Information Exchanges – Difficult Not To Go Bananas!

The European Court of Justice recently confirmed that pre-pricing communications between competitors involving discussions about price-setting factors, quotation prices and pricing trends may be incompatible with EU antitrust law if they make it possible to reduce the degree of uncertainty between participants as regards their strategy or conduct on the market.

The Bananas Cartel

In 2008, the European Commission fined a number of banana suppliers as they engaged in bilateral pre-pricing communications, during which they discussed banana price-setting factors, pricing trends or gave indications of quotation prices for the forthcoming week. The Commission considered these information exchanges were liable to influence the market players' pricing behavior, concerned the fixing of prices and gave rise to a concerted practice having as its object the restriction of competition, thus resulting in a breach of EU competition law. The General Court and, most recently, the Court of Justice, the highest court of the EU judiciary, confirmed these findings.1

Appeal to the Court of Justice

On appeal to the Court of Justice, Dole argued, inter alia, that the exchanges of information did not amount to a "by object" concerted practice, submitting that (i) the pre-pricing communications were not capable of removing uncertainty as to actual prices and (ii) those communications were carried out by employees who were not responsible for setting quotation prices.

In its judgment, the Court of Justice rehearsed the applicable framework for assessing information exchanges under EU competition law:

an exchange of information qualifies as a concerted practice and is liable to be incompatible with EU competition law if it reduces or removes the degree of uncertainty between participants as regards their strategy or conduct on the market in question; certain types of information exchanges are so harmful to competition that there is no need to examine their effects. In order to determine whether an exchange of information between competitors is a restriction "by object," regard must be had to its objective and the economic and legal context in which it occurs. While the parties' intention may be relied upon, it is not a necessary factor for a "by object" finding. The Court of Justice then addressed Dole's arguments.

It first held that the detailed findings of the General Court showed that bilateral pre-pricing communications were exchanged between Dole and its...