On 1 August 2022, the Court of Justice of the European Union (‘the CJEU’) ruled in Case C-588/20 Daimler (Ententes – Camions à ordures ménagères) (‘Daimler’) that specialised trucks, including household refuse collection trucks, are covered by the cartel found in the decision of the European Commission (‘the Commission’) of 19 July 2016 in Case AT.39824 LKW (‘the Trucks Decision’).
Contrary to first impressions, the CJEU is not dealing only with a very specific question of an individual case. Rather, its judgment concerns the fundamental and in practice highly relevant question of how to identify the products directly affected by a cartel infringement according to the decision of a competition authority. In this respect, such a decision is binding for the civil courts in a follow-on action for damages.
A consequence of this will be that the right of injured parties under Directive 2014/104/EU (‘the EU Antitrust Damages Directive’) to access the Statement of Objections (‘SO’) sent by the competition authority to the cartel members prior to the adoption of the decision gains in importance, especially if this decision has finally been adopted after a settlement between the authority and the infringers.
The Daimler case
The Daimler judgment is based on a request of the regional court of Hanover (‘the Landgericht’), Germany, for a preliminary ruling that relates to the interpretation of the Trucks Decision. The Landgericht is dealing with a follow-on action brought by the Northeim District, Germany, against the car manufacturer Daimler AG for damages caused by the latter’s infringement of the cartel prohibition under Article 101 TFEU (and Article 53 EEA Agreement), which the Commission established in the Trucks Decision.
In view of Article 16(1) of Regulation (EC) No 1/2003, which provides that national courts may not give decisions which are contrary to a Commission decision on Article 101 or 102 TFEU, the Landgericht had doubts as to which products are covered by the cartel at issue. The Landgericht asked whether the Trucks Decision must be interpreted as meaning that specialised trucks, in particular household refuse collection trucks, fall within the scope of the products covered by the cartel as found in that decision.
The CJEU has affirmed this in its judgment of 1 August 2022 for the following reasons:
Sole relevance of the contents of the competition authority’s decision
In line with the opinion of the Advocate General (the ‘AG’), the CJEU notes that the products concerned by an infringement of Article 101 TFEU found in a Commission decision are determined by reference to the agreements and activities covered by the cartel. The members of the cartel voluntarily concentrated their anti-competitive actions on the products covered by that cartel.
In contrast, definitions of the product in question in other acts of secondary EU legislation are irrelevant. For the application of Article 101(1) TFEU, as the AG clarifies with reference to the settled case law of the CJEU, a separate definition of the relevant market is not required, at least not if the agreement at issue has an anticompetitive object. This applies in particular to the most serious agreements expressly prohibited by Article 101(1)(a)-(e) TFEU (price-fixing, market-sharing, etc.).
Instead, to determine whether a certain product falls within the scope of the products covered by the cartel found in the Commission decision at issue, reference must be made, as a matter of priority, to the operative part and to the statement of reasons for that decision.
In the present case, therefore, the CJEU refers to Article 1 of the Trucks Decision and several recitals in its subsection headed ‘The Product’. The CJEU concludes that the Trucks Decision relates to the sale of all medium trucks and heavy trucks, both rigid trucks and tractor units, including all special and standard equipment and models as well as all factory-fitted options offered by the respective manufacturers that participated in the cartel. Apart from trucks for military use, nothing in that decision suggests that specialised trucks are not among the products covered by the cartel. In those circumstances, it must be held that specialised trucks, including household refuse collection trucks, are among the products directly concerned by the infringement of Article 101 TFEU found in the Trucks Decision.
Irrelevance of the Commission’s request for information in the context of a settlement procedure
In particular, the CJEU rejects the argument that the requests for information sent by the Commission to Daimler AG and other companies in the context of a settlement procedure were ‘necessarily relevant’ for determining whether specialised trucks were among the products covered by the cartel.
In fact, the Commission stated in its requests that specialised trucks did not fall within the concept of ‘trucks’ for which the turnover achieved by the cartelised undertakings with products related to the infringement had to be submitted to determine the amount of the fine. However, the CJEU recalls its case law that a request for information is an investigative measure the sole purpose of which is to enable the Commission to obtain the information and documentation necessary to check the existence and scope of a specific factual and legal situation, but not to define or specify the products covered by the anti-competitive conduct. In addition, the Commission enjoys broad discretion as regards the method for calculating fines in relation to infringements of the EU competition rules.
