1.

Are the notices of the European Commission in the field of competition law binding on the national competition authorities and the national courts? That, in essence, is the question confronting the Court in this reference for a preliminary ruling. The question has arisen in relation to the so-called ‘de minimis notice’ ( 2 ) in which the Commission sets out the circumstances under which it presumes that there is an appreciable restriction of competition within the meaning of Article 81 EC (now Article 101 TFEU).

2.

The question has been submitted by the French Cour de cassation ( 3 ) which is dealing with a dispute between Expedia, an on-line travel agency, and the French Competition Authority. ( 4 ) Expedia formed a joint venture with the French State railway company Société nationale des chemins de fer (SNCF) for the sale of rail tickets and other travel services. Through this collaboration Expedia obtained privileged access to the ‘voyages-sncf.com’ website created by SNCF, thereby enjoying preferential treatment for its services which was withheld from other travel agencies. The French Competition Authority regarded this as a prohibited restriction of competition and imposed fines on Expedia and SNCF, finding that there was an infringement of Article 81 EC and the corresponding provision of national competition law.

3.

The parties to the main proceedings disagree primarily as to whether the disputed agreement between Expedia and SNCF appreciably restricted competition within the meaning of Article 81 EC. Expedia alleges that the market share threshold of 10% laid down by the Commission in the de minimis notice was not attained in the present case, which was why, in Expedia’s opinion, the French Competition Authority should not have found that there was an appreciable restriction of competition.

4.

Against that background the Cour de cassation asks whether national authorities are permitted by Article 3(2) of Regulation (EC) No 1/2003 ( 5 ) to presume an appreciable restriction of competition even below the market share of 10%. At the same time, the referring court emphasises that, according to the findings in the main proceedings, the contested agreement between Expedia and SNCF had not only an anti-competitive effect, but also an anti-competitive object.

5.

The Court’s reply to the question referred will to a large extent determine the scope which the national competition authorities and courts will have in the future when applying Article 101 TFEU. In addition, the case provides an opportunity for further clarification of the requirements for a finding of restrictions of competition by object at both Union and national level. The importance of both points should not be underestimated for the functioning of the decentralized system for antitrust law enforcement which was brought into being by Regulation No 1/2003.

6.

In replying to the present reference for a preliminary ruling it will be necessary to refer to the prohibition of anti-competitive agreements (also: prohibition of cartels) in the version before the Treaty of Lisbon entered into force because the French Competition Council decision at issue in the main proceedings was delivered in February 2009. Therefore the Union law context of this case is determined by Article 81(1) EC and Regulation No 1/2003 which was adopted for implementing it. However, my observations concerning Article 81 EC apply by analogy to Article 101 TFEU which is cited by the referring court.

7.

The relationship between [Article 81 EC] … and national competition law is governed by Article 3 of Regulation No 1/2003 as follows:

‘(1)   Where the competition authorities of the Member States or national courts apply national competition law to agreements, decisions by associations of undertakings or concerted practices within the meaning of Article 81(1) [EC] which may affect trade between Member States within the meaning of that provision, they shall also apply Article 81 [EC] to such agreements, decisions or concerted practices …

(2)   The application of national competition law may not lead to the prohibition of agreements, decisions by associations of undertakings or concerted practices which may affect trade between Member States but which do not restrict competition within the meaning of Article 81(1) [EC], or which fulfil the conditions of Article 81(3) [EC] or which are covered by a Regulation for the application of Article 81(3) [EC].’

…’

8.

Article 11(1) of Regulation No 1/2003, headed ‘Cooperation between the Commission and the competition authorities of the Member States’, is worded as follows:

‘The Commission and the competition authorities of the Member States shall apply the Community competition rules in close cooperation.’

9.

In addition, reference must be made to the explanations in recitals (1), (6), (8), (14), (15), (22) and (34) of the preamble to Regulation No 1/2003:

…

…

…

…

…

…’

10.

In the present case the Commission’s de minimis Notice of 2001 is also relevant. It reads as follows:

‘…

…

…

…

…

11.

In French law, the relevant provision is Article L 420-1 of the Code de commerce (Commercial Code) which basically sets out the same prohibition of anti-competitive agreements as Article 81 EC (now Article 101 TFEU) at Union level.

12.

In addition, Article L 464-6-1 of the Code de commerce incorporates the threshold values of the Commission de minimis notice and leaves the institution of proceedings to the discretion of the Competition Authority in the case of agreements of minor importance. ( 6 ) Therefore if the market shares of undertakings which are parties to an agreement are less than those referred in the abovementioned notice, the Competition Authority may decide not to continue proceedings.

13.

