Introduction

Contrary to the most criminal or quasi-criminal regimes,1 Art 101 TFEU does neither explicitly recognise the status of an instigator, accomplice, or a facilitator—as opposed to a perpetrator—nor does it postulate special requirements for their participation in anticompetitive agreements.2 The feature that these actors have in common is that they are not active on the market that is ought to be affected by the anticompetitive agreement, and hence their contributions are rather of a passive nature, compared to the active contributions of direct perpetrators. While it has been argued that the lack of an explicit provision on passive participants prevents the European Commission (‘Commission’) from instituting proceedings against them,3 the Court of Justice has recently confirmed that ‘mere’ facilitating of anticompetitive conduct by undertakings active on non-cartelised markets does not fall outside the ambit of Art 101 TFEU. Moreover, the Court stipulated that even a consultancy firm may be held liable for its participation in an anticompetitive agreement where it contributes to its operation, even though it is not active on the cartelised market.4

Naturally, this begs the question of the scope within which ancillary activities of undertakings not active on the cartelised market, such as suppliers, trading partners, trade associations, online platforms, brokers, dealers etc. may be seen as passive participation in agreements. While this question has so far not played an important role at the EU level,5 it has preoccupied several national competition authorities, mostly in the form of hub-and-spoke conspiracies. Analysing only different—for the most part complex—hub-and-spoke conspiracies and the approach of national competition authorities in persecuting these forms of collusion may however dim the more holistic view on passive participation in agreements in general. In particular one may ‘miss the wood for the trees’ with respect to what is sufficient but also more importantly what is not required in order to passively participate in an agreement. With this in mind this Article focuses on the requirements for (passive) participation in an agreement in the light of the recent case law at the EU-level. What however constitutes an anticompetitive agreement goes beyond the scope of this article.

Key Points

  • The Court of Justice has recently confirmed that ‘mere’ facilitating of anticompetitive conduct by undertakings active on non-cartelised markets (‘passive participation’) does not fall outside the ambit of Art 101 TFEU.

  • This broad interpretation raises the question of the scope within which passive participation presents a liability risk—a particularly sensitive issue as passive participants are treated as direct perpetrators.

  • This article depicts the relevant scope of passive participation between the special case of facilitation by a consultancy firm and the predominantly persecuted forms of the so-called ‘hub-and-spoke’ conspiracies.

Requirements for passive participation

Passive (just as active) participation in an agreement requires (i) the existence of an ‘agreement’ and (ii) a form of an ‘intended contribution’ on part of the participant in knowledge of the common objectives pursued by the participants.6 Simple as it may seem at first glance both notions encapsulate a myriad of layers developed by the case law over the last decades. Unsurprisingly for autonomous concepts of EU law, the EU Courts have so far mainly shaped both notions by clarifying which requirements are redundant when it comes to establishing the existence of an ‘agreement’ and a finding of an ‘intended contribution’.

Existence of anagreement’

The EU Courts define an ‘agreement’ in settled case law as the expression of a concurrence of wills (‘joint intention’) of at least two parties, while the form in which that concurrence is expressed not being by itself decisive.7 At the same time, the EU Courts have held over the years, that for an agreement to come about, there is in particular no need for the agreement to have a particular form, binding effect or even to be implemented. In addition, while the parties to an agreement need to be different undertakings (ie not form a single economic unit),8 there is no need for all of them to be active on the same market. With the exception of not being part of the same economic entity9 the following sections demarcate the notion of an ‘agreement’ along the line of the negative requirements.

No need for a particular form

The notion of an agreement centres on the concurrence of wills of at least two parties. The form in which this concurrence of wills is being manifested is neither decisive nor important as long as it constitutes a faithful expression of the parties’ intention.10 The agreement need to be in no particular form, whether written or verbal, electronic or over the phone. Nor need it be governed by any particular rules. Communication of an agreement to the parties and its tacit acceptance suffice to prove the existence of an agreement. Even tacit acceptance may, where the person concerned does not distance itself, be treated as acceptance of and participation in a prohibited agreement.11 Tacit acquiescence may even lead to a measure apparently adopted unilaterally being viewed as an agreement.12

Nevertheless, actions that are purely unilateral cannot be generally qualified as an agreement.13 Such unilateral actions might however reach the status of an agreement, if they are taken in connection with a complex framework of anticompetitive agreements or despite being initiated unilaterally lead to acceptance by another party. In practice, the demarcation question between unilateral actions and agreements arises mostly within distribution systems. For instance, the refusal to supply or quota fixing on the part of the producer may qualify as unilateral actions even if such actions have their legal basis in the dealer agreement.14

As regards the legal form, even settlement agreements concluded before courts in order to put an end to litigation may be qualified as agreements.15 The same holds for statues of associations,16 framework agreements17, recommendations that have been followed,18 or gentlemen's agreements.19 It is also not necessary that the partners or principal managers of the undertaking concerned are involved in expressing the concurrence of wills on behalf of their undertaking. An action of a person who is authorised to act on behalf of the undertaking suffices.20 The irrelevance of a particular form of the agreement is also corroborated by the standard of proof in this respect. The existence of an agreement can be inferred from a number of coincidences and indicia which, taken together, in the absence of another plausible explanation, constitute evidence of an infringement.21

The concrete contractual construct of an agreement is also negligible. For instance, in case AC-Treuhand, the Court established that the consultancy firm AC-Treuhand was a party to an anticompetitive agreement between producers of heat stabilisers, even though the consultancy contracts were formally concluded separately from the commitments entered into by the producers of heat stabilisers among themselves.22

No need for a binding effect or implementation

The notion of an agreement is completely detached from any form of a legally binding contract. An agreement does not need to create mandatory obligations or enforcement mechanisms.23 There is also no need to examine whether the agreement imposes legal, factual, or moral obligations on the parties to follow it.24

