Overview
I. Introduction
On January 23, a cartel workshop was held in Brussels in which the Director of the Cartel Directorate of the DG Competition, Mrs. Maria Jaspers, was questioned on the state of play of cartel enforcement and what the Commission’s priorities are for 2025. This post highlights the workshop’s key takeaways on what is expected from the new five-year mandate in terms of information exchange between competitors, referring also to the recent Banco Português case and the current cartel investigation in the tire replacement sector.
II. Information exchange
“If I can hint a little bit on the issues that I think you should pay attention to, and be prepared for in the year to come, then it is in the area of information exchanges” said the Director of the Cartel Directorate, emphasizing that the change in forms of collusion through information exchange is gaining momentum on the radar of EU competition law enforcers.
The targeting of this area is highly significant for businesses for several reasons. In the first place, the application of competition law to the exchange of information is especially difficult. It is complex, fact-specific and often involves a balancing of pro-competitive, neutral and potentially adverse factors to determine what may constitute an infringement. Secondly, unilateral ‘exchanges’ of information can constitute an illegal concerted practice – which might appear counter intuitive given the requirement under A.101(1) of the Treaty on the Functioning of the European Union (TFEU) for there to be an agreement, arrangement or understanding[1]. Thirdly, most decisional practice has involved private (usually secret) exchanges of information. However, even public disclosures can give rise to concerted practices. For example, the announcement of future price increases to customers which are shared with competitors; or future market intentions shared on investor calls (see below on the tire investigation) or even at conferences[2], could give rise to a concerted practice. Moreover, and perhaps most importantly, the advent of the digital age with the ready availability of AI, blockchain and the potential for algorithmic collusion, has drawn the focus of enforcers across jurisdictions to this area.
The European Commission (Commission) has a strong history of cartel enforcement and although the number of decisions has varied over the years, leading to a concern amongst some that enforcement has decreased, there has recently been a general uptick in ex officio cases and also an increase in leniency applications. On information exchanges, EU cartel enforcers are keeping an eye on the ways in which competitors may collude through information sharing, not only in secret but also through public channels, warning that this could violate competition law. Mrs. Jaspers stated that there are live investigations into such conduct, stressing that information exchange can be illegal not only as a mean of implementing a cartel, but also as a sui generis free standing infringement in and of itself.
As noted above, information exchange is one of the most complex areas in which to determine whether an infringement has occurred. Apart from clear-cut cases where the sharing of competitively sensitive information between rivals is clearly recognized and fined as a hardcore restriction by object[3], there are many nuances depending on various factors (e.g. the information exchange elements, the structure of the market and the nature of the product or service in question). Additionally, there are also cases where information exchange can be pro-competitive, enhancing economic efficiency and consumer welfare in a product market by fostering more intense competition, spreading the technological knowledge, promoting innovation and encouraging product standardization or benchmarking. An example of this would be the sharing of necessary confidential information between competitors which are parties to an R&D Join Venture.
In past decisional practice, exchange of information was typically viewed as an “extra element” within cartels: an additional infringement, alongside and integral to, a finding of price fixing, customer allocation or market sharing, but not treated as a standalone infringement. Occasionally, we have seen decisions focused on information exchanges as a form of price signaling (e.g. Dyestuffs, or the Anic decision referred to above) or in hub and spoke cases[4]. But no longer, it seems: information exchange can be a hardcore restriction in breach of A.101(1) in the same way as any other hardcore cartel activity. The Commission’s signaling of its focus on this area is a warning to businesses to take care to ensure that there are no gaps in their competition law training and compliance programs around the tricky area of information exchanges – from trade association participation, to conferences, to investor calls, to deployment of algorithms and other digital tools. It seems that we are now at a turning point: pure information sharing is increasingly being recognized as a violation in its own right.
An application of this can be seen in the Banco Português case[5], in which the European Court of Justice (CJEU) ruled that standalone information exchange between competitors is a serious competition law infringement. In September 2019, the Portuguese Competition Authority fined several credit institutions for participating in "standalone" exchanges of information between 2002 and 2013. These exchanges involved details on conditions for credit transactions, including current and future credit spreads and risk variables. The term "standalone" signifies that there was no allegation of the institutions engaging in other anti-competitive practices, such as price-fixing or market-sharing, linked to the information exchange. The Portuguese Competition Authority referred questions to the CJEU to determine whether a standalone exchange of information may be considered a restriction by object under Article 101(1) TFEU, given the specifics of the case.
The CJEU applied the Advocate General Rantos’ by-object doctrine to a standalone exchange of information[6], without a link to a wider anti-competitive practice, and it went beyond his Opinion by ruling that:
- any exchange of information relating to future prices, or some of the factors determining those prices, is inherently anticompetitive in light of the risk of harm to competition which they entail;
- the concept of strategic information is broad and encompasses any data not already known to economic operators that could reduce participants’ uncertainty about each other’s future actions concerning the actual conditions and structure of the market; and
- information pertaining to current or past events can also be considered strategic if, based on market realities, another firm may accurately infer the future conduct of other participants in that exchange or their reactions to potential strategic moves on the market [7].
The CJEU held that a standalone exchange of information constitutes a restriction of competition by object under Article 101 TFEU and that it can be regarded as in itself so harmful to competition that an examination of its actual or potential effects is not required.
III. Information exchange in the digital era
Exchange of information must also be carefully considered in the context of the digital age in which we now operate - which presents new challenges for EU competition enforcers. Technology, especially the rise of the Internet and digital platforms, has transformed the way information is gathered and shared. This transformation has significant implications for the assessment of information exchange cases, as it may facilitate coordination between rival firms and amount to an infringement of Article 101 TFEU, as also explained by the Commission in its report “Competition Policy for the digital era”[8] with regard to data sharing. This is also acknowledged in the Commission’s current project to update its investigation powers contained in the now 20 years old Regulation 1/2003. Read our recent post, “Regulation 1/2003: Is It Still Fit for Purpose After 20 Years?”
