USA: Transatlantic views on information exchange in the field of competition law
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Concurrences REVUE DES DROITS DE LA CONCURRENCE | COMPETITION LAW JOURNAL USA: Transatlantic views on information exchange in the field of competition law International l Concurrences N° 3-2015 www.concurrences.com Luís Silva Morais luis.morais.adv@netcabo.pt Professor, Lisbon Law University (FDL), Lisbon PhD FDL, Jean Monnet Chair (Economic Regulation of the EU) Founder and Partner of Luis Silva Morais/Sérgio Gonçalves do Cabo – Law Firm, Lisbon Chairman, CIRSF (Research Center on Regulation and Supervision of the Financial Sector in scientific partnership with the Bank of Portugal and the Institute of Insurance of Portugal Lúcio Tomé Feteira l.tomefeteira@lsmadvogados.com Professor, Nova Law School (FDUNL), Lisbon PhD European University Institute, Florence Attorney-at-law
International
USA:
Abstract
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
Sous l’angle du droit comparé, l’auteur
Ce document est protégé au titre du droit d'auteur par les conventions internationales en vigueur et le Code de la propriété intellectuelle du 1er juillet 1992. Toute utilisation non autorisée constitue une contrefaçon, délit pénalement sanctionné jusqu'à 3 ans d'emprisonnement et 300 000 € d'amende (art.
L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
examine la pratique d’échange d’informations
Transatlantic views
tant du point de vue du droit de l’Union
européenne que du droit de l’antitrust
étatsunien. Contrairement à d’autres sphères
du droit de la concurrence, l’échange
d’informations fait partie des domaines dans
on information
lesquelles la convergence transatlantique est
très poussée. Cependant, des disparités
existent et s’expliquent notamment par une
approche plus «ouverte» du droit de l’antitrust
exchange in
américain, où l’échange d’informations est
considéré comme une pratique neutre voire
bénéfique pour la concurrence. Le contraste
est latent avec le droit européen de la
concurrence qui traduit une réserve due aux
the field of
effets négatifs réels ou potentiels sur la
concurrence. Cette dernière position trouve
notamment appui dans quatre éléments :
la notion large d’»informations stratégiques»,
competition law
l’évaluation stricte du caractère indispensable
des informations, l’absence de «zone de
sécurité» des échanges d’informations ainsi
que la crainte, injustifiée, d’un verrouillage
anticoncurrentiel. Du point de vue de l’auteur,
l’approche restrictive du droit européen,
qui a par ailleurs affecté la pratique des
autorités nationales, mériterait d’être
assouplie en s’alignant davantage sur
la méthode adoptée par l’antitrust étatsunien.
Luís Silva Morais*
luis.morais.adv@netcabo.pt
Professor, Lisbon Law University (FDL), Lisbon
This contribution is but a brief exercise in PhD FDL, Jean Monnet Chair (Economic Regulation of the EU)
Founder and Partner of Luis Silva Morais/Sérgio Gonçalves do Cabo – Law Firm, Lisbon
comparative competition law, having its focus
Chairman, CIRSF (Research Center on Regulation and Supervision of the Financial Sector in scientific
on the competitive assessment of information
partnership with the Bank of Portugal and the Institute of Insurance of Portugal
exchange under EU competition law and US
antitrust. Unlike other areas of competition
law, information exchange is part of a broad
area of transatlantic convergence
Lúcio Tomé Feteira*
in competition policy. Nevertheless, disparities
do exist and they relate, in essence, to a more
‘open-minded’ approach under US antitrust,
l.tomefeteira@lsmadvogados.com
which views information exchange as being
mostly neutral or beneficial for competition, Professor, Nova Law School (FDUNL), Lisbon
in contrast with EU competition law’s PhD European University Institute, Florence
reservations about potential or actual Attorney-at-law
anticompetitive effects. The latter is mainly
supported by four elements: a broad notion
of “strategic information”, an excessively
strict approach to indispensability,
the absence of safety zones for information
I. Introduction
exchange, and an insufficiently justified
concern over anticompetitive foreclosure.
In our view, the more restrictive approach
under EU competition law, which has had
a trickle-down effect on national competition 1. In both his capacity as a competition lawyer and a scholar, Prof. Hawk has
authorities, could use some correction
not only devoted considerable attention to comparative antitrust, but also
and further alignment with
the approach under US antitrust. actively contributed to the development and expansion of the field. One of
such contributions was Prof. Hawk’s landmark article on the appraisal of
vertical restraints under EC competition law,1 a text whose reading is practically
mandatory for anyone studying EU competition law.
*This article is a chapter excerpted from
Professor Barry Hawk Liber Amicorum
to be published by Concurrences Review. 2. From the year when Prof. Hawk first published his sharp and timely criticism on
the assessment of vertical restraints under then EC competition law to the present
day, a considerable amount of water has run under the bridge of (nowadays)
EU competition law. Though differences still exist and are likely to persist in
the foreseeable future, the abyss that once separated US antitrust approach to
vertical restraints and the views endorsed by EU competition law on the same
subject is no more. The time elapsed since 1995 has allowed Brussels to move
1 B. E. Hawk, System Failure: Vertical Restraints and EC Competition Law (1995) 32 Common Market Law
Review, Issue 4, pp. 973-989.
