EU Cartel Analysis: An introduction

Under the glowing florescent lights hung above floor 13 of the Berlaymont building in starchy central Brussels, everything can transform in three years time.

Three years ago, José Manuel Barroso, Portugal’s former prime minister, helmed the massive conference table where members of the European Commission met to hash out the continent’s business. At that same table was Joaquín Almunia, the political dealmaker and media maven charged with protecting Europe’s economy from attacks on free competition. It was 2012, and Europe was still struggling to wrench itself from the most significant economic collapse in modern history. Almunia had trained DG Comp’s attention on helping the Commission right the economic ship.

Today, that same oblong conference table contains a whole new cast of politicians and bureaucrats in charge of Europe’s political affairs. Now in the president’s seat sits another ex-prime minister, Luxembourg’s Jean-Claude Juncker - a skilled politician snakebitten by the Luxembourg Leaks tax scandal and an unprecedented influx of refugees from far-flung foreign wars. And in Almunia’s former digs resides Margrethe Vestager, the charming and powerful Danish politico who, in just a year, has reshaped DG Comp in her image and won over a considerable chunk of the Brussels competition bar. All the while, Europe’s political focus has also shifted, from scrambling out of recession to true economic growth and job creation. Vestager appears on board, content to bend with the changing political winds insofar as DG Comp can. And the winds, they do change.

However, there is one part of the competition portfolio that remains immune to such changes, no matter who is in charge: cartels.

The bedrock of any competition authority, cartel enforcement typically churns along even when administrations change and political priorities shift. At DG Comp, one of the world’s top cartel shops continued to hum even as the Almunia administration wound down, in preparation for a new commission, president and competition chief. Cracking down on cartels remains a constant at the Commission, and even though enforcement has yet to reach the lofty heights of the last decade, when the commission doled out nearly €10 billion in fines between 2005 and 2009, the Commission still brought or closed 15 new cases in the last two years of the Almunia administration, with fines topping €3 billion in total.

Now, in GCR’s third update to our EU cartel survey, we’ve collected extensive data about those cases filed between 2012, when we last updated our survey, and 2014. We relied on primary source documents – full Commission decisions when available, or supporting documents when the decisions had not been made public – to examine how the Commission calculated its fines, how investigations began, where EU cartel defendants come from, and a host of other factors that play into the Commission’s price fixing cases. The result is what we believe to be the most comprehensive collection of data on EU cartel decisions anywhere – a dataset that now includes a full decade’s worth of cases, from 2005 through the end of last year.

For competition practitioners, much of the heavy lifting on behalf of their cartel defendant clients happens after a DG Comp hands down its decision. The two EU courts that oversee competition appeals – the General Court and the Court of Justice – have become the primary venue for fights over the facts of a case, and DG Comp’s procedures during the investigation. So this year, for the first time, we compiled a database of appeals to the ECJ over the past five years, to better understand why the Court agrees to lower or cancel a cartel fine, what arguments against Commission decisions succeed and fail before the courts, and how well the Commission has adapted its behaviour in the face of court judgments.

Where possible, we also endeavoured to update pre-2012 cases in which DG Comp released the full case decision after we published our prior survey update. Those cases now include additional or updated information not reflected in the older version of our database.

Below, we look at four slices of our dataset we found interesting or noteworthy: DG Comp’s record in appeals before the ECJ; the nationality of cartel defendants; DG Comp’s handling of inability to pay requests; and the Commission’s record of, and reasons for, raising or lowering cartel fines for reasons outside of cartel behaviour itself.

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