Latham Successful in Landmark Case Before the European Court of Justice

Antitrust group achieves major victory for client concerning restriction of competition by object.

September 15, 2014

Latham & Watkins’ Antitrust Practice achieved a major victory for its client, Groupement des Cartes Bancaires, on 11 September 2014 (Case C-67/13 P), persuading the European Court of Justice to dismiss the General Court’s judgment which supported the European Commission’s allegations that certain pricing measures adopted by Groupement des Cartes Bancaires were contrary to EU competition law.

Groupement des Cartes Bancaires, a French payment-card association which coordinates payments and cash withdrawals among affiliated members, adopted certain pricing measures in 2002. The European Commission (EC) issued two statements of objections in 2004 and in 2006 (the first of which was withdrawn), then found the association out of compliance with EU competition law because of both the association’s object and their anti-competitive effects. The European Commission required Groupement des Cartes Bancaires to end the alleged infringement. Groupement des Cartes Bancaires appealed the decision, but the General Court dismissed the appeal, finding no need to examine the effects of the measures on the market, as the EC could properly conclude that the pricing measures at issue restricted competition because of their anti-competitive object and constituted an unlawful decision of an association of undertakings.

Groupement des Cartes Bancaires appealed to the Court of Justice, claiming, inter alia, that the General Court had erred in law in applying the concept of the restriction of competition by object. On 11 September 2014, the Court of Justice confirmed that the General Court had failed to correctly assess whether there was a restriction of competition “by object” and whether the coordination of undertakings under our client’s umbrella revealed in itself a sufficient degree of harm to competition. The Court of Justice annulled the General Court’s judgment and referred the case back to it.

The ruling sets an important precedent to the extent that it explicitly sets out that characterizing conduct as a restriction of competition by “object” — which exempts the EC from the obligation to prove the actual effects of that conduct on the market — must be interpreted restrictively and used only if the conduct reveals in itself a sufficient degree of harm to competition. This ruling stands in stark contrast to the EC’s approach which favours a somewhat expansive and open-ended interpretation of “by object” restrictions.

The Latham & Watkins team was led by Paris partner Frédéric Pradelles and Brussels partner Javier Ruiz Calzado, with Paris associates Constance d’Ornellas Chancerelle and Oriane Fauré.

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