Moreover, the fact that the Trucks Decision was adopted under the Commission Notice on settlement procedures has no bearing on the determination of the scope of the anti-competitive conduct. In the context of a such a procedure, the Commission may reward the cooperation of the undertakings concerned. But it does not negotiate either the question of the existence of the infringement or the appropriate sanction.
Necessity of the interpretation of the competition authority’s decision
Against a tendency of national courts in follow-on litigation, the CJEU has clarified that it is not for the courts to define the relevant market, nor do they have to verify whether the competition authority defined the relevant market. A court is only required to assess the scope of the administrative decision, that is, in particular, to establish which products are concerned by the infringement found therein. For this, the court has to base its reasoning solely on the wording of the decision itself.
These principles directly derive from Article 101(1) TFEU. They therefore apply not only to decisions of the Commission but also to decisions of the national competition authorities applying that provision.
The practical implications are evident:
Firstly, having implemented Article 9 of the EU Antitrust Damages Directive, all Member States ensure that an infringement of competition law found by a final decision of a national competition authority (or by a review court) is deemed to be irrefutably established for the purposes of an action for damages brought before their national courts. In principle, the same applies as for Commission decisions under Article 16(1) of Regulation (EC) No 1/2003, to which the Landgericht referred. In either case, the administrative decision is binding on the courts in follow-on proceedings within its scope in particular with regard to the products directly affected by the cartel.
Secondly, there is no longer any room for the popular tactic of defending cartelists to downplay their illegal conduct, and hence to minimise their liability risks, by referring to the narrowest market definition to be found in other proceedings (e.g. merger control), instead of disclosing the true subject of their agreement.
Statement of Objections as an important aid to interpretation
The crucial question is: What exactly is the scope of the competition authority’s decision at issue?
In case of the Trucks Decision, it was possible to define the products concerned directly based on the precise wording and clear definitions contained therein. But not every decision of a competition authority is similarly meaningful, especially if it was adopted in the context of a settlement procedure.
In such a case, the SO can shed light and explain what exactly is meant by a certain term in the decision. A current and prominent example of this is the sugar cartel litigation in Germany. One of its main issues is what is covered by the terms ‘processed sugar’ and ‘household sugar’, which the national competition authority (Bundeskartellamt) uses to refer to the cartelised products in its fining decision without further definition. As the authority itself has told the courts in the context of several follow-on actions, its SO, which was accepted by the cartelists without objections in the context of a settlement procedure, and thus forms the basis of the decision and is about ten times longer than the latter, contains much more detailed information.
The fact that the SO is significant for interpreting the wording of the final decision and the context in which it occurs, which the CJEU considers to be crucial for the decision’s scope, is inherent in its very nature. The SO sets out the preliminary position of the competition authority on an alleged competition law infringement. Its purpose is to inform the undertakings concerned of the objections raised against them to enable them to exercise their rights of defence. The SO must therefore sufficiently detail all relevant facts (e.g., see Commission Notice on Antitrust Best Practices, paras. 81 et seqq.).
In particular, the SO is different from a request for information. As the AG points out in Daimler, ‘the purpose of such requests is not to define or specify the products covered by the anticompetitive conduct, which is reserved for the statement of objections and the final decision’ (emphasis added). Thus, unlike a request for information, the SO may well be used to understand the decision itself, especially if the latter does not contain all the information or details about the products that the competition authority found to be directly affected by the anti-competitive conduct.
Right of injured parties to access the Statement of Objections
Under the EU Antitrust Damages Directive, once the competition authority has closed its proceedings by adopting a decision or otherwise, national courts may order the defendant in a follow-on case or a third party, upon request of the claimant, to disclose the information that the competition authority has drawn up and sent to the undertakings concerned in the course of its proceedings (Articles 5 and 6(5)(b)). In the light of the foregoing considerations, it is hardly surprising that the prime example of this is, as the EU Antitrust Damage Directive explicitly clarifies in its Recital 25, the SO.
In fact, the national courts have so far hardly enforced the right of injured parties to access the SO. However, following the CJEU’s Daimler judgment, the courts’ attention must turn to what exactly the competition authority has decided notably with regard to the products covered by the anti-competitive conduct. This means that meaningful administrative documents, such as the SO, in cartel damages proceedings must be given more focus, not least to enable the courts to comply with the applicable laws on the binding effect of the competition authority’s decision.
By Carsten Krüger