Thursday 21 January 2016

Court of Justice rejects two appeals by Toshiba against cartel fines



The Court of Justice has confirmed a penalty of EUR 13.2 million imposed by the European Commission on Toshiba for market sharing in the power transformer sector.  The judgment comes within a day of the Court upholding the Commission’s fine against Toshiba for its involvement in the gas insulated switchgear cartel over the period 1998-2004.
In the power transformer case the Commission maintained that the infringement involving a ‘gentleman’s agreement’ between Toshiba and its European competitors to protect their respective Japanese and EU markets was a restriction by object.  The Court dismissed claims by the members of the cartel that the arrangement had no effect on competition due to what were alleged to be insurmountable difficulties for Japanese companies to penetrate the EU market.
The case raises the familiar debate over the classification of restrictions of competition by object and restrictions by effect.  The Court concluded that the arrangements amounted to a market sharing cartel and as such constituted a restriction by object.
The outcome is not surprising.  It is a reminder that a claim that an agreement to stay out of a particular territory or reserve it to incumbent suppliers does not restrict competition will rarely be accepted by a competition authority.  In this case the Court upheld the Commission’s position that the agreement was a traditional hard core restriction and the Commission did not have to prove anticompetitive effects. 
The case can be contrasted with the recent Cartes Bancaires case which has revisited the debate over object restrictions.  Cartes Bancaires was less straightforward which explains why in that case the Court reminded the Commission of the need not to circumvent the evidential burden in cases involving more complex arrangements.
Case C-373/14 P Toshiba Corporation v European Commission, ECJ judgment, 20 January 2016 (ECLI:EU:C:2016:26)

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