Exotic Fruits (Bananas) cartel case - no extensive examination of economic and legal context required if anti-competitive object is readily apparent

• 09/05/2017
• Articles

According to established case law, agreements with an anti-competitive object are those which, by their very nature, can be regarded as being harmful to the proper functioning of normal competition. Thus, where the anticompetitive object of the agreement is established, it is not necessary to examine its actual effects on competition. In order to determine whether an agreement reveals in itself a sufficient degree of harm to competition for it to be considered a restriction of competition by object, regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms part.

In its appeal to the Court of Justice of the European Union (“ECJ”), Pacific Fruit argued that the General Court (“GC”) had failed to sufficiently examine the economic and legal context of the contested conduct. In its recent judgment, the ECJ dismissed this ground of appeal. It recalled that Pacific Fruit had taken part in a price-fixing cartel and noted that this represents a particularly serious restriction of competition. In line with AG Kokott’s Opinion (see VBB on Competition Law, Volume 2016, No. 11), the ECJ emphasised that the GC’s analysis of the economic and legal context of which the practice forms part could therefore be limited to what is strictly necessary to establish the existence of a restriction of competition by object.

Furthermore, and again in line with the opinion of AG Kokott, the ECJ found that the arguments relating to the economic and legal context of the case put forward by Pacific Fruit were not relevant for the purpose of determining whether the conduct had an anticompetitive object. It noted that some of those arguments, such as the argument that the European banana market was subject to a common organisation at the time of the infringement, instead called into question the very existence of the agreement.

As a result, the ECJ upheld the GC’s ruling that the infringement could be characterised as a restriction of competition by object.