(L)awful mind

Procopé & Hornborg Competition blog: The impact of the ECN+ Directive - Is Article 101 TFEU lost in translation?

30.03.2021 | By Lotta Uusitalo

I have been reading Article 101 TFEU in several different language versions for the past 25 years - so quite a few times. You can understand my surprise to find an appreciable difference in the Finnish language version of the Article, and thus also in Finnish national competition law, compared to at least most of the EU − and perhaps all of it.

The close examination of the change brought about by the ECN+ directive revealed that the wording of Article 101 TFEU is different in Finland from many other EU member states. The English language version reads “The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices…” and identically in French: “Sont incompatibles avec le marché intérieur et interdits tous accords entre entreprises, toutes décisions d'associations d'entreprises et toutes pratiques concertées…” The German, Spanish, Danish and Italian versions at least seem identical with the English and French versions. 

Interestingly, the Finnish version is phrased differently. It states (here as a word-to-word translation into English and any additional words in bold) “The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings…). The Swedish – the other official language of Finland - version of Article 101 TFEU is in line with the English, French, German, Spanish, Danish, and Italian versions. Since both the Finnish and Swedish versions are of equal footing in Finland – much like all other language versions in force in the EU - we have two different versions of Article 101 TFEU in force in Finland. And how about national law then? It follows the Finnish language version of Article 101 TFEU.

So, the Finnish language version of Article 101 TFEU and national competition law restricts the type of infringement an association of undertaking may be found guilty of only to “decisions”, whereas the other language versions of Article 101 TFEU mentioned above also cover “concerted practice”. In Finnish case law, stand-alone cases concerning trade associations have found trade associations to be breaching competition law within the meaning of “decisions” (see for example Leipuriliitto). The latest  case where a trade association is being accused of engaging in cartel activity, and where contemporary law is being applied, the trade association is defined as an “association of undertakings” (see for example Isännöintiliitto) and the infringement is defined as “a decision” – although the description of the infringement seems to cover all sorts of practices. A great deal of cases judged and legal literature published so far seem to deal with infringement by associations of undertakings as “decisions”, but there is also settled EU case law according to which the type of infringement concerning an association of undertakings has been defined as  “concerted practice” (see for example T-5/00 and T-6/00 Nederlandse Federative).

The different concepts of competition law are intwined and have been developed through case law – and in the future we will see new elements in the definitions as more legal proceedings are instigated. A “decision” has normally been a trade association’s newsletter, guideline or recommendation including a “common will” of the association to influence the commercial behavior of its members. A “decision” has a unilateral element to it and sounds slightly more formal than ”concerted practice”, and is also targeted to a wider audience. A “concerted practice” is a form of coordination on the economic behavior without reaching the stage of achieving a proper understanding, leads to the reduction of competition uncertainties and, as stated often in case law, is “between undertakings”.  The threshold for triggering “concerted practice” is lower than that for a “decision”.

Why does this matter? Perhaps, it has not been of great importance before – although to find this additional wording in Finnish competition law is beyond baffling – it gains new relevance through the national implementation of the ECN+ Directive. One of the novelties of the ECN+ Directive is that it increases and extends the liability for fines for associations of undertakings, such as trade associations and other associations. After the implementation, national competition authorities may impose a fine on associations of undertakings based on the turnover of each member active on the market. The members of an association will be liable for fines imposed on the association itself, if, for example, it turns out that the association is insolvent. The liability for fines extends to undertakings that have not been involved in the infringement, unless they can prove that they were unaware of the infringing activity or that they had actively condemned it. The burden of proof is on the member itself. The national implementation of the ECN+ directive will possibly skyrocket the level of fines imposed on the basis of a trade association’s infringement and extend the liability also for possibly innocent members if they fail to reverse their burden of proof.

After the implementation of the ECN+ Directive, the questions raised by the different readings of Article 101 TFEU in practice are the following: in case the board members of a trade association exchange views on future pricing policies at a board meeting of a trade association - without it being a “decision”-  can the fines be imposed on the trade association – and possibly extended to its other members not present at the meeting? Or, in case the trade association cannot be fined for a concerted practice in Finland, can the association only be defined as an “undertaking” excluding the possibility for extending the fines to its members with the sky-high level of fines? Many language versions of Article 101 TFEU allow for the former interpretation after the ECN+ Directive has been implemented, whereas in Finland, perhaps the latter interpretation should prevail? However, due to the different language versions and reading alternatives, the door is certainly left open for the imposition of fines for a concerted practice based on the turnover of all the members of the trade association, and allocated on the trade association and extended possibly to its members also in Finland. Or, could it be that this depends on whether trade between member states is affected and the applicability of Article 101 TFEU in the first place?

The ECN+ Directive does not make any changes to what is prohibited as a type of infringement. Due to the extended liability aspect, it is of utmost importance to understand what type of infringement by an association of undertakings may in theory trigger the imposition of fines for almost all market participants. Given that the extension in liability for fines and the reversed burden of proof brings about such a huge increase in risk, I would expect the law to be clear and courts to uphold the exact definitions. Personally, I do not agree with blurring the lines of types of infringement and the imposition of fines on a party for a type of infringement not clearly stated in the law, even though there may be found some relevant EU case law in this respect.

Legal certainty and due process are already compromised with some aspects of the ECN+ Directive’s mechanism on the extension of liability for fines and the reversed burned of proof for (innocent) members of associations of undertakings. Is the additional wording in Article 101 TFEU a typo in the Finnish translation, or did the Finnish translators in 1995, when Finland joined the EC, have more insight in how the Article was intended to be interpreted,  than the founding fathers back in the early days? I do not know the answer to this,  but I do know that if we intend to integrate and harmonize competition law enforcement within the EU, the first requirement would be an identical content and wording for Article 101 TFEU in all member states, not allowing for different scenarios and further compromising the legal certainty of market participants. Something is lost in translation.


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Lotta Uusitalo

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