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Abstract
The pursuit of hard-core cartel activity represents the core aspect of modern antitrust. Since the late 1990s, increased recognition of dangers posed by cartelization has led European competition regulators to initiate organizational changes and to modernize procedures and practice to combat cartels. However, has policy toward hard-core cartels softened in a harsher economic environment from late 2008? This article provides a comparative examination of the approach towards cartels by the European Commission and, at the national level, by the German Bundeskartellamt. It argues that, on current evidence, any doubts about how far the heightened anti-cartel drive could be sustained in the economic downturn post 2008 should be put aside. While some adjustments to fines have been made to take into account inability to pay in exceptional circumstances, no special provisions have been introduced to allow crisis cartels and it appears that the legislation continues to be interpreted strictly by the competition authorities as before.
Notes
1. Stated by Sarkozy at a meeting of the European Council prior to agreement on the Lisbon Treaty as quoted by Munchau, W. Europe’s drift to mercantilism, in The Financial Times, 24 June 2007.
2. The original Article 85 was renumbered as Article 81 under the 1997 Treaty of Amsterdam before being renumbered again as Article 101 under the 2007 Treaty of Lisbon. This article refers to the current numbering under Lisbon.
3. Regulation 17/62 identified the European Commission’s legal competence as the principal actor in the administration and implementation of competition policy decision making. It invested the Commission with exclusive powers of investigation (including the ‘dawn raids’) into suspected violations of the EU’s competition rules and enabled DG Competition or DG COMP to codify, exempt and impose fines on offending firms. Commission competition decisions could only be overturned by the European Court of Justice.
4. Commission Guidelines on the Method of Setting Fines Imposed OJ C9, 1998.
5. Commission Notice on Immunity from Fines and Reduction of Fines in Cartel Cases, OJ C 298, 2006.
6. As Competition Commissioner designate, Almunia spelt out his priorities and objectives for his term in office before members of the EP Economic and Monetary Affairs Committee on 12 January 2010.
7. Eurotribune.eu,12 January 2010.
8. White Paper on Damages Actions for Breach of the EC Antitrust Rules, COM(2008) 165 final.
10. Almunia, J. Comments at the International Law Forum, St Gallen, 8. April 2011, as reported in http://www.bloomberg.com/news/2011-04-08/arcelormittal-case-may-prompt-eu-to-revamp-cartel-fine-rules.html.
11. See footnote 3, point 35.
12. Bathroom Fittings press release IP/10/790 23 June 2010.
13. Almamet’s fine in Calcium Carbide (2009) was lowered by 20 per cent outside the inability to pay provisions after evaluating its special circumstances, its financial position and the required deterrent effect of the fine.
14. Inability to pay under paragraph 35 of the 2006 guidelines on the method of setting fines imposed information note from Mr Alumnia and Mr Lewandowski, SEC 2010 737/2 12.06.2010
15. In the 1970s, a proposal for a draft Regulation specifically dealing with crisis cartels was put forward by Commissioner Davignon together with the then Competition Commissioner but this was not taken forward to the Council of Ministers.
16. Case C-209/07 Competition Authority vs. Beef Industry Development Society Ltd and Barry Brothers (Carrigmore) Meats Limited [2008] ECR 1-8637.
17. One example is an agreement to assist with overcapacity in Greek fish farming. The scheme was supported by the Minister of Agricultural development and Food but the Hellenic Competition Commission objected. The agreement aimed to stabilize or increase prices by controlling the quantity of sea bream bought to market and included provision for a weekly exchange of information on prices and sales quantities. It was held to be anticompetitive and total fines of €677,885 were imposed in 2010 (HCC Decision no. 492/VI/2010).
18. Antitrust: Commission closes investigation into ‘Baltic Max Feeder’ scheme, 26 March 2010. Available on DG Competition web site.
19. Statistiches Bundesamt Deutschland.
20. The second amendment to the ARC also inserted a new ban on concerted action to the section on cartels to cover so-called gentlemen’s agreements (informal agreements).
21. Some sectors, such as agriculture (as in the EEC case), were immune from the competition rules and remained so under the latest amendments while others, such as energy, have gradually been opened to competition although certain restrictions still apply.
22. German submission to the Intergovernmental Group of Experts on Competition Policy and Law, Geneva, July 2009.
23. The Higher Court is Düsseldorf (which was created in 1906) is the relevant court for hearing FCO cartel appeals as it is the one that takes responsibility for the Bonn area. Different courts will usually be involved for decisions taken by the regional cartel offices.
24. Notice No. 28/2006.,2006. Guidelines on the Setting of Fines under Section 81(4) sentence 2 of the German Act against Restraints of Competition, 15 September.
26. Fines totaling some €24 million were imposed on Reckitt Benckiser for fixing prices in the dishwasher detergent market. The case arose out of a leniency request from the other cartel participant, Henckel. The case was concluded quickly through settlement. See FCO press release from 23 November 2011 and available at: http://www.bundeskartellamt.de/wEnglisch/News/press/2011_11_23.php.
27. The draft bill and is expected to come into force in January 2013. Its primary focus is the improvement of merger control policy.
28. FCO press release from 25 October 2011 and available at: http://www.bundeskartellamt.de/wEnglisch/News/press/2011_10_25.php.
30. Monopolkommission Press Release, 22 January 2009 (in German) at www.monopolkommission.de.presse/pressemitteilung090122.pdf.