Unravelling Cartel Investigations in the EU Often concealed from the public, cartel operations can imperil markets and pass significant fees on to consumers without their knowledge. The effective investigation of cartels – and organisations’ willingness to cooperate with these investigations – is therefore essential. Natalie Greenwood, partner at Euclid Law, takes a deeper look at cartel law in this article, outlining what is defined as a ‘cartel’ under EU law and how companies can best respond if they find themselves embroiled in an investigation. Expert Insight EXPERT INSIGHT 41 powers to enforce both European (if in the EU) and domestic competition law. How are these investigations carried out and how is information gathered? Competition authorities can launch investigations based on information they receive from parties to the investigation (leniency applications in exchange for reduced fines), thirdparty complaints or their own data, including from data analysis teams that scour public information for specific patterns which may indicate anticompetitive behaviour. A competition authority may carry out unannounced inspections (known as dawn raids) at the start of its investigation – often at various companies and locations at once. Competition authorities’ powers during a dawn raid are extensive and obstruction of inspections can result in significant fines. In 2019, the musical instruments company Fender was fined £25,000 by the UK’s competition authority because one of its employees removed 10 of his To set a foundation for this discussion, what are the key principles governing cartel investigations in the EU? The term ‘cartel’ is used to describe an agreement – typically secret – between two or more businesses not to compete with each other. Cartel participants will generally be involved in fixing prices, limiting production, sharing customers or markets or engaging in bid-rigging or other similar conduct. However, it is even possible that the exchange of competitively sensitive information may be sufficient to be classed as cartel conduct. For example, the Commission fined a number of banana suppliers for exchanging quotation prices for bananas which they then quoted to customers, but which were not the actual prices charged to individual customers. In the EU, the European Commission has extensive powers to investigate and enforce EU competition law against cartel participants. National competition authorities across Europe have similar
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