Concurrences N° 3-2015 I International I Luís Silva Morais, Lúcio Tomé Feteira I USA: Transatlantic views on information exchange in the field of competition law 1closer to Washington,2 a phenomenon made possible by of enforcement—through the DOJ and the FTC—
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
the evolution of European competition policy in a field it has never had neither the margin for intervention and
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L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
where the laws of physics and geodynamics do not apply. decision, nor the discretion, enjoyed by the Commission
(acting as EU competition law enforcer) or by most
3. In other areas of antitrust/competition law, the national competition authorities of the EU Member
transatlantic divide remains a reality with the most obvious States. Furthermore, private parties were also given
example being the appraisal of single-firm conduct under broad powers of enforcement in the US context, which
Section 2 of the Sherman Act (monopolization) and were particularly enhanced by specific legal instru-
the prohibition of abuse of dominance in Article 102 of ments as treble damages or one-way cost recovery. That
the Treaty of the Functioning of the European Union explains why, historically, some of the most important
(“TFEU”). It lies beyond the scope of this Chapter to US antitrust precedents were created in private cases
engage in the discussion on whether such differences are (although this tended to happen above all in earlier cases
justified and justifiable,3 so suffice to refer that Section 2 and has somehow drastically changed in more recent
Sherman Act and Article 102 TFEU are likely to remain years).
the most salient differences that set competition policy
on both sides of the Atlantic apart. One may also find 6. As regards the federal agencies antitrust investigations
occasional differences in the review of mergers involving in civil cases, the final role in determining facts and liabi-
sectors of strategic interest, but such differences are more lities belongs to Courts—which have shown themselves
often ascribable to industrial policy motivations rather increasingly conservative in this field—and that, in
than to fundamental disagreements on competition policy. turn, may explain a more cautious or even conserva-
tive approach on the part of those Agencies (in compa-
4. Conversely, there is no doubt that, at the current rison with the European Commission). It is striking to
stage of evolution of US antitrust law and EU compe- notice that in recent years there were fewer cases initiated
tition law, different procedural frameworks influence to by the US federal agencies that have been pursued to
a certain extent different enforcement options, that, in the judicial phase, whilst the DOJ/FTC are assuming
turn, play a part in the maintenance of appreciable areas more frequently the role of amicus curiae supporting
of divergence between those two bodies of law. While the defendants in private cases. Conversely, in the field
different procedures were always bound to influence of cartels, the US federal antitrust agencies—namely the
the substantive definition of multiple legal institutes, DOJ—have extensive criminal enforcement powers that
that aspect is especially relevant in the field of competi- the European Commission does not possess (nor do most
tion law (a body of law whose rules are predominantly of the national antitrust enforcers of the EU Member
dependent, as regards its extent and legal meaning, on States, although things may change soon, since criminal
casuistic processes of enforcement). The US antitrust competition law statutes have recently been enacted in
system was clearly built upon a common law basis, which the UK and Ireland and other States seem to be conside-
fundamentally differs from an administrative system as ring reforms along that line as well).
the one that underlies EU competition law (and national
competition Laws in a significant part of the Member 7. Information exchanges, on the other hand, are not
States with civil law systems). an obvious candidate to be the subject of a comparative
exercise, at least to the extent that one seeks dissimilarities
The system of enforcement of US federal rather than commonalities. Unlike single-firm conduct
antitrust law relied essentially on Courts,
or even merger control, information exchange is part of
a broad area of transatlantic convergence in competition
which have played a major part in the rule matters, which seldom yields enough disparities to fuel
of reason parameter a contribution in the field of comparative competition
law. The purpose of this contribution is to unearth
5. In short, the system of enforcement of US federal such disparities, which we believe are a manifestation
antitrust law relied essentially on Courts, which have of a larger and deeper disagreement on the nature of
played a major part in building fundamental legal information exchanges: While US antitrust approaches
parameters—e.g. the rule of reason parameter. Although information sharing as being either neutral or beneficial
the US Federal Government was given significant powers to competition, EU competition law displays an almost
ingrained mistrust towards information exchange as the
source of potential or actual anticompetitive effects.
2 See on this overall movement of convergence between the US antitrust and The problem with the latter view is that information
EU competition law systems, L. S. Morais, Evolutionary Trends of EU Compe- exchange—like the chameleon we borrowed for our
tition Law – Convergence and Divergence with the US Antitrust Law in a title—may assume an extreme variety of tones that
Context of Crisis (2010) Revista da Concorrência e Regulação/Competition
and Regulation Review (C&R), Issue 1, Jan/Mar 2010, pp. 63‑101. competition authorities should be able to distinguish, but
in practice do not always do.
3 Compare B. E. Hawk, Article 82 and Section 2: Abuse and Monopolizing
Conduct, Issues of Competition Law and Policy, Vol. 2, p. 871, 2008;
Fordham Law Legal Studies Research Paper No. 1301690, available at 8. The changing tones of information sharing may
SSRN: http://ssrn.com/abstract=1301690; and H. Schweitzer, Parallels and
Differences in the Attitudes towards Single-Firm Conduct: What are the
and sometimes do have an anticompetitive effect, but
Reasons? The History, Interpretation and Underlying Principles of Sec. 2 associating the latter with former is prone to create
Sherman Act and Art. 82 EC (December 2007), EUI LAW Working Paper false positives (type I errors). Within certain limits set
No. 2007/32, available at SSRN: http://ssrn.com/abstract=1093248 or http://
dx.doi.org/10.2139/ssrn.1093248. by antitrust, the diversity of content, form and context
2 Concurrences N° 3-2015 I International I Luís Silva Morais, Lúcio Tomé Feteira I USA: Transatlantic views on information exchange in the field of competition lawsurrounding information exchange is in itself a reflection or as the very object of such agreement7—in practice it
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
of an attempt by rational actors to collect relevant data has been the residual and porous notion of “concerted
Ce document est protégé au titre du droit d'auteur par les conventions internationales en vigueur et le Code de la propriété intellectuelle du 1er juillet 1992. Toute utilisation non autorisée constitue une contrefaçon, délit pénalement sanctionné jusqu'à 3 ans d'emprisonnement et 300 000 € d'amende (art.
