TO THE PRESIDENT AND THE MEMBERS OF THE EFTA COURT WRITTEN OBSERVATIONS. European Commission

Transcription

1 Ref. Ares(2016) /05/2016 ORIGINAL! 'i Brussels, 10 May 2016 sj.e(2016) TO THE PRESIDENT AND THE MEMBERS OF THE EFTA COURT WRITTEN OBSERVATIONS submitted pursuant to Article 20 of the Statute of the EFTA Court by the European Commission represented by Henning Leupold, Hubert van Vliet and Teresa Vecchi of its Legal Service, acting as Agents, with an address for service at the office of Merete Clausen, also of its Legal Service, Bâtiment Bech, L-2721 Luxembourg, in case E-3/16 Ski Taxi SA, Follo Taxi SA og, Ski Follo Taxidrifí AS v Staten v/ Konkurransetilsynet concerning a Request for an Advisory Opinion on the interpretation of Article 53 of the Agreement on the European Economic Area, submitted by the Supreme Court of Norway pursuant to Article 34 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice.

2 2 TABLE OF CONTENTS L INTRODUCTION 3 IL FACTS 4 1. Background 4 2. The Decision 5 Ш. THE QUESTIONS RAISED BY THE SUPREME COURT OF NORWAY 6 IV. THE COMMISSION'S VIEWS 6 Question 1- identifying restrictions 'by object' - the legal test 6 Question 2 - open cooperation 12 Question 3 - joint tenders as restrictions by object 13 V. CONCLUSION 16

3 3 I. INTRODUCTION 1. The request for an advisory opinion submitted to the EFTA Court by the Supreme Court of Norway ("Request for an Advisory Opinion") concerns the inteipretation of Article 53 of the Agreement on the European Economic Area ("EEA Agreement"). The provisions in Article 53 of the Treaty are identical in substance to the provisions of Article 101 of the Treaty on the Functioning of the European Union ("Treaty"). The present case thus falls within the scope of Article 6 of the EEA Agreement and Article 3, paragraph 2 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice ("Surveillance and Court Agreement"). 2. Article 6 of the EEA Agreement provides: Without prejudice to future developments of case-law, the provisions of this [EEA] Agreement, in so far as they are identical in substance to corresponding rules of the [Treaty] [...] shall, in their implementation and application, be interpreted in conformity with the relevant rulings of the Court of Justice of the [European Union] given prior to the date of signature of this [EEA] Agreement. 3. Article 3, paragraph 2 of the Surveillance and Court Agreement provides: în the interpretation and application of the EEA Agreement [...] the EFTA Court shall pay due account to the principles laid down by the relevant rulings of the [ Court of Justice of the European Union] given after the date of signature of the EEA Agreement and which concern the interpretation of [...] such rules of the [Treaty] [...] in so far as they are identical in substance to the provisions of the EEA Agreement [...]. 4. The European Commission ("Commission") has the honour to submit these Written Observations pursuant to Article 20 of the Statute of the EFTA Court.

4 4 II. FACTS 1. Background 5. The Commission understands that the facts underpinning the Request for an Advisory Opinion are as follows. 6. On the 4 th of July 2011 the Norwegian Competition Authority issued a decision (the "Decision") imposing administrative fines on Ski Taxi SA ("Ski Taxi"), Follo Taxi SA ("Follo Taxi") and Ski Follo Taxidrift AS ("SFD") in respect of breaches of Section 10 of the Norwegian Act of 5 March 2004 No 12 ("Competition Act"). Section 10 of the Competition Act is based on Article 53 of the EEA agreement which is in turn based on Article 101 of the Treaty. The breach relates to the submission of joint tenders by Ski Taxi and Follo Taxi through a jointly owned management company, SFD. 7. Ski Taxi and Follo Taxi are two taxi companies which compete in the area of passenger transport using small passenger cars. Both companies operate in the Folio region, which consists of seven municipalities. Follo Taxi primarily serves the municipalities of Nesodden, Frogn, Vestby, As and Enebakk, though it also operates in the remaining municipalities of Ski and Oppegård. Ski Taxi operates primarily in Ski, As and Oppegård, but is also active to some extent in the remaining five municipalities. 8. In 2001, Ski Taxi and Follo Taxi formed SFD, a management company in which both parties owned 50% of the shares. This company was established to undertake administrative functions relating to both companies' dispatch centres. According to a strategy document for ("Strategy Document"), the basis for the existence of SFD is 'to secure and to win back major contracts' and 'to take measures to meet competition in the form of joint projects or marketing efforts.' The document defined the market area of SFD as all seven of the Folio municipalities. An SFD shareholder agreement dated 3 May 2007 ("Shareholder Agreement") notes that 'the position of the parties in relation to the functions assigned to the company indicates that there will be 'less competition between them in the market than there was previously.' Further, the agreement provides that this reduction in competition 'applies to both price policy in tenders and other strategic measures in relation to the market.'