The French State railway company SNCF wished to expand the sale of train tickets and travel over the internet and sought an experienced partner for that purpose. Its choice fell on Expedia, a company incorporated under US law specialising in the sale of travel services over the internet. In September 2001 SNCF and Expedia concluded a number of cooperation agreements and formed a joint subsidiary, GL Expedia, which in 2004 changed its name to Agence Voyages-sncf.com (Agence VSC). The website voyages-sncf.com, which until then had offered only information and the reservation and sale of train tickets over the internet, thereafter hosted the activities of the joint subsidiary and was expanded to offer, in addition to its initial services, the services of an online travel agency.

14.

Following a complaint by several competitors, the French Competition Authority found, by Decision No 09-D-06 of 5 February 2009, that SNCF and Expedia had engaged in anti-competitive practices prohibited by Article L 420-1 of the Code de commerce and by Article 81 EC. According to the referring court, the Competition Authority found that the course of action agreed upon by SNCF and Expedia had an anti-competitive object. By way of a penalty, the Competition Authority fined Expedia EUR 500 000 and SNCF EUR 5 000 000.

15.

In the administrative proceedings before the Competition Authority Expedia had argued, in essence, that the threshold figures of the Commission de minimis notice and the corresponding limits in Article L 464-6-1 of the Code de commerce had not been attained because of a calculation error. ( 7 ) Therefore, as the market share was not 10%, under Article 3(2) of Regulation No 1/2003 no penalty should have been imposed by the national authority because the de minimis notice prescribes when there is an appreciable restriction of competition within the meaning of Article 81 EC. On that point, it argued, national competition law must not be more stringent that European law.

16.

The Competition Authority rejected Expedia’s arguments, observing that Expedia and SNCF were competitors in the market for on-line services of travel agencies and that their market shares were more than 10%. In addition, the Competition Authority emphasised that the agreement between Expedia and SNCF had an anti-competitive object.

17.

Expedia appealed to the Cour d’appel, Paris, against the Competition Authority’s decision. That court did not consider directly the question of the calculation of the shares of Agence VSC in the market in question. That court’s judgment of 23 February 2010, referring to the use of the word ‘may’ in Article L 464-4-1 of the Code de commerce, states that proceedings may be brought in respect of cartels, and penalties may be imposed, even if the market-share thresholds are not attained. Provided that the conditions of Article 81 EC are fulfilled, which the Cour d’appel found to be the case here, Article 3(2) of Regulation No 1/2003 does not preclude the imposition of fines either.

18.

As a result of Expedia’s appeal on a point of law against that judgment, the case is now pending before the Cour de Cassation, ( 8 ) the referring court.

19.

By judgment of 10 May 2011, received by the Court on 16 May 2011, the French Cour de Cassation stayed the proceedings and referred the following question to the Court for a preliminary ruling:

‘Should Article 101(1) TFEU and Article 3(2) of Regulation (EC) No 1/2003 be interpreted as precluding proceedings being brought and penalties being imposed by a national competition authority, on the grounds of both Article 101(1) TFEU and the national law of competition, in respect of a practice under agreements, decisions of associations of undertakings or concerted action that may affect trade between Member States, but which does not reach the thresholds specified by the European Commission in its [de minimis notice]?’

20.

In the proceedings before the Court, written observations have been submitted by Expedia and the French Competition Authority, the governments of France, Italy and Poland, Ireland, the European Commission and the EFTA Surveillance Authority. With the exception of Ireland and the governments of Italy and Poland, the same parties were represented at the hearing of 27 June 2012.

21.

Article 3 of Regulation No 1/2003 should be the starting point for considering the reply to be given in this case. It establishes a close link between European Union and national competition law. ( 9 ) Where national antitrust law is applied to an agreement between undertakings which may affect trade between Member States, Article 3(1) of Regulation No 1/2003 states that Article 81 EC (Article 101 TFEU) must also be applied in parallel. ( 10 )

22.

If EU and national competition law have to be applied in parallel in that way, Article 3(2) of Regulation No 1/2003 ensures that the approach of EU competition law takes precedence. In brief, agreements between undertakings may be prohibited under national competition law only if they are also prohibited under EU law. ( 11 ) Consequently national competition law must not lead to more stringent results than Article 81 EC.

23.

As, in relation to Article 81 EC, it has consistently been held that proceedings may be instituted and penalties may be imposed only for agreements between undertakings ( 12 ) which have the object or effect of appreciably restricting competition, ( 13 ) Article 3(2) of Regulation No 1/2003 requires the criterion of appreciable effect to be taken into account even if – as here – EU and national competition law are applicable in parallel before national authorities or courts.

