Information Exchange 2019 – European Union

1 DESCRIBE THE PRINCIPAL COMPETITION RULES GOVERNING INFORMATION EXCHANGE IN YOUR JURISDICTION.

Information exchanges are assessed under article 101 of the Treaty on the Functioning of the European Union (TFEU). The first step is to analyse whether the information exchange restricts competition under article 101(1); the second, to assess the extent to which it is possible to raise efficiency arguments under article 101(3) (see question 8).

The constituent elements of article 101(1) are as follows:

Existence of an agreement, concerted practice or decision by associations of undertakings

Information exchanges between competitors are typically assessed as concerted practices under article 101(1) TFEU, which is a looser form of coordination not requiring the establishment of a binding agreement. There are three key components to a concerted practice: concertation; subsequent conduct on the market; and a relationship of cause and effect between the two.

Concertation is a form of coordination between economic operators by which, without having reached the stage where an agreement has been concluded, they knowingly substitute practical cooperation between them for the risks of competition (see Case C-8/08 T-Mobile Netherlands BV v Raad van bestuur van de Nederlandse Mededingingsautoriteit, at para 26). This is underpinned by the principle that each economic operator should independently determine the policy that it intends to adopt on the market (T-Mobile Netherlands, at paragraphs 32-33). It is sufficient that, through a declaration of intention, a competitor has eliminated or, at the very least, substantially reduced the strategic uncertainty as to the conduct to be expected from it on the market. It follows that a concertation takes place where strategic data is shared between competitors, because it is presumed to reduce the independence of a competitor's conduct on the market and diminishes their incentives to compete.

Information exchange in the context of agreements between competitors may also fall under article 101(1) TFEU, as well as decisions of associations of undertakings. Both concepts are relatively broad and the latter can include an association's rules and regulations, codes of conduct, binding decisions and recommendations.

Between undertakings or associations of undertakings

Under EU competition rules, an "undertaking" encompasses any entity engaged in economic activity (ie, offering goods or services on a market), regardless of its legal status or financing. Economic activities are distinguished from tasks carried out in the public interest, forming part of the essential functions of the state (imperium): activities within the exercise of public powers are not of an economic nature justifying the application of article 101 TFEU. However, public entities may qualify as undertakings to the extent that they are engaging in an economic activity.

Article 101(1) requires that the coordination take place between two or more distinct undertakings. Exchanges between companies forming part of a single economic unit (eg, within the same group) are therefore not caught. Article 101(1) also applies to decisions of associations of undertakings, without the need to identify a formal agreement by the association.

Restriction of competition by object or effect

This distinction is described in more detail in question 5.

Jurisdictional threshold

There are three key elements to establish EU jurisdiction:

"trade between EU member states": this is a broad concept covering all cross-border economic activity. It requires an impact on cross-border economic activity involving at least two EU member states. A list of EU member states is maintained here. "may affect trade" threshold requires it to be possible to foresee with a sufficient degree of probability, based on a set of objective factors of law or fact, that the conduct may have an influence, direct or indirect, actual or potential, on the pattern of trade between EU member states. Conduct that affects the entire territory of a single member state is presumed to have this effect. "appreciability": EU law jurisdiction is limited to practices which have effects of a certain magnitude. Appreciability is...