AG Szpunar on concerted practices and unilateral communication

On the same day as the probably more hyped Huawei judgment was published, an interesting opinion about concerted practices from Advocate General Szpunar was published (case C-74/14).

In the opinion AG Szpunar discusses whether unilateral communication can be sufficient to establish a concerted practice. This is a question to which we can’t find a clear answer in the case law of the CJEU. The Adovate Generals of the Court has dealt with this topic earlier though. Szpunar is (at least) the fourth Advocate General discussing the topic, and his opinion does distinguish itself from the previous ones.

The case concerns an alleged concerted practice between Lithuanian travel agencies. The concerted practice consisted of a technical restriction implemented in their online booking system reducing the maximum discount rate from 4% to 3%. This technical restriction was implemented by the company providing the travel agencies with the booking system, following an email from the company running the booking system to all travel agencies asking for a vote on the restriction the discount rates. The result of the vote has not been proven. The same day as the restriction was implemented a system notice informing about the change of discount rates appeared in the software. All travel agencies using the booking system were found to have participated in a concerted practice. The CJEU has now received a question from Vilnius District Administrative Court about whether such a scenario should be considered a concerted practice.

The most interesting question raised by AG Szpunar is probably whether a concerted practice can be based on unilateral communication. This question has been discussed by other Advocate Generals previously. AG Darmon in his opinion in Wood Pulp expressed that “it is clear to me that by definition concertation requires reciprocation of communications between competitors” (para 170). Later AG Cosmas in Anic and AG Kokott in T-Mobile both expressed a different opinion. To quote Cosmas: “None the less, I do not see why reciprocity must be deemed to be an element of the notion of concerted practice. What must be ascertained is whether there has been ‘concertation’ between undertakings and not whether that ‘concertation’ is based on reciprocity.”(para 40).

Szpunar starts out by referring to judgments where the General Court has applied a requirement of reciprocal communication (para 45 and footnote 15). In both judgments, Cimenteries and BPB the GC appears to base itself on AG Darmon’s Wood Pulp opinion. Then Szpunar states that (paragraphs 46 and 47):

“In my opinion also, the concept of a concerted practice does imply reciprocity. A concerted action is necessarily the result of a consensus. However, the level of formalisation of that consensus should not be subject to overly rigid requirements, since this would undermine the versatility inherent in the concept of a concerted practice.” And “In particular, reciprocity should equally encompass tacit approval.”

At first sight AG Szpunar appears to have included a requirement of reciprocal communication in the concept of concerted practice, by stating that a concerted practice implies reciprocity. However, when including tacit approval as a possible basis for consensus and hence a concerted practice, reciprocal communication does not appear necessary. In other words the reciprocity that Szpunar refers to appears to be connected to the consensus and not the communication. My understanding of Szpunar is that the communication, unilateral or not, has to be sufficient for the undertakings to be able to reach a consensus, and if unilateral communication met by silence is sufficient to reach consensus, than unilateral communication is sufficient for there to be a concerted practice.

If this is the correct interpretation of the statement, AG Szpunar appears to agree with AG Cosmas’ Anic opinion (He never refers to Cosmas’ opinion though or any of the other AG opinions touching upon the question). This can be supported in my opinion by the subsequent paragraphs of the opinion. In paragraph 48 we are told that the possibility of establishing a concerted practice based on tacit approval “depends on the context of the communication”, and in paragraph 49 that an undertaking’s “acquiescence in that initiative may be inferred from the absence of response, provided that the circumstances are propitious to the formation of a tacit consensus”. The deciding factor here appears to be if the undertakings can reach a consensus based on the communication, and not whether the communication is unilateral or reciprocal. This is quite similar to what AG Cosmas argued in his Anic opinion, when he highlighted reduction of uncertainty or concertation, and not reciprocity as the essential element in a concerted practice.

It will be interesting to see how the Court will solve the question. It is about time that the CJEU takes advantage of the opportunity to clarify whether a concerted practice requires reciprocal communication or not. In my opinion the CJEU should follow AG Szpunar’s opinion on this question. Whether the communication is sufficient for establishing a concerted practice should be dealt with when assessing reduction of uncertainty. There are probably not many cases where unilateral communication will reduce uncertainty to an extent that makes concertation possible, but in the few cases where this is the case, the concertation or coordination should not be considered legal due to lack of reciprocal communication.

In the end two other aspects of the opinion may be mentioned. In paragraph 42 of the opinion Szpunar distinguishes the case from AC Treuhand on the grounds that the operator of the booking system in this case is a contractual partner of all travel agencies and is active on the market of licensing online booking systems which is related to the market of travel agents. The other aspect is that according to Szpunar the case-law concerning publicly distancing oneself from a concerted practice can be transposed to scenarios where there have been no meetings between the undertakings (paragraph 82 to 93).

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