On 9 June 2016, the UK’s Competition and Markets Authority (CMA) issued a statement of objections (SO) to Ping Europe Limited (Ping), a golf equipment manufacturer, alleging that Ping had breached EU and UK competition law by banning the sale of its golf clubs online.
European Commission Considers Taking Over Cartel Investigations to Prevent Exploitation of German Law Loophole
Under German law, companies may escape cartel fines by undertaking an internal restructuring. The German competition authority has indicated a willingness to reallocate such cases to the European Commission, which can impose a fine on the corporate group regardless of any internal restructuring. Commission officials speaking at a conference have suggested recently that the Commission would be willing to take over cartel cases from EU Member States, even at a late stage in the proceedings, in order to fine undertakings for their anti-competitive behaviour.
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The German Competition Authority has started a sector inquiry in the food retail sector yesterday and has sent questionnaires to 21 retailers and over 200 producers in the food and beverages industry.
According to the press release (at the moment only available in German at: https://www.bundeskartellamt.de/wDeutsch/download/pdf/Presse/2011/2011-09-16_PM_SU_LEH.pdf), the inquiry will focus on the following product categories: canned vegetables, milk, butter, cold coffee and milkdrinks, ketchup, frozen pizza, roasted coffee and sparkling wine. The inquiry could be extended to further product categories in the future.
The Authority will primarily investigate the question whether the retailers enjoy significant buyer power vis-à-vis producers.
A sector inquiry concerns a whole sector and is not directed against any particular undertakings. However, depending on the outcome of the investigation, the Authority may initiate antitrust investigations against one or more undertakings in the sector.
EU’s Top Competition Court Rules that Companies Seeking Damages May Have Access to Leniency Statements
A recent decision by the Court of Justice of the European Union may make it easier for prospective claimants to obtain at least those leniency statements and related materials that are submitted to the national competition authorities of the EU Member States. Companies doing business in the European Union are urged strongly to follow developments in this area and factor the risk of disclosure into the decision of whether or not to apply for leniency.
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Top EU Court Rules That Companies May Have Access to Leniency Statements Submitted to National Competition Authorities
The European Court of Justice (ECJ) ruling of 14 June 2011 followed a case that originated in Germany. Pfleiderer, a firm in the wood industry, was considering a damages claim against members of a paper cartel. It sought access to the cartel files held by the German Competition Authority (FCO) in order to substantiate its claim. A dispute followed over whether disclosing the documents of companies who had cooperated with the FCO would undermine the national leniency programme since potential leniency applicants would fear eventual disclosure.
A German court asked the ECJ for a preliminary ruling whether or not the provisions of EU competition law are to be interpreted as meaning that cartel victims can be granted access to leniency applications received by an EU Member State competition authority.
The ECJ has held that it was for the courts and tribunals of each EU Member State on the basis of their own national law to determine the conditions under which such access must be permitted or refused by weighing the interests protected by EU law. The upshot of this ruling is therefore that each judge in each Member State has a discretion as to what type of leniency document can be disclosed to a cartel victim. The ECJ has therefore distanced itself from recommendations made by the Advocate General who suggested that documents which existed before the cartel was uncovered could be disclosed but said that submissions drafted for the purpose of revealing the infringement should be protected.
For leniency applicants, weighing the decision whether to apply for leniency has now become even more complex. On the one hand, a potential leniency applicant stands to benefit from immunity, or a reduction, from fines. On the other hand, it will now have to take into consideration not only the remaining risk of a fine and criminal sanctions but also the the fact that private damages claimant might get easier access to incriminating evidence. Such complexity is all the more greater given that the ECJ’s ruling may lead to different results in different European countries.