5 5 2ο The Declsioiî 9. As noted above, the Decision imposed fines on Ski Taxi, Follo Taxi and SFD for the submission, through SFD, of two joint tenders. Both tender competitions concerned the provision of patient transport services for the South-Eastem Norway Regional Health Authority announced by Oslo University Hospital in The first tender competition, no. 2010/16213 ("Tender Competition 1"), invited tenders for the purchase of patient transport services in nine different tender areas. Two of the nine tender areas comprised the seven municipalities of Folio. SFD submitted a joint tender in respect of these areas. The tender stated that it was submitted on behalf of Ski Taxi and Follo Taxi. As SFD was the only tenderer for the two relevant areas, the competition was cancelled for these areas. 11. The second tender competition, no. 2010/22795, ("Tender Competition 2") concerned the cancelled part of Tender Competition 1, except the two geographical areas subject to the tender had been changed and divided into the five smaller areas of Oppegård, As, Nesodden, Frogn and Vestby. SFD submitted a tender on behalf of Ski Taxi and Follo Taxi in relation to all five of the geographical areas, once again expressly informing the procuring authority that the submission was made jointly on behalf of Ski Taxi and Follo Taxi. Two other companies, Konsentra and Oslo Taxi, submitted tenders for Tender Competition 2. SFD was assigned second priority in all five of the geographical areas while Oslo Taxi and Konsentra were awarded first and third priority alternately in different areas. 12. The Decision is premised on the fact that both Ski Taxi and Follo Taxi could have individually submitted tenders for both competitions. As a result, the Competition Authority found that their conduct had the object of restricting competition. 13. The District Court of Folio found that the Decision was invalid. The Decision was, however, affirmed by the Court of Appeal which agreed that the cooperation had the object of restricting competition. The Court of Appeal agreed that both Ski Taxi and Follo Taxi could have submitted separate tenders. This finding has not been appealed. The judgment of the Court of Appeal was appealed to the Supreme Court. It is these proceedings which give rise to the present Request for an Advisory Opinion.

6 6 III. THE QUESTIONS RAISED BY THE SUPREME COURT OF NORWAY 14. In its Request for an Advisory Opinion, the Supreme Court of Norway has referred three questions to the EFTA Court: Question 1: What is the legal test when determining whether an agreement between undertakings has a competition-restricting object within the meaning of Article 53 EEA? a) In this context, is it sufficient in order to be able to categorise a form of conduct as an infringement by object pursuant to Article 53 EEA, that the cooperation is capable of restricting competition? Question 2: What is the legal significance for the consideration of whether a form of conduct constitutes an infringement by object, that such cooperation took place openly vis-à-vis the procuring authority? Question 3: What legal criteria must in particular be emphasised when considering whether cooperation that takes the form of two competing companies submitting a joint tender through a joint venture, and where the two undertakings are to be subcontractors to the joint venture, should be deemed to constitute an infringement by object? IV. THE COMMISSION'S VIEWS Question 1- identifying restrictions 'by object' - the legal test 15. With the first question, the referring court is seeking guidance as to which legal test should be applied when determining whether a certain conduct constitutes a restriction of competition "by object". With its sub-question, the referring court is asking whether it is sufficient for that certain conduct to be capable of restricting competition in order to be considered a "by object" infringement and thus meet the legal test. 16. The Commission will provide its view with regard to the first question and its subquestion at the same time as the answer to the first question necessarily provides a reply to the sub-question as well.