For an agreement to come into existence there is also no need for the parties to conduct their business in line with the agreement or implement it in any way.25 This means that the existence of an agreement cannot be called into question in the event the parties decide not the implement it or subsequently deviate from it. This holds true also in case the parties have never intended to comply with the agreement or even in case the parties engage in fierce competition.26

No need for all parties to be active on the same relevant market

General principle

Traditionally, the EU Courts perceive agreements as the expression of a joint intention of the parties to conduct themselves on the market in a specific way.27 However, contrary to a first intuition, this conduct of the parties does not need to be related to one and the same relevant market. The EU Courts have clarified at an early point that the expression of a joint intention of the parties to conduct themselves in a particular manner while being active at different stages of the production and distribution chain, might just as well constitute an agreement.28 The same holds for the expression of a joint intention by parties active on neighbouring and/or emerging markets.29

A further leap—recently confirmed by the Court of Justice—has been taken towards the conduct of parties on markets that are neither vertically related nor could be seen as ‘neighbouring’ markets in a broader sense. This leap concerned in particular the participation of a consultancy firm in an agreement related to organic peroxides30 and heat stabilisers of a certain type,31 a broker in an agreement related to Yen interest rate derivatives32 and the long forgotten participation of a consultancy firm in an agreement related to cast glass.33

Although one may argue that this leap extends the scope of the agreement in an unpredictable fashion, the EU Courts view it rather as the correct application of a well-established general principle. According to this principle, Art 101 TFEU applies to all agreements (and concerted practices) that restrict competition on the common market, irrespective of the specific market on which the parties to the agreement operate, and that only the commercial conduct of one of the parties need be affected by the terms of the agreement in question.34 Any other interpretation would be liable to negate the full effectiveness of Art 101 TFEU.35 Against this background, it becomes clear that as far as the establishment of an agreement is concerned any defensive argumentation based on market definition and/or the activities of the parties to the agreement on different markets are irrelevant.

Attorney General Wahl's proposal of making the status of a party to an (anticompetitive) agreement dependent on whether the undertakings in question are able to constitute competitive constrains for each other, fell on deaf ears.36 In his view, for an undertaking to be found to participate in an agreement, the Commission would have to show that it poses a competitive constraint on other parties to the agreement and that this constraint has been eliminated or reduced through collusion. Applied in practice, undertakings active on different markets would in principle not be considered parties to an agreement as they do not present competitive constraints on each other.37

Out of several reasons for the Court of Justice not to follow this line of reasoning, the most prominent reason appears to be the administrability of such a requirement. In order to establish a competitive constraint and its elimination or reduction, the Commission would need to define the relevant markets and carefully examine the competitive interplay between the various parties to the agreement. While such an exercise may sound familiar thinking of merger control,38 it should be borne in mind that in cartel cases the competitive situation tends to be more complex, distorted by the infringement in question and the parties less willing to provide the Commission with sufficient evidence. Appreciating the complexity of most cartel cases, adding an analysis of competitive constraints would most likely disproportionately increase the burden of proof on part of the Commission. This is so particularly in cases where the Commission is not required to analyse the effects of the agreement on competition but may rely on the concept of a self-evident restriction by object.39

Reach of the general principle

The wide formulation of the general principle opens the door for inclusion of any passive participant as it renders the fact that the passive participant is active on a different (even unrelated) market meaningless. In order to better imagine the reach of this principle one must analyse its concrete consequences.

First of all, the general principle applies equally to different relevant geographic markets as it applies to different relevant product markets.40 Provided that an agreement restricts the competition on the common market and affects the commercial behaviour of one party, it is irrelevant whether the other parties to the agreement are active on different product, regional, national, or (or even distant) local markets. Thus, any form of defence along the lines of the parties being active on different geographical markets is doomed to failure. Even if the Commission would completely ignore arguments of the parties to this effect, it would not constitute grounds for an appeal. According to established case law, the Commission is only obliged to define a market for the purposes of a decision adopted under Art 101 TFEU where, without such definition, it is impossible to determine whether the agreement in question is capable of affecting trade between Member States and has the object or effect of preventing, restricting, or distorting competition within the common market.41 The Commission is however not required to demarcate the relevant market in order to establish whether an undertaking may be qualified as a party to an agreement. Moreover, if the Commission is able to show that an agreement reveals by its very nature a sufficient degree of harm to the proper functioning of normal competition,42 or has the effect of preventing, restricting, or distorting competition43 and may be such as to affect trade between Member States,44 the existence of an agreement cannot be called into question by pointing to the fact that the Commission has not defined relevant markets in order to establish that the parties were not active on the same market.

Thought through to the end, being active on different markets is not a barrier to the existence of an agreement even in cases where the parties are legally or de facto prevented from competing with each other. In case E.ON Ruhrgas, the Commission fined E.ON and GDF Suez for concluding a market sharing agreement in respect of the French and German markets for natural gas. As regards the French market, the Commission found that the infringement began on 10 August 2000, the date on which the First Gas Directive providing for the liberalisation of the gas market should have been transposed. Before that date, as a result of GDF Suez's legal monopoly on the importation and supply of gas the conduct at issue could not have restricted competition.45

Similarly, regarding the German market, the General Court considered that the simultaneous use of demarcation agreements and exclusive concession agreements falling under an exemption had the effect of establishing a de facto system of areas of exclusive supply, although there was no legal prohibition against other companies supplying gas. Consequently, until 24 April 1998, the date from which those agreements were no longer exempt, the German market for gas was characterised by the lawful existence of de facto territorial monopolies. That situation was likely to result in the absence of any competition, not only actual, but also potential, on that market and the fact that there was no legal monopoly in Germany was irrelevant.46 Even though both the Commission and the General Court recognised that for a particular period in time, E.ON and GDF Suez were not able to compete the existence of an agreement was neither disputed nor considered to be unlikely. In fact, while such an agreement may at the end of the day not be found to be anticompetitive, it will still be an agreement.