24.

In that connection the Cour de cassation asks whether the assessment of the appreciability by national authorities of a restriction of competition necessarily depends on the criteria published at EU level in the Commission’s de minimis notice. In particular, the Cour de cassation wishes to know whether a national authority may presume an appreciable restriction of competition if, although the agreement between undertakings in question does not attain the market shares specified in the de minimis notice, the agreement nevertheless has an anti-competitive object.

25.

Of the parties which submitted observations to the Court, Expedia is the only one which considers that national competition authorities and national courts are bound by the market share thresholds in the de minimis notice, even if there is an anti-competitive object. All the authorities and governments concerned in the proceedings take the view that the de minimis notice is not binding on national authorities. Some of them also take the view that it is not necessary to consider specifically whether there is an appreciable restriction of competition when investigating an agreement between undertakings with an anti-competitive object.

26.

As the Court has found in another connection, Commission notices in the area of EU competition law do not have binding legal effect for national authorities and courts. ( 14 ) That is so also in the present case with regard to the de minimis notice and the market share thresholds which it contains. This follows not only from the wording of the notice, but also from its purpose and the context in which it was adopted.

27.

It follows beyond doubt from the wording of the de minimis notice that it expresses only the Commission’s view of the law ( 15 ) and that it is ‘not binding’ on the courts and authorities of the Member States. ( 16 ) Likewise in principle it has no binding effect on the Courts of the European Union as it is expressly made clear that it is ‘without prejudice’ to any interpretation of Article 81 EC which may be given by the Court of Justice or the General Court. ( 17 )

28.

The purpose of the de minimis notice also suggests that the statements in it are not binding. The Commission’s only purpose in issuing the notice was to make transparent its administrative practice in the application of Article 81 EC ( 18 ) and to provide guidance with useful information on interpretation for undertakings active in the internal market and for the authorities and courts of the Member States. ( 19 )

29.

That impression is confirmed if we consider the context of the de minimis notice. The Commission issued the notice, not by virtue of its legislative powers, but in its capacity as the competition authority of the European Union. On the one hand, the notice is an explanation of the Commission’s own administrative practice and, on the other, the Commission gives in it a general opinion or recommendation concerning competition policy in the framework of its responsibility for maintaining and developing a system of undistorted competition in the European internal market. ( 20 ) The Commission is empowered for that purpose by Article 85 EC in conjunction with the second indent of Article 211 EC (now Article 105 TFEU in conjunction with the fourth sentence of Article 292 TFEU). ( 21 )

30.

However, such recommendations and opinions have no binding force (fifth paragraph of Article 249 EC, now the fifth paragraph of Article 288 TFEU). Only the Council may lay down legally binding provisions to give effect to the competition rules in the European treaties, in the form of regulations or directives (Article 83 EC, now Article 103 TFEU ( 22 )). The Commission may adopt only block exemption regulations, but likewise only with the authorisation of the Council (Article 85(3) EC, now Article 105(3) TFEU).

31.

Apart from that, under Article 10 of Regulation No 1/2003 the Commission may, in exceptional cases, declare by decision that Article 81 EC is not applicable. However, such decisions may relate only to individual cases (‘an agreement’) and are, furthermore, intended in particular for new types of agreements or practices. ( 23 ) Broader statements of a general nature relating to competition policy such as those concerning the appreciability of restrictions of competition in the de minimis notice would be outside the scope of Article 10 of Regulation No 1/2003.

32.

Furthermore, the publication of the de minimis notice in the ‘C’ series of the Official Journal of the European Communities shows that it was not intended to lay down binding legislative measures because, by contrast with the ‘L’ series of the Official Journal, the ‘C’ series is not intended for the publication of legally binding measures, but only of information, recommendations and opinions concerning the European Union. ( 24 )

33.

Finally, the principle of the lawfulness of penalties (nulla poena sine lege), ( 25 ) which is recognised at Union level, likewise does not require the de minimis notice to be regarded as a binding legal measure. Contrary to what Expedia appears to believe, the legal basis for the competition authorities’ enforcement action against anti-competitive agreements between undertakings does not lie in the de minimis notice as such. The prohibition of cartels in EU law is established at the level of primary law in Article 81 EC, that is to say, a Treaty provision which has direct effect both in favour of and against undertakings. ( 26 ) So far as the penalties imposed by the French Competition Authority are concerned, they arise from national law. ( 27 )

34.

All in all, therefore, it must be concluded that the de minimis notice is not, of itself, intended to produce binding legal effects.

35.

