Highest EU Court rules that information exchange is anticompetitive by object

The Court of Justice has confirmed that the sharing of commercially sensitive information between competitors amounts to an infringement of competition law by its very object.  This means that the European Commission can sanction such practices under the EU competition law prohibition on restrictive agreements without having to show any negative effects on the market. 

The Court gave its ruling in an appeal by Dole Foods against the Commission’s decision and fine for the company’s participation in the banana cartel and follows the rejection of Dole’s appeal to the General Court.  The Commission had originally found that Dole, Weichert and Chiquita routinely discussed and disclosed to each other their pricing plans over a two year period (2002-2003) before implementing them.  The Court upheld the Commission’s finding that there was an anticompetitive concerted practice and said that this was so without having to show that there was any connection between the companies’ interactions and prices paid by consumers. 

The Court’s ruling is not unexpected and follows an opinion of the Advocate General. It reflects a tough stance under EU competition law towards information exchange by comparison with some other jurisdictions where the assessment of information exchange is more nuanced and effects-based.

On the substantive issues, I’m disappointed in the Court’s reasoning.  It is true that information exchanges between competitors should naturally raise the eyebrows of competition authorities and that they should be vigilant to the risks that the practices reduce market uncertainty to the detriment of consumers.  However, the approach now confirmed by the Court significantly reduces the probative burden on the authority as once an infringement is found to be anticompetitive by object it is very difficult to defend such practices.  Of particular concern is that the Commission’s case seems to have been largely founded on exchanges of information between more lower level employees.  While such contacts were evidently inadvisable it is not clear that the practices at issue should be treated in the same way as a blatant market sharing or price fixing cartel. 

The judgment settles one of the knotty areas around the circumstances in which information exchange or market intelligence gathering is acceptable under competition law.  However, the law on information exchange is far from settled.  Another area relating to information exchange which has been topical in national infringement decisions has been  so-called ‘hub and spoke’ arrangements where retailers exchange information through a common supplier.  This practice tends to have less of a cross-border angle, although it is a remaining source of uncertainty.    

Source:  Case C-286/13 P - Dole Food Company Inc and Dole Fresh Fruit Europe v Commission, judgment of 19 March 2015 and Commission MEMO/15/4637