International Law

Information Exchanges Under EU Competition Law: Heading For Regulatory Overload

by Frank L. Fine

Until recently, there have been only isolated instances in which information exchanges were caught by the European Commission pursuant to Article 101(1) of the TFEU in the absence of a wider cartel. There is now a wider array of information which, when exchanged, may fall within the ambit. Dr. Fine analyzes this more aggressive approach by the EC to determine whether this increased regulation is better for competition or makes it less efficient.

The author writes: Historically, the European Commission has penalized information exchanges by competitors, pursuant to Article 101(1) of the Treaty on the Functioning of the European Union ["TFEU"], when such exchanges served to reinforce price-fixing or market sharing arrangements. Until recently, there have been only isolated instances in which information exchanges have been caught by Article 101(1) in the absence of a wider cartel.

However, in the last several years, the European Commission and Courts have taken a more aggressive stance toward stand-alone information exchanges. There is now a wider array of information which, when exchanged, may fall within the ambit of Article 101(1). Moreover, as the Court of Justice indicated in its 2009 judgment in T-Mobile Netherlands, an information exchange which is limited to a single meeting of competitors may result in liability for those attending the meeting.

Additionally, as the result of the 2008 Treuhand judgment of the Court of First Instance, independent consultants may be found liable for having facilitated information exchanges. This judgment opens the door for the Commission to fine not only the companies whose sensitive information has been exchanged, but also industry consultants, analysts and journalists for their role in facilitating the exchange.

The importance of information exchanges as a Commission cartel enforcement priority is also evidenced by the Commission's devotion of an entire section of its draft revised Horizontal Guidelines to such exchanges (hereinafter the "Draft Guidelines"), which is anomalous for a document addressing mostly forms of permissible cooperation among competitors.

Given the above circumstances, market participants and independent third parties face heightened risks in Europe for illicit information exchanges. Companies must be vigilant of their communications with competitors, the information that they provide to third parties and how precisely (and widely) said information is to be disseminated to the public. Additionally, companies should actively apprise themselves of what their trade associations, and industry intelligence and news sources are doing with company-specific information supplied to them.

This article will explain the new risks faced by companies for illicit information exchanges under EU competition law and how these risks should be managed. [footnotes omitted]

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Frank L. Fine has been practicing EC competition law in Brussels since 1986. He is currently the Director of EC Competition Law Advocates in Brussels, which is engaged in the representation of companies and governments in competition law proceedings and litigation. He is a member of the California and D.C. Bars, as well as member of the Law Society of England and Wales. He obtained his J.D. in 1982 from Loyola Law School of Los Angeles, where he served as Editor‑in‑Chief of the Loyola International & Comparative Law Journal. Mr. Fine has LL.M. and Ph.D. degrees from the University of Cambridge in EC competition law. Frank is the general editor of European Competition Laws: A Guide to the EC and Its Member States (Matthew Bender & Co., LexisNexis Group). He is the author of The EC Competition Law on Technology Licensing (2005, Sweet & Maxwell) and of Mergers and Joint Ventures in Europe: The Law and Policy of the EEC (2nd ed, 1994; Kluwer International). He is Vice-Chair of the ABA Antitrust Section's Cartel and Criminal Practice Committee and is a former Vice-Chair of the Intellectual Property and International Committees. Mr. Fine is a Fellow of the American Bar Foundation. He is also EU competition law advisor to SAI Global and is a member of the Advisory Boards of the Northwestern Journal of International Law & Business, The Antitrust Counselor and the Corporate Counsel's International Adviser.