ECJ: Restriction of competition „by object“
„Groupement des cartes bancaires“ („Grouping“) is a French economic interest grouping of the main banking institutions which created the interoperability of payments and withdrawals made with bank cards issued by the members of the Grouping (“CB-cards”). At the end of June 2007 the Grouping already had 148 members.
The Grouping introduced in 2002 three pricing measures which included: (1) a mechanism for regulating the acquiring function (“MERFA”), whereby members who issue more CB-Cards than affiliate new trade members to the payment system have to pay certain fees; (2) a reform of the membership fee for new members as well as an additional fee for members, whose CB-Cards in stock exceed a certain threshold; and (3) a fee for issuing CB-Cards to be paid by inactive members.
II. European Commission
On 17 October 2007 the European Commission (“Commission”) considered these pricing measures as anticompetitive and thus prohibited them and any future implementation of similar measures by the Grouping. The Commission concluded that these practices were contrary to European competition law due to its object and anticompetitive effects.
III. The General Court
The General Court (“Court“) upheld the decision of the Commission in Case T-491/07, CB v Commission on 29 November 2012 and dismissed the action brought by the Grouping to annul the original decision of the Commission. Moreover, the Court stated that the Commission was not required to examine the economic effects of the pricing measures of the Grouping due to their very anti-competitive nature. Thus, the measures were classified as a restriction of competition “by object”.
Anti-competitive measures are generally classified as restrictions “by object”, if they reveal in themselves anti-competitive effects. This can be found for example in cases of horizontal price-fixing between competitors or exclusivity agreements made by a dominant company with the purpose of creating market entry barriers and force competitors out of the market.
IV. European Court of Justice
The Grouping appealed the decision of the Court before the European Court of Justice (“ECJ”). However, the ECJ annulled the decision of the Court on 11 September 2014 in its case C-67/11P, CB v Commission, referring the case back in order to examine whether the pricing measures are to be prohibited due to their anti-competitive effects.
According to the ECJ, the Court had merely stated that the pricing measures of the Grouping could have anti-competitive effects. However, it did not prove how these measures could be considered as a restriction of competition “by object”. The ECJ emphasized that the essential criterion for such classification is that an agreement or coordination between companies is in itself harmful to competition. Hence, the Court could have only concluded that the pricing measures intended to restrict competition of new members on the French CB-Card issuing market. The ECJ also admitted the Grouping’s argument that the implemented pricing measures combat free-riders of the payment system.
Furthermore, the ECJ criticized that the Court had considered the potential effects of the measures and not only its object in the assessment of the options left for members of the Grouping (Payment of fees or restrict issuing of CB-Card). This would already prove that the pricing measures of the Grouping did not reveal in themselves anti-competitive effects and therefore could not be considered as a restriction of competition “by object”.
Dr. Christina Hummer