Introduction
In the following analysis of the preliminary ruling in Président de l’Autorité de la Concurrence v Association des Producteurs Vendeurs d’endives (APVE) and Others shall argue that the case finally confirms the prevalence of Article 39’s objectives and therefore the objectives of the Common Agricultural Policy over European Competition Law. The cartel in this case engaged in an agreement to fix the price of endives through multiple mechanisms, nevertheless this discussion shall focus upon the overall agreements between producer organisations (POs) and associations of producer organisations (APOs) as well as their actions to stabilise producer prices and adjust production to demand and how this can be permissible if they are linked to their responsibilities and the general derogations. Finally, the Court’s decision on whether anticompetitive arrangements can escape the prohibition so long as their aim is to achieve the objectives of the Common Agricultural Policy shall be discussed. This discussion shall emphasize how although it could be argued that agricultural policy has now been able to supersede Article 101 of the Treaty on the Functioning of the European Union (TFEU), the scope of this is still extremely narrow and up to much debate.
Background
As Article 42 states that “the rules on competition law shall apply to the production of, and trade in, agricultural products only to the extent determined by the European Parliament and Council” ; consequently, this discretionary scope of competition has led to numerous cases involving the agricultural sector across multiple member states. In this case, APVE and Others were deemed by the Autorité de la concurrence (French Competition Authority) to have been involved in a “complex and continuous cartel” from January 1998 to March 2012 regarding the endives market. This consisted of 10 producer organisations (POs) and 7 associations of producer organisations (APOs) which engaged in anti-competitive agreements in contravention of Article 101(1) TFEU and Article L.420-1 of the Code de Commerce (French Commercial Code). Article 101(1) TFEU states:
“The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade by Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market”
This is assisted by Article L.420 which states the following will be prohibited:
“Common actions, agreements, express or tacit undertakings or coalitions, particularly when they are intended to:
1. Limit access to the market or the free exercise of competition by other undertakings;
2. Prevent price fixing by the free play of the market, by artificially encouraging the increase or reduction of prices;
3. Limit or control production, opportunities, investments or technical progress;
4. Share out the markets or sources of supply.”
APVE and Others were specifically involved in certain price and supply mechanisms by mutual agreement. This involved setting a minimum price on a weekly basis and distributing this information to the parties involved. Consequently, this allowed parties to machinate the quantity of endives on the market and consequently, through their sharing of pricing information, the parties were able to fix a minimum price for producers and producer organisations. As a consequence of the investigation, fines of €3,970,590 were imposed on the parties involved. However, the parties and several agricultural organisations appealed and the Cour d’appel (Court of Appeal Paris) held that the French Competition Authority had failed to fully establish that the parties had infringed Article L.420-1 of the French Competition Code and Article 101(1) TFEU as they did not conclusively establish that the distribution of minimum pricing instructions was completely prohibited and therefore, the parties had exceeded their derogations due to the difficulties in determining the parameters of price stabilisation under the competition law derogations to ensure the fulfilment of the Common Agricultural Policy. Therefore, the main issue here was what are the limitations of the derogations of agricultural policy, is the core focus the objective to be achieved or the action taken? As the Court of Cassation noted, the Court of Justice has not previously ruled whether the specific derogations to competition law exist or how they impact upon other areas of competition law within the agricultural sector.
The Court stated that in order to properly assess the interaction between competition law and agricultural policy, Article 101 TFEU cannot be considered alone. Instead the Court must also consider Article 2 of Regulation 26 which states that Article 101(1) TFEU is inapplicable where the parties’ actions:
“form an integral part of a national market organisation or are necessary for attainment of the objectives set out in Article [39 TFEU] […] unless the Commission finds that competition is thereby excluded”.
Alongside this, the Court must look at Article 11(1) of Regulation 2200/96 and Article 3(1) of Regulation 1182/2007 , prior to their repeals to define the legal entities involved and their respective responsibilities. Overall, the Court reiterated Article 42 TFEU’s recognition of the supremacy of the Common Agricultural Policy over competition law whilst confirming their previous decisions in the Bananas case and the Wine case , that the Council has the discretion to decide to what extent these rules shall be applied to the agricultural sector, which shall be discussed more thoroughly later on.
Derogations concerning Article 101 TFEU
In the precedent establishing case of Maizena states, the Council has a wide discretion to exercise whether prohibition and excepts to competition law policy shall apply in relation to the agricultural sector. However, as Advocate Wahl states that “collusive practices […] cannot escape that prohibition solely on the ground that they are in some way intended to fulfil the responsibilities of the producer organisations and associations of producer organisations”. It is important to distinguish between the two derogations for agriculture under Article 101 TFEU. Firstly, according to Regulation 26 as succeed by Regulation 1184/2006 , the Treaty is not applicable to those actions, agreements or decisions that “form an integral part of a national market organisation or are necessary for attainment of the objectives set out in Article 39 (TFEU)”. Consequently, this derogation does apply to farmers’ associations or associations of farmers’ associations as long as they concern production or sales within the agricultural sector or the use of joint facilities and supplies. However, the scope of this has been previously narrowed by the Commission. In the Scottish Salmon case, the Commission stated that as there was already a common organisation of the market in fisheries then the Scottish Salmon Board was consequently unable to rely on the national organisation defence.