EU High Court Pushes Boundaries Of What Amounts To A Cartel

April 3, 2015

Law360, New York (April 02, 2015, 10:16 AM ET) -- The EU Court of Justice’s recent judgment in Dole v. Commission (C-286/13 P) is another case for those who struggle with the concept of “concerted practices,” in particular when the latter qualify as restrictions of competition by object, i.e. cartels, and how the European Commission is relieved from having to evaluate the likely impact of the concert on the affected market(s). In this article, we look at where concerted practices fit into Article 101 of the Treaty on the Functioning of the European Union and how the EC has expanded the concept to cast the net so wide that it can prosecute as hard-core cartels information exchanges whose content would bear little connection to final prices.

Concerted Practices

Competition law starts with the premise that every undertaking must independently determine the policy it intends to adopt on the market. This requirement of independence prohibits a company from having any direct or indirect contact that: (1) influences an actual/potential competitor’s conduct on the market or (2) involves disclosing to an actual/potential competitor the course of conduct that the company has decided to adopt or contemplates adopting on the market.

A concerted practice is a form of coordination whereby a company eliminates or, at the very least, substantially reduces uncertainty as to the type of conduct its competitors can expect from it on the market. Common forms of conduct among competing companies that would fall within the notion of concert include price-checking and price-signaling activities. The concept of a concerted practice includes some notion of reciprocity among the participants, as well as a relation of cause and effect. Reciprocity can be established when one competitor discloses its future intentions or conduct on the market to another, when the latter requests it or, at the very least, accepts it. As to cause (the conduct being examined) and effect, there is a presumption that undertakings that participate in concerted practices take account of the information exchanged with their competitors when determining their own conduct on that market. Dole v. Commission addresses this presumption, which gives the EC the power to go after what may be viewed as rather borderline infringements.

Restriction by Object

To determine whether there is a restriction of competition by object, the essential legal criterion is the finding that the conduct reveals “in itself” a sufficient degree of harm to competition. Horizontal price-fixing is an example of a conduct that is harmful “by its very nature” to the proper functioning of normal competition. Experience shows that such conduct almost always leads to a drop in production and an increase in price. Relying extensively on T-Mobile, the EU Court of Justice in Dole v. Commission reminds the reader that an information exchange among competitors constitutes an infringement by object when it is capable of removing uncertainty as to the timing, extent and details of the pricing conduct to be adopted by the undertakings concerned. The CoJ further emphasizes the fact that, since competition law is purported to protect “the structure of the market and hence competition as such” a concerted practice consisting of an information exchange may be characterized as an infringement by object even though there is no “direct link between that practice and consumer prices.”

Dole v. Commission

It is among the concerted practices that restrict competition by object that we find Dole v. Commission.


In the EC’s 2008 decision, the EC found that Chiquita Brands International Inc., Dole Food Company Inc. / Dole Fresh Fruit Europe and Internationale Fruchimport Gesellschaft Weichert & Co. KG had participated in a cartel between 2000 and 2002 in violation of Article 101 TFEU. At the time of the infringement, Weichert was trading mainly Fresh Del Monte Produce Inc. branded bananas and was 80 percent owned by Del Monte. According to the EC, the undertakings had anti-competitive, bilateral, discussions. On Wednesdays, before setting their weekly quotation prices, the undertakings would: (1) discuss factors relevant to setting their quotation prices for the coming week; (2) discuss/disclose price trends; and/or (3) share indications of quotation prices for the coming week. Subsequent to setting their prices, on Thursday afternoons, the undertakings shared their actual quotation prices.


In its appeal, among other things, Dole argued that the pre-pricing communications should not have been classified as a restriction of competition by object. The Wednesday information exchanges could not be classified as being capable of “removing uncertainty” as to the undertakings’ intended conduct when setting actual prices. Dole reasoned that this was impossible because: (1) these discussions were among employees who were not responsible for setting quotation prices and (2) the communications were only about quotation price trends (as opposed to actual prices). The quotation prices were, according to Dole, far removed from actual prices.

The Court of Justice made quick work of Dole’s argument. After going through the case law on concerted practices and their ability to restrict competition by object, the court pointed out that there is a presumption that undertakings that take part in a concerted practice and remain active on the market use the information they have exchanged with their competitors when they determine their own conduct on the market. In this case, the presumption was bolstered by the following:

  • The Dole employees that were involved in the pre-pricing communications participated in internal pricing meetings 
  • The pre-pricing communications were among competitors who discussed their own quotation prices and certain market price trends 
  • The quotation prices were relevant because:
    • It was possible to infer from the quotation prices market signals, market trends or intended pricing developments
    • Some actual prices were directly linked to the quotation prices

Therefore, according to the Court of Justice, the General Court was right to allow the EC to rely on this presumption in order to conclude that the object of Dole’s and its competitors’ pre-communications was to remove uncertainty as to each other’s further conduct. This in turn allowed the EC to conclude that such conduct created conditions of competition other than those normally found in competitive markets.


Any time competitors discuss anything that bears any relationship to the formation of market prices, however weak or remote such discussion may be from negotiated prices or consumer retail prices, the EC is allowed to assume a worst-case scenario, i.e. that such discussions amount to a “hard-core” cartel. According to the Court of Justice, to support an infringement by object, it is sufficient for the EC to show that the subject matter of such discussion involves market indications, signals or trends on the future development of market prices. Once this is established, it may comfortably presume that the companies that engaged in such discussions adapted their competitive behavior accordingly.

Without delving into the details of the case, the Dole case is striking in at least two important respects. First, even if the subject matter may be (allegedly) remote from the formation of actual market prices or even consumer prices, it may nevertheless be caught as violation by object. In substance, the Court of Justice infers that the EC has sufficient experience with such kinds of practices to conclude that they almost always hurt competition and consumers. In short, the court stretches the notion of an object violation even further.

Second, the judicial presumption of subsequent anti-competitive conduct dispenses with the need for the EC to inquire into the likely impact of the information exchange on the market. Under T-Mobile, the Court of Justice held that the presumption is stronger when undertakings have engaged in concerted practices regularly over an extended period of time. The two points, combined, allow the EC to prosecute borderline cases as cartels without having to properly develop a theory of harm as to how such practices actually impact market prices. Of course, Cartes Bancaires teaches that an object violation requires an examination of the subject matter and the proper context in which such conduct arises, which is arguably what the EC did in Bananas by focusing on the timing, the frequency and the content of those pre-pricing communications. Nevertheless, the Court of Justice's position seems to leave the door wide open for the EC to further push the boundaries of what falls within hard-core restrictions of competition.

What would happen if a case concerned, for example, alleged hub and spoke? In such a case, one could imagine the EC relying on Dole in order to find a restriction by object. It would be quite a challenge to mount a defense to prove two negatives — the information was not of a kind that could be capable of removing price uncertainty in the market and was not used by the recipient in order to make decisions on its future pricing conduct in the market.

—By Yves Botteman and Laura C. Atlee, Steptoe & Johnson LLP

Yves Botteman is a partner and Laura Atlee is an associate in Steptoe's Brussels office.

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