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General Court rules on the concept of a single and continuous infringement in the smart card chips cartel case

General Court rules on the concept of a single and continuous infringement in the smart card chips cartel case

General Court rules on the concept of a single and continuous infringement in the smart card chips cartel case

02.01.2017 EU law

Competition Law Newsletter of January 2017

On 15 December 2016, the General Court ("GC") dismissed the appeals brought by Infineon and Philips in the smart card chips cartel case. The European Commission had imposed fines totalling €138 million on Infineon, Philips and two other manufacturers of smart card chips for taking part in bilateral contacts during which commercially sensitive information was discussed. With regard to the appeal lodged by Infineon, the GC held that although Infineon engaged in a few bilateral contacts with only two of the cartel members, it had participated in the single and continuous infringement.

Between September 2003 and September 2005, the smart card chips producers Infineon, Philips, Renesas and Samsung exchanged information on prices, customers, production capacity and future market conduct during bilateral contacts. The GC upheld the Commission's finding that the information exchanged was commercially sensitive and capable of influencing the commercial strategy of competitors. Furthermore, the GC found that the parties shared a single anticompetitive objective, which was to slow down the price decrease on the smart card chips market. The links of complementarity between the bilateral contacts, particularly the common discussions on pricing and capacity, the identity of the participants and the timing of the contacts, were found to provide evidence that these contacts formed part of the same overall plan.

Consequently, the GC confirmed that all smart card chips producers participated in a single and continuous infringement. However, in contrast to the case concerning Philips, there was no evidence that Infineon was aware of the bilateral contacts between some of the other cartel participants, or could reasonably have foreseen them. The GC ruled that the finding of a single and continuous infringement must be distinguished from the question as to whether an undertaking is liable for that infringement in its entirety. Despite the fact that there was a single and continuous infringement, Infineon was not held liable for the infringement as a whole. Therefore, the GC rejected Infineon's claims that the Commission misapplied the concept of a single and continuous infringement.

The judgment confirms the high risks involved in bilateral contacts with competitors on information capable of reducing commercial uncertainty. When such contacts are linked to similar contacts between other competitors, companies can be found to have participated in a single and continuous infringement, even when there is no evidence that they were aware of those other contacts.

This article was published in the Competition Law Newsletter of January 2017. Other articles in this newsletter:

1. Envelope maker's cartel fine annulled in first successful European settlement appeal
2. District Court of Limburg rules that damages claims in the Dutch prestressing steel case are time-barred
3. ACM established guiding principles in relation to sustainability arrangements
4. Belgian Competition Authority confirms that the acquisition by a dominant player of a small competitor is not automatically an abuse of a dominant position

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