Let's talk antitrust - Information exchange – the Balmoral Tanks appeal

Royaume-Uni | Vidéo | mai 2019 | 08:20

Clio Angeli	Thank you for coming today to discuss the Court of Appeal judgment in the Balmoral case. Very interesting judgment adopted in February this year. Many of the key issues regarding anti-competitive information exchange are basically there in just one document. Perhaps you can remind us of the facts of this case.
Richard Whish QC	Well yes, I think it’s a very interesting case actually. It’s almost like the, sort of, exam question that I would set to students at King’s College. So, basically you have got a cartel between four firms which had run from, I think, 2005 to 2012 and there is a cartel there and they agree with the CMA that there has been an infringement and fines over £2 million were imposed. But then, separately, a company called Balmoral Tanks entered into the market in 2011, very much towards the end of the period of the cartel and there were discussions as to whether Balmoral might like to join the cartel and it said no, no, no we are not going to enter into a cartel. But then they say, well, we are having a meeting in a hotel in Tamworth on July 11, 2012, why don’t you come to the meeting? And Balmoral go to the meeting not realising that the meeting is being videoed under the CMA surveillance powers or the OFT surveillance powers at the time. And they, at the meeting, say we are not going to join the cartel but then for more than an hour, a discussion takes place about strategic things within the galvanised water tanks sector, prices, including future prices, I tell you my thoughts, you tell me your thoughts and that’s what was recorded.
Clio Angeli	That’s interesting. And so, what was the approach of the CMA going from there?
Richard Whish QC	Well, the CMA said we’ve already fined the four cartelists for the cartel that had lasted for a long time, but this is the crucial point about the case, the CMA also says this meeting, this one meeting, when Balmoral didn’t join the cartel but did exchange strategic information including future information with the other firms present, that amounted to a concerted practice which restricted competition by object and for that Balmoral Tanks was fined £130,000.
Clio Angeli	And actually before the Court of Appeal, Balmoral really disagreed with this approach. They argued that …
Richard Whish QC	Well, yes, and not just the Court of Appeal, of course, because Balmoral went to the Competition Appeal Tribunal and the CAT was very clear that this was a T-Mobile type infringement, that being a famous case from the Court of Justice – one meeting, one exchange of information can infringe – and the CAT said, yes as far as we can see this is very much the same. Appeal to the Court of Appeal, and I find it interesting that the Court of Appeal doesn’t seem to have had the slightest hesitation in upholding the CAT which had upheld the CMA.
Clio Angeli	One thing I was wondering about, is there any upside to Balmoral arguing that they should have been held liable together with the other tank producers?
Richard Whish QC	Well, it’s difficult to follow the line of argument for Balmoral Tanks, who say there was a general cartel and then the CMA says that there was this separate exchange of information and they say this is all inconsistent, that if Balmoral was in the cartel, it was in the whole cartel, the overall, the single continuous infringement. But that’s a rather odd thing to argue, so that means apparently that I’m arguing that my client was guilty of something much more serious than what they were actually found guilty of, and the Court of Appeal does say we really find this argument somewhat strange and I have to say I agree with them.
Clio Angeli	You mentioned T-Mobile actually, and we’re celebrating this year the ten year anniversary of that judgment with the very interesting confirmation from the Court of Appeal. So, companies should perhaps beef-up their compliance programmes again, attracting attention around even the odd one-off exchange?
Richard Whish QC	Well, I think that’s the really important point about it. I mean, competition compliance training is absolutely critical, obviously – fines, damages, director disqualification orders etc. So, training is essential and people get the idea that a long running price-fixing cartel is bad. Do people quite so readily realise that even one meeting can be bad? And one can agree or disagree with the conclusions of these courts but, let’s face it, we’ve got the Court of Justice of the EU and now we have got the Court of Appeal of England and Wales looking at this particular factual setting and having no hesitation in saying, this can be a concerted practice by object and that fines are appropriate. So, I think for competition law compliance training, in a sense, it’s as good as it gets. If you really want to warn people be very careful, that’s what emerges from this judgment.
Clio Angeli	And so, I was asked this question, and I wanted to have your views on this as well. Some people think that because there was this seven-year long cartel behind it, that’s the reason why the CMA went for that side stand-alone information exchange and without the broader cartel maybe the stand-alone information exchange wouldn’t have fallen on their radar.
Richard Whish QC	Well, there are two different issues there. I mean, one issue is would they have discovered this and would they have investigated it? Maybe not, but if, on the other hand, they had discovered it and then you set the exam question, can this amount to an infringement? Well, I think the answer is absolutely clear, yes it can – T-Mobile.
Clio Angeli	The other related question in terms of enforcement which is argued this time by Balmoral on the other end of the spectrum is to say the cartelists who have already been fined for the entire infringement and that meeting as well actually should also be fined separately for the information exchange infringement. Do you think there is an enforcement gap here because they didn’t get fined?
Richard Whish QC	No, I don’t. I think the two cases are different. The infringements are related, I mean, it’s the same people and it’s galvanised tanks, but the CMA is saying that this was a particular, discreet infringement and that the rest of it was somewhat different. So, there is no unequal treatment – the Court of Appeal is absolutely clear there is no inequality of treatment here.
Clio Angeli	Perhaps, one final question in terms of compliance – Balmoral tried to come up with a lot of reasons and justifications for the information exchange, including the fact that they came to the meeting to decline the invitation to be involved in the cartel, the fact that this information that they exchanged was routinely passed on by customers to the producers anyway, they also argued that they didn’t take the information into account and they argued finally that at the next bid they managed to put forward a more competitive price and to still be active on the market as a fair competitor. Do you think that there is any option once you are caught if you failed to distance yourself at the time to escape from the allegation?
Richard Whish QC	No, I think if you look at the facts of the case and the CAT was very clear about this, this is talking about my likely future behaviour, the information could be used in relation to future bids. The CAT was quite clear and the Court of Appeal agrees that this is the kind of exchange of information that would have or could have an effect in this kind of market, it’s a commodity product after all. Tanks are tanks after all and there were just two different sizes, so I am afraid I find those arguments very unconvincing on the side of Balmoral.
Clio Angeli	Well, thank you very much Richard for your time today.