On 3 December 2015, Advocate General Wathelet issued his opinion on a request for a preliminary ruling from the Latvian Supreme Court, which raised the issue of whether a company could be held liable for the anti-competitive conduct of an independent third party in charge of the preparation of a tender when there is no evidence that the company was aware of this conduct or authorised it.
The case arose from proceedings before the Latvian Competition Council concerning alleged bid-rigging. In connection with the preparation of a bid for the supply of food to educational institutions, Partikas Komanija sought legal assistance from a law firm, which in turn called upon a sub-contractor, MMD lietas. MMD lietas was also preparing, without Partikas Komanija's knowledge, the bids for two other tenderers, Ausma Grupa and VM Remonts. The investigation revealed that an MMD lietas employee prepared the bids of the two other tenderers on the basis of Partikas Komanija's tender offer.
In October 2011, the Latvian Competition Council imposed fines on the three companies for bid-rigging in breach of the Latvian equivalent of Article 101 TFEU. On appeal, the Latvian Regional Administrative Court annulled the contested decision in so far as it found an infringement on the part of Partikas Komanija, but upheld the decision with regard to the two other companies. The Court found that Partikas Komanija had fixed its prices independently and that it had not colluded with the two other tenderers. This judgment was subsequently appealed by the Latvian competition authority before the Latvian Supreme Court, which decided to stay proceedings and refer questions to the European Court of Justice.
In his Opinion, the Advocate General acknowledges that a company may be held liable for the anti-competitive acts of a third party if that third party acted on the behalf and in the name of that company and within the scope of its mandate. However, the liability of a company, such as Partikas Komanija, is less clear cut in the situation where an independent third party (such as MMD lietas) takes initiatives that are manifestly outside the scope of its mandate, does not share any economic risks with the company and is not contractually bound by an exclusivity agreement to that company.
In such circumstances, the Advocate General considers that it would be wrong to automatically impute liability to a company such as Partikas Komanija for the acts of a third party. It would be equally wrong to impose an obligation on the competition authority to establish that Partikas Komanija knew of its agent's activities or authorised them.
As a solution, the Advocate General proposes to establish a rebuttable presumption of liability for anti-competitive acts committed by third party service providers who do not belong, directly or indirectly, to the company's organisation (i.e., that are not integrated into the company's organisational structure). According to the Advocate General, such a presumption would maintain the balance between, on the one hand, the enforcement of competition rules and, on the other hand, the safeguard of fundamental rights (i.e., the principle of personal responsibility).
Under the Advocate General's suggested approach, once the competition authority demonstrates that a third party hired by a company, whether or not it belongs to the company's organisation, breaches competition law, the company will be presumed liable for the acts of the third party. The company may rebut this presumption by providing evidence that: (i) the third party acted outside its assigned mandate; (ii) the company was not aware of any anti-competitive conduct carried out by that third party; and (iii) the company took all the necessary precautions to prevent the breach of competition law. Specifically, the company must establish that it has taken all necessary precautions to prevent such an infringement at three particular points in time.
The first point in time is the hiring of the third party, which covers, inter alia, the choice of provider, task definition and monitoring of implementation, obligations to ensure compliance with the law, and the authorisation required for any act not provided for in the contract. The second point in time takes place during the implementation of the tasks entrusted to the third party, during which the company should ensure that the third party complies in a strict manner with the tasks as defined by the contract. Finally, if there is an infringement of competition law by the third party, the company must publicly distance itself from the anti-competitive act, prevent its recurrence and/or denounce the infringer to the competition authorities.
The Advocate General also noted that the fact that the company has not benefited from the anti-competitive act of the third party is one of the elements it could put forward to rebut the presumption of liability. The Advocate General concluded that it is for the national court to assess, in the light of these elements, whether any liability is to be imputed to Partikas Komanija.
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