In 2012, the French Competition Authority fined endive producers €4 million for alleged anticompetitive behaviour implemented by producer organisations (POs) and associations of producer organisations (APOs) consisting in colluding to fix prices and quantities as well as exchanging commercially sensitive information.
The sanctioned organisations appealed this decision arguing that such practices would be covered by the Common Agricultural Policy (CAP). This dispute led the Cour de Cassation, before which the case is pending, to refer a preliminary ruling to the Court of Justice of the EU.
In its judgment, the Court has first underlined that, within the Treaty on the Functioning of the European Union (TFEU), the CAP has precedence over the objectives of competition. As such, POs and APOs may ensure that production is planned and adjusted to demand, which would entail concentrating supply and placing the products on the market as well as optimising production costs and stabilising producer prices.
This, however, shall not be translated into a total exemption from Competition Law rules. In this sense, the Court has clearly indicated that farmers may exchange information and coordinate quantities and prices as long as they do so within POs and APOs recognised by the State and which strictly pursue the CAP’s objectives. By contrast, it is forbidden to coordinate their behaviour outside such organizations and they can never fix minimum sale prices; as such practice cannot be considered as proportionate to the objectives of stabilising prices and concentrating supply.
As a consequence of the above, agreements between several POs and/or APOs (and not within a PO or APO) would go beyond what is necessary.
The judgement has been delivered among a rather taut political atmosphere since French President Macron had recently announced future measures to fight abusively low prices and the imbalance between farmers’ income and certain supermarket’s high market power.
Settlements with the European Commission do not prevent further probes (Judgment of 23 November 2017 in Case C-547/16 Gasorba SL, Josefa Rico Gil, Antonio Ferrándiz González v Repsol Comercial de Productos Petrolíferos SA)
In 2006 the European Commission issued a decision to end a competition investigation related to the Spanish oil company Repsol and its agreements with gas stations.
More concretely, the Commission was concerned that such agreements, which in certain cases lasted for decades, could have a significant ‘foreclosure effect’ on the Spanish retail fuel and artificially increase prices.
The investigation came to an end with a commitment decision by which Repsol, inter alia, would avoid entering into long-term exclusivity agreements; offer all service station tenants concerned financial incentives for an early termination of their existing long-term supply agreements; and refrain for a certain period of time from buying any independent service stations for which it did not yet act as supplier.
After this, a dispute between Repsol and the owners of a gas station led the Spanish Supreme Court to refer a preliminary ruling to the Court of Justice of the EU to clarify whether a national court may declare the nullity of a supply agreement under EU Law, when the Commission has previously accepted a series of commitments on that same agreement.
In its judgment, the Court of Justice of the EU has firstly indicated that the application of EU Competition law is based on a system of parallel competences within which both the Commission and the national competition authorities and courts may apply EU competition rules.
A commitment decision cannot create a legitimate expectation in respect of the undertakings concerned as to whether their conduct complies with Competition rules; or in other words, a commitment decision cannot ‘legalise’ the market behaviour of the undertaking concerned, and certainly not retroactively.
However, national courts cannot overlook that type of decision, they shall take into account the preliminary assessment carried out by the Commission and regard it as an indication, if not prima facie evidence, of the anticompetitive nature of the agreement at issue.
Therefore, a commitment decision concerning certain agreements between undertakings does not preclude national courts from examining whether those agreements comply with the competition rules and, if necessary, declaring those agreements void pursuant to Article 101(2) TFEU.
Sara Moya Izquierdo listed in the Top 500 influential women in Spain by the magazine Yo Dona
Our associate Sara Moya Izquierdo, based in our Brussels office, has been listed for the second consecutive year within the Top 500 influential women in Spain by the magazine Yo Dona, supplement to the newspaper El Mundo.
The full list is available here:
http://estaticos.elmundo.es/yodona/estaticas/documentos/2017/11/500masinfluyentes2017.pdf
