🚨On 29 July 2024, the ECJ responded to questions of a Portuguese court regarding the exchange of information between banks on current and future credit spreads – the difference between applied interest rates and received refinancing interest rates –, current and future risk variables and past individual production figures (the amount of loans granted in the preceding month).

In line with its earlier case-law, the ECJ recalled that enforcement authorities must rely on the following criteria to decide that the information exchanges between competitors infringe competition by object, so that no effects must be proven:

☑ 𝐂𝐨𝐧𝐭𝐞𝐧𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐩𝐫𝐚𝐜𝐭𝐢𝐜𝐞: the ECJ considered that the information exchanged was strategic information, that is, data not already known which is likely to reduce the uncertainty regarding the future conduct of the participants with regard to one or more parameters relevant for competition. The ECJ indicated moreover that, despite it being historical, past individual production figures are nevertheless strategic if future conduct may be inferred from its exchange (because of the context or because of the combination with other types of information exchanged or already freely available).

☑ 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐚𝐧𝐝 𝐥𝐞𝐠𝐚𝐥 𝐜𝐨𝐧𝐭𝐞𝐱𝐭: This examination of the context serves to check if a practice that is usually anti-competitive may in certain circumstances not be capable of restricting competition. If so, the practice would in those circumstances not warrant a by object qualification. The ECJ ruled strictly and said that exchanges of confidential and strategic information are anti-competitive by object even if, in a specific context, the exchanges would not allow the participants to adapt their market conduct. The ECJ indicated in this respect that it is sufficient that the exchanged information removes strategic uncertainty.

☑ 𝐎𝐛𝐣𝐞𝐜𝐭𝐢𝐯𝐞𝐬: Anti-competitive objectives are not required to establish a by object infringement but are nevertheless relevant, particularly now that the ECJ finds that the exchange of information such as credit spreads cannot pursue any objective aim other than that of distorting competition.

The ECJ’s ruling will surely be welcomed by competition authorities as it confirms the Commission’s approach in its horizontal guidelines and reduces authorities’ burden of proof.

🖹 Read the full judgment here.

Questions? Want to learn more about what information you can and cannot exchange with your competitors and/or in the context of a trade association?

👉 Feel free to contact your usual contact person at 𝐜𝐨𝐧𝐭𝐫𝐚𝐬𝐭.

#Competition #fine #ECJ