Although the de minimis notice has no binding legal effects, as I have just shown, it would be a mistake to regard it as of no importance at all in law for proceedings concerning cartels. ( 28 ) Publications like the de minimis notice are in the nature of ‘soft law’ the relative importance of which in cartel proceedings, at the European and the national levels, should not be underestimated.

36.

With regard to administrative proceedings concerning competition law at EU level, it is recognised in the case-law that the Commission binds itself by issuing notices relating to its administrative practice. They form rules of practice from which the Commission may not depart in an individual case without giving reasons that are compatible with the principle of equal treatment. ( 29 ) The Commission is bound in the same way by its own rules in the present case of the de minimis notice, in which the Commission expressly states that, in cases of minor importance, it will not ‘institute proceedings either upon application or on its own initiative’. ( 30 ) The Commission goes on to announce that it will not impose fines where undertakings assume in good faith that an agreement is covered by the de minimis notice. ( 31 )

37.

So far as competition-law proceedings at Member State level are concerned, the de minimis notice expressly claims that ‘although not binding on them, this notice also intends to give guidance to the courts and authorities of the Member States in their application of Article 81 EC.’ ( 32 ) Such guidance is of decisive importance for the functioning of the decentralised system for the enforcement of competition law established by Regulation No 1/2003. ( 33 ) It contributes to the fundamental aim of applying as effectively and uniformly as possible throughout the European Union Articles 81 EC and 82 EC (now Articles 101 TFEU and 102 TFEU). ( 34 ) At the same time it supports the creation of equal competition conditions (‘level playing field’) ( 35 ) in the internal market and also enhances legal certainty for the undertakings concerned. ( 36 ) That circumstance was rightly highlighted not least by Expedia.

38.

The Commission’s leading role, firmly anchored in the system of Regulation No 1/2003, in framing European competition policy ( 37 ) would be undermined if the authorities and courts of the Member States simply ignored a competition policy notice issued by the Commission. It therefore follows from the duty of sincere cooperation which applies to all the Member States (Article 10 EC, now Article 4(3) TEU) ( 38 ) that the national authorities and courts must take due account of the Commission’s competition policy notices, such as the de minimis notice, when exercising their powers under Regulation No 1/2003. ( 39 )

39.

Therefore, even though no binding requirements concerning the competition-law assessment of agreements between undertakings arise for national competition authorities and courts from the Commission’s de minimis notice, those authorities and courts must nevertheless consider the Commission’s assessment, as set out in the notice, of what constitutes an appreciable restriction of competition and must give reasons which can be judicially reviewed for any divergences. ( 40 )

40.

Of course, this does not mean that national competition authorities and courts are absolutely prohibited from proceeding against agreements between undertakings below the de minimis market-share thresholds specified by the Commission.

41.

First, the market share is only one of a number of different quantitative and qualitative criteria for determining whether an agreement between undertakings appreciably restricts competition. As the Italian Government correctly observes, in addition to the respective market shares of the undertakings involved, the question depends on the general economic and legal context of a particular agreement. ( 41 )

42.

Secondly, there may be special national or regional competition problems in the various markets in the Member States to which the respective authority and the respective court must be able to react effectively. In addition, in the proceedings before the Court the French Competition Authority rightly observed that there may be objective differences in the enforcement practice of competition authorities, even though all those authorities belong to the European Competition Network (‘ECN’) ( 42 ) and work in close cooperation. ( 43 )

43.

Consequently the national competition authorities and courts are free to proceed against agreements between undertakings below the thresholds of the de minimis notice, provided that they have taken due account of the Commission’s guidance in the notice and that, in the particular case, there is evidence, other than the market shares of the undertakings concerned, which suggests that the effect on competition is appreciable.

44.

The question remains of the significance to be attached to the market share thresholds of the de minimis notice as guidance for national authorities and courts where agreements between undertakings with an anti-competitive object are concerned. According to the referring court, it is clear that the disputed agreement between Expedia and SNCF had an anti-competitive object, ( 44 ) although Expedia, the French Government and the Commission question this before the Court.

45.

Consequently it is necessary to ascertain whether, according to the de minimis notice, an appreciable effect on competition may be presumed where an anti-competitive object is being pursued but the Commission’s de minimis market share thresholds are not reached. As was shown in the course of the hearing, clarification of the Court’s case-law on that point would be highly desirable.

46.

First of all, it must be noted that the fact that an act of the Commission like the de minimis notice is not legally binding does not prevent the Court from interpreting it in the context of a preliminary ruling procedure under Article 267(1)(b) TFEU. ( 45 )

47.

