Trade associations like EUROFER pursue legitimate objectives. They provide a valuable service for their members. They represent and promote common interests of members in front of government and administrative bodies, political and social groups and the public. They may conduct market research programs and track current industry issues. Such activities do not raise antitrust concern. Though coordinated with or among members, they do not relate to members’ market activities. “Joint lobbying” is no antitrust offence. On the contrary, trade associations act in the public interest because they collect and bundle information from members and enable them to speak with one voice.
Trade associations like EUROFER also serve as a communication centre where statistical data are collected and distributed and where members exchange general information. Such exchange is on principle not objectionable.
However, trade associations are composed of a group of competitors. The association could be used by its members as a platform to coordinate members’ market behaviour in their quality as undertakings. Such coordination would qualify as an infringement of Art. 81 EC Treaty (ECT), and/or of national competition laws, where applicable.
EUROFER is committed to comply with European Union [EU] and national antitrust laws. EUROFER’s activities must on no account lead towards a restriction of competition between members, nor must meetings of members organized or supported by EUROFER be used by members to discuss or coordinate future market behaviour resulting in a restriction of competition. More generally, the platform offered by EUROFER to its members must not be misused for activities prohibited by the antitrust rules.
These Guidelines are addressed to all persons involved in the activities of EUROFER.
The most important competition rule to be observed in the conduct of EUROFER’s activities is Art. 81 ECT.
Art. 81 ECT prohibits agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect an appreciable restriction of competition. This prohibition applies without limitation to all hardcore agreements between undertakings (such as price-, quantity-, customer- or territorial agreements). Other restrictive agreements may not be caught by the prohibition if they lack an appreciable effect (de-minimus rule). The EU Commission considers restrictive agreements not to be appreciable when the parties’ joint share on the relevant market does not exceed 10% (agreements between competitors), 15% (agreements with suppliers or customers), or 5% (cumulative effect of agreements). Likewise, restrictions in agreements between small and/or medium-sized undertakings are normally not appreciable. Even appreciable restrictive agreements will be exempted from the prohibition if they fulfil certain conditions contained in Art. 81 (3) ECT. Such exemption no longer depends on an explicit decision adopted by the EC Commission but applies automatically once the conditions of Art. 81(3) are being met (“legal exception”). Undertakings therefore must assess by themselves whether their agreements produce appreciable effects on competition and fulfil the conditions of the exemption.
With regard to trade associations, the European Court of Justice (ECJ) interprets Art. 81 ECT in permanent case law to be addressed not only to the association’s member undertakings, but also to the association itself in order to prevent the prohibition of restrictive agreements and concerted practices to be circumvented by decisions of the association. Art. 81 ECT thus applies to associations of undertakings wherever their own activity or the activity of their members purports to produce consequences which Art. 81 ECT wishes to prevent.
Art. 81 ECT applies directly in the EU member states. A similar rule is applicable in the European Economic Area (EEA). In the member states, national competition legislation has been enacted which is similar to EU antitrust law.
Antitrust offences are subject to severe sanctions. Restrictive agreements are unenforceable. Further, under the laws of EU member states, third parties may raise claims in private actions before national courts for damages suffered through infringements of Art. 81 ECT. Finally, the EU Commission is empowered to impose fines on undertakings and associations of undertakings participating in the infringement of up to 10% of their total worldwide turnover in the preceding business year.
According to the EU Commission’s guidelines (published in the Official Journal of the EU – 2006/C 210/02), fines will consist of a basic amount set at a level of up to 30% by reference to the value of the undertaking’s sales in the market to which the infringement relates. This basic amount can be increased or reduced subject to aggravating or mitigating circumstances.
Where the infringement committed by a trade association relates to the activities of its members, the value of sales will generally be calculated in correspondence with the sum of the value of sales of all members active on the market affected by the infringement.
Where a fine is imposed on a trade association on account of the turnover of its members and the trade association is not solvent, the EU Commission is entitled to require payment of the fine
“… directly by any of the undertakings whose representatives were members of the decision-making bodies concerned of the association.”
Where necessary to ensure full payment of the fine, the EU Commission is entitled to require payment of a balance
“… by any of the members of the association which were active on the market on which the infringement occurred.”
The EU Commission shall, however, not require payment from undertakings
“… which show that they have not implemented the infringing decision of the association and either were not aware of its existence or have actively distanced themselves from it before the Commission started investigating the case.”
(Art. 23 par. 4 of Council Regulation No. 1/2003)
In some countries, certain national antitrust infringements are treated as criminal offence and can lead to imprisonment and/or fines for individuals.
Infringements against Art. 81 ECT can be committed not only by agreements or decisions but also by concerted practices. According to the case law of the ECJ, a concerted practice is a form of coordination not formalized through the conclusion of an agreement but which substitutes practical cooperation for the risks of competition. An illegal concerted practice between competitors of their future market behaviour may include such situations as signals given by a participant of a meeting and expected and understood by the other attendants.
The activities of trade associations like EUROFER may lead to situations where antitrust issues could arise. Some examples are being specified here-below.
Trade associations adopt decisions which may relate to members’ future competitive conduct and thereby produce or be aimed at illegal restrictions. Art. 81 ECT will apply to such decisions irrespective of the nature of their adoption (by the association’s executive body under its statutory provisions or by members in meetings).
Such data exchange can under certain circumstances constitute an antitrust infringement (see below in more detail: Market Information Systems).
In principle, trade associations like EUROFER bear no responsibility for antitrust infringements of their members. However, it is important for a trade association to keep in mind the typology of some restrictions of competition which may be committed by member undertakings in connection with trade association matters or activities. EUROFER must on no account support or assist or get involved in such illegal conduct of members:
Typically, trade associations like EUROFER collect and distribute statistical data from and to their member undertakings and support meetings of member undertakings active on the same product market.
Both the EU Commission and the ECJ repeatedly dealt with Market Information Systems with regard to their compliance with EU competition law. Resulting from various decisions of the EU Commission, and confirmed by the ECJ case law, Market Information Systems do not appear to restrict competition if they meet the following criteria:
In the light of the above, the following statistical exchange carried out by EUROFER has been approved by the EU Commission:
The establishment of product committees within a trade association is no antitrust offence provided that the rules explained above under II are observed. The activity of such product committees is considered as legitimate by the EU Commission. This applies in particular to general information exchange and discussion of market developments.
The following are considered to be permitted:
Trade associations like EUROFER may be used to establish or support a range of other committees which in view of their nature and objective give less rise to antitrust issues, but which must remain attentive to strict compliance with the rules of competition.
EUROFER representatives as well as chairpersons and meeting attendants from member undertakings and associations are under a duty to pay attention to strict adherence to the antitrust rules by everyone concerned in the framework of EUROFER’s activities.
With special regard to meetings, the attending EUROFER representative and the chairperson are required to recognize situations where antitrust issues arise, and to immediately react to potential offences through appropriate indications and references, and by bringing the potentially illegal behaviour to an end. Where this cannot be achieved, the EUROFER representative is required to leave and the chairperson is to end the meeting. This must be recorded in the minutes of the meeting concerned.