Furthermore, the digital era and its effects have also been considered by the Commission in the Horizontal Guidelines[9]. The Guidelines, in addition to stating that an online platform can act as a “hub-and-spoke” structure that facilitates anti-competitive information exchanges between platform users, provided new guidance on assessing algorithms, thus flagging the potential for indirect information exchange via pricing algorithms to constitute a competition infringement. For more information on pricing algorithms, read our post, “Clarity Starts to Form Regarding Pricing Algorithm Antitrust Cases.”
According to the Director of the Cartel Division, the Commission aims for its enforcement to guide the industry. To achieve this, it must address cases that require it to assess new market realities, including the impact of technologies such as automated tools and algorithms. The Commission also emphasized the importance of monitoring information-sharing through indirect channels, such as “hub-and-spoke,” public communications channels, and third-party bodies and tools used for coordinating strategies.
Acknowledging that the Commission issued fewer cartel decisions than usual in 2024, Mrs. Jaspers stated that there is no cause for concern and predicted an increase this year. She affirmed that the Commission had initiated several "interesting" investigations last year and that the upcoming decisions will showcase the diverse range of cases the Commission has chosen to pursue, pointing to the Commission’s ongoing investigation into the tire replacement sector.
The Commission is investigating suspicions that public investor earnings calls may have been used to disclose commercially sensitive strategies[10]; consequently, the Commission carried out unannounced inspections at the premises of companies active in the tires industry in several Member States (dawn raids) focused on new replacement tires for passenger cars, vans, trucks and busses sold in the European Economic Area. The Commission is concerned that price coordination took place amongst the inspected companies, potentially through public communications. It suspects that the inspected companies may have violated EU competition rules that prohibit cartels and restrictive business practices (Article 101 TFEU).
France's Michelin confirmed that it had been inspected and, with an appeal filed on April 8, 2024, has challenged the legality of the Commission’s dawn raids before the EU General Court (GC)[11]. Michelin argued that the Commission did not have sufficient basis to conduct the unannounced inspections at its premises as part of the suspected cartel investigation among tire producers.
IV. Conclusions
Recent case law and the Commission’s current approach to investigating cartels point to the same conclusion: information exchange is more central to their focus than ever before.
The CJEU’s judgment in the Banco Português case illustrates that competition authorities are now treating information exchange as an independent violation of the competition rules, meaning that information sharing, especially regarding future competitive parameters, is considered a standalone infringement by object, not requiring a link with other anti-competitive behaviors such as price fixing or market sharing. Hard core restrictions are relevant to all businesses large and small. Further, according to Mrs. Jaspers, the Commission plans to adopt additional key decisions on cartels this year, with a particular focus on the exchange of information through direct and indirect channels. This includes “hub-and-spoke” structures, public communications channels and third-party bodies and tools used for coordination. She also emphasized that unlawful exchanges of information, including those facilitated by new technologies and tools (such as algorithms and AI), will be a primary focus area for her agency. Businesses hardly need reminding that they can be fined up to 10% of gross worldwide turnover for infringements of A.101(1) TFEU. Some simple protective measures businesses can take, could include:
- Checking whether all meetings with competitors (e.g. trade associations) are necessary;
- Advance review of agendas and purposes for such meetings;
- Determining whether a competition lawyer should attend meetings for sensitive topics;
- Immediate in-house reporting of matters of concern which arise;
- Public distancing from any exchange of commercially sensitive information;
- Use of ‘clean teams’ to receive and review sensitive information (e.g. in mergers or JVs)
Given how challenging it can be to determine whether an exchange of information may or may not infringe competition laws, it would be prudent for businesses to re-validate that information exchanges are properly addressed in their competition law training and compliance programs.
[1] Guidelines on the applicability of Article 101 TFEU to horizontal co-operation agreements (Horizontal Guidelines), (2023/C 259/01), paragraph 396; CJEU, Case C-49/92P, Commission v. Anic, EU:C:1999:356
[2] Horizontal Guidelines, paragraphs 389 and 398-400; [2] CJEU, case 48/69, Dyestuffs – ICI v. Commission, EU:C:1972:70
[3] Horizontal Guidelines, paragraph 66: “Information exchange can create mutually consistent expectations regarding the uncertainties present in the market. On that basis companies can then reach a common understanding on the terms of coordination of their competitive behavior, even without an explicit agreement on coordination. Exchange of information about intentions concerning future conduct is the most likely means to enable companies to reach such a common understanding.”
[4] For example, the UK’s Hasbro decision CA98/18/2002
[5] CJEU, case C-298/22, Banco BPN v. BIC Português and Others, ECLI:EU:C:2024:638.
[6] Opinion of Advocate General A. Rantos of October 5, 2023, case C‑298/22, ECLI:EU:C:2023:738.
[7] CJEU, judgment of 29 July 2024 in case C‑298/22, Banco BPN v. BIC Português and Others, paragraphs 64 and 65.
[8] EUROPEAN COMMISSION, Directorate-General for Competition, Competition Policy for the digital era, Final report [2019].
[9] Horizontal Guidelines, see note 1.
[10] EUROPEAN COMMISSION, case AT.40863 “Replacement tires.”
[11] Action brought on April 8, 2024 – Compagnie générale des établissements Michelin v. Commission, case T-188/24 (C/2024/4334).