An even more extreme example of parties being active on different markets would be outright illegal activities. In case Universal Music Group/EMI Music, the Commission concluded that it is not appropriate from the demand or from the supply side perspective, to consider legal and illegal music as part of the same relevant product market for the wholesale of recorded music. This conclusion was, however, without prejudice to the analysis of piracy as an out-of-market constraint on record companies’ pricing and output decisions in the context of the competitive assessment of the proposed concentration.47 Thus, under certain circumstances in a cartel scenario, an agreement between players offering legal and illegal music may be found not to restrict competition. Still, a consequent application of the general principle, the expression of a joint intention by a company active on a market for the wholesale of recorded music and a company involved in piracy as an agreement, provided the arrangement affects at least the commercial conduct of one of the parties on its market.

Reach of the general principle beyond Art 101 TFEU

As only the conduct of one of the parties to the agreement needs to be affected by the terms of the agreement, it is insignificant how many parties are actually active on a different market or merely providing organisational support. In theory, an agreement falls into the scope of Art 101 TFEU even in the event there is one consultancy firm supporting the anticompetitive conduct of one party to the agreement whose commercial conduct is affected by the agreement in an anticompetitive manner. In Attorney General Wahl's view, exactly this consequence of the general principle would allow Art 102 TFEU to be applied by means of analogy to cases where a facilitator provides strategic advice or support in general to a dominant undertaking abusing its position.48

However, bearing in mind the general principle set out above, there is no need for an analogous application of Art 102 TFEU to cases where a facilitator supports a dominant undertaking in its abuse because such arrangements would amount to agreements caught by Art 101 TFEU anyway. Provided that they restrict competition within the internal market such agreements affect the commercial conduct of a (dominant) party to the agreement. On the top of it, as such arrangements fall within the ambit of Art 101 TFEU there is no need for the abusing party to be dominant.

It should also not come as a surprise that such practices have been already scrutinised by national competition authorities under the concept of ‘hub-and-spoke’ conspiracies. In the notoriously known case ToysRUs, Toys ‘R’ Us used its dominant position as a toy distributor to obtain agreements from toy manufacturers to stop selling to warehouse clubs the same toys that they sold to Toys ‘R’ Us. In 1998, the Federal Trade Commission (‘FTC’) issued its decision that Toys ‘R’ Us had orchestrated horizontal and vertical agreements with and among toy manufacturers to restrict the availability of popular toys to warehouse clubs, and ordered the company to stop pressuring manufacturers to limit supply or otherwise refuse to sell to discount club stores. Toys ‘R’ Us appealed to the Seventh Circuit, and in August 2000, the appellate court upheld the Commission's order.49 Another recent example of a dominant manufacturer pressuring food retailers to increase the retail price of its product across the retail level was the case of Haribo in Germany enforced by the German Federal Cartel Office (‘FCO’). Some of the retailers have facilitated Haribo's endeavours by agreeing to increase their own retail price provided Haribo convinces other retailers to do the same. Haribo did not shy away from threats of refusal of supply and other sanctions to achieve this goal.50 On any account, the application of the general principle to such scenarios would not be condemned as a violation of the principle that offences must be defined by the law but rather seen as a progressive application of the case law on the terms agreement and concerted practice.51

Intended contribution

In order for an undertaking to be found liable for participating in an anticompetitive agreement, it must be shown that the undertaking intended to contribute by its own conduct to the common objectives pursued by all participants and that it was aware of the actual conduct planned or put into effect by other undertakings in pursuit of the same objectives or that it could reasonably have foreseen it and that it was prepared to take the risk.52 While there is no need for the intended contribution to be of a particular intensity, it is still subject to debate whether the minimum threshold that must be met is different for active and passive participants. What is clear, however, is that not all parties to the agreement need to restrict their own freedom of action.

Intensity of contribution

Art 101 TFEU does not require the parties to an agreement to participate in the shaping of the joint intention to the same extent or to implement the agreement with the same intensity. It is particularly irrelevant for the existence of an agreement, whether a party has taken part in all aspects of the scheme created by the agreement, or that it played only a minor role in the aspects in which it did participate.53 Conflicts between the parties, rivalry or even cheating play no role. Different forms of participation according to the characteristics of the market, the position of the parties on the market, the aims pursued and the means of implementation chosen or envisaged are also not fit to rule out the participation of a party in an agreement.54

In this respect, the question arises whether the notion of an agreement requires some form of indispensable minimum of participation to consider an undertaking to be a party to an agreement. Considering that the agreement does not need to be implemented the bar of involvement for participation in an agreement is not raised very high. In fact, according to settled case law it is sufficient for the Commission to show that an undertaking participated in meetings, at which anticompetitive agreements were concluded, without opposing them by publicly distancing itself from its content or reporting it to the administrative authorities.55 This holds true also for meetings that are not only attended by competing undertakings but also by their clients.56

However, when it comes to facilitators the case law appears to set a higher standard for the participation in an agreement. In AC-Treuhand the Court of Justice at first reiterated the case law according to which passive participation in meetings is sufficient to establish the participation in an agreement.57 However, when it came to AC-Treuhand's participation, the Court did not simply revert to the finding the AC-Treuhand passively participated in meetings without publicly distancing itself or reporting it to authorities. The Court went rather on to state that AC-Treuhand played an essential role by organising a number of meetings which it attended and in which it actively participated, collecting and supplying to the producers of heat stabilisers data on sales on the relevant markets, offering to act as a moderator in the event of tensions between those producers and encouraging the latter to find compromises, for which it received remuneration.58

Thus, it still may be polemicised whether the benchmark for passive participation is in fact set higher, requiring an essential contribution and full knowledge of relevant facts or is still met by simply participating in meetings while being able to foresee the conduct of other companies pursuing an anticompetitive objective.59

The highest standard for an intended contribution by a passive participant that comes into mind would be that the contribution constitutes a ‘condition sine qua non’ for the existence of the agreement. It might be argued that the persecution of passive participants is not needed to ensure the full effectiveness of Art 101 TFEU because the contribution by a passive participant is normally not an end in itself but dependent upon the existence of an agreement. In other words, as the conduct of the passive participant does normally not constitute a ‘condition sine qua non’ for the agreement, but rather an ancillary action that is not self-standing it should not be punishable under Art 101 TFEU.

