Law Office


Concerted Practices

Scope and the Burden of Proof


This paper aims to identify the scope of Article 101 TFEU, in respect to concerted practices. When such a case arises, the key issue is the burden of proof. The titles under which the paper is structured are as follows:: 1.Introduction, A. Scope, B. Prisoners’ Dilemma; 2.Plausible Explanations; 3.Burden of Proof; 4.Aditional evidence on concentrations; 5.Conclusions.



  1. A.     Scope

The term is used sometimes to refer to the whole of old Article 81 EC, now 101 TFEU, in contrast to unilateral practices which are caught by old Article 82 EC, now Article 102 TFEU; other times it is used to refer just to practices in contrast to contracts, i.e. explicit agreements. Here questions arise to the burden of proof.

Article 101 TFEU applies to agreements and coordinated practices. That is, Article 101 TFEU requires at least a concurrence of wills or a meeting of minds between the undertakings concerned. If the market conduct of an enterprise is not the result of either an agreement or at least a conscious common intention of coordination among competitors, Article 101 TFEU is not


As the ECJ stated in ICI[1], Article 101 TFEU draws a distinction between the concept of “concerted practices” and the concepts of “agreements between undertakings” or “decisions by associations of undertakings”. As explained by the ECJ, the reference to concerted practices in Article 101 is intended to bring within the scope of the prohibition a form of coordination between undertakings which, without having reached the stage where an agreement properly so called has been concluded, knowingly substitutes practical cooperation between them for the risks of competition.

The question therefore arises as to what extent, if any, parallel behaviour in an certain market is the result of a meeting of minds or whether, on the contrary, it is the result of the autonomous will of each undertaking? .

The ECJ stated in ICI that: “by its very nature, then, a concerted practice does not have all the elements of a contract but may inter alia arise out of coordination which becomes apparent from the behaviour of the participants”.

Therefore, concentration implies a form of cooperation that: (1) protects the undertakings concerned from the risks of competition; and (2) usually becomes apparent from the behaviour of the participants (for example, from parallel conduct with regard to their pricing policy).


                        B. Prisoners’ Dilemma or Game Theory.

According to game theory, if in a game the worst solution for each player is to ignore the behavior of the other players, since such behaviour will affect the outcome of the game, the players will end up cooperating. They will either decide from the very first moment that reaching an agreement is the most advantageous solution, or they will reach the conclusion that it is necessary to cooperate by trial and error. In such a case, the players will cooperate “as if” they had reached an agreement. For game theory it does not matter whether such cooperation is reached through an express agreement or by tacit cooperation (acting “as if” there was an agreement). What matters is whether the conditions of the game create the incentives for the players to cooperate.

The position of the ECJ in ICI must be read in light of the subsequent cases, and mainly in light of Woodpulp II. In Woodpulp II, the ECJ reformulated its previous statement in ICI. The ECJ again said that account must be taken “of the nature of the products, the size and the number of the undertakings and the volume of the market in question”, but with an important difference. The goal of such an analysis is no longer to establish what “the normal conditions of the market” are but to ascertain whether or not the parallel conduct can be explained otherwise than by concentration. Thus, the case law must be seen as an evolution whose outcome is clear. Parallelconduct is not prohibited, and it does not create a presumption iuris tantum of collusion. Nevertheless, parallel conduct can be considered sufficient proof of collusion if concentration is the only plausible explanation.


                                                2. Plausible explanations

The list of plausible explanations is not exhaustive, but to date, two main circumstances

have been considered to be plausible explanations for parallel behaviour: (1) price

leadership; and (2) market structure.

As said before, it is legitimate for economic operators to adapt themselves intelligently to the existing and anticipated conduct of their competitors[2].

Consequently, if there is a price leader in the market, competing undertakings could try to adapt themselves to the leader’s commercial policy. Such parallel pricing behavior in an oligopoly, for instance, producing homogeneous goods would not in itself amount to concentration within the meaning of Article 101 TFEU[3].

A price leader could be characterised as an economic operator which due, for example, to its market share, is able to act independently of its competitors, knowing that they would almost certainly follow suit (“dominant price leadership”). Another possibility is so-called “barometric price leadership”, where the firm taking the lead is not dominant but is widely accepted as the best performing operator in the sense of meeting demand and adapting to evolving market conditions (i.e. cost increases).

