Source: https://chillingcompetition.com/2014/09/17/10-comments-on-the-ecjs-judgment-in-case-c-6713-p-groupement-des-cartes-bancaires/
Timestamp: 2017-04-27 01:25:43
Document Index: 495376573

Matched Legal Cases: ['Art 101', 'art. 101', 'Art.101', 'Art.101', 'Art.101', 'Art.101']

Relaxing whilst doing Competition Law is not an Oxymoron 10 Comments on the ECJ’s Judgment in Case C-67/13 P, Groupement des Cartes Bancaires
7) What remains rather unclear is the degree of intensity with which the assessment of” the context” is to be carried out; how deep into the factual, legal and economic context do we need to look? Arguably, the theoretical analytical framework used by the ECJ in this Judgment seems to require a more or less “quick effects analysis” in order to identify a restriction by object. And, yes, that can be confusing and it might prima facie seem to result in some line-blurring, at least at a theoretical level. In my view, if the justification for the very existence of the object shortcut lies on considerations of procedural efficiency (as the Court appears to acknowledge and as the AG explicitly stated in para. 31 of the Opinion), then its advantages can only materialise if the “context” examination can be undertaken swiftly and easily. Where this isn’t possible, then a full-blown effects assessment is in order.
Written by Alfonso Lamadrid 17 September 2014 at 6:02 pm
17 September 2014 at 6:29 pm	Reply	I’m sorry to comment this late, maybe we’ll still have something to discuss…
My question is – do paras 70 and 75 of this decision come necessarily against the findings of the European court in the Pierre Fabre case? Para. 75 specifies that “the fact that these measures at issue pursue the legitimate objective of free-riding does not preclude their being regarded as having an object restrictive of competition […]”. So, theoretically, the court seems to be of the opinion that the existence of a legitimate objective (e.g. objective justification) does not lead to the conclusion that an antitrust deed does not exist. We concur. Indeed, there may be a “by object” breach. But what does the objective justification do? Does it nullify the findings of the Commission/NCA, as if the antitrust breach never existed? No, it rather exonerates the undertaking invoking it of it’s culpability for perpetrating such deed. Consequently, the finding of the court is correct. There may be a breach, even a “by object” one, but that doesn’t necessarily mean that the undertaking should be sanctioned for this.
29 October 2014 at 1:26 pm	Reply	I just had a seminar where we discussed this point and found para 70 (the text you quote above) to be equivocal. We actually thought the passage was wrong, or at least badly phrased: if there is an objective justification that should prevent the finding of a restriction by object, because you would not engage Art 101 at all.
The only way to explain the passage is to think of the litigation dynamic: (1) Plaintiff says ‘it’s restrictive by object’ and only then (2) Defendant says ‘no, it’s not a restriction because there is an objective justification.’ But then if the plaintiff is supposed to look at the legal and economic context in (1) he should see the potentially ancillary nature of the restraint and so would have to abandon the object analysis and test the effects of the agreement. On this reading a finding by object would, if done properly, mean that there could not be any space for a plea of objective justification by the defendant.
30 October 2014 at 12:59 pm	Reply	I see your point, Giorgio. What I was thinking was rather the case of a NCA finding a restriction by object subsequent to its investigation. In such a case, considering that it’s by object, that NCA would rather drop the deep economical/legal analysis, because the finding of a restriction by object allows it. It would say that taking into account the per se nature of the deed, no other legal and/or economical analysis of it was necessary, thus fulfilling its burden of proof. In such context, can your defendant invoke the objective justification? That is, in the context of art. 101 TFUE?
30 October 2014 at 2:15 pm	I both agree and disagree with Mr.Monti and Germin: having to invoke an objective justification resembles a little too much defending one’s grounds under Art.101(3), from which everybody, including the ECJ, seems to be drifting away (hence its slow and painful death). So if what I believe to be the ECJ’s reasoning in GCB was properly applied in a case, then the agreement (or the measure) itself -analyzed in its legal and economic context- would be the one to prove that there is no restrictive object, and not the parties to the agreement. As such, there could not be any space for a plea of objective justification, regardless of whether the authority eventually found a restriction by object under Art.101. Based on a literal reading of para.70, even if there were room to invoke the objective justification, the authority would essentially analyze the measures in their context to determine whether there is restrictive object, and while the justification could help in the analysis, it could not be the actual factor relieving the parties from an object infringement.
