Colour shifting risks: cartel fines for alleged indirect info exchange upheld


Companies should be wary of the novel approach taken by two national competition authorities towards indirect information exchange.

A Dutch and a Belgian appellate court have upheld the cartel fines imposed by the Dutch Authority for Consumer and Markets (ACM) and the Belgian Competition Authority (BCA) on four cigarettes producers for allegedly indirectly exchanging information on the future retail prices of cigarettes through their wholesalers and other buyers (see also our October 2020 newsletter).

So far, the European Commission has flaggedonly the risks of horizontal collusion through vertical information exchange, acknowledging the practical difficulty of proving the horizontal coordination element. However, the appellate courts’ upholding of the ACM’s and BCA’s approach lowers the standard of proof for horizontal collusion in the case of a vertical competitively sensitive information flow, thereby pushing the boundaries of current EU case law.

This expanded scope leaves companies and their compliance advisers guessing at its limits. A clear framework to assess when communications between suppliers and buyers (which are typically legitimate and pro-competitive) shift colour and become horizontal collusion between suppliers (or buyers) is (still) missing. An approach without clear limiting principles differentiating between prohibited horizontal collusion and legitimate flows of information between suppliers and distributors, will be difficult to comply with in practice. 

It remains to be seen whether the higher appellate courts will agree with this widened scope in potential appeals against the appellate courts’ rulings; hopefully seizing the opportunity to clearly define the exact limits of collusion. For now, companies should remain vigilant about the collection and use of market information by the business.


Due to a sector-specific taxation system, cigarette pack prices are set by the manufacturer instead of the retailer (as is usual for consumer products). To allow wholesalers and other buyers to adapt their systems to newly-set prices, tobacco manufacturers send price lists to them in advance. 

According to the ACM and BCA, some of the buyers passed the manufacturers’ future price lists on to competing manufacturers, enabling the manufacturers to align their pricing strategies. Because the manufacturers (i) allegedly knew that the buyers would pass on the information to competing manufacturers, as they themselves received competitor price information from one or more buyers; and (ii) did not take any measures to prevent the information flows, they allegedly participated in a concerted practice. The ACM and BCA also took into account the fact that some of the manufacturers (sporadically) asked for competitor future price lists and/or used the information received to set their own retail prices for cigarettes packs.

Rotterdam District Court

The Rotterdam District Court upheld the ACM’s fines imposed on four tobacco manufacturers for alleged indirect information exchange on future retail cigarette prices through their wholesalers and buyers. 

The manufacturers argued that the parallel, bilateral, vertical information flows cannot in themselves prove the existence of horizontal collusion between the manufacturers. More is needed for such flows to violate Article 101 TFEU, even if they include competitively sensitive information about competitors. In fact, there are many legitimate and pro-competitive reasons for vertical information flows. The ACM should in any event have proven that there was (mental) consensus among the manufacturers to substitute competition for practical cooperation (the concept of a concerted practice), i.e. a horizontal element, before labelling the vertical information flows as a cartel. 

The District Court, however, referred to EU case law (Eturas) to conclude that the information exchange – even absent direct competitor contact – may constitute a concerted practice without the parties’ ‘intentions’ (which according to the District Court equals mental consensus) having to be proven. The District Court found that the manufacturers were aware of the existence of the information flows, used the information received internally, and based their own market behaviour on that information. Therefore, the manufacturers allegedly deviated from normal market circumstances and did not determine their behaviour independently. According to the District Court, the ACM could establish horizontal collusion on this basis. It remarkably used the criteria set out in EU case law to establish a party’s responsibility for (VM Remonts & AC-Treuhand) or participation in (Eturas) pre-established anticompetitive behaviour as a self-standing notion of collusion. 

The District Court also easily accepted the ACM applying the Anic presumption, established in EU case law (according to which a party to an information exchange that remains active on the market is deemed to take account of this information when determining its market conduct), and the ACM’s classification of the alleged indirect information exchange as a ‘by object’ infringement. On both aspects the District Court sides with the ACM in finding that the way the information is exchanged – either directly or indirectly – is irrelevant. Instead, it would be the result that matters.  

The Belgian Market Court

The Belgian Market Court upheld the BCA’s finding of two separate concerted practices among several tobacco manufacturers. One involved British American Tobacco (BAT) and Philipp Morris Benelux (PMB). Another involved PMB, Etablissements L. Lacroix Fils (ITB) and JT International Company Netherlands (JTI). 

The manufacturers put forward the same argumentation as in the Dutch case: vertical information flows are in and of themselves insufficient to prove horizontal collusion. In the absence of any evidence of a horizontal element, the BCA could not establish a horizontal concerted practice.   

Referring to the VM Remonts case of the European Court of Justice, the Market Court ruled that if a manufacturer could reasonably foresee that a wholesaler would share its price information with another competitor and did not take any measures to prevent this, horizontal collusion between the manufacturers can be established. The manufacturers should have proactively taken action to stop the information flows. Reversing the burden of proof, the Market Court also found that the manufacturers had failed to adequately demonstrate that the information exchange took place exclusively within a context of negotiations with the wholesalers. 

The Market Court also confirmed the applicability of the Anicpresumption to the finding of an infringement by object. Like the Rotterdam District Court, the Market Court ruled that it did not matter whether information is exchanged directly or indirectly. 

The Market Court, however, ruled that the finding of a single and continuous infringement lacked any serious motivation. The Market Court also noted that the BCA was wrong to find that BAT temporarily participated in the alleged infringement on its own, which is evidently impossible under the EU and Belgian cartel provisions – it takes two to tango. The Market Court therefore partially annulled the BCA decision on these points and referred the case back to the BCA. For now, it therefore remains unclear when the alleged concerted practices started and ended.


The appellate courts’ confirmation of the ACM’s and BCA’s approach has expanded the scope of the cartel prohibition. Individual but parallel behaviour of competitors – consisting of individual producers and customers exchanging information about market developments, including competitors' behaviour – with a certain degree of awareness, implies coordination between these competitors without any need for evidence of horizontal coordination. 

This expanded scope leaves companies and their compliance advisers struggling to determine the exact boundaries. There is no clear rule on when legitimate and even pro-competitive vertical communications change colour and become horizontal collusion. The absence of clear limiting principles, differentiating between prohibited horizontal collusion and legitimate flows of information between suppliers and distributors, makes the ACM’s and BCA’s approach difficult to comply with in practice.  

It remains to be seen whether higher appellate courts will follow the reading of the appellate courts. It is to be hoped that the higher appellate courts will clearly define what the limits of collusion are. 

In the meantime, companies must remain cautious when receiving (even inadvertently) competitively sensitive information from their competitors. It is advisable to clearly state ‘confidential – not for redistribution’ on all customer communications and to instruct sales teams to expressly decline all competitor information inadvertently received through third parties.