However, such a line of reasoning might overlook that a particular intensity of participation in an agreement in terms of a ‘condition sine qua non’ is not required by Art 101 TFEU. The mere fact that each undertaking takes part in the infringement in ways particular to it does not suffice to rule out its liability for the entire infringement, including conduct put into effect by other participating undertakings but sharing the same anticompetitive object or effect.60 In fact, such requirement would even enable direct perpetrators to escape liability by demonstrating that the agreement would exist irrespective of their participation.

Concerted practice as a catchall element

When assessing the intensity of a party's participation in an agreement, it should not be overlooked that the passive conduct in question may still qualify as a concerted practice. The competition law distinguishes between agreements on the one hand and concerned practices on the other hand, with the sole purpose of catching various forms of collusion between undertakings which, from a subjective point of view, have the same nature and are distinguishable from each other only by their intensity and the forms in which they manifest themselves.61

In fact, as has been recently confirmed by the Court of Justice, also a mere unilateral dispatch of a message towards the users of an electronic system by the administrator concerning an anticompetitive action may justify the presumption that the receivers of the message were aware of the conduct.62 If it can be shown that the receivers took account of the information in determining their conduct on the market, and the information was causal for their market conduct, the receivers may be held liable for participating in a concerted practice.63 It is then up to the receivers of the message to prove that they have not received the message or they have at least expressed objections towards the sender or determined their market conduct independently.64

The fact that the administrator of the electronic system is not active on the same market as its users has no bearing on their liability. It has also no bearing on the liability of the administrator.65 The assessment of the existence of a concerted practice is not affected by the fact that an undertaking may be active on a level of trade different from that of the other participants in a concerted practice. Rather, it is sufficient that there is a joint intention of the undertakings to conducting themselves on the market in a specific way. Thus, the relevant market on which a member of a concerted practice is active does not need to be the same as the market on which that concerted practice is deemed to materialize.66

No need to restrict the freedom of action

As regards the relevance of the freedom of companies to act on the market in an autonomous manner a distinction must be drawn between the need for the agreement to restrict the commercial autonomy of an undertaking and the voluntary engagement of undertakings in an agreement on their own initiative. If anticompetitive conduct is required of undertakings by national legislation or if the latter creates a legal framework which itself eliminates any possibility of competitive activity on their own part, Art 101 TFEU does not apply.67 Thus, in general a participation in an agreement presupposes the freedom of undertakings to take an independent and autonomous action.68 Such an independent action is also possible when the autonomy of the undertakings is limited by law only partially as the agreement may still restrict residual competition.69 Economic dependence or pressure exerted on part of other parties to an agreement is however irrelevant because the undertakings have always the option to bring the anticompetitive agreement to the attention of the authorities.70

Provided that undertakings have the freedom to engage in agreements on their own initiative, it is irrelevant whether the agreement itself restricts their commercial autonomy vis-à-vis their competitors, and hence contradicts their freedom to determine their policy which they intend to follow on the common market autonomously. The principle that all undertakings must determine independently their policy which they intend to adopt on the market,71 does not postulate such a requirement.72 It follows, that an undertaking does not need to restrict its own freedom of action on the market on which it is primarily active to become a party to an agreement. In general terms, the contribution to an anticompetitive agreement does not need to come from an economic activity forming part of the relevant market on which that restriction materialises or on which it is intended to materialise.73

Procedural particularities of passive participation

Once the passive participation of an undertaking in an anticompetitive agreement (or concerted practice) has been established the most pressing issue becomes its treatment within the Commission's procedure. Including the option of the passive participant to apply for leniency, to settle the case with the Commission, or to submit to ordinary proceedings and respond to the statement of objections, the procedural position of the passive participant does not differ from the position of an active perpetrator. The point when the peculiar position of the passive participant needs to be taken into account is the setting of the fine.

According to the Commission's Fining Guidelines74 in determining the basic amount of the fine to be imposed, the Commission will normally take the value of the undertaking's sales of goods or services to which the infringement directly or indirectly relates in the relevant geographic area within the EEA. Applying this method to a passive participant that is not active on the same market as the active perpetrators would, however, inevitably result in no fine being imposed, because the facilitator does not generate any turnover on the cartelised market.75 Applying this method by means of analogy to the turnover that the facilitator achieved on its own market as a result of the cartel (eg consultancy fees) would in Court of Justice's view not accurately reflect the economic importance of the infringement and the individual participation of the facilitator.76

Thus, in such cases the Commission is entitled to deviate from the calculation method of the Fining Guidelines77 and impose the fine based on a not-further specified lump sum.78 The use of a lump sum is not at odds with the Commission's obligation to state reasons. The Commission is namely only required in this respect to identify the factors which indicate the gravity and duration of the infringement, and it is not required to indicate the figures related to the method of calculating the fines.79 Thus, the only certainty that passive participants have with respect to the amount of the fine is that it will not exceed the 10% ceiling. Other mitigating circumstances, such as the limited involvement in the infringement80 or the novelty of their participation81 will probably be taken into account only under specific circumstances.

Practical example—hub-and-spoke conspiracies

Over the past years, the most prominently persecuted form of passive participation has been the so-called ‘hub and spoke’ conspiracy. The common characteristic of these forms of collusion is that its direct participants interact only via a common trading partner who is active on another (usually upstream) market. The case law at the national level in this respect is manifold and concerns a myriad of different sectors. The following selection of recent cases at the national level is apt to illustrate how passive participants may expose themselves to liability by playing a part in these types of conspiracies.

