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ECJ: The De minimis notice is not binding upon national competition authorities

ECJ: The De minimis notice is not binding upon national competition authorities

06.03.2013 16:23
Autor: Martin Vráb, KŠB

And to many, the answer might be quite surprising.

The preliminary question was referred to the ECJ as a part of a dispute between Expedia, a company specializing in on-line sales of tours, and the French competition authority. The case concerned the provision of services by the internet travel agency. With the aim of expanding the on-line sales of train tickets and tours, the French railway company SNFC and Expedia entered into several agreements and founded a joint subsidiary GL Expedia.

However, in 2009 the French competition authority declared that the cooperation between SNFC and Expedia represents a cartel in violation of Article 81 EC and subsequently penalized the arrangement. Expedia originally argued that the joint relevant market share of the parties did not exceed 10 %. The French competition authority was thus obliged to apply the De minimis notice and therefore reach the conclusion that the disputed agreement falls outside the scope of the general ban on cartels, as stipulated by Article 101 (1) of the Treaty on the functioning of the European Union.

The issue was referred to the European Court of Justice as a preliminary question, in order to determine the binding nature of the Commission’s De minimis notice (in its full, long designation: “the Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty establishing the European Community” – or currently Article 101 of the Treaty on the functioning of the European Union for the purposes of application by the national competition authorities.)

The ECJ opened with the traditional statement to the effect that only those agreements aiming at or resulting in a significant restriction of business competition and capable of affecting the free trade between member states may fall within the purview of the ban in question. The ECJ subsequently declared that neither the wording, nor the intent of the De minimis notice warrant a conclusion that it is to be construed as binding upon the individual member states’ national competition authorities, in addition to the Commission itself.

The thresholds established by the De minimis notice may thus be employed by the national competition authorities in deciding on the permissibility of agreements restricting business competition, but do not represent a binding limit. The ECJ on the other hand reiterated that agreements capable of affecting trade between member states with an anti-competition aim (e.g. price cartels) represent a substantial restriction of competition simply by virtue of their nature. Irrespective of their real consequences, such agreements fall under the Union ban on cartel arrangements. 

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