anti-competitive, despite the fact that the market share thresholds in the Commission’s De Minimis Notice are not reached, provided that the national authority has taken due consideration of the De Minimis Notice and has otherwise proved that the object or effect of the agreement is an appreciable restriction of competition.
Since market shares are only one indicator amongst many other factors of determining a competition restriction, the Advocate General considered that in cases where it is necessary to determine whether the restrictions of competition arising from an agreement with an anti-competitive object are appreciable, the market shares thresholds, as provided by the De Minimis Notice, are irrelevant.
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