In June 2015, the US Court of Appeals for the Second Circuit affirmed the district court's judgment in United States v. Apple, Inc.82 that Apple and five of the largest book publishers in the USA orchestrated a hub-and-spoke conspiracy intended to extinguish price competition among e-book retailers and for increasing retail e-book prices by an average of 24 to 40 per cent. Beginning in 2009, in the run-up to launching its new iPad in April 2010, Apple designed and executed upon a scheme with five of the six largest book publishers in the USA to fix prices for e-books and extinguish retail competition for the same. In late 2009, Amazon enjoyed a 90 per cent share of US e-book sales. It engaged in a loss-leader pricing practice of selling New York Times bestsellers and other new books for USD 9.99 to entice new customers. The publishers feared that Amazon's practice—which priced some of the publishers’ most in-demand books near or below their wholesale price—put downward pricing pressure on the publishers’ pricing for paper books. As the district court found, Apple understood that the publishers wanted to pressure Amazon to raise the USD 9.99 price point for e-books that the publishers were searching for ways to do that and that they were willing to coordinate their efforts to achieve that goal.83 Under an agency model, the publishers coordinated with each other and Apple to determine e-book retail prices that the publishers would (nominally) independently set and pay Apple a 30 per cent commission for each e-book it sold. Apple further imposed price caps and most-favoured-nations clauses in the agency agreements with each of the publisher defendants. Apple went on to facilitate the publishers’ coordinated imposition of similar agency agreements with Amazon. The Court held that in a case of a hub-and-spoke conspiracy, as here, where a vertical actor is alleged to have participated in an unlawful horizontal agreement, plaintiffs must demonstrate both that a horizontal conspiracy existed, and that the vertical player was a knowing participant in that agreement and facilitated the scheme. The Court found ample and compelling evidence satisfying this requirement and condemned Apple's behaviour as per se illegal.

In August 2015, US Court of Appeals for the Ninth Circuit dismissed a class claim by consumers who alleged that the largest US retailer of musical instruments conspired with guitar and amplifier manufacturers and a trade association to fix prices in case Musical Instruments and Equipment Antitrust Litigation.84 Consumers who purchased guitars and guitar amplifiers from Guitar Center Inc., the largest retail seller of musical instruments in the USA, filed multiple suits against the seller and guitar and amplifier manufacturers alleging that between 2004 and 2009 these companies—along with the National Association of Music Merchants—conspired to implement and enforce minimum advertised price (‘MAP’) policies that fixed the minimum price any retailer could advertise for the products. The plaintiffs alleged that those MAP policies tended to raise retail prices and restrain competition. The Court dismissed the class action pointing to the fact that the plaintiffs have indeed provided a context for the manufacturers’ adoption of MAP policies, but not one that plausibly suggests they entered into illegal horizontal agreements. Instead, the complaints told a different story, one in which Guitar Center used its substantial market power to pressure each manufacturer to adopt similar policies, and each manufacturer adopted those policies as in its own interest. Such conduct may be anticompetitive but it does not suggest the manufacturers illegally agreed among themselves to restrain competition.

In Europe, the recent enforcement measures concerning hub-and-spoke conspiracies have been related to the food retail sector.

In the dairy retail price initiatives decision, the Office of Fair Trading (‘OFT’) decided that the UK's big supermarkets had exchanged information about their retail pricing intentions for milk and cheese.85 The OFT decided that on eight occasions in 2002 and on five occasions in 2003 there had been anticompetitive exchanges of information pursuant to a plan to coordinate the retail process for cheese. All retailers and suppliers (except for Tesco) admitted the infringements and settled the cases. Tesco, on the other hand challenged the OFT's decision before the Competition Appeals Tribunal (‘CAT’) which held that there was insufficient evidence of a secret plan to coordinate retail prices of cheese in 2003 or for five of the eight occasions in 2002. However, the CAT held that on the remaining three occasions in 2002 the Tesco cheese buyers had participated in unlawful exchanges of information with Sainsbury's.86 Tesco and the OFT subsequently settled the case with Tesco agreeing to pay GBP 6.5 million.

In June 2015, the Belgian Competition Authority (‘BCA’) adopted a settlement decision and fined 18 parties, both retailers and suppliers for their involvement in hub-and-spoke collusion in the drugstore, perfumery and hygiene sector between 2002 and 2007.87 Price coordination had been orchestrated through indirect contacts between the retailers. The retailers exchanged information through their suppliers, which acted as intermediaries for their own products. The BCA found that the parties’ behaviour met the state of mind test because the retailers had conveyed certain information to their common supplier, and the competing retailer that was on the receiving end was aware of the context and purpose of the information exchange.

In June 2015, the German FCO concluded its investigations into hub-and-spoke conspiracy between German food retailers and a confectionery manufacturer, Haribo.88 In a period from 2004 to 2009 Haribo has systematically tried to influence the retail price of its products and managed to implement two price increases across the food retail sector. In both instances, Haribo managed to convince the discount supermarket chain Aldi to increase the retail price of Haribo's products. This price increase on part of Aldi has been the condition of other food retailers to increase their retail price of Haribo's products. Haribo has also promptly reacted to any attempts of particular food retailers to lower the retail price by arguments or even by threats not to deliver its products. The food retailers have not only actively implemented the ‘recommended’ price increases but have also demanded from Haribo to ensure a stable price level of its products across the food retail sector.

Conclusion

Considering all the above, one cannot help but conclude that in the light of the most recent case law at the EU level the notion of passive participation is rather superfluous. The case law of the EU Courts treats all types of passive and active participants as equal perpetrators, and hence as full-fledged parties to agreements. As long as the existence of an agreement and an intended contribution on part of the participant in knowledge of the common objectives pursued by the participants are established, there is nothing to prevent the passive or active participant from being qualified as a party to an agreement. To this end, it is irrelevant whether the agreement in question had a particular form, a binding effect or whether it has even been implemented. It is also irrelevant whether the intended contribution has a particular intensity and whether the participant has restricted its own commercial freedom. If such an agreement is found to be anticompetitive, the passive participant may be held liable for infringing Art 101 TFEU.