The conclusion could be quite different if additional evidence is adduced, such as evidence of contacts between undertakings on desirable price changes prior to the adoption of a new price, or of an exchange of information that reinforces such contacts. In any event, an agreement between competitors to follow or to choose a price leader will be regarded as concentration within the meaning of Article 101 TFEU.

Another possibility is that the very structure of the market leads to parallel conduct (in oligopolistic markets).

The ECJ has implicitly acknowledged that, in some markets (i.e oligopolistic), competitors are interdependent. Accordingly, in Woodpulp II the ECJ appointed a group of economic experts to examine the characteristics of the affected market during the period covered by the Commission’s contested decision. After examining the market in the relevant period, the experts concluded that the normal operation of the market was a more plausible explanation for the uniformity of prices than concentration[4]. The ECJ accepted this as a plausible explanation for the parallel conduct and upheld the applicants’ argument that the Commission had not sufficiently proved concentration within the meaning of Article 101 TFEU. It is worth noting that, in Woodpulp II the experts did not say that the normal operation of the market was the sole plausible explanation for the uniformity of prices. For the ECJ, it was enough that there were other explanations apart from collusion. Concentration thus cannot be inferred from the mere existence of parallel conduct.


                                                3. Burden of proof

To what extent, if any, the market characteristics amount to a concerted practice within the meaning of Article 101 TFEU?       The ECJ has acknowledged that, although each economic operator must determine its own commercial policy independently, it is legitimate for the economic operators to adapt themselves intelligently to the existing and anticipated conduct of their competitors[5]. However, if adapting intelligently to the existing and anticipated conduct of their competitors is legitimate, it is foreseeable that all the existing operators will adapt similar conduct, i.e. parallel conduct[6]. Such conduct could be easily read as an evidence of “coordination which becomes apparent from the behaviour of the participants”[7], mainly in oligopolistic markets.

The ECJ rightly acknowledged this, and ruled that parallel conduct as such is not caught by Article 101 TFEU and creates no presumption of collusion between the undertakings concerned.

–          Nevertheless, the Court’s case law seemed to provide for two  guidance of this substantive rule:

a)      First, in ICI the ECJ stated that, although parallel behaviour may not by itself be identified with a concerted practice, parallel conduct may amount to strong evidence of concentration if it leads to conditions of competition which do not correspond to the normal conditions of the market, having regard to the nature of the products, the size and number of the undertakings, and the volume of the said market[8].

b)      Second, in Woodpulp II the ECJ ruled that parallel conduct cannot be regarded as proof of concentration unless concentration constitutes the only plausible explanation for such conduct.[9].

In spite of the fact that the language varies from one case to another, these two “exceptions” can be read as a single one: parallel conduct is not proof of concentration if the conduct of the enterprises can be explained by market conditions.

According to the case law of the ECJ, in order to establish that parallel behaviour is the result of concerted action, the evidence must be “sufficiently precise and coherent”[10]. In the light of the foregoing, in Woodpulp II Advocate General considered that this statement of the ECJ implied that it is necessary to establish a degree of certainty that goes beyond any reasonable doubt. He further added that, in “accordance with the principles governing the burden of proof, it is for the Commission to demonstrate that; the burden of proof cannot be shifted simply by a finding of parallel conduct[11]. Moreover, the Advocate General considered that, in any event, if a plausible alternative explanation is put forward by the parties, then concentration cannot be deemed to be established[12].

The position of Advocate General Darmon in Woodpulp II was quite clear: the burden of proof is always borne by the competition authority. Parallel conduct neithercreates a presumption of concentration nor shifts the burden of proof. In view of the conclusions of Advocate General Darmon, in Woodpulp II the ECJ ruled on this point as follows[13]:

“[70] Since the Commission has no documents which directly establish the existence of concentration between the producers concerned, it is necessary to ascertain whether the system of quarterly price announcements, the simultaneity or near-simultaneity of the price announcements and the parallelism of price announcements as found during the period from 1975 to 1981 constitute a firm, precise and consistent body of evidence of prior concentration.

