Liability of an undertaking for the acts of a service provider

Case Summary 5 – ‘VM Remonts’ C-542/14, 21 July 2016 (date of ECJ Judgment)

Issue

For the purpose of Article 101(1) TFEU (EU equivalent of our First Conduct Rule), whether an undertaking would be held liable for a concerted practice arising from the acts of an independent service provider supplying it with services?

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Liability of cartel facilitator

Case Summary 3: AC-Treuhand AG, C-194/14P

Issue: Would a mere facilitator of a cartel be caught by the First Conduct Rule?

The ECJ (“the Court”) in AC-Treuhand AG, C-194/14P, was faced with the issue as to “whether a consultancy firm may be held liable for infringement of Article 81(1) EC where such a firm actively contributes, in full knowledge of the relevant facts to the implementation and continuation of a cartel among producers active on a market that is separate from that on which the undertaking itself operates.” [26]

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Restriction of competition by object

Case Summary 1: Toshiba Corporation v European Commissio Case C-373/14P

The First Conduct Rule

Section 6 (1) of the Competition Ordinance (Cap.619) provides that:

            “An undertaking must not (a) make or give effect to an agreement; (b) engage in a concerted practice; or (c) as a member of an association of undertakings, make or give effect to a decision of the association, if the object or effect of the agreement, concerted practice or decision is to prevent,  restrict or distort competition in Hong Kong.” [Emphasis added]

The use of the word “or” makes it clear that it is non-cumulative. It would follow that where there is a restriction of competition by object, there is no need to prove the existence of anti-competitive effects for the First Conduct Rule to apply. This is consistent with paragraph 3.2 of the Guideline on the First Conduct Rule (“the Guideline”).

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