7 7 17. Article 53 of the EEA Agreement prohibits all agreements between undertakings 'which may affect trade between Contracting Parties and which have as their object or effect the prevention, restriction or distortion of competition within the tenitory covered by this Agreement.' 18. Agreements which restrict competition "by object" have been defined by the Union Courts as those which can be regarded, 'by their very nature, as being injurious to the proper functioning of normal competition.' Recently, the Court of Justice in Cartes Bancaires has clearly reaffirmed that the legal test to be applied in ascertaining whether coordination has the object of restricting o competition is that it 'reveals in itself a sufficient degree of harm to competition.' 20. It is correct that in T-Mobile the Court of Justice held that a practice must simply be 'capable in an individual case, having regard to the specific legal and economic context, of restricting competition', in order to be categorised as a restriction by # Q object. SFD, Ski Taxi and Follo Taxi contend that this evidences the application of a 'lower standard', which was applied to their cooperation by the Norwegian Court of Appeal, which has since been rejected in Cartes Bancaires However, the Commission observes that Т-Mobile and Cartes Bancaires form part of a consistent body of case law on the notion of restrictions by object. Cartes Bancaires did not, as SFD, Ski Taxi and Follo Taxi maintain, overrule or modify the test employed by the Court of Justice in T-Mobile. 22. The statement in paragraph 31 of T-Mobile, to the effect that it is sufficient that an agreement is capable, in an individual case, of restricting competition, to classify it as a restriction by object, must be read against the backdrop of the referring court's contention that a finding that an agreement had an anti-competitive object required a See, for example, judgments in Beef Industry Development and Barry Brothers, C-209/07, EU:C:2008:643, par. 17; T-Mobile, C-8/08, EU:C:2009:343, par. 29; Allianz Hungária, C-32/11, EU:C:2013:160, par. 35; Cartes Bancaires, C-67/13 P, EU:C:2014;2204, par. 50. Judgments in Cartes Bancaires, C-67/13 P, EU:C:2014:2204, par. 57; Beef Industry Development and Barry Brothers, C-209/07, EU:C:2008;643, par. 15; LTM, C-56/65, EU:C:1966:38, page 249. Judgment in T-Mobile, C-8/08, EU:C:2009;343, par. 31. Judgment in Cartes Bancaires, C-67/13 P, EU:C:2014:2204.

8 8 consideration of its effects. 5 In affirming that an agreement need only be capable of restricting competition to be found to have an anti-competitive object, the Court of Justice sought simply to clarify that no effects analysis is required in such an assessment. The Court of Justice did not, as alleged in the first plea of the applicants before the referring court, 6 establish a lower standard, whereby all agreements capable of restricting competition will be found to have an anti-competitive object. This is supported by the fact, firstly, that the judgment invokes the long-established criteria * Τ for the categorisation of conduct as restrictive by object (see below) and, secondly, that the Court of Justice refers to restrictions by object as those recognised 'by their o very nature, as being injurious to the proper functioning of normal competition.' 23. As noted above, in Cartes Bancaires, the Court of Justice identified as the 'essential legal criterion' 9 in classifying conduct as restrictive by object 'the finding that such coordination reveals in itself a sufficient degree of harm to competition.' 10 This was affirmed by the Court of Justice in its recent judgment in Toshiba} 1 This establishment of a sufficient degree of harm is consistent with the reference in Т-Mobile to restrictions which are 'inherently injurious' to competition. The Court of Justice confirmed, in Cartes Bancaires, that proof that an agreement is merely capable of restricting competition, without more, is not sufficient to find that a restriction has 1 9 an anti-competitive object. 24. The Commission would like to point out, however, that the finding that an agreement is capable of restricting competition plays a role, albeit a limited one, in the classification of agreements as restrictive by object. The purpose of this criterion is to ensure that the competition provisions are only applied where there is competition to be restricted. The "capability criterion" will, therefore, prevent a finding that an I Judgment in Т-Mobile, C-8/08, EU:C:2009:343, par. 20. Page 7 of the Request for an Advisory Opinion. 7 Judgment in Т-Mobile, C-8/08, EU:C:2009:343, par Judgment in