bid-rigging

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On January 14, 2021, the Court of Justice of the European Union (CJEU) answered the preliminary ruling requested by the Finish Supreme Administrative Court (FSC) on June 13, 2019 in case C-450/19 – Kilpailu- ja kuluttajavirasto, (the judgment is available here).

The Finish Competition Authority (FCA) ruled that Eltel had infringed Article 101(1) TFEU (and the national equivalent) by reaching an agreement with the company Empower on prices, margins and market sharing for the construction of electricity transmission lines in Finland. The FCA ruled that it was a single and continuous infringement implemented in the course of several meetings from at least October 2004 until March 2011. As a result, it proposed fining Eltel €35 million. Empower was granted leniency. Therefore, it was exempted from all sanctions.

On March 30, 2016, the Finish Commercial Court (markkinaoikeus) dismissed the fine proposal, taking the view that the infringement was time-barred because Eltel had ceased to participate in the restriction of competition before October 31, 2009. The FCA appealed that decision to the FSC, which referred a question to the CJEU for a preliminary ruling to establish at what point an undertaking’s  alleged participation in an infringement of Article 101(1) TFEU is regarded as having ended, which consists in the concerted submission, with its competitors, of a tender, when that undertaking has won the tender and has concluded a contract with the contracting authority.

According to the CJEU, the duration of the participation covers the entire period during which that undertaking implemented the anticompetitive agreement that it entered into with its competitors, including the period during which the offer was in force or could have become a definitive contract. It states that it cannot extend beyond the date on which the essential characteristics of the contract were definitively determined. In general, this coincides with the date of the signature of the contract, as this constitutes the latest moment the contracting authority can obtain the services in question under normal market conditions. However, the Court leaves it up to the FSC to determine this moment.

The judgment confirms that any restrictive effects produced by the infringement disappear at that moment, underlining the need to distinguish such potential restrictive effects on competition from the economic impact that this type of anticompetitive practice could have in the future, in view of possible claims for damages before national courts. 

Finally, the CJEU states that the effective implementation of the legal concept of of limitation period cannot justify the artificial extension of the duration of the infringement period in order to allow competition authorities to prosecute it.

In light of the foregoing, it is worth noting the importance of this judgment for the consolidation of an established position of the courts with regard to the duration and the scope of bid-rigging and, in particular, the moment where it ends, which cannot be extended beyond the contract award. Moreover, it should be emphasized that the CJEU interprets Article 101 TFEU restrictively, clarifying that the anticompetitive effects of the conduct cannot be extended, as this could lead to an artificial extension of the duration of the conduct to avoid the effects of limitation and allow competition authorities to prosecute such practices.

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