[71] In determining the probative value of those different factors, it must be noted that parallel conduct cannot be regarded as furnishing proof of concentration unless concentration constitutes the only plausible explanation for such conduct. It is necessary to bear in mind that, although [Article 101] of the Treaty prohibits any form of collusion which distorts competition, it does not deprive economic operators of the right to adapt themselves intelligently to the existing and anticipated conduct of their competitors (see the judgment in Suiker Unie, cited above, paragraph 174).

[72] Accordingly, it is necessary in this case to ascertain whether the parallel conduct alleged by the Commission cannot, taking account of the nature of the products, the size and the number of the undertakings and the volume of the market in question, be explained otherwise than by concentration.”

The position of the ECJ seems, at first glance, to follow Advocate General Darmon. However, this may not be a realistic interpretation of the existing case law.

First, competition authorities reason, sometimes, in a quite different way: parallel conduct is either proof of concentration, or at least creates a presumption of collusion. No matter how the case law defines the principles governing the burden of the proof in these cases, a competition authority will presume the existence of concentration if there is parallel behaviour. It will then be a hard task for the defendants to find “sufficiently precise and coherent” evidence that concentration is not the only plausible explanation. It is neither practical nor realistic to expect competition authority officials to presume that there is no concentration when facing with parallel behaviour.

Second, Woodpulp II must be read in the light of the previous case law. Indeed, in CRAM and Rheinzink, the ECJ stated: “The Commission’s reasoning is based on the supposition that the facts established cannot be explained other than by concerted action by the two undertakings. Faced with such an argument, it is sufficient for the applicants to prove circumstances which cast the facts established by the Commission in a different light and which thus allow another explanation of the facts to be substituted for the one adopted by the contested Decision” (emphasis added).

This seems to be a much more practical approach. Competition authorities tend to presume that parallel conduct is the result of concentration if they see no clear evidence supporting an alternative explanation. It is then for the defendants to provide an alternative plausible explanation.

This does not mean that a competition authority must never look for alternative explanations. As an initial matter, a competition authority must also examine on its own initiative whether such an alternative explanation exists or not. However, if after a preliminary analysis the competition authority does not find a plausible alternative explanation, the burden of proof will shift to the defendants. It is then for the defendant undertakings to provide evidence which casts the facts established by the competition authority in a different light and which thus allows another explanation for those facts[14].


                                                4. Additional evidence of concentration

Nevertheless, the problem of the plausible explanation, the burden of proof or the structure of the market only arises if evidentiary support for the case is insufficient. Parallel conduct could be considered as proof of collusion if it can be connected with other evidence of collusion, in particular with facilitating practices or “plus factors”. These facilitating practices have been defined as activities that promote interdependent behaviour among competitors by reducing their uncertainty as to each other’s future action, or by diminishing their incentive to deviate from a coordinated strategy.

For instance, parallel conduct can be deemed to be proof of concentration if it is accompanied by evidence of any of the following:


Taken together, a finding of parallel market conduct and documents which show that the practices were the result of concerted action are sufficient proof of concentration[15].



Contacts between competitors.

In its landmark Sugar case, the ECJ held that Article 101 TFEU strictly precludes any direct or indirect contact between operators that can influence the conduct on the market of an actual or potential competitor. In such a case, the defendants cannot explain the existence of the parallel conduct by the fact that they have adapted intelligently to the existing and anticipated

conduct of their competitors. Such contacts remove in advance the uncertainty as to the future conduct of the competitors, and thus protect the undertakings from the risks of competition.

These contacts could consist of, for example, meetings between competitors.

Disclosing to competitors the course of conduct that each undertaking

has decided to adopt (or contemplates adopting) on the market.

For example, announcements of price increases, together with parallel conduct, can be regarded as proof of concentration[16].

Exchange of Information.

Exchange of sensitive data can be considered proof of concentration, especially if the data are closely linked to the competitive conditions in respect of which the conduct of competitors is parallel.

Reciprocal supply agreements between competitors.

Reciprocal supply agreements between competitors could be regarded as proof of concentration, especially if, at the same time, the concerned undertakings refrain from supplying competitors’ clients[17].

Common board members.

Having representatives on the board of directors or any other management body of a competitor could be considered a device facilitating collusion.