L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
dispersed throughout the market.4 Such diversity includes practice” that has proven a more adequate instrument
information exchanged directly among competitors or to deal with information sharing among competitors.
indirectly via a common agency (frequently a trade associa- Despite the fact that Court of Justice has stated that the
tion) or a third party (market research organisations, retail- context in which the information exchange takes place
ers, suppliers);5 information exchanged outside the context “is not liable to alter the legal analysis to be carried out
of any agreement, as an ancillary element of a broader under Article [101 TFEU],”8 the former has not remained
horizontal agreement or even the very object of an agree- indifferent to the competitive assessment carried out by
ment (stand-alone infringement); and the purpose presid- competition authorities and to the justification of the
ing over the information exchange—as well as the nature of infringement under Article 101(3) TFEU.
the information itself—can greatly vary from case to case.
The combination of these different circumstances provides 12. This being said, we should focus our attention in a
equally different scenarios, many of them neutral or even particular type of cooperation—concerted practice—
pro-competitive from an antitrust perspective. and its characterisation by the Court. In this regard, we
have to go back to the Dyestuffs9 judgment, in which the
9. This paper proposes to explore the chameleonic Court of Justice elaborated on the notion of concerted
features of information exchange—which perhaps too practice as “a form of coordination between undertakings
often (although somehow understandably) are not which, without having reached the stage where an agree-
properly apprehended by Competition Authorities— ment properly so-called has been concluded, knowingly
against the background of a comparative research into substitutes practical cooperation between them for the
EU competition law and US antitrust. The itinerary risks of competition.”10 Although such “form of coordina-
is divided into five stages, which include the present tion” is not to be confounded with mere parallel conduct,
(I) introduction, (II) the assessment of information the latter “may however amount to strong evidence of such
exchanges between competitors under EU competition a practice if it leads to conditions of competition which do
law and (III) US antitrust, followed by (IV) the analysis not correspond to the normal conditions of the market,
of the distinctive traits of the competition assessment having regard to the nature of the products, the size and
carried out in both sides of the Atlantic and, finally, (V) number of the undertakings, and the volume of the said
some concluding remarks on the topic. market.”11
13. The rationale that stands behind the prohibition
II. Information of concerted practices—the principle of economic
self-determination—was fleshed out in the Suiker Unie12
exchange under judgment, where the Court stated that “each economic
operator must determine independently the policy which
EU competition law he intends to adopt on the common market including the
choice of the persons and undertakings to which he makes
offers or sells.”13 While not precluding the possibility
10. Information exchange logically requires the of undertakings adapting themselves intelligently to
involvement of at least two (potential or actual) present or future market conditions—as rational actors
competitors—even if in some occasions it appears to are expected to do—“it does however strictly preclude
be nothing but unilateral disclosures of information6— any direct or indirect contact between such operators, the
and may thus be subject to scrutiny under Article 101(1) object or effect whereof is either to influence the conduct
TFEU. It should be recalled that the first paragraph of this on the market of an actual or potential competitor or to
provision prohibits all agreements between undertakings,
decisions by associations of undertakings and concerted
practices “which may affect trade Member States and which
have as their object or effect the prevention, restriction or 7 See Case T-35/92, John Deere Ltd. v. Commission of the European Communi-
ties [1994], ECR II-00957; and Case C-7/95 P, John Deere Ltd. v. Commission
distortion of competition within the internal market.” of the European Communities [1998], ECR I-03111.
8 See Case C-238/05, Asnef-Equifax, Servicios de Información sobre Solvencia
11. Although competitors may engage in information y Crédito, SL v. Asociación de Usuarios de Servicios Bancarios (Ausbanc)
exchange as part of an horizontal agreement between [2006], ECR I-11125, § 32.
undertakings—either as a facilitating element thereof 9 Case 48/69, ICI v. Commission of the European Communities [1972] ECR
619.
10 Ibid. § 64.
4 The point has epistemological consequences that largely exceed the 11 Ibid. § 66. In general, on distinct forms of cooperation between undertak-
topic of this paper but which have been extensively analysed by Hayek. ings, see L. S. Morais, “Horizontal Cooperation Agreements, Chapter 2”, in
See F. A. Hayek, Individualism and Economic Order (Chicago, Chicago Handbook on European Competition Law – Substantive Aspects, I. Lianos
University Press, 1980). and D. Geradin (eds), Edward Elgar, 2013.
5 Sometimes referred to “hub-and-spoke” collusion; see Bellamy & Child, 12 Joined Cases 40 to 48, 50, 54 to 54, 11, 113 and 114/73, Coöperatieve Vereni-
European Union Law of Competition, 7th edition (edited by Vivien Rose and ging “Suiker Unie” UA and others v. Commission of the European Commu-
David Bailey), Oxford, 2013, OUP, p. 347. nities [1975], ECR 01663. See also Case 172/80, Gerhard Züchner v. Bayeri-
sche Vereinsbank [1981], ECR 2021.
6 As when an undertaking unilaterally discloses strategic information to its
competitors. 13 Suiker Unie, § 173.
