AC-Treuhand v Commission: Article 101 TFEU for Everyone!

November 3, 2015

On October 22, 2015, the European Court of Justice (CoJ) issued its judgment in AC-Treuhand v European Commission (C-194/14 P), which was an appeal of the General Court’s (GC) February 6, 2014 (T-27/10) judgment.


The judgment relates to the European Commission’s (EC) 2009 decision in Heat Stabilizers, which imposed fines on a number of companies for participating in a cartel that focused on two kinds of stabilizers added to PVC products to improve their thermal resistance.  AC-Treuhand AG (AC-Treuhand) was among the companies fined.  However, it is not in the heat stabilizer business; AC-Treuhand is a consulting company that offers a full range of tailor-made services to professional associations.  The EC imposed a fine on AC-Treuhand because it had played a central role in organizing and facilitating the cartel.  Specifically, the EC found that AC-Treuhand had made its premises available to the cartel, collected and supplied sales data on the relevant markets to the cartel participants, and encouraged alignment among the cartel with a view to reaching anti-competitive agreements.

AC-Treuhand appealed the EC’s decision before the GC (see our previous briefing for more details) arguing, among others, that the EC infringed the principle that offences and penalties must be defined by law:  (i) that Article 101 Treaty on the Functioning of the European Union (TFEU) applies to a consultancy’s conduct, when it is supporting a cartel, and (ii) such an interpretation of Article 101 TFEU was reasonably foreseeable at the time that AC Treuhand was offering this service.

The GC rejected this line of argument, as well as all of the others, and now so has the CoJ.

The Great Expanse of Article 101 TFEU

AC-Treuhand continued to hold firm that the wording of Article 101 TFEU precluded it from being caught by the Treaty provision, and even if its conduct could be caught by Article 101 TFEU, there is no way (it was not “foreseeable”) that AC-Treuhand could have known that at the time.  The CoJ takes a quick survey of Article 101 TFEU, the case-law defining an “agreement” and the case-law defining a “concerted practice.”  It comes to the conclusion that any agreement or concerted practice that distorts competition on the internal market is caught by Article 101 TFEU even if only one party’s conduct is affected by the terms of the agreement/concerted practice.  It does not matter which market(s) the parties operate on.

Unfortunately for AC-Treuhand, by organizing and attending meetings, acting as moderator among the producers, and encouraging compromises – and getting paid to do all of this – it was right in the thick of it all.  AC-Treuhand supported the heat stabilizers’ efforts to fix prices, share markets, allocate customers, and exchange commercially sensitive information.  Therefore, AC-Treuhand infringed Article 101 TFEU. 

As for whether it was foreseeable that AC-Treuhand’s conduct could infringe Article 101 TFEU, the CoJ starts by acknowledging that a number of factors come into play when determining foreseeability.  However, in this case AC-Treuhand should have expected it, on its own or after getting legal advice. The terms “agreement” and “concerted practice” are so broad that it would not be a great mental leap to extend them to the type of things that AC-Treuhand was up to.  In support of its position that AC-Treuhand should have seen this coming, the CoJ cites an obscure 35-year old EC decision in which the EC concluded that F-Unione Fiduciaria SpA, a consultancy firm, infringed Article 101 for supporting the participants in the Italian cast glass cartel.  It states that EC has not revised its position since the 1980 decision.

Dashed Hopes:  Down with the AG’s Opinion

While the CoJ’s ignorance of AG Wahl’s thoughtful opinion in this case comes as no surprise, some may still feel downhearted.  AG Wahl had opined that for the EC to find that an undertaking has infringed Article 101 TFEU: (i) the EC should define the relevant market affected by the anti-competitive behaviour and (ii) the undertakings concerned by the proceeding must be in a position to exert competitive constraints on one another, although they do not necessarily have to be active on the relevant market (but should be somehow connected to it).

AG Wahl suggested that if an undertaking:  (i) is not active on the affected or related markets, including vertically related markets, and (ii) is not restricted in the way it offers its products and services by a restrictive agreement to which it is merely acting as 'facilitator,' then it cannot be liable for participating in a violation of Article 101 TFEU.  AG Wahl’s approach conflicted with the GC’s judgment in the previous AC-Treuhand case (T-99/04), which had not been appealed.  In that case, the GC held that an undertaking may infringe Article 101 TFEU when the purpose of the undertaking’s conduct, which is coordinated with that of other undertakings, is to restrict competition on a specific relevant market within the common market.  The undertaking does not have to be active on that relevant market itself.  The CoJ now clearly endorses this position.

It’s Settled:  Article 101 TFEU for Everyone

It is settled now.  If an undertaking (or a trade association) is associated with any type of anti-competitive behaviour it is assuming a significant amount of risk.  It does not matter what the undertaking’s relationship is vis-à-vis the product or service that is the focus of the illicit behaviour; if it is “facilitating” the illicit behaviour, the EC can charge it with an infringement of Article 101 TFEU.  Direct participants in anticompetitive agreements and concerted practices have tried for many years to successfully argue the “it was them, not me” defense.  AC-Treuhand has joined their ranks, as will many other consultancies who believe that they can escape Article 101 TFEU.