The subject-matter of the de minimis notice builds on the Court’s case-law to the effect that the prohibition of restrictive practices laid down by Article 81 EC (now Article 101 TFEU) covers only appreciable restrictions of competition. ( 46 ) That fundamental finding has been applied by the Court to agreements between undertakings with an anti-competitive object as well as to agreements with an anti-competitive effect. ( 47 ) In other words, the restriction of competition must in principle be appreciable in the case of both ‘restrictions by object’ and ‘restrictions by effect’.

48.

However, that does not mean that the requirements concerning proof of appreciable effect are the same in both cases. On the contrary, the requirements differ according to whether an agreement between undertakings has an anti-competitive object or only has an anti-competitive effect.

49.

Only if there are insufficient grounds for presuming an anti-competitive object does the application of Article 81(1) EC require proof that an agreement has actual anti-competitive effects. If, on the other hand, it is clear that the agreement in question has an anti-competitive object, then, according to settled case-law, actual proof of adverse effects on competition is unnecessary. It is then sufficient to show that the agreement is actually capable of preventing, restricting or distorting competition within the internal market. ( 48 )

50.

These different requirements regarding proof arise from the fact that restrictions of competition ‘by object’ are regarded, by their very nature, as being injurious to the proper functioning of normal competition. ( 49 ) Agreements with an anti-competitive object are recognised as having harmful consequences for society. ( 50 ) They can hardly be regarded as de minimis infringements. On the contrary, it must be presumed that undertakings which enter into an agreement with an anti-competitive object always intend an appreciable effect on competition, irrespective of the size of their market shares and turnover.

51.

The Commission may not act in a manner inconsistent with those requirements arising directly from Article 81 EC. ( 51 ) Accordingly the de minimis notice expressly excepts certain ‘hardcore restrictions’ from the application of the market share thresholds. ( 52 ) As the Commission itself conceded at the hearing before the Court, that, of course, does not amount to an exhaustive list of all agreements with an anti-competitive object. ( 53 )

52.

The non-application of the de minimis market share thresholds to agreements with an anti-competitive object makes sense not only in law, but also in terms of competition policy. Market share thresholds such as those in the de minimis notice are intended to provide legal certainty. They form a safety zone, or safe harbour, within which undertakings which are parties to an agreement need not fear infringing the prohibition of cartels. Preferential treatment of that kind can hardly be given to undertakings that enter into agreements with an anti-competitive object. Otherwise undertakings whose market shares are below the de minimis thresholds would be practically invited to refrain from effective competition with each other and to join together in restraint of trade, which would be contrary to the fundamental principles of the internal market. This was rightly pointed out not least by Poland.

53.

Altogether, therefore, it must be concluded that the market share thresholds of the de minimis notice are irrelevant where it is necessary to determine whether restrictions of competition originating from agreements between undertakings with an anti-competitive object are appreciable. This was rightly noted by the French Competition Authority, Ireland, and the governments of France and Italy. The Commission also, in essence, concurred in that view in the course of the hearing before the Court.

54.

It is true that in the Court’s case-law a few judgments can be found which rule that the prohibition of cartels is not applicable even to agreements between undertakings with an anti-competitive object, provided that the agreement ‘has only an insignificant effect on the markets, taking into account the weak position which the persons concerned have on the market of the product in question’. ( 54 ) However, this must not be misconstrued as meaning that the appreciable effect of restrictions of competition ‘by object’ must be measured by reference to market share thresholds, and still less by reference to the same thresholds as those used when examining the appreciable effect of restrictions of competition ‘by effect’. ( 55 ) Otherwise the fundamental difference between restrictions of competition ‘by effect’ and ‘by object’ would become blurred.

55.

Accordingly the Court has not hesitated to find appreciable restrictions of competition, even in the case of relatively small market shares considerably less than the ‘de minimis threshold’ of 10% discussed in the present case, provided that the undertakings concerned pursued an anti-competitive object by means of their behaviour. ( 56 ) Certain judgments of the Courts of the European Union did not even require any concrete evidence at all of an appreciable restriction of competition if it was clear that an agreement between undertakings had an anti-competitive object. ( 57 )

56.

All this permits the conclusion that the requirements concerning proof that a restriction of competition ‘by object’ is appreciable should under no circumstances be more stringent than the requirements concerning proof of an appreciable effect on trade between Member States for the purposes of Article 81(1) EC (Article 101(1) TFEU). ( 58 )

57.

If, therefore, it is established – as in the present case – that an agreement between undertakings with an anti-competitive object is capable of appreciably affecting trade between Member States, ( 59 ) it may readily be inferred that the agreement is also capable of appreciably restricting, distorting or even preventing competition within the internal market.

58.

In the light of the foregoing considerations, I propose that the Court’s reply to the question referred by the French Cour de Cassation should be as follows: