Araceli Turmo , 24 juin 2013

According to the European Court of Justice, seeking legal advice does not preclude the imposition of fines for intentional or negligent infringements of Article 101 TFEU, nor can this information form the basis of a legitimate expectation that the company’s conduct was not incompatible, or would not give rise to the payment of a fine. This ruling was made on 18 June 2013, in reply to a preliminary reference by an Austrian court, in Case Schenker & Co A.G. e.a. (C-681/11).

Schenker and the other defendants in the national proceedings were members of the “SSK”, an interest group representing certain freight forwarding agents and logistics service providers with a forwarding licence. The Austrian Cartel Court, and the legal practice specialized in EU competition law consulted by the SSK, took the view that the SSK constituted a minor cartel which could be implemented without approval under Austrian law, but did not examine its compatibility with European Union law. However, after the Commission announced that it had reason to believe that these undertakings had infringed European Antitrust Law, the Federal Competition Authority claimed that Schenker had infringed, inter alia, Article 101 TFEU, and requested the Higher Regional Court in Vienna to order the other defendants to pay a fine for the said infringement. The Court dismissed the application, on the grounds that their undertakings were not at fault, in particular because they had sought legal advice on the lawfulness of their conduct in advance. On appeal, the Supreme Court referred two questions to the ECJ for a preliminary ruling. The first one sought to determine whether fines may be imposed on the basis of Article101 TFEU, when the undertaking had sought specialized legal advice, and/or when a national competition authority had found the conduct to be permissible solely on the basis of national law. A second question was whether national competition authorities could decide not to fine a company which has participated in a leniency programme.

Regarding the first question, the ECJ found that neither of those two factors could, by themselves, exempt a company from the imposition of a fine. The appropriate criterion under Article 23(2) of Regulation n° 1/2003is whether the company could not be unaware of the anti-competitive nature of its conduct. In the case at hand, the members of the SSK coordinated their tariffs for transport throughout Austria, and could therefore not have met this criterion. According to the Court, wrong legal characterization of its own conduct cannot have the effect of exempting the company from the imposition of a fine. Neither can companies plead breach of the principle of the protection of legitimate expectations on the basis of advice given by a legal practice, or by a national competition authority such as that at issue, neither of which constitute authorities competent to decide that there is no infringement of Article 101 TFEU. Moreover, in the main proceedings, the national authority had only examined the conduct at issue on the basis of national competition law.

As regards the second question, the ECJ held that Article 5 of Regulation n° 1/2003 does not preclude national authorities from finding an infringement of Article 101 TFEU without imposing a fine, but that such a decision must be made only in exceptional circumstances, so as not to undermine the effective and uniform application of the Treaty. The Court recalled that the Commission’s power to reduce fines is restricted only where the company’s cooperation was genuine, and made it easier to detect the cartel and bring it to an end. The Member States’s leniency programmes may therefore only grant immunity in ‘strictly exceptional situations’, such as where the undertaking’s cooperation was decisive in detecting and suppressing the infringement.

The Grand Chamber thus refuses to follow Advocate General Kokott’s Opinion, in which, after recognizing the central importance of legal advice in the system set up by Regulation n° 1/2003, she had set out a number of minimum requirements according to which expectations created by legal advice may be recognized as the basis for an error of law precluding liability. Such requirements would have included the independence of the lawyer advising the undertaking, or the fact that the advice must not be manifestly incorrect. Although these strict criteria would not have been met in the case at hand, the Court’s ruling clearly goes further and excludes any such reliance on legal advice.

Reproduction autorisée avec l’indication: Araceli Turmo, "Seekig Legal Advice does not Exempt Companies from Payment of Antitrust Fines", www.ceje.ch, actualité du 24 juin 2013.