EFTA Court to Rule on The Interpretation of Restriction of Competition by Object

SUMMARY

In Depth - On 19 February 2016, the Supreme Court of Norway asked the European Free Trade Association (EFTA) Court to provide an advisory opinion on the legal test required to qualify an agreement as restricting competition “by object” under Article 53 of the Agreement on the European Economic Area (EEA Agreement), which has the same content as Article 101 of the Treaty on the Functioning of ... (see full summary)

 
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In Depth

On 19 February 2016, the Supreme Court of Norway asked the European Free Trade Association (EFTA) Court to provide an advisory opinion on the legal test required to qualify an agreement as restricting competition “by object” under Article 53 of the Agreement on the European Economic Area (EEA Agreement), which has the same content as Article 101 of the Treaty on the Functioning of the European Union (TFEU).

Background

In July 2011, the National Competition Authority of Norway imposed fines totaling €315,000 on Ski Follo Taxidrift AS, Follo Taxisentral BA and Ski Taxi BA for alleged bid rigging concerning their joint participation to a public tender announced in 2010 by the Oslo University Hospital (Ski Taxi SA, Follo Taxi SA og Ski Follo Taxidrift AS v staten v Konkurransetilsynet). In February 2013, the District Court of Follo annulled the Authority’s decision.

On 17 March 2015, the Borgarting Court of Appeal overturned the District Court’s judgment and confirmed the Authority’s decision, but reduced the amount of the fines to €145,000. The parties appealed the Borgarting Court judgment before the Supreme Court of Norway (Norges Hoyesterett), which asked the EFTA Court for the advisory opinion (case E-3/16).

Norway is a Member State of EFTA and a party to the EEA Agreement, which brings together the 28 Member States of the European Union and three EFTA States: Iceland, Liechtenstein and Norway. The EEA Agreement provides for the application throughout the 31 States of the EU legislation that covers the free movement of goods, services, people and capital, including the rules applicable to restrictions of competition. In order to ensure uniform implementation and application of the common rules in all EEA countries, the EFTA Court has jurisdiction for giving advisory opinions to courts in EFTA States on the interpretation of EEA rules. Its jurisdiction largely corresponds to that of the Court of Justice of the European Union (CJEU) for the EU Member States.

The Three Questions

The Supreme Court of Norway submitted the following three questions to the EFTA Court:

  1. What is the “legal test” for determining whether or not an agreement has a competition-restricting object within the meaning of Article 53 of the EEA Agreement?
  2. If the cooperation takes place openly with regards to the procuring authority, does this have any legal significance when establishing whether or not the parties’ conduct qualifies as a restriction by object?
  3. What legal criteria should be applied in order to establish whether or not the parties’ conduct qualifies as a restriction by object, if their cooperation takes the form of two competitors submitting a joint tender through a joint venture, where the two companies are to be subcontractors to the joint venture?

Restricting Competition “By Object”

Article 53 of the EEA Agreement (as Article 101(1) of the TFEU) prohibits agreements that have “as their object or effect the prevention, restriction or distortion of competition”.

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