Competition Newsflash - February 2023

• Jurisdiction: European Union
• Law Firm: Strelia
• Subject Matter: ntitrust/Competition Law, Antitrust, EU Competition
• Author: Mr Pierre Goffinet
• Published date: 20 February 2023

The Unilever Court Case: national competition authorities can no longer simply disregard evidence submitted by parties allowed to be heard

1. Introduction

On 19 January 2023, the Court of Justice of the European Union delivered a groundbreaking ruling stating that national competition authorities (hereafter, "NCAs") can no longer disregard the "as efficient competitor test" (hereafter, "AEC test") when the undertaking under suspicion puts forward evidence based on this test to dispute the actual ability of an exclusionary practice (in this case, an exclusivity clause) to restrict competition.

This Newsflash highlights the most important aspects of the preliminary ruling and discusses its key consequences. Before getting into the details of the ruling, the facts leading to the case will be briefly explained.

2. Background

The dispute concerns Unilever, which produces and sells packaged ice cream, sold through the brands Algida and Carte d'Or. In Italy, individually packaged ice cream intended for consumption "away from consumers' homes", i.e., in cafés, sport clubs, bars or other leisure sites, is distributed through a network of 150 distributors. Following a complaint by a competitor for abuse of dominant position by Unilever on the market for individually packaged ice cream, the Italian Competition and Markets Authority ("the AGCM") opened an investigation.

The practice under investigation concerned the imposition of exclusivity clauses on sales outlet operators by Unilever's distributors. Those clauses obliged them to obtain supplies exclusively from Unilever for their entire ice cream requirements in return for a wide range of rebates and commission fees. Those rebates and commission fees were designed to give the purchaser an incentive to obtain its supplies exclusively from Unilever and not from its competitors.

During its investigation, the AGCM did not consider the economic studies produced by Unilever to demonstrate that the practices under investigation did not have exclusionary effects toward its equally efficient competitors. The AGCM alleged that exclusivity clauses are per se abuses of dominance when they are imposed by an undertaking in a dominant position and therefore no analysis of the effects was necessary.

On 31 October 2017, the AGCM found that Unilever had abused its dominant position on the Italian market for the sale of individually packaged ice creams intended for consumption away from consumers' homes and therefore infringed Article 102 TFEU. Consequently, a fine of 60 668 580 euro was imposed on Unilever.

Unilever appealed the AGCM's decision to the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative...