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Court of Justice clarified the concept of a concerted practice for unilateral announcements

Court of Justice clarified the concept of a concerted practice for unilateral announcements

02.02.2016 NL law

On 21 January 2016, the Court of Justice interpreted in its preliminary ruling in Eturas what constitutes a concerted practice in the context of a unilateral announcement in an online booking system. In its answer to a reference from the Supreme Administrative Court of Lithuania, the Court of Justice clarified under which conditions the existence of a concerted practice may be presumed and rebutted.

The Lithuanian Competition Council had fined several travel agencies for capping the discounts that they applied to online bookings. The agencies used the travel booking system E-TURAS, developed by the company Eturas, to offer tours to their customers. In August 2012, the administrator of this system sent a notice to the agents informing them that they should apply a maximum discount of 3 per cent to their bookings. In addition, a technical restriction was introduced by Eturas to cap the discounts that could be entered in the booking system at 3 per cent. According to the Competition Council, this meant that Eturas and the agents participated in a concerted practice.

The travel agents appealed, stating that they could not be held liable for the unilateral behaviour of Eturas. Some of the agents argued that they had not read the message, not restricted their discounts or not even sold the relevant product. The Supreme Administrative Court decided to make a preliminary reference to the Court of Justice, essentially asking whether the unilateral dispatch of the system notice is sufficient evidence to presume that the travel agents knew or should have known about the restriction of discounts, on the basis of which they were liable for a concerted practice.

The Court of Justice firstly considered that although the assessment of evidence is strictly speaking a matter for national law, it would be contrary to the presumption of innocence to infer the awareness of the travel agents on the sole basis that the message was dispatched to them. In the absence of awareness, participation in the concerted practice cannot be inferred from just the technical restriction that was introduced by E-TURAS. Nevertheless, if there are also other objective and consistent indicia present, national courts are not precluded from applying a rebuttable presumption of awareness. Furthermore, if the travel agents were aware or ought to be aware of the message, their participation in the concerted practice may be presumed.

The travel agents can rebut this presumption by reporting the restriction to the administrative authorities, or by publicly distancing themselves from the message. In this case, where it was impossible to identify all recipients of the message, the agent was not required to send a declaration to all the addressees. Instead, it would suffice to send 'a clear and express objection' to the administrator of E-TURAS. [See also our newsletter article on Toshiba below, from which it follows that the concept of public distancing should be dealt with on a case-by-case basis]. Interestingly, the Court of Justice added that these options are not exhaustive. A rebuttal by other means is also possible, for example, by adducing evidence that a discount exceeding the cap has been systematically applied.

This case appears to demonstrate a tendency towards a more nuanced approach in the assessment of concerted practices by unilateral announcements. A few months ago, the Court ruled in Total that publicly distancing itself is not the only means to rebut the presumption of a concerted practice or agreement [see our October 2015 newsletter]. Following the current judgment, the Commission issued a statement in which it indicated that it will review the implications of the ruling for the standard of proof in cartel cases where communication took place via online database systems.

This article was published in the Competition Law Newsletter of February 2016. Other articles in this newsletter:

  1. Court of Justice confirmed independence of EU and national leniency programmes
  2. Court of Justice reduced fine imposed on Galp Energía España and acknowledged excessive duration of General Court proceedings
  3. Court of Justice dismissed Toshiba's appeal in the power transformers cartel case
  4. Belgium's "excess profit" tax scheme qualified as illegal state aid
  5. German Competition Authority fined ASICS for restricting Internet sales of its distributors

Team

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