Associations of enterprises.

If all (or the majority) of the undertakings investigated are members of an association of enterprises, this can be an element supporting an accusation of concentration by a competition authority.

Network of joint ventures coordinated by a parent company.

In the Optical fibers case, the Commission found that concentration in an oligopolistic market could result of a network of interrelated joint ventures with a common technology provider and a common parent company[18]..

The above non-exhaustive list of examples shows that, in the presence of parallel conduct, any device, practice or framework facilitating collusion can be considered sufficient supporting proof of concentration. In such cases, it is not enough for the defence merely to provide a plausible alternative explanation of the parallel conduct. The additional proof (exchange of information, documents, etc.) must also be rebutted.

Furthermore, it should be recalled that most of the facilitating practices can serve precompetitive as well as anticompetitive purposes. Therefore, the mere fact that some sort of facilitating practice exists should not alone lead to a conclusion of illicit collusion among the defendants.


                                                5. Conclusions

Since direct proof of illicit collusion is often difficult, when parallel behaviour is accompanied by facilitating practices, as a matter of practice, competition authorities tend to shift the burden of proof to defendant undertakings.


The key issue is to distinguish between situations in which strategic coordination implies some sort of illicit collusion and when it merely corresponds to spontaneous coordination resulting from the rational response of each member of the market to the perceived interdependencies.

[1] Case 48/69 Imperial Chemical Industries Ltd. v Commission [1972] ECR 619

[2] Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114/73, Suiker Unie v Commission [1975] ECR 1663, para. 173-174.

[3] Commission Decision EEC/84/405 of 6 August 1984, Case IV/30.350 – zinc producer group, OJ L 220 [1984], pars. 75-76.

[4] Joined Cases -89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85 A. Ahlström Osakeyhtiö e.a. (Woodpulp II) [1993] ECR I-1307, para. 75 and the following.

[5] Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114/73 Suiker Unie v Commission [1975] ECR 1663, para. 173-174

[6] Case 172/80 Gerhard Züchner v Bayerische Vereinsbank AG [1981] ECR 1981 para 14 and the following

[7] Case 48/69 Imperial Chemical Industries Ltd. (ICI) v Commission [1972] ECR 619, para. 65

[8]  Case 48/69 Imperial Chemical Industries Ltd. (ICI) v Commission [1972] ECRR 619, para. 66.

[9] Joined Cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85, A.Ahlström Osakeyhtiö e.a. (Woodpulp II) [1993] ECR I-1307, para. 71.

[10] Joined Cases 29/83 and 30/83 Compagnie Royale Asturienne des Mines SA (CRAM) and Rheinzink GmbH v Commission [1984] ECR 1679, para. 20.

[11] Joined Cases -89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85 A. Ahlström Osakeyhtiö e.a. (Woodpulp II) [1993] ECR I-1307

[12] Idem.

[13] See Opinion of Advocate General Darmon in Joined Cases -89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85, A. Ahlström Osakeyhtiö e.a. (Woodpulp II) [1993] ECR I-1307,para. 96 and 196.

[14] See Joined Cases T-305/94, T-306/94, T-307/94, T-313/94 to T-316/94, T-318/94, T-325/94, T-328/94, T-329/94 and T-335/94 Limburgse Vinyl Maatschappij NV, Elf Atochem SA, BASF AG, Shell International Chemical Company Ltd, DSM NV, DSM Kunststoffen BV, Wacker-Chemie GmbH, Hoechst AG, Société artésienne de vinyle, Montedison SpA, Imperial Chemical Industries plc, Hüls AG and Enichem SpA v Commission (PVC II) [1999] ECR II-931, para. 728.

[15] Idem, para. 724-728.

[16] Case 48/69 Imperial Chemical Industries Ltd. (ICI) v Commission [1972] ECR 619, para. 83 and the following.

[17] Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114/73, Suiker Unie v Commission [1975] ECR 1663, para. 173-174.

[18] Commission Decision EEC/86/405 of 14 July 1986, Case IV/30.320 – optical fibers,OJ L 236 [1986]

►  Competition Council Issues New Order on Access to Investigation Files

For the purpose of observing the EU principles on competition, mainly with respect to uniform and consistent application of the European rules on competition, the Competition Act was amended substantially on 5 August 2010.

