The European Court of Justice handed down a ruling on 22 October 2015 which clarifies that middlemen can also be fined for their role in facilitating a cartel under existing European legislation. This is relevant to situations where the cartel activity (such as price fixing or bid-rigging) is co-ordinated by a separate company which is not itself active in the provision of the cartelised products or services.
This clarification comes in connection with the European Commission’s 2009 investigation into a cartel related to PVC additives known as heat stabilizers. The cartel involved a number of chemical companies, who were all found to have infringed competition law, and also AC Treuhand, whose consulting services were used to prepare the operational framework for the cartel and to monitor implementation of the illegal agreements.
Examples of the actions taken by AC Treuhand include:
- the organisation and active participation in meetings for the cartel participants;
- the mediation of discussions between the companies involved, often encouraging them to find a compromise position; and
- the administration of a monitoring system to measure compliance with the market share quotas allocated to each of the cartel members.
AC Treuhand appealed its fine for participating in the cartel, arguing that it was not itself active on the chemicals market and so was not in a position to distort it. The appeal was dismissed in its entirety, with the ECJ holding that the actions of AC Treuhand had not been ‘merely peripheral’ but were instead ‘directly linked’ to the cartel efforts.
This is the first case to reach the ECJ regarding a faciltator’s role in a cartel and should serve as salutary reminder to other middlemen who are, or are considering, facilitating cartel activity on behalf of others. Of note, ICAP was fined 14.9 million euros in February 2015 for its role in the Libor cartel in facilitating the manipulation of trades on behalf of various investment banks.