18 December 2008

3 minute read

Europe

This judgment puts an end to the case and confirms the principle that in the case of antitrust violations by associations of undertakings, the fine can take account of take account of the turnovers of the association's members.

On 2 April 2003, the Commission imposed fines totalling €16.7 million on six French federations in the beef sector (see IP/03/479). The federations were fined for having taken part in a written agreement in the first place, and in an oral secret agreement in the second place, to set a minimum price for some categories of beef and to suspend or, at the very least, limit imports of all types of beef into France. The following fines were therefore imposed:

• Federation Nationale des Syndicats d’Exploitants Agricoles (FNSEA): € 12 million
• Jeunes Agriculteurs (JA): € 600 000
• Federation Nationale Bovine (FNB): €1 440 000
• Federation Nationale des Producteurs de Lait (FNPL): € 1 440 000
• Federation Nationale de l’Industrie et des Commerces en Gros des Viandes (FNICGV): €720 000
• Federation Nationale de la Coopération Bétail et Viande (FNCBV): € 480 000.

In setting such fines, the Commission took account of the specific context of the case (notably the "mad cow" disease crisis) and reduced the fines it would otherwise have imposed by 60%.

The judgment of the Court of First Instance in December 2006

All the federations appealed the Commission's decision. One of the appeals (FNICGV) was rejected as inadmissible in 2004. In its judgment of 13 December 2006, the Court of First instance substantially confirmed the decision of the Commission, rejecting almost all the claims raised in the other appeals (see MEMO/06/489).

It however considered that the Commission should have reduced the fines by 70% in order to take account of the specific circumstances of the economic sector, rather than the 60% reduction applied by the Commission. The CFI accordingly reduced the fines imposed on the five applicants.

The European Court of Justice judgment

In their appeal before the ECJ, the parties put forward ten different pleas in law against the judgment of the CFI. These pleas covered different grounds on procedure (such as alleged violation of rights of defence), substance (such as an alleged distortion of evidence) and fines (contesting the level of the fines).

The ECJ however rejected all these pleas.

This judgment puts an end to the litigation against the Commission's decision.

The cartel

On 24 October 2001, after several weeks of demonstrations by farmers, six French federations entered into an agreement in the beef sector. Four of the federations represented farmers and the two others slaughterers. Under the agreement, the federations jointly set a minimum price. They also undertook to suspend or at least limit imports of all types of beef. The agreement secretly continued beyond the end of November 2001, the date on which it was supposed to end, despite the fact that the Commission had warned the federations on 25 November 2001 that the agreement was unlawful.

There is no doubt that the organisations knew that their conduct was unlawful. During the inspections carried out by the Commission in December 2001, documents were found which noted that the agreement was "a bit against the law, but that can't be helped" and asked "can we close ranks, without being caught by the DGCCRF?". DGCCRF is the French competition authority.

In its decision, the Commission recognised the importance of trade union freedom. However, the decision indicated that it is not the job of trade unions to assist in the conclusion and implementation of agreements that disregard the rules governing law and order and, more specifically, the competition rules.

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