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The European Commission's established antitrust enforcement practice has gained the trust of the EU courts, with the Scania judgment being the latest case to validate the Commission's work in the area of cartel enforcement.

The Commission has been preparing to use its recently acquired and new enforcement powers to ensure fair and workable markets. With a focus on complex and rapidly evolving markets, it is expected to embark on unprecedented paths of enforcement (see e.g. our blog on the DMA).

The Scania judgment
The Scania judgment concerns one of the longest running cartels fined by the Commission. The investigation into the participation of truck manufacturers in a wide-scale cartel was concluded under the ‘hybrid procedure’. This is when the Commission adopts both a settlement decision and a normal infringement decision on to the same cartel.

The settlement procedure is a type of a 'streamlined' procedure that speeds up the adoption of a decision and frees up resources for the Commission in exchange for a 10% reduction in fines for the settling parties. The hybrid procedure was introduced in 2008 and is voluntary. If a company decides not to enter into settlement discussions or wishes to withdraw during such discussions, the Commission may proceed under the settlement procedure with the settling parties and under the standard infringement procedure with the non-settling parties.

In the truck manufacturers cartel, the Commission issued a decision in 2016 imposing fines on MAN, Renault, Daimler, Iveco and DAF following a settlement procedure. Although Scania initially entered into settlement discussions with the Commission, it subsequently broke off the discussions. The Commission continued the investigation under the standard infringement procedure and issued its decision against Scania in 2017, imposing a fine of EUR 880 million.

Disagreeing with this decision, Scania appealed to the General Court. According to Scania a staggered procedure, where the Commission first adopted the settlement decision against several manufacturers and then continued its investigation against Scania without designating a different team, meant that the Commission had not acted impartially. In February 2022, however, the General Court dismissed Scania’s appeal in its entirety. Not resigning itself to the decision of the General Court, Scania appealed to the European Court of Justice (the Court), which has now rendered its long-awaited decision.

Trust in the Commission’s objective impartiality is and remains the norm
In the Scania judgment, the Court reiterates that the requirement of impartiality under Article 41 of the EU Charter of Fundamental Rights covers both objective impartiality (there must be sufficient guarantees to exclude any legitimate doubt as to bias of the Commission) and subjective impartiality (no member of the Commission who is responsible for the case may show any bias or personal prejudice). The Court firmly states that the staggered use of hybrid procedures, whereby the settlement decision is adopted before the decision following the standard infringement procedure, does not in itself give rise to a breach of the duty of impartiality.

The Court clarifies that there can be no legitimate doubt as to the Commission's objective impartiality as long as:

  • The rights of defence of the non-settling parties, as provided for in the standard infringement procedure, are respected.
  • The Commission carries out a full examination of the facts and evidence, as it is in no way bound by the factual findings and legal classifications on which the settlement decision is based.
  • The Commission has taken into account any new evidence submitted by the non-settling parties.

The mere fact that the same case team is responsible for the investigation in both procedures leading to a settlement and to an infringement decision is not in itself, without any other objective evidence, an infringement of the principle of impartiality. According to the Court, Scania did not put forward any such evidence.

Guidelines and safeguards for a hybrid procedure
Taking into consideration previous case-law on hybrid procedures, in particular the Pometon and HSBC judgments, several guidelines and safeguards can be derived for a hybrid procedure.

  • The Commission should refrain from making any public statements that could imply any liability on the part of the non-settling parties still under investigation and remain cautious in its wording.
  • The reference to the non-settling parties in the announcement of the settlement decision as such does not cast doubt on the impartiality of the Commission, nor does the announcement that it is preparing a Statement of Objections.
  • The Commission should carefully formulate its reasoning in the settlement decision in such a way as to avoid any possible prejudgment of the liability of the non-settling parties. However, it may be objectively necessary for the Commission to refer to certain facts and conduct of the non-settling parties in the settlement decision. Any such reference should be limited to what is 'objectively relevant' to the description of the facts of the case.

Reaffirming the use(fulness) of presumptions and the concept of 'single and continuous infringement'
In its Scania judgment, the Court also reaffirmes the Commission’s use of the concept of 'single and continuous infringement'. According to settled case-law, a series of acts or continuous conduct may be regarded as a single infringement, provided that (i) the various actions are part of an 'overall plan'; (ii) the undertaking intended to contribute to the overall plan; and (iii) the undertaking was aware of the offending conduct of the other cartel participants.

In applying this concept, the key takeaways in this judgment are as follows:

  • Scania argued that it could not be inferred from its participation in meetings at German level that the geographic scope of its liability extends to the entire European Economic Area (EEA) territory merely because EEA-related information was exchanged during those meetings. According to Scania, the Commission should still prove Scania's 'intention'. In the Court’s view, Scania's participation in the meetings was sufficient in itself, taking into account the information exchanged during the meetings at German level. Consequently, the burden of proof to demonstrate that it distanced itself from the anti-competitive behaviour shifted to the company. According to the Court, Scania failed to do prove it had distanced itself.
  • A single and continuous infringement may consist of a series of actions which, taken in isolation, could also constitute an infringement. Moreover, actions which, taken in isolation, would not constitute an infringement may nevertheless be relevant to establish the existence of a single and continuous infringement and may form part of the body of evidence on which the Commission may rely.

The market behaviour of ‘big tech’ has dominated the competition headlines of late. With the recent major regulatory developments in the area of competition law in the digital markets (the DMA), one could almost have missed the Commission’s efforts in uncovering and fining cartels. But the Commission has not been sitting idle.

Although the 'output' in terms of fines and cartel decisions slowed down in 2023, we expect the numbers to increase in 2024. In addition to an increasing number of leniency applications, the Commission has started to conduct dawn raids and is searching for creative ways to uncover cartels. Illustrative is the joint video from the U.S. Department of Justice’s Antitrust Division and the Commission, that encourages companies (upstream or downstream) to contact the competition authorities if they have any suspicions.

While we may expect the courts to scrutinise future Commission decisions relating to digital markets and to critically assess the expected novel theories of harm on which these decisions will be based when it comes to cartel enforcement, the courts have to a great extent validated the way in which the Commission conducts its investigations, thereby providing comfort to a Commission drowning in work.

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