Short Reads

Court of Justice rules on the application of competition law to agricultural producer organisations

Court of Justice rules on the application of competition law to agric

Court of Justice rules on the application of competition law to agricultural producer organisations

01.12.2017 EU law

On 14 November 2017, the European Court of Justice rendered its judgment on a request for a preliminary ruling from the French Supreme Court. The Court clarified the conditions under which competition rules must be applied to agricultural producer organisations (POs). POs are established to pursue the objectives of the common agricultural policy and may – if certain criteria are met – be exempted from the competition rules.

In March 2012, the French competition authority found that several undertakings, POs and other market organisations had implemented a cartel in the endive market. The cartel consisted of the fixing of minimum prices, coordination of the quantity of endives placed on the market and the exchange of strategic information. The undertakings and associations subsequently appealed the decision, arguing that the practices in question were necessary to pursue the objectives of the common agricultural policy and should therefore be excluded from the scope of the competition rules. The French Supreme Court asked preliminary questions to the Court of Justice on the issue.

According to the Court, the common agricultural policy takes precedence over the objectives in the field of competition. However, the common organisation of markets in agricultural products is not a competition-free zone. The Court therefore examined whether the practices of POs and associations of POs (APOs), such as those at issue, are excluded from the scope of the competition rules.

First of all, it is required that the practices of the POs and APOs are necessary to achieve the objectives of the common agricultural policy. According to the Court, this means that the practice is implemented by an entity that is recognized by the Member State as a PO or an APO and that is entitled to pursue the objectives of the common agricultural policy. Moreover, only coordination between producers that are members of the same recognized PO or APO can be justified.

Secondly, the practices must also be proportionate to the pursuit of the objectives assigned to the PO or APO. The Court ruled that the exchange of strategic information between producers is liable to be proportionate, as well as the concentration of supply to strengthen the position of producers vis-à-vis the greater concentration of demand. However, the Court concluded that the collective fixing of minimum sales may not be considered to be proportionate since it has the effect of reducing the already low level of competition in the markets for agricultural products.  

With its judgment, the Court clarified the conditions under which agreements on prices or quantity, or the exchange of information by members of such an organisation may escape the prohibition of Article 101 TFEU.

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

  1. Court of Justice dismisses appeal of British Airways in Air Cargo case
  2. National courts may declare that a practice infringes competition law after it was the subject of a commitment decision
  3. General Court partially annuls the Commission's ICAP decision (in the YIRD case)

Team

Related news

01.08.2018 EU law
Belgian Court of Cassation annuls decision prohibiting pharmacists from using Google Adwords

Short Reads - On 7 June 2018, the Belgian Court of Cassation, ruled that a decision of the Pharmacists Association Appeals Council (Appeals Council) prohibiting pharmacists from using Google Adwords to offer over-the-counter (OTC) products violated Belgian competition law because the Appeals Council did not sufficiently justify why such a prohibition was necessary for health reasons. The Appeals Council must now issue a new decision.

Read more

01.08.2018 EU law
General Court underlines importance of Commission's duty to state reasons

Short Reads - On 13 July 2018, the General Court annulled the EUR 1.13 million fine imposed on Stührk Delikatessen Import GmbH & Co. KG (Stührk) by the European Commission in 2013 for Stührk's participation in the shrimp cartel. The Court ruled that the Commission had failed to adequately state reasons in the contested decision as to why the cartel participants were granted divergent fine reductions.

Read more

01.08.2018 EU law
Court of Appeal in the Netherlands decides to appoint independent economic experts in TenneT v ABB

Short Reads - On 20 July 2018, the Court of Appeal of Gelderland published another interim judgment in the ongoing proceedings between TenneT, the grid operator in the Netherlands, and ABB in relation to the gas insulated switchgear (GIS) infringement. After the Dutch Supreme Court had confirmed in a judgment of 8 July 2016 [see our August 2016 Newsletter] that the passing-on defence is available under Dutch law, the Court of Appeal of Gelderland decided to appoint independent economic experts to provide input on the calculation of overcharge and the existence of pass-on.

Read more

Our website uses cookies: third party analytics cookies to best adapt our website to your needs & cookies to enable social media functionalities. For more information on the use of cookies, please check our Privacy and Cookie Policy. Please note that you can change your cookie opt-ins at any time via your browser settings.

Privacy – en cookieverklaring