Concurrences N° 3-2015 I International I Luís Silva Morais, Lúcio Tomé Feteira I USA: Transatlantic views on information exchange in the field of competition law 3disclose to such a competitor the course of conduct which individual sales) and the highly concentrated structure
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
they themselves have decided to adopt or contemplate of the market created artificial transparency and favoured
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L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
adopting on the market.”14 Although the notion of a collusive outcome.
concerted practices extends beyond information sharing,
it fits the latter particularly well. 17. Conversely, in Asnef-Equifax18 it was the economic
conditions in the relevant market and the nature of
14. The relevant number of judgments issued by the the information exchanged that set aside any potential
Court of Justice is relatively modest and the majority anti-competitive effects. At stake was a system for the
deals with concerted practices involving exchange of exchange between financial institutions of credit infor-
information. We have selected a few of these judgements mation concerning the identity and economic activity of
(Wood Pulp II, John Deere, Asnef-Equifax, T-Mobile, and debtors. Provided that certain safeguards were in place,
Dole) on account of their relevance to clarify the analyt- the Court recognised that such a system was not liable,
ical grid deployed under EU competition law. in principle, to have the effect of restricting competition,
while it could have positive effects in reducing the risk
The relevant number of judgments issued of defaults and thus bringing down the overall cost of
by the Court of Justice is relatively modest
borrowing.19
and the majority deals with concerted 18. In T-Mobile,20 the Court of Justice was faced with
practices involving exchange of the question whether the disclosure on a single occasion
information of confidential and strategic information could result in
a concerted practice that restricted competition on the
market. The Court of Justice answered affirmatively on
15. The first of these cases, Wood Pulp II,15 concerned account of the fact that, if the purpose of that single
a system of quarterly public price announcements made
meeting “is only to concert action on a selective basis in
in close succession or even simultaneously by wood pulp
relation to a one-off alteration in market conduct with
producers. The Court of Justice considered that the price
reference simply to one parameter of competition, a single
announcements were not sufficient evidence of a concert-
meeting between competitors may constitute a sufficient
ed practice to fix prices because the specific features of
basis on which to implement the anti-competitive object
the relevant market could also explain the similarity in
which the participating undertakings aim to achieve.”21
the dates of the price announcements and the subsequent
parallelism of prices. The relevant passage is the follow-
19. In a more recent case (Dole),22 the Commission initiated
ing: “it must be stated that, in this case, concertation is
not the only plausible explanation for the parallel conduct. an infringement procedure against a number of banana
To begin with, the system of price announcements may producers and importers for having participated in a
be regarded as constituting a rational response to the fact concerted practice consisting in coordinating their quota-
that the pulp market constituted a long-term market and tion prices for bananas marketed in a number of national
to the need felt by both buyers and sellers to limit com- markets. The Court of justice upheld the Commission’s
mercial risks. Further, the similarity in the dates of price finding that the information exchange amounted to a
announcements may be regarded as a direct result of the restriction by object and that neither the structure of
high degree of market transparency, which does not have to the market, nor the existence of buyer power, nor the
be described as artificial. Finally, the parallelism of prices objective of obtaining efficiency gains, were relevant for
and the price trends may be satisfactorily explained by the categorising the conduct as a restriction by object.
oligopolistic tendencies of the market and by the specific
circumstances prevailing in certain periods. Accordingly, 20. The subject of information exchange was explicitly taken
the parallel conduct established by the Commission does up in the reviewed version of the horizontal cooperation
not constitute evidence of concertation.”16 guidelines23 (the “Horizontal Guidelines”), which presently
includes an entire section devoted to the topic (“General
16. In John Deere,17 the information exchange at stake Principles on the competitive assessment of information
(between the members of a trade association composed exchange”).24 Though partially a restatement of the Court’s
of manufacturers and importers of agricultural tractors case law, the section dedicated to information exchanges was
operating in the UK) did not concern prices and was also a necessary, albeit in our view far from accomplished
not supported by any anti-competitive arrangement.
However, the Court of Justice found that the nature
of information (which allowed the identification of
18 Case C-238/08, Asnef-Equifax v. Ausbanc [2006] ECR I-11145.
19 Asnef-Equifax, §§ 55-56.
14 Ibid. § 174. 20 Case C-8/08, T-Mobile Netherlands [2009] ECR I-4529.
15 Case C-89/85 etc., Åhlström Osakeyhtiö v. Commission (“Wood Pulp II”) 21 T-Mobile, § 60.
[1993] ECR I-1307.
22 Case T-588/08, Dole Food and Dole Germany [2013], not yet reported.
16 Wood Pulp II, § 126.
23 Commission Communication – Guidelines on the applicability of Article 101
17 Case T-35/92, John Deere [1994] ECR II-957, affirmed on appeal in case of the Treaty on the Functioning of the European Union to horizontal co-oper-
C-7/95P, John Deere [1998] ECR I-3111. On the relevance of the market ation agreements (OJ C 11, 14.01.2011, pp. 1-72).
structure for the competitive assessment of information exchange, see also
case C-194/99 P, Thyssen-Stahl [2003] ECR I-10885. 24 Pp. 13-25, §§ 55-110 of the Horizontal Guidelines.
4 Concurrences N° 3-2015 I International I Luís Silva Morais, Lúcio Tomé Feteira I USA: Transatlantic views on information exchange in the field of competition lawanalytical exercise25 to meet growing concerns of the industry 23. The first sub-section serves as an introduction to the
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
about the legal uncertainty that surrounded the topic (and anticompetitive concerns associated with information
Ce document est protégé au titre du droit d'auteur par les conventions internationales en vigueur et le Code de la propriété intellectuelle du 1er juillet 1992. Toute utilisation non autorisée constitue une contrefaçon, délit pénalement sanctionné jusqu'à 3 ans d'emprisonnement et 300 000 € d'amende (art.
L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
has not been removed or even mitigated in the extent that we exchange, a point that cannot be dissociated from the
deem adequate with such Horizontal Guidelines). It should multifaceted appearance of information exchange.
be reminded that under Article 1 of Regulation 1/2003, As referred in the Horizontal Guidelines, information
companies are required to undertake a self-assessment of exchanges can assume different forms (data can be
the compatibility of their conduct with competition rules. exchanged between competitors either directly or indirectly
through a common agency or a third party) and can take
Behind its cautious wording, the Horizontal place in different contexts (either as an ancillary or as a
Guidelines do not always strike an adequate
stand-alone information exchange arrangements). At the
same time, as acknowledged in the Horizontal Guidelines,
balance between the anti-competitive information exchanges may be the source of positive and
potential of information exchange and its negative effects. The former are basically the result of the
pro-competitive effects, with the latter efficiency-inducing effect of the flow of information both
being neglected in favour of the former
for companies (reduction of information asymmetries,
internal efficiency through benchmarking, efficient
management of inventories) and consumers (reduction
21. Whereas introduction of information exchange in the
of search costs and making a more informed choice,
Horizontal Guidelines was generally welcomed, the somewhat
which in turn induces an improvement of choice itself).32
mistrustful tone adopted by the Commission proved to be less
of a success.26 Behind its cautious wording, the Horizontal
24. The second sub-section addresses what the Horizontal
Guidelines do not always strike an adequate balance between
Guidelines term as “the main concerns pertaining to
the anti-competitive potential of information exchange and its
information exchanges:”33 the collusive outcome and
pro-competitive effects, with the latter being neglected in
anti-competitive foreclosure. The collusive outcome
favour of the former. In fact, while information exchanges
can be brought about in three ways: directly, through
are too often—and at times, too easily—associated with
a common understanding on the terms of coordina-
cartels, only a painstaking exercise of data collection may
tion of the companies competitive behaviour; indirectly,
allow companies to meet the check-list included in the
either through increased internal stability of a collusive
Horizontal Guidelines and dispel such an association.27
outcome on the market (information exchange induces
transparency which in turn facilitates detection and
22. At this point it is useful to provide a brief overview
sanction of deviations from the collusive outcome) or
of the section devoted to information exchange in the
through increased external stability of a collusive of a
Horizontal Guidelines. This section is divided into
collusive outcome on the market (again it is transparency
four sub-sections that cover (i) definition and scope,28
induced by information exchanges which makes possible
(ii) assessment under Article 101(1) TFEU,29 (iii) assess-
the detection and targeting of new entrants). As for
ment under Article 101(3) TFEU30 and (iv) a list of
anti-competitive foreclosure, this concern refers to the
examples of different types of information exchange and
fact that companies that do not participate in the infor-
their appraisal under the Horizontal Guidelines.31
mation exchange are placed at a “significant competitive
disadvantage as compared to companies affiliated within
the exchange system.”34
25 For a similar comment in the context of the appraisal of joint ventures, see
L. D. S. Morais, Joint Ventures and EU Competition Law, Oregon, Hart, 2013, 25. Since information exchange is captured under
p. 196.
Article 101 TFEU, the distinction between restriction by
26 For an appraisal of the Horizontal Guidelines, see C. Hatton, L. M. Breed, object and restriction by effect also applies irrespective
M. Mills, The European Commission publishes a set of documents dealing
with cooperation between competitors, 14 January 2011, e-Competitions
of the type of cooperation (agreement, decision by
Bulletin January 2011, Art. No 35767; N. Petit, The European Commis- an association of undertakings or concerted practice)
sion issues new guidelines on horizontal co-operation agreements focusing that allows the flow of data between competitors. This
on information exchanges under Art. 101 TFEU, 14 January 2011, e-Com-
petitions Bulletin January 2011, Art. No 36403; A. Lamadrid De Pablo, distinction is all the more relevant since, as the Court of
The European Commission issues new guidelines on the applicability of Justice pointed out in Hüls35 and in a number of other
Art. 101 TFEU to horizontal co-operation agreements equating information judgments,36 restrictions by object dispense with an
exchanges between competitors with cartels, 14 January 2011, e-Competi-
tions Bulletin January 2011, Art. No 36405; and A. Winckler, M. Dolmans,
The European Commission publishes new guidelines on the applicability of
article 101 TFEU to horizontal co-operation agreements, 14 January 2011,
e-Competitions Bulletin January 2011, Art. No 45124. 32 On the pro-competitive effects that may be associated with information
exchanges, see D. Sevy, V. Meunier, S. Naugès and S. Risser, Exchange of
27 As Wagner-von Papp rightly points out, the association between informa- information: Can exchange be pro-competitive? September 2013, Concur-
tion exchanges and cartels is backed by an historic pattern which nowadays rences no 3-2013, Art. No 53053, www.concurrences.com; and Wagner-von
has little correspondence with the average case of information exchange. See Papp (2013), pp. 147 ff.
F. Wagner-von Papp, Information exchange agreements, in Handbook on
European Competition Law – Substantive Aspects, I. Lianos and D. Geradin 33 § 64 of the Horizontal Guidelines.
