CJEU prevents competitors from taking the law into their hands (C-68/12)

In its Judgment of 7 February 2013 in case Slovenská sporiteľňa, the Court of Justice of the EU (CJEU) has clarified that the fact that an agreement between competitors is concluded in order to prevent a situation of allegedly illegal competition by a third party is irrelevant for its analysis under Article 101 TFEU.

In the very clear terms of the Slovenská sporiteľňa Judgment,

18 Article 101 TFEU is intended to protect not only the interests of competitors or consumers but also the structure of the market and thus competition as such (Joined Cases C501/06 P, C513/06 P, C515/06 P and C519/06 P GlaxoSmithKline Services and Others v Commission and Others [2009] ECR I9291, paragraph 63).
19 In that regard, it is apparent from the order for reference that the agreement entered into by the banks concerned specifically had as its object the restriction of competition and that none of the banks had challenged the legality of Akcenta’s business before they were investigated in the case giving rise to the main proceedings. The alleged illegality of Akcenta’s situation is therefore irrelevant for the purpose of determining whether the conditions for an infringement of the competition rules are met.
20 Moreover, it is for public authorities and not private undertakings or associations of undertakings to ensure compliance with statutory requirements. The Czech Government’s description of Akcenta’s situation is evidence enough of the fact that the application of statutory provisions may call for complex assessments which are not within the area of responsibility of those private undertakings or associations of undertakings.
21 It follows from those considerations that the answer to the first and second questions is that Article 101 TFEU must be interpreted as meaning that the fact that an undertaking that is adversely affected by an agreement whose object is the restriction of competition was allegedly operating illegally on the relevant market at the time when the agreement was concluded is of no relevance to the question whether the agreement constitutes an infringement of that provision (C-68/12 at paras. 18 to 21, emphasis added).
In my view, the general principle reinforced by the CJEU is sensible and prevents undertakings from taking the law into their own hands--and, even further, from trying to disguise anticompetitive agreements behind an appearance of law-reinforcing behaviour. It clearly establishes a positive obligation for undertakings (either unilaterally or through a sectoral association?) to report instances of potential illegal competition to the competent authorities. Also, although not mentioned by the CJEU, undertakings may be able to file judicial claims (including requests for interim measures) on the basis of unfair competition rules under the relevant domestic legislation [which offers yet one more instance of potential (dis)coordination between unfair competition and antitrust rules in the EU; see Ulrich's reflective piece Anti-Unfair Competition Law and Anti-Trust Law - A Continental Conundrum?].

Moreover, in the view of the CJEU, the existence of such avenues for legal reaction / opposition exclude the possibility to apply the exemption of Article 101(3) TFEU:
35 Even if [the first] condition were met [regarding the protection of conditions for healthy competition and, in the broader sense, thus seeked to promote economic progress], the agreement at issue in the main proceedings does not appear to meet the other three conditions – more particularly, the third condition, whereby an agreement must not impose on the undertakings concerned restrictions which are not indispensable to the attainment of the objectives referred to in the first condition laid down in Article 101(3) TFEU. Even if, as stated by the parties to that agreement, the purpose was to force Akcenta to comply with Slovak law, it was for those parties [...] to lodge a complaint with the competent authorities in that respect and not to take it upon themselves to eliminate the competing undertaking from the market(C-68/12 at para. 35, emphasis added).
Again, the general position of the CJEU seems highly appropriate. However, a feeling remains that the CJEU's Slovenská sporiteľňa Judgment may be too blunt and that the assessment of fulfillment of the conditions could be refined by leaving a door open for a justification in view of Article 101(3) TFEU in some (extreme) cases where lack of reaction on the part of the established industry could result in irreversible changes to market structure, or where other (superior) conflicting interests may be affected. Indeed, a reading of paragraph 35 of the Judgment seems to disqualify the standard position that it is possible to exempt any agreements prohibited under Article 101(1) TFEU if the four conditions of Article 101(3) TFUE are fully met (as indicated by the CJEU only in para. 31).

In any case, as a matter of principle, it must be welcome that the CJEU has excluded the "an eye for an eye" principle and strongly pushed for undertakings to resort to the established regulatory and judicial avenues in order to try to prevent instances of illegal competition in their markets. At the same time, it seems to generate some (positive) pressure on sectoral regulators and the courts to integrate competition law analysis (or competition implications) when deciding on the existence of potential illegal competition or intrusion in a given market.