1
It may be argued that Competition law while of an administrative nature floats in a criminal law sphere, in particular when it comes to imposing fines – see to this end Case C-501/11 P, Schindler Holding Ltd and Others v Commission, EU:C:2013:522, para 33.
2
Opinion of AG Wahl in Case C-194/14 P, AC-Treuhand AG v Commission, EU:C:2015:350, para 83.
3
Opinion of AG Wahl in Case C-194/14 P, AC-Treuhand AG v Commission, EU:C:2015:350, para 84.
4
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717.
5
See for instance most prominently Case 39847 – E-BOOKS, Commission Decision of 25 July 2013, para 73; Case 39.861 – Yen Interest Rate Derivatives (YIRD), Commission Decision of 4 December 2013; Case T-180/15, ICAP v Commission (currently pending before the General Court).
6
See most recently Joined cases C-293/13 P and C-294/13 P, Fresh Del Monte Produce Inc. v Commission, EU:C:2015:416, paras 156 et seq.
7
See Case C-74/04 P, Commission v Volkswagen, EU:C:2006:460, para 37; Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 28.
8
See Case C-73/95 P, Viho Europe BV v Commission, EU:C:1996:405, paras 47 et seq.
9
A discussion of when two legal entities constitute parts of a single economic entity (an undertaking) is subject to a well-developed case law and would clearly go beyond the scope of this article.
10
Joined cases C-2/01 P and C-3/01 P, Bundesverband der Arzneimittel-Importeure eV and Commission of the European Communities v Bayer AG, EU:C:2004:2, para 97; Case C-235/92 P, Montecatini SpA v Commission, EU:C:1999:362, para 162; Case C-74/04 P, Commission of the European Communities v Volkswagen AG, EU:C:2006:460, para 37; Case T-99/04, AC-Treuhand v Commission, EU:T:2008:256, para 118 (not appealed).
11
Case T-56/99, Marlines SA v Commission, EU:T:2003:333, para 21 (upheld on appeal Case C-112/04 P, Marlines v Commission, EU:C:2005:554).
12
Case T-41/96, Bayer AG v Commission, EU:T:2000:242, para 71; upheld on appeal Joined cases C-2/01 P and C-3/01 P, Bundesverband der Arzneimittel-Importeure eV and Commission of the European Communities v Bayer AG, EU:C:2004:2, para 102 et seq.
13
Case T-208/01, Volkswagen AG v Commission, EU:T:2003:326, para 33 upheld on appeal Case C-74/04 P, Commission v Volkswagen AG, EU:C:2006:460).
14
Joined cases C-2/01 P and C-3/01 P, Bundesverband der Arzneimittel-Importeure eV and Commission of the European Communities v Bayer AG, EU:C:2004:2, para 102 et seq.
15
Case 65/86, Bayer AG and Maschinenfabrik Hennecke GmbH v Heinz Süllhöfer, EU:C:1988:448, paras 14, 15; Case 258/78, L.C. Nungesser KG and Kurt Eisele v Commission, EU:C:1982:211; Case T-145/89, Baustahlgewebe GmbH v Commission, EU:T:1995:66 (partially annulled by Case C-185/95 P, Baustahlgewebe GmbH v Commission, EU:C:1998:608).
16
Case C-250/92, Gøttrup-Klim e.a. Grovvareforeninger v Dansk Landbrugs Grovvareselskab AmbA, EU:C:1994:413, paras 28 et seq.
17
Case T-7/89, SA Hercules Chemicals NV v Commission, EU:T:1991:75 (upheld on appeal Case C-51/92 P, Hercules Chemicals NV v Commission, EU:C:1999:357).
18
Joined cases 96–102, 104, 105, 108 and 110/82, NV IAZ International Belgium and others v Commission, EU:C:1983:310, para 20.
19
Case C-373/14 P, Toshiba Corporation v Commission, EU:C:2016:26, para 23 et seq; Case T-53/03, BPB plc v Commission, EU:T:2008:254, para 82 (not appealed).
20
Case C-68/12, Protimonopolný úrad Slovenskej republiky v Slovenská sporiteľňa a.s., EU:C:2013:71, para 25.
21
Joined cases T-44/02 OP, T-54/02 OP, T-56/02 OP, T-60/02 OP and T-61/02 OP, Dresdner Bank AG and Others v Commission, EU:T:2006:271, para 65 (not appealed).
22
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 39.
23
Case T-66/99, Minoan Lines SA v Commission, EU:T:2003:337, para 207 (upheld on appeal Case C-121/04 P, Minoan Lines v Commission, EU:C:2005:695); Joined cases T-25/95, T-26/95 ao, Cimenteries CBR and Others v Commission, EU:T:2000:77, para 958 (partially annulled by Joined cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P, Aalborg Portland ao v Commission, EU:C:2004:6).
24
Case T-347/94, Mayr-Melnhof Kartongesellschaft mbH v Commission, EU:T:1998:101, para 65 (not appealed).
25
Joined cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P, Dansk Rørindustri A/S ao v Commission, EU:C:2005:408, para 144; Joined cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P, S ao v Commission/S ao v Commission, EU:C:2004:6, para 85; Case 86/82, Hasselbad v Commission, EU:C:1984:65, para 46.
26
Case T-66/99, Minoan Lines SA v Commission, EU:T:2003:337, para 208 (upheld on appeal Case C-121/04 P, Minoan Lines v Commission, EU:C:2005:695); Case T-327/94, SCA Holding Ltd v Commission, EU:T:1998:96, para 142 (upheld on appeal Case C-297/98 P, SCA Holding Ltd v Commission, EU:C:2000:633); Case T-67/01, JCB Service v Commission, EU:T:2004:3, para 105 et seq (upheld on appeal Case C-167/04 P, JCB Service v Commission, EU:C:2006:594).
27
