Court of Justice clarifies the criteria for a cartel termination
On 17 September 2015, the Court of Justice of the European Union handed down judgments on appeals by Total SA and its subsidiary Total France, against judgments of the General Court relating to the paraffin waxes and slack wax cartel. Total had not participated in the last three meetings of the cartel. It argued that it had thus ended its participation.
The case inter alia dealt with the termination of a cartel, in particular if a so-called public distancing is the only viable option of withdrawal from a cartel, a question that is of major importance for undertakings that have identified potentially anti-competitive conduct. Public distancing refers to a situation in which a company involved in anti-competitive agreements informs the other participants of the suspicious conduct, and not the general public, that it will cease its participation.
The General Court had held in its prior decision that an undertaking can only end its participation by a public distancing even if it had not participated in later meetings. Total appealed to the ECJ, which held that the General Court had erred in law in considering that the public distancing by an undertaking from a cartel is the only way to prove that the undertaking had ceased participation in the cartel, even in the case where that company has not participated in some anti-competitive meetings.
The decision clarifies when a public distancing is necessary. It is still required if an undertaking continues to participate in anti-competitive meetings. However, a mere lack of a public distancing cannot by itself be considered an ongoing-participation. The Commission and National Competition Authorities applying Art. 101 TFEU therefore need to base any decision finding an ongoing infringement on additional “objective and consistent indicia” and cannot revert to the mere lack of a public distancing.
Any questions? Please contact: Alexander Israel or Jan Moritz Lang
Practice Group: Antitrust & Competition
Further reading: Changing competition regimes and the growing contribution of corporate in-house counsels