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Monday, 8 April 2013

Illegality and object agreements

Case C-68/12 Protimonopolny urad Slovenskej republiky, judgment of 7 February 2013 (CJEU), is a case coming from the Slovakian Supreme Court. Here three Slovakian banks had agreed not to deal with a Czech competitor of theirs in the field of cashless foreign exchange services. The Slovak competition authority had fined them for breach of Article 101 TFEU and the corresponding Slovak law. The banks defended themselves in front of the Slovak courts arguing, among other things, the activities of their competitor were illegal under Slovak law and so this meant that there was no breach of Article 101 TFEU.

The CJEU dismissed this argument quite briefly, without needing an opinion from the Advocate General. This was an agreement with the object of restricting competition and the banks had never raised the illegality point before the competition law investigation. Moreover, it was for the public authorities to ensure compliance with the law. In this case the issue was not straightforward, because the Czech and Slovak authorities had disagreed over the question of the need for a licence.

This is an easy case. Even if the illegality point is accepted, the appropriate response from a bank would be to either report the issue to the appropriate authorities or to cease trading with the allegedly offending undertaking. The one thing that should not be done is to agree collective action with your competitors to, in effect, remove another competitor from the market!

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