31 October 2014 at 1:48 am	Reply	Paragraph 70 doesn’t actually use the term “objective justification”. Looking back at the case law the General Court referred to in the paragraphs that the ECJ cited approvingly para 70 just seems to be setting out the well-established principle that an agreement can have both a legitimate (i.e. not anticompetitive) objective and an anticompetitive object at the same time, and in that case it will still be treated as an object infringement. These sorts of legitimate aims can involve all manner or efficiencies or consumer benefits(environmental, social etc) – the Courts’ position is that, for object infringements, those kinds of aims are taken into account under 101(3).
14 November 2014 at 1:27 pm	Reply	Maybe we should not use “legitimate objective” and “objective justification” interchangeably- I agree that the “objective justification” in Pierre Fabre is a different thing but I also think that in GCB, the ECJ drifted from the reasoning in Pierre Fabre. Pierre Fabre’s reasoning would allow invoking justifications under Art.101(1) for an anticompetitive aim and getting away from the application of object restrictions. This is understandable because Pierre Fabre was rendered at a time when the scope of object restrictions was getting wider and wider. But read literally, could this not allow parties to submit justifications under 101(1) for a cartel ? Therefore, as GCB narrowed down the scope of object restrictions, there is no longer room or the need to give parties tools to escape from the object box. In the end, I think it comes down to this: if there is a very obvious anticompetitive object, then the agreement is prohibited under 101(1) without allowing the parties to submit any justifications. If anticompetitive object is not so obvious, then the effects must be analysed.
18 November 2014 at 10:39 am	Reply	ok, let’s have an example. say we have a group of companies that agree to act against one entity (their competitor), which has an illegal conduct on the market. no singular course of action, by any of this companies, can lead to the desired goal (fair competition). to complicate things further, let’s say the action undertaken is by no means capable of affecting the competitor, in fact it affects the very entities that have taken it. so, apparently we have a breach by object (elimination of a competitor from the market), but: (a) the competitor not only that is not removed, but is unaffected, (b) the market/competition suffers no harm, (c) the only harm being supported by the entities that acted together.
20 November 2014 at 11:42 am	Thank you for the example Germin. The entities may have pursued the legitimate goal to stop the illegal practices of their competitor (which I think may not be all that legitimate, as it is up to the authorities to stop anticompetitive behavior and not to the market players, but that would be another debate), but in the meantime they also acted with the intent to remove a competitor from the market. To the extent we are able to call this an obvious anticompetitive objective (i.e. the aim to remove a competitor from the market, or to collectively boycott a competitor) and to the extent this object is proven by the authority, then the entities would be found infringing Art.101(1) by object.
20 November 2014 at 7:43 pm	Reply	i see your points and agree, I was referring to the PF case. and again, correct, 101 (3) would be a different story, but that’s another thing. let’s get back to the example, trying to use both the GCB and PF decisions. the entities pursue a legitimate goal, but it would seem it is a breach by object. nevertheless, we all know that criminal principles apply, to a certain extent, in competition law. so, in a rather plastic wording (for highlighting purposes) what we have in my example are 5 kids that agree to eliminate a Mike Tyson from the market, by using their kiddy boxing skills. indeed, their intention (which is enough to convict them) comes against the provisions of 101 (1), it’s by object. but does the deed really exist? or should we put it under the microscope, to see what’s about it, even if it is per se?
21 November 2014 at 9:03 am	Reply	Germin, I see your point and agree in that if we applied PF, there would be room under 101(1) for objective justifications. I was rather thinking that the PF decision can’t really coexist with the CB judgment. That said, there is no knowing what the Commission and the EU Courts will be applying from now on. In the end, I guess we’ll have to wait and see.
26 November 2014 at 3:17 pm	As regard the application of ‘objective justification’ to restrictions by object, an article by Enchelmaier comes to mind (2012 COMP LAW 182) that I would be interested in your take on in light of, particularly, your comments on Pierre Fabre (I also referred to your previous blog post on this). Enchelmaier argues (from my understanding) that in the application of 101(3) we should draw an analogy with Cassis De Dijon in free movement law, which recognised other grounds of justification than those mentioned in the Treaty. He essentially argues that the justification for restrictions by object is governed exclusively by 101(3), whereas restrictions by effect can, additionally, benefit from other objective justifications (thus explaining Wouters through a division between distinctly and indistinctly applicable measures). I was almost convinced by this, but after reading your previous post on Pierre Fabre I was put into doubt, and I wonder if any of the contributors to this discussion had come across this, or otherwise have thoughts on the argument.
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