Ellisphere decision highlights benefits of French leniency regime1
On
Background
BvD and Ellisphere are active in the economic intelligence sector and sell subscriptions to databases such as Diane, Astrée, Amadeus and
The cartel conduct
As a result of their interrelated activities, Ellisphere and BvD entered into cooperation agreements as of 1989, by which they explicitly agreed on: (i) a common pricelist for the products they coedited; and (ii) a customer allocation scheme. These contracts were renewed on a regular basis since then. A steering committee was also set up to monitor price revisions and to ensure that the previously agreed rules were upheld.
As an illustration of the anticompetitive object of these contracts, the
- Evidence of price-fixing: "The parties undertake to sell Amadeus and
- Evidence of customer allocation: "In each country, a client will be attributed to the concerned Information provider or BvD according to the following criteria:
- if the contract is subscribed following a trial installation, to the company having made the exhibition
- if the contract is subscribed without a trial installation, to the company having obtained the contract.".
Snapshot: Other French developmentsThe French Competition Authority warns against companies taking advantage of the inflation by making "excessive profits". Benoît Coeuré, head of theFCA , reminded companies that the authority has the means to impose severe sanctions (see press report in English, here). - if the contract is subscribed following a trial installation, to the company having made the exhibition
- On
16 February 2023 , theParis Court of Appeal overturned a decision issued by theFCA fining a pharmaceutical company ?444 million for disparagement. The Court considered that the information that was regarded as disparaging by theFCA was in fact in the interest of public debate. (Judgment available in French only.) - In a ruling (available in French only) handed down on by the
Paris Court of Appeal on5 April 2023 , it was held that agents of theFCA may not, during a dawn raid, request that additional mailboxes be handed over to them post completion of the dawn raid. The Court held that undertakings would otherwise not be able to benefit from the guarantees relating to seized documents set out by the provisions of the French Code of Commerce governing dawn raids. - The FCO has ensured that the animal welfare initiative "Initiative Tierwohl" (a sustainability initiative among the big German supermarket retailers) abolishes a compulsory premium due to competition law concerns (see here).
In
Comment
This case is the first application of the
The changes in the
The
Ellisphere opted for the settlement procedure and decided not to contest the objections raised by the
This case illustrates the potential benefits that can flow from making a leniency application following the acquisition of a company and of the importance of detecting potentially anti-competitive practices in the context of a transaction due diligence process (with Moody's successfully obtaining full immunity).
The German "Beer Saga" - Higher Regional Court adopts ?50m fine against Carlsberg
In 2014, the Federal Cartel Office ("FCO") imposed fines amounting to c. ?338 million in its proceedings concerning illegal price fixing agreements for beer.2 The fines were imposed on a veritable "who's who" of German breweries, including Veltins, Warsteiner, Bitburger, Krombacher, Radeberger, Cölner Hofbräu P. Josef Früh and Carlsberg.
The FCO concluded that in 2006 and 2007 the companies had exchanged information and agreed prices for their draught and/or bottled beers.
German Beer Basics: Pils vs Kölsch
While most of the brewers reached settlements with the FCO, Carlsberg and a group of regional Kölsch brewers appealed the decision to the Higher Regional Court of Düsseldorf. Kölsch is brewed according to the "Kölsch Konvention", one of the most strictly defined beer styles in
But the difference between Kölsch and Pils in this case in not just a matter of taste. For the Kölsch brewers, the Higher Regional Court found that the factual evidence presented by the FCO for their involvement in the anti-competitive information exchange or outright price fixing was insufficient. In particular, the Court doubted the credibility of one of the main witnesses. It therefore completely acquitted the Kölsch brewers3 - a novelty in a cartel fine case - and its judgment was later upheld by the
Most Pils breweries, on the other hand, settled the case with the FCO. Only Carlsberg appealed the decision. It achieved a major victory at the Higher Regional Court in
At the heart of the case lies a very important practical question: how should undertakings that engage in anti-competitive information exchange be penalised under German law?
In its 2019 decision, the Higher Regional Court confirmed the FCO's findings that Carlsberg's representatives had attended a meeting in
Based on these facts the Higher Regional Court concluded that the meeting in
Snapshot: Other German developments
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The German Government has referred a proposal for reform of the ARC to
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Footnotes
1. The full text of the decision (in French) is available here and the
2. See press releases of
3. Judgment of
4. Treaty on the Functioning of the
5. Decision of
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