See Case 41/69, ACF Chemiefarma v Commission, EU:C:1970:71, para 112; Joined cases 209 to 215 and 218/78, van Landewyck v Commission, EU:C:1980:248, para 86; Case T-7/89, Hercules Chemicals v Commission, EU:T:1991:75, para 256 (upheld on appeal Case C-51/92 P, Hercules Chemicals NV v Commission, EU:C:1999:357); Case T-347/94, Mayr-Melnhof v Commission, EU:T:1998:101, para 65 (not appealed); Case T-41/96, Bayer v Commission, EU:T:2000:242, para 67 (upheld on appeal); Joined cases T-44/02 OP, T-54/02 OP, T-56/02 OP, T-60/02 OP and T-61/02 OP, Dresdner Bank v Commission, EU:T:2006:271, para 54 (not appealed); see also Case T-99/04, AC-Treuhand v Commission, EU:T:2008:256, para 118 (not appealed); Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 32.
28
See to this end Joined cases 56 and 58–64, Cour Consten and Grundig v Commission, EU:C:1966:41, p 399–400.
29
Case T-328/03, O2 Germany v Commission, EU:T:2006:116, paras 65 et seq.
30
Case 37.857 – Organic Peroxides, Commission Decision of 10 December 2003; Case T-99/04, AC-Treuhand v Commission, EU:T:2008:256 (not appealed).
31
Case 38.859 – Heat Stabilisers, Commission Decision of 11 November 2009; Case T-27/10, AC-Treuhand v Commission, EU:T:2014:59; upheld on appeal Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717.
32
Case 39.861 – Yen Interest Rate Derivatives (YIRD), Commission Decision of 4 December 2013 (appeal currently pending before the General Court Case T-180/15, ICAP v Commission).
33
Case 29.869 – Italian cast glass, Commission Decision of 17 December 1980 (not appealed).
34
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 35 and the case law cited; see also Case T-29/05, Deltafina SpA v Commission, EU:T:2010:355, para 45 et seq (appeal withdrawn).
35
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 36.
36
Opinion of AG Wahl in Case C-194/14 P, AC-Treuhand AG v Commission, EU:C:2015:350, para 45 et seq.
37
Opinion of AG Wahl in Case C-194/14 P, AC-Treuhand AG v Commission, EU:C:2015:350, para 62 et seq.
38
See to this end for instance Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings, OJ C 31, 5 February 2004, p 5–18.
39
See to this end Commission Staff Working Document, Guidance on restrictions of competition ‘by object’ for the purpose of defining which agreements may benefit from the De Minimis Notice, 25 June 2014, SWD(2014) 198 final.
40
See Joined cases T-456/05 and T-457/05, Gütermann AG and Zwicky & Co. AG v Commission, EU:T:2010:168, para 53 (not appealed).
41
Case T-44/00, Mannesmannröhren-Werke AG v Commission, EU:T:2004:218, para 132 (upheld on appeal Case C-411/04 P, Salzgitter Mannesmann GmbH v Commission, EU:C:2007:54); Joined cases T-49/02 to T-51/02, Brasserie nationale SA (anc. Brasseries Funck-Bricher et Bofferding), Brasserie Jules Simon et Cie SCS and Brasserie Battin SNC v Commission, EU:T:2005:298, para 144 (not appealed); Case T-213/00, CMA CGM and Others v Commission, EU:T:2003:76, para 206 (upheld on appeal Case C-236/03 P, Commission v CMA CGM ao, EU:C:2004:679); see also Case T-29/92, Vereniging van Samenwerkende Prijsregelende Organisaties in de Bouwnijverheid and others v Commission, EU:T:1995:34, para 74 (upheld on appeal Case C-137/95 P, Vereniging van Samenwerkende Prijsregelende Organisaties in de Bouwnijverheid and others v Commission, EU:C:1996:130).
42
Case C-67/13 P, Groupement des cartes bancaires v Commission, EU:C:2014:2204, paras 49, 50.
43
Case C-234/89, Stergios Delimitis v Henninger Bräu AG, EU:C:1991:91, para 17 et seq.
44
See for the low bar set by the case law Case C-518/13, The Queen, on the application of Eventech Ltd v Parking Adjudicator, EU:C:2015:9, para 71.
45
See Case 39.401 – E.ON/GDF, Commission Decision of 16 October 2009.
46
See Case T-360/09, E.ON Ruhrgas AG and E.ON AG v Commission, EU:T:2012:332, paras 89, 116 (not appealed).
47
See Case 6458 – Universal Music Group/ EMI Music, Commission Decision of 21 September 2012, para 214.
48
Opinion of AG Wahl in Case C-194/14 P, AC-Treuhand AG v Commission, EU:C:2015:350, para 72.
49
See Case No. 98-4107, ToysRUs v FTC, Court of Appeals for the Seventh Circuit Decision of 1 August 2000.
50
See Case B 10 – 040/14, Haribo, FCO Decisions of 19 December 2014, 2 June 2015, and 16 June 2015; see also below.
51
See Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 43.
52
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 30; Case C-49/92 P, Commission v Anic Partecipazioni SpA, EU:C:1999:356, paras 86-87; Joined cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P, S ao v Commission/S ao v Commission, EU:C:2004:6, para 83.
53
Joined cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P, and C-219/00 P, Aalborg Portland A/S ao v Commission, EU:C:2004:6, para 86.
54
Case T-99/04, AC-Treuhand v Commission, EU:T:2008:256, para 131 (not appealed).
55
Joined cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P, Dansk Rørindustri A/S ao v Commission, EU:C:2005:408, para 142-143; Joined cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P, Aalborg Portland A/S ao v Commission, EU:C:2004:6, para 84; see also Case C-373/14 P, Toshiba Corporation v Commission, EU:C:2016:26, para 62.
56