Following this amendment, various important enactments having as object the application of the Competition Act were issued by the Romanian Competition Council (“RCC”).

Recently, the conditions and procedure for access to files in which anti-competitive practices or economic concentrations are investigated have been enacted by RCC.

The act, entered into force on 2 March 2011, regulates the persons entitled to access the file, the information that may be accessed, the moment when such access may be granted, as well as the actual procedure to be followed.

In principal, the person having the right to access the investigation file is that whose conduct is scrutinized by RCC in an investigation report. However, in case of an economic concentration, it rests with RCC to decide if the access to file documentation will be granted only to the persons that have notified the economic concentration or will be extended to the other persons involved in the concentration.

In addition, the person filing a complaint before RCC shall have the right to access the file if, after performing its analysis, RCC intends to dismiss the complaint with-out initiating an investigation. However, it rests with RCC to decide whether the person filing the complaint will receive a non-confidential version of the report prior being heard by RCC in case an investigation has been initiated.

Further on, for the case when RCC intends to take interim measures prior to issuing a decision, it will inform the relevant person who will have the right to access all the preliminary documentation save for trade secrets and other confidential information concerning other parties.

Last but not least, the court of law expected to rule a claim for damages arising out of an anti-competitive practice has the right to request from RCC the documentation based on which the decision was issued. Subsequently, the court of law will be under the obligation to secure the confidentiality of trade secrets and other confidential information.

Concerning the file documentation that may be accessed, as a rule the internal documentation of RCC and its correspondence with other local or foreign authorities, as well as the trade secrets and other confidential information concerning the involved parties involved may not be accessed. However, if the person accessing the file considers necessary to know the restricted information in order to prepare its defense, it shall address to RCC’s Chairman who will decide if access to such information will be granted.

Concerning the confidentiality of the information provided, unless expressly requested by the parties, RCC shall not treat the information it receives as confidential. To this end, the person providing the information is required to file a request indicating what information needs to be kept confidential, why the information is to be kept confidential, and, the parties towards which the information is to be kept confidential. Further on, the person is also required to provide a separate non-confidential version of the information provided.

It shall rest with RCC to decide if the information will be treated as confidential or not.

Moreover, as a rule, RCC presumes the data referring to sales, market share and other similar information and which is older than 5 years is no longer confidential.

The General Court annuls the fines imposed on Mitsubishi and Toshiba for their participation in the cartel on the gas insulated switchgear market


In addition, Fuji’s fine of €2.4 million is reduced to €2.2 million, whereas the fine of €50.4 million imposed on Hitachi is maintained

By decision of 24 January 20071, the Commission imposed fines totalling €750.71 million on 20 European and Japanese companies2 for their participation in a cartel on the market for gas insulated switchgear (GIS). GIS is used as a major component for electric substations to convert electrical current from high to low tension and vice versa. Its function is to protect the transformer from overload and/or insulate the circuit and the faulty transformer.

The companies which participated in the cartel concluded an agreement with a view to coordinating their commercial activity worldwide and developed a quota system aimed at determining the market shares which each group could share among its members.

According to the Commission, the cartel participants also concluded an unwritten understanding to reserve the European market to European undertakings and the Japanese market to Japanese undertakings. In its decision, the Commission found that the cartel had operated from 15 April 1988 to 11 May 2004.

The companies which were fined brought actions before the General Court seeking the annulment of the Commission’s decision and a reduction of their respective fines3. As for the Japanese companies, Mitsubishi Electric (€118.58 million) and Toshiba (€90.9 million) were fined the heaviest.

In today’s judgments the Court finds, first, that it is the alleged commitment of the Japanese undertakings, under the unwritten understanding, not to enter the European market which constitutes an infringement of the European Union competition rules.

In that regard, the Court notes, first, that the existence of an unwritten understanding is proved directly by the statements of several undertakings involved in the cartel and by the witness statements of the employees of one of those undertakings.