(eds), Edward Elgar, 2013, p. 132, fn. 8. 34 § 70 of the Horizontal Guidelines.
28 §§ 55-63 of the Horizontal Guidelines. 35 Case C-199/92 P, Hüls AG v. Commission of the European Communities
29 §§ 64-94 of the Horizontal Guidelines. [1999], ECR I-04287.
30 §§ 95-104 of the Horizontal Guidelines. 36 See, for example, Case C-49/92 P, Commission of the European Communities
v. Anic Partecipazioni Spa [1999], ECR I-04125; and Case C-235/92, Monte-
31 §§ 105-110 of the Horizontal Guidelines. catini Spa v. Commission of the European Communities [1999], ECR I-04539.
Concurrences N° 3-2015 I International I Luís Silva Morais, Lúcio Tomé Feteira I USA: Transatlantic views on information exchange in the field of competition law 5assessment of the impact on the market while restrictions 29. There are two points worth advancing at this stage
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
by effect do not. According to the Horizontal Guidelines, and both concern perceived limitations of the Horizontal
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L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
information exchanges concerning future conduct Guidelines.
regarding prices or quantities are particularly likely to
be considered as having as their objective the restric- 30. The first concerns the Horizontal Guidelines broad
tion of competition (restrictions by object). Differently, definition of “strategic information” as “data that
the appraisal of information exchanges which fall into reduces strategic uncertainty in the market,” which can be
the category of restrictions by effect requires a case-by- related to “prices (for example, actual prices, discounts,
case analysis of the likeliness of an appreciable adverse increases, reductions or rebates), customer lists, produc-
impact on one or several competition parameters—price, tion costs, quantities, turnovers, sales, capacities, qualities,
output, product quality, product variety or innovation. marketing plans, risks, investments, technologies and R&D
programmes and their results.”40 In this respect, it would
Depending on market characteristics and appear even more suspicious if companies engaged in
on the characteristics of the information
exchanging data with no strategic (as understood in the
Commission’s broad terms) value whatsoever. Although
exchanged, anticompetitive effects— adding that the “strategic usefulness of data also depends
namely, a collusive outcome— on its aggregation and age, as well as the market context
will be more or less probable and frequency of the exchange,”41 the last statement hardly
mitigates the broad definition of strategic information,
26. In order to carry out such an appraisal it is essential to especially if we take into consideration that none of these
take into consideration “both the economic conditions of circumstances is sufficiently reassuring to dispel suspi-
the relevant markets and the characteristics of the informa- cions of collusion. In fact, according to the Horizontal
tion exchanged.”37 Depending on market characteristics Guidelines, the possibility that aggregate data and infre-
and on the characteristics of the information exchanged, quent exchanges may facilitate a collusive outcome is not
anticompetitive effects—namely, a collusive outcome— to be excluded altogether.42 In addition, there is no way to
will be more or less probable. Whereas transparency, a be sure when data becomes historic and no longer poses
high degree of market concentration, non-complex or a competitive threat,43 while the influence of the market
unstable market environments and symmetric market context upon the assessment of information exchanges is
structures are market characteristics that tend to favour in itself subject to a number of variables.44
collusive outcomes, the opposite is equally true. As for
the characteristics of the information exchange, the 31. The second relates to the restrictive understanding
following factors tend to play a role in favouring collu- of the indispensability condition under Article 101(3)
sive outcomes: the strategic nature of the information, TFEU as applied to information exchange. In this
in particular “data that reduces strategic uncertainty in respect, the Horizontal Guidelines state that “[f]or
the market;”38 data coverage, in the sense that the likeli- fulfilling the condition of indispensability, the parties’ will
ness of restrictive effects is proportional to the portion need to prove that the data’s subject matter, aggregation,
of the relevant market covered; individualised data (as age, confidentiality and frequency, as well as coverage, of
opposed to aggregate data); age of the data; frequency the exchange are of the kind that carries the lowest risks
of the information exchange; non-public nature of the indispensable for creating the claimed efficiency gains.
information and of the information exchange. Moreover, the exchange should not involve information
beyond the variables that are relevant for the attainment of
27. In a third sub-section the Horizontal Guidelines the efficiency gains.”45
reviews information exchanges in the light of
Article 101(3) TFEU.39 While potential efficiency gains 32. Despite their best intentions, the Horizontal
should extend beyond companies to consumers (positive Guidelines’ approach to information exchange is not
condition) and should not entail the possibility of elimi- as open-minded as one would like it to be. In fact,
nating competition in respect of a substantial part of the it is not difficult for competitors to exchange data
products concerned (negative condition), the indispens- that, for one reason or the other, will be caught by
ability of the restriction requires that the latter does not Article 101(1) TFEU. This would not be too much of a
exceed what is necessary to achieve the efficiency gains problem if not for the particularly burdensome task of
generated by the information exchange. ticking all the boxes required by the assessment under
Article 101(3) TFEU. In addition, in a recent survey
28. Finally, the fourth sub-section provides a number of the most relevant national developments in the field
of examples intended to illustrate how the principles
enunciated in the previous three sub-sections can be applied.
40 Idem, § 86. On this point, see also Wagner-von Papp (2013).
41 Idem, ibidem.
42 Idem, §§ 89 and 91.
37 § 76 of the Horizontal Guidelines. 43 Idem, § 90.