Joined cases T-202/98, T-204/98 and T-207/98, Tate & Lyle plc, British Sugar plc and Napier Brown & Co. Ltd v Commission, EU:T:2001:185, paras 62–66 (upheld on appeal Case C-359/01 P, British Sugar plc v Commission, EU:C:2004:255).
57
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 31.
58
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 37.
59
See to this end also Case T-99/04, AC-Treuhand v Commission, EU:T:2008:256, para 151 et seq (not appealed) – nevertheless the General Court highlighted that given the symbolic amount of the fine imposed on AC-Treuhand (EUR 1,000) the Court is not required to give a ruling on the exact extent of AC-Treuhand's participation for the purposes of its effect on the lawfulness of the level of the fine imposed.
60
Case C-49/92 P, Commission v Anic Partecipazioni SpA, EU:C:1999:356, paras 78–80.
61
See Case C-8/08, T-Mobile Netherlands BV, EU:C:2009:343, para 23.
62
Case C-74/14, ‘EturasUAB and Others v Lietuvos Respublikos konkurencijos taryba, EU:C:2016:42, para 40.
63
See Case C-286/13 P, Dole Food Company Inc. and Dole Fresh Fruit Europe v Commission, EU:C:2015:184, para 126.
64
Case C-74/14, ‘EturasUAB and Others v Lietuvos Respublikos konkurencijos taryba, EU:C:2016:42, paras 41, 48-49.
65
Opinion of AG Szpunar in Case C-74/14, ‘EturasUAB and Others v Lietuvos Respublikos konkurencijos taryba, EU:C:2015:493, para 42; while General Attorney Szpunar has left the question of the administrator's liability open, he also referred to the then pending AC-Treuhand case before the Court of Justice and highlighted that the administrator was a contractual partner of all receivers active on a market related to the market on which the receivers of the message were active.
66
Case 39847 – E-BOOKS, Commission Decision of 25 July 2013, para 73.
67
Joined cases C-359/95 P and C-379/95 P, Commission and French Republic v Ladbroke Racing Ltd, EU:C:1997:531, para 33; Case T-66/99, Minoan Lines SA v Commission, EU:T:2003:337, para 176 (upheld on appeal Case C-121/04 P, Minoan Lines v Commission, EU:C:2005:695); Case T-387/94, Asia Motor France SA, Jean-Michel Cesbron, Monin Automobiles SA, Europe Auto Service (EAS) SA and SA Somaco SARL v Commission, EU:T:1996:120, para 61 (upheld on appeal Case C-401/96 P, Somaco SARL v Commission, EU:C:1998:208).
68
Case C-401/96 P, Somaco SARL v Commission, EU:C:1998:208, para 66; Case T-308/94, Cascades SA v Commission, EU:T:1998:90, paras 108 et seq (partially annulled by Case C-279/98 P, Cascades SA v Commission, EU:C:2000:626).
69
Case T-66/99, Minoan Lines SA v Commission, EU:T:2003:337, para 177 (upheld on appeal Case C-121/04 P, Minoan Lines v Commission, EU:C:2005:695).
70
Joined cases T-71/03, T-74/03, T-87/03 and T-91/03, Tokai Carbon Co. Ltd ao v Commission, EU:T:2005:220, para 76-77; Case T-59/99, Ventouris Group Enterprises SA v Commission, EU:T:2003:334, para 90; Case T-368/00, General Motors Nederland BV and Opel Nederland BV v Commission, EU:T:2003:275, para 147; it could be possible only in cases of extreme pressure Case T-308/94, Cascades SA v Commission, EU:T:1998:90, paras 108 et seq (partially annulled by Case C-279/98 P, Cascades SA v Commission, EU:C:2000:626).
71
See most recently Case C-74/14, ‘EturasUAB and Others v Lietuvos Respublikos konkurencijos taryba, EU:C:2016:42, paras 27.
72
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 33 et seq.
73
Case T-99/04, AC-Treuhand v Commission, EU:T:2008:256, paras 124–127 (not appealed).
74
Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (‘Fining Guidelines’), OJ C 210, 1 September 2006, p 2–5, para 13.
75
See also Case T-27/10, AC-Treuhand v Commission, EU:T:2014:59, para 302 (upheld on appeal).
76
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 66.
77
See Fining Guidelines, para 37.
78
Case C-194/14 P, AC-Treuhand v Commission, EU:C:2015:717, para 67.
79
Case C-295/12 P, Telefónica SA and Telefónica de España SAU v Commission, EU:C:2014:2062, para 181.
80
Fining Guidelines, para 29.
81
Case COMP/38.859 – Heat Stabilisers, Commission Decision of 11 November 2009, para 745.
82
Case No. 13-3741-cv (L), United States v. Apple, Inc., Court of Appeals for the Second Circuit Decision of 30 June 2015.
83
For the parallel EU case see Case 39847 – E-BOOKS, Commission Decision of 25 July 2013.
84
Case No. 12-56674, Musical Instruments and Equipment Antitrust Litigation, Court of Appeals for the Ninth Circuit Decision of 28 August 2015.
85
Case CE/3094-03, Dairy retail price initiatives, OFT Decision of 26 July 2011.
86
Case No. 1188/1/1/11, Tesco v OFT, CAT Decision of 20 December 2012.
87
Case 15-IO-19-AUD, Hausses coordonnées des prix de vente de produits de parfumerie, d'hygiène et de droguerie, BCA Decision of 22 June 2015.
88
See Case B 10 – 040/14, Haribo, FCO Decisions of 19 December 2014, 2 June 2015, and 16 June 2015.

Author notes

*
Dr. iur., Associate at Schönherr Rechtstanwälte GmbH; email l.solek@schoenherr.eu. All views and opinions expressed are personal. This article reflects the state of case law and other relevant legal developments up until May 2016.