European Union: CJEU Confirms Tax Investigation Documents Can Be Used In Cartel Case

The European Commission was allowed to use documents collected by police in a tax investigation to issue a cartel fine, the EU's top court has ruled.

The Court of Justice of the European Union (CJEU) has dismissed an appeal by Italian banana importers against the €6.7 million fine for participating in a price-fixing cartel, saying that all that mattered was the credibility of any evidence.

Pacific Fruit group was fined by the Commission in 2011 for participating with Chiquita in a price fixing cartel for fresh bananas in Greece, Italy and Portugal. The investigation was based on documents found by Italy's financial police, the Guardia di Finanzia, during a tax investigation-related search of a Pacific Fruit employee's home

The Commission was allowed to use these documents in evidence in proving the cartel, the CJEU said.

"The prevailing principle in EU law is that evidence may be freely adduced and that the only relevant criterion for the purpose of assessing the evidence adduced is its credibility," the court said.

The CJEU disagreed with Pacific Fruit's contention that transmission of the documents was covered by EU statutes, saying instead that national law applied.

The Court also rejected Pacific Fruit's attempts to show that the cartel served a pro-competitive purpose.

Pacific Fruit had argued that at the time of the infringement the European banana market was inflexible, with a high degree of transparency on volumes and prices that encouraged competitors to work together. The exchange of information at issue took place on an occasional basis without any clear link between the timing of those contacts and the timing of the respective price setting, the company said.

The lack of any anticompetitive effect did not prove the lack of an anticompetitive object, the CJEU said.

The rules on cooperation between authorities in the European Competition Network do not prevent the Commission from using information transmitted by other national authorities than competition authorities purely on the ground that the information was obtained for other purposes, the CJEU said.

The Commission welcomed the ruling.

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.