Second, the Court confirms the existence of a notification and account loading mechanism attached to the quota system, corroborated by statements made by certain participants to the cartel and by a credible witness. The Court notes that the Japanese undertakings refrained from entering the European market and that the European undertakings committed to notify them of the results of the allocation of GIS projects in certain European countries and to load those projects into the quota system. In doing so, the European undertakings voluntarily committed themselves not to bid for a number of GIS projects on certain international markets, in addition to their commitment not to enter the Japanese market. The European undertakings thus regarded the Japanese undertakings as being potential competitors which could have entered the European market. If they did not do so it is because they committed themselves not to.

The Court thus states that that mechanism constitutes a link between the collusive activities on the European market and the Japanese producers. It therefore constitutes indirect evidence of the unwritten understanding.

Accordingly, the Court upholds the Commission’s decision that the Japanese undertakings participated in the unwritten understanding and, consequently, in the cartel.

Next, the Court examines the method adopted by the Commission to calculate the fines imposed on the Japanese undertakings. In so far as the Commission did not use the same reference year for Mitsubishi Electric and Toshiba (2001) and the European undertakings (2003), the Court finds that the Commission did not treat the Japanese producers and the European producers equally.

The Court notes that the Commission proceeded in that manner in order to take account of the fact that, for most of the period of infringement, Mitsubishi Electric and Toshiba participated in the cartel as individual undertakings, and not as part of their joint venture, TM T&D Corp. Consequently, in calculating their fines, the Commission took account of their turnovers for the year prior to the creation of TM T&D. However, although the objective pursued by the Commission was legitimate, the Court finds that it could have used other methods to achieve its objective without treating the Japanese producers and the European producers unequally.

Accordingly, the Court finds that the Commission infringed the principle of equal treatment and annuls the fines imposed on the two companies concerned.

As regards the Fuji Group, the Court notes that the Commission decided that, for the infringements committed prior to 1 October 2002, a fine of €2.4 million had to be paid joint and severally by Fuji Electric Holdings (‘FEH’), the group’s holding company, and by Fuji Electric Systems (‘FES’), a subsidiary of the holding company4.

In that regard, the Court notes that FEH and FES provided the Commission with essential information relating to the cartel for the period prior to 1 October 2002, which the Commission should have taken into account when calculating the fines in accordance with the Leniency Notice.5

For that reason, the Court imposes a single fine of €2.2 million on Fuji Electric, the company born of the merger between FEH and FES on 1 April 2011.

Finally, the Court rejects the action brought by Hitachi in its entirety.


1 Commission Decision C (2006) 6762 final relating to a proceeding under Article 81 EC and Article 53 of the EEA Agreement (Case COMP/F/38.899 – Gas insulated switchgear).

2 ABB Ltd, Alstom SA, Areva SA, Areva T&D AG, Areva T & D Holding SA, Areva T & D SA, Fuji Electric Holdings Co., Ltd, Fuji Electric Systems Co., Ltd., Hitachi Ltd,. Hitachi Europe Ltd., Japan AE Power Systems Corporation, Mitsubishi Electric Corporation, Nuova Magrini Galileo S.p.a., Schneider Electric SA, Siemens Electric SA, Siemens AG, Siemens Aktiengesellschaft Österreich, Siemens Transmission & Distribution SA, Siemens Transmission & Distribution Ltd., Toshiba Corporation and VA Tech Transmission & Distribution GmbH & Co KEG.

3 For the cases involving European companies, see the judgments of 3 March 2011 in Case T-110/07 Siemens AG v Commission; Cases T-117/07 and T-121/07 Areva, Areva T & D Holding SA, Areva T & D AG, Alstom v Commission; and Joined Cases T-122/07 to T-124/07 Siemens AG Österreich, VA Tech Transmission & Distribution GmbH & Co. KEG, Siemens Transmission & Distribution Ltd., Siemens Transmission & Distribution SA, Nuova Magrini Galileo SpA v Commission.

4 For the infringements committed after 1 October 2002, the date on which the Fuji Group transferred its GIS activities to the joint venture Japan AE Power Systems ‘JAEPS’, the Commission imposed a fine of €1.35 million on FEH and FES joint and severally with JAEPS and Hitachi, the main shareholder in the joint venture.

5 Commission Notice of 19 February 2002 on immunity from fines and reduction of fines in cartel cases (OJ 2002 C 45, p. 3).