38 Idem, § 86. 44 Idem, §§ 77 ff.
39 Idem, §§ 95-104. 45 Idem, § 101.
6 Concurrences N° 3-2015 I International I Luís Silva Morais, Lúcio Tomé Feteira I USA: Transatlantic views on information exchange in the field of competition lawof information exchange we have found some evidence Competitors50 (henceforth “Antitrust Guidelines”):
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
suggesting that the Commission’s mistrust towards “Certain types of agreements are so likely to harm compe-
Ce document est protégé au titre du droit d'auteur par les conventions internationales en vigueur et le Code de la propriété intellectuelle du 1er juillet 1992. Toute utilisation non autorisée constitue une contrefaçon, délit pénalement sanctionné jusqu'à 3 ans d'emprisonnement et 300 000 € d'amende (art.
L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
information agreements has passed-on to national tition and to have no significant procompetitive benefit
competition authorities.46 On the one hand, we have that they do not warrant the time and expense required
noticed that national competition authorities tend for a particularized inquiry into their effects. Once identi-
somehow to overlook the pro-competitive effects of infor- fied, such agreements are challenged as per se unlawful.
mation exchange;47 on the other hand, we have concluded All other agreements are evaluated under the rule of reason,
that national competition authorities sometimes qualify which involves a factual inquiry into an agreement’s overall
information exchange as being a restriction by object in competitive effect. As the Supreme Court has explained,
order to avoid the detailed analysis required by restric- rule of reason analysis entails a flexible inquiry and varies
tions by effect. On the whole, we detect a too frequent in focus and detail depending on the nature of the agree-
analytical deficit on the part of competition authorities ment and market circumstances.”51
that fails to capture the very diverse market “nuances”
which may lead to very different outcomes in terms of 35. Information exchanges amounting to a per se
the overall effects of information exchange (particularly violation of Section 1 either provide circumstantial
striking in our view is the lack of analytical confronta- evidence of an unlawful price fixing or market allocation
tion of implications arising from a dynamic and a static agreement or, in the absence of such an agreement,
perspective of economic analysis, which, in turn, could display a high probability of having an effect on prices.
evidence in some cases, as e.g. X. Vives points out, that The first situation is illustrated in In re Petroleum Prods.
under certain conditions undertakings may have interest Antitrust Litigation,52 where the defendants had been
in sharing information with no collusive purpose or involved in mutual exchange of pricing and price-re-
actual collusive outcome).48 lated information directly related with a conspiracy
to raise or stabilize prices in the market for refined oil
products. The second situation is exemplified in United
III. Information States v. Container Corp. of America,53 a case involving
the exchange of information between manufacturers of
exchange under pasteboard boxes. Under the rule of reason applied in
this case, “if the market in which the information exchange
occurred is concentrated, if the product is fungible so that
US antitrust price is the predominant element in competition, and if the
demand at the competitive price is inelastic, the exchange is
33. Information exchanges among competitors may virtually certain to be condemned, particularly if the court
amount to a violation of Section 1 of the Sherman Act finds any relationship, downward or upward, between the
to the extent that they qualify as a “contract, combination information exchange and the market price.”54
in the form of trust or otherwise, or conspiracy, in restraint
of trade or commerce among the several States, or with The recognition of the pro-competitive
effect of information sharing agreements
foreign nations.” Should this be the case, the lawfulness
of the information exchange is examined either under
the “rule of reason” or, in those rare occasions where is neither a novelty, nor a rarity under
it amounts to an outright infringement of Section 1, US antitrust and is shared both by
condemned as a per se violation.49 the US courts and antitrust agencies
34. The distinction between these two types of analysis— 36. The recognition of the pro-competitive effect of
per se condemnations and rule of reason—is premised information sharing agreements is neither a novelty,
upon the likelihood of anticompetitive effects associated nor a rarity under US antitrust and is shared both by
with certain types of agreements. As explained in the US courts and antitrust agencies. The latter is
the Antitrust Guidelines for Collaborations Among clearly reflected in the Antitrust Guidelines, but was
also expressed on several occasions in the FTC advisory
opinions and in the DOJ business review letters.
46 L. D. S. Morais, L. T. Feteira, Concerted practices and exchange of informa-
tion: Recent developments in EU and national case law, 18 February 2014,
e-Competitions Bulletin Exchange of information, Art. No 63909
47 Idem, pp. 4-5.
48 Idem, pp. 6-7. See also, on this approach, X. Vives, Information Sharing 50 Federal Trade Commission and the Department of Justice, Antitrust Guide-
among Firms, in The New Palgrave Dictionary on Economics, 2th edition, lines for Collaborations Among Competitors, April 2000, available online at:
2006; emphasizing as well the analytical deficit at stake, see S. Naugès, http://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-doj-is-
S. Risser, Les échanges d’informations proconcurrentiels dans le cadre de la sue-antitrust-guidelines-collaborations-among-competitors/ftcdojguidelines.
commande publique, Concurrences no 3-2013, pp. 1 ff; D. Sevy, V. Meunier, pdf
Remarques sur le bilan concurrentiel des “échanges d’informations,” Concur-
rences no 3-2013, pp. 15 ff. 51 Idem, p. 3.
49 See the report prepared by the US authorities for the 2010 OECD roundtable 52 In re Petroleum Prods. Antitrust Litigation, 906 F 2d 432, (9th Cir. 1990).
on Information Exchanges between Competitors under Competition Law 53 United States v. Container Corp. of America, 393 U.S. 333 (1969).
[henceforth “OECD – US Report”], pp. 295-296. All the contributions have
been collected and are available online at: http://www.oecd.org/competition/ 54 H. Hovenkamp, Federal Antitrust Policy – The Law of Competition and its
cartels/48379006.pdf. Practice, 4th edition, St. Paul, West, 2011, p. 236.
Concurrences N° 3-2015 I International I Luís Silva Morais, Lúcio Tomé Feteira I USA: Transatlantic views on information exchange in the field of competition law 737. Though not the first, Maple Flooring Mfrs.’ Ass’n v. presentation (individual or aggregate data) of the data
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
United States55 was one of the earliest cases involving exchanged. The point is explained in the following
Ce document est protégé au titre du droit d'auteur par les conventions internationales en vigueur et le Code de la propriété intellectuelle du 1er juillet 1992. Toute utilisation non autorisée constitue une contrefaçon, délit pénalement sanctionné jusqu'à 3 ans d'emprisonnement et 300 000 € d'amende (art.
L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
information exchange among competitors decided paragraph of the Antitrust Guidelines: “The compet-
by the Supreme Court. The case involved the Maple itive concern depends on the nature of the information
Flooring Manufacturer’s Association, an association shared. Other things being equal, the sharing of informa-
gathering a significant number of sellers and shipper tion relating to price, output, costs, or strategic planning is
of maple flooring and whose activity consisted in more likely to raise competitive concern than the sharing
collecting and disseminating detailed historic informa- of information relating to less competitively sensitive
tion concerning the industry. Three elements proved variables. Similarly, other things being equal, the sharing
decisive in the Supreme Court’s ruling: the information of information on current operating and future business
exchange did not cover current prices or the names of plans is more likely to raise concerns than the sharing of
purchasers and sellers; the data were not kept confiden- historical information. Finally, other things being equal,
tial but instead widely publicised in trading journals; the sharing of individual company data is more likely to
and no alignment of prices resulted from the informa- raise concern than the sharing of aggregated data that does
tion exchange. The following passage provides an illumi- not permit recipients to identify individual firm data.”56
nating account of the pro-competitive benefits that may
be associated with information exchange agreements: 40. The second element is the (ii) likelihood that (competitively
“It is the consensus of opinion of economists and of many sensitive) information will be shared and used for
of the most important agencies of government that the anticompetitive purposes. As the Antitrust Guidelines clarify,
public interest is served by the gathering and dissemina- “this likelihood depends on, among other things, the nature of the
tion, in the widest possible manner, of information with collaboration, its organization and governance, and safeguards
respect to the production and distribution, cost and prices implemented to prevent or minimize such disclosure.”57
in actual sales, of market commodities because the making
available of such information tends to stabilize trade and
industry, to produce fairer price levels and to avoid the
All in all, the elements taken into
waste which inevitably attends the unintelligent conduct of consideration by US antitrust agencies
economic enterprise. ʻFree competition’ means a free and do not differ significantly from those
open market among both buyers and sellers for the sale and mentioned in the Horizontal Guidelines
distribution of commodities. Competition does not become
less free merely because the conduct of commercial opera- 41. All in all, the elements taken into consideration by
tions becomes more intelligent through the free distribution US antitrust agencies do not differ significantly from those
of knowledge of all the essential factors entering into the mentioned in the Horizontal Guidelines. Features such
commercial transaction. General knowledge that there is an as the nature and quantity of the information exchanged,
accumulation of surplus of any market commodity would the parties’ intent behind the information exchange, the
undoubtedly tend to diminish production, but the dissem- industry structure, the public or confidential nature of
ination of that information cannot in itself be said to be the information and the frequency of the exchange are
restraint upon commerce in any legal sense. The manufac- also criteria taken into consideration for the assessment
turer is free to produce, but prudence and business foresight of the legitimacy of the information exchange.58
based on that knowledge influences free choice in favor
of more limited production. Restraint upon free competi- 42. Unlike its EU counterpart, the Antitrust Guidelines
tion begins when improper use is made of that information designate a number of “safety zones” with the explicit
through any concerted action which operates to restrain the purpose of providing the participating companies with a
freedom of action of those who buy and sell.” “degree of certainty in situations in which the anticompet-
itive effects are so unlikely that that the antitrust agencies
38. The scope covered by Antitrust Guidelines embraces presume the arrangements to be lawful without inquiring
different types of collaborations among competitors, into particular circumstances.”59 Information exchanges
including information sharing. The potential that fall outside the safety zone are subject to an evalu-
pro-competitive effects of information notwithstanding, ation under the general principles sketched above, while
the main point of concern addressed by Antitrust those that fit the safety zone are presumed—absent
Guidelines is that information sharing agreements may extraordinary circumstances (juris tantum)—lawful.
be used to facilitate collusion. In the absence of actual
anticompetitive effects, evaluating whether or not such 43. The Antitrust Guidelines distinguish between two types
probability exists will depend on two elements, namely of safety zones: those concerning competitor collaboration
the (i) “nature of the information shared” and (ii) the in general involving a market share of no more than twenty
likelihood that such information will be shared and used percent in each relevant market where competition may
for the purpose of restricting competition.
39. In what concerns the (i) nature of the information
shared, it comprises the content (competitively sensitive 56 Idem, pp. 15-16.
nature or not), age (current, future or historic) and 57 Idem, p. 21.
58 On this point, with references to the case law, see the OECD – US Report,
pp. 296-298.
55 Maple Flooring Mfrs.’ Ass’n v. United States, 268 U.S. 563 (1925). 59 Idem, p. 25.
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