The Limits Of Time-Barring Once Again Being Tested By The FCCA

By Päivi Tammilehto

10-2021

The Finnish Competition and Consumer Authority (“FCCA”) has on 27 September proposed a penalty payment of nearly 1,9 million euros to be imposed on six coach operators for having submitted illegal joint tenders in three tendering processes for public transport services in 2013, 2014 and 2016 in Western Finland.

Despite acknowledging that the infringement was interrupted between the tenders, the FCCA nonetheless argues the three joint bids form a single and continuous infringement. This is a questionable follow-on attempt by the FCCA to extend its reach to time-barred infringements after its decision in the Eltel case was overturned by the courts.

The FCCA seems to have taken note of the last time their interpretation of time-barring was challenged and overturned by the Supreme Administrative Court of Finland, following a preliminary ruling by the Court of Justice of the European Union (“CJEU”; see below), by stating that the infringement period for each tendering process started at the submission of the joint bid and ended with the conclusion of each of the contracts.

Competition law aficionados may remember, that the issue of the effects of a competition law infringement and subsequently time-barring was brought for a preliminary ruling before the CJEU in the Eltel case C-450/19. The CJEU stated that regarding infringements of Article 101(1) TFEU consisting of manipulation of a tender procedure, the restrictive effects on competition of the cartel disappear, in principle, at the latest at the time when the essential characteristics of the contract have been definitively determined. The CJEU continued to dismiss the argument of the FCCA claiming that the effective implementation of Article 101 would support a finding of a longer infringement period.  According to the CJEU limitation periods applicable to enforcement actions of competition authorities are recognized by Union law, and the effective implementation of Article 101 cannot justify artificially extending the duration of the infringement period in order to allow its prosecution.

Admittedly, there are differences between the Eltel case and the current case of the three joint bids. In the Eltel case, the infringement with regards a public tender procedure had occurred only once, and the actions under consideration concerned the most recent tender. The question brought before the CJEU for preliminary ruling concerned the effects of a cartel in a public tender and not whether the concept of a single, continuous infringement was applicable. In this case, according to the FCCA, illegal joint bidding had taken place on three separate occasions. According to the FCCA, the implicated companies could have submitted independent tenders and failing to have done so, are responsible for a serious competition law infringement. Naturally, an eventual finding of a single, continuous infringement in the case at hand would be affected by the nature of the interaction between the participants between the tenders. Had there been other forms of cartel behaviour between the tenders, a finding of a single, continuous infringement would be merited. But what of cases, where there is no cartel behaviour between the occurrences of the joint bids? Therefore, a more general stance by the national courts regarding the applicability of the concept of a single, continuous infringement in relation to public tenders would be needed.

The very essence of the concept of a single, continuous infringement is that the infringement (or the participation thereto) can be found to have lasted during periods for which there is no evidence. By FCCA’s own admittance, the infringement was interrupted between the different tenders for the three tenders at issue here. The application of the concept of a single, continuous infringement to cases where the issue is not that certain details require reconstituting by deduction seems artificial, especially if it is accepted by the authority that the infringement was interrupted. As the limitation period starts running at the end of the single continuous infringement (here the conclusion of the last contract), joint bids which would have been time-barred absent the application of the concept are included in the scope of the infringement, thereby leading to more significant fines. It can only be hoped that the courts rule on the admissibility of such an approach, which seems capable of extending competition authorities’ reach to potentially time-barred joint bids. From the perspective of the rule of law such a possible extension is naturally very concerning.

For reference, please see the FCCA’s press release in English here and the FCCA’s proposal to the market Court in Finnish here.

For more information, please contact Päivi Tammilehto.

 
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