AG Kokott Gives Opinion On Application Of EU De Minimis Threshold In National Competition Authority Proceedings

On 6 September 2012, Advocate General Kokott handed down her opinion on a preliminary reference from the French Supreme Court on whether national competition authorities can institute proceedings against companies found to be in breach of Article 101 TFEU, but who fall below the market share thresholds mentioned in the European Commission's Notice on agreements of minor importance (De Minimis Notice).

Before ruling on a dispute between Expedia, an online travel agent, the French state railway company SNCF, and competing travel agencies, the French Supreme Court referred a question to the EU Court of Justice on the binding nature of the De Minimis Notice for national competition authorities.

The De Minimis Notice issued by the Commission in 2001 states that the Commission will not institute proceedings either upon application or its own initiative, or impose a fine, where an agreement is covered by the Notice. The De Minimis Notice further adds that agreements between undertakings which affect trade between member states do no appreciably restrict competition within the meaning of Article 101(1) TFEU if the aggregate market share held by the parties in a horizontal agreement does not exceed 10% on any of the relevant markets.

In the case before the French Supreme Court, SNCF and Expedia, in order to improve rail ticket and travel sales over the internet, created a joint subsidiary, Agence Voyages-sncf.com (formerly GL Expedia). As a result, Expedia was given privileged access to voyages-sncf.com, a fact which was highlighted by several competitors as being anti-competitive and, as such, complaints were made to the French Competition Authority. The French Competition Authority subsequently fined Expedia € 500,000 and SNCF € 5 million, for what was considered by the French Authority to be anti-competitive practices contrary to EU and national competition law. Expedia contested the fine and took the position that national competition authorities cannot prosecute a breach of Article 101(1) TFEU where the conduct falls below the market share threshold as defined by the De Minimis Notice, regardless of whether the practices in question are anti-competitive.

In her opinion, AG Kokott disagreed with Expedia's arguments, stating that while the Commission specifies in the De Minimis Notice that it will not institute proceedings either on demand or on its own initiative for agreements falling below the de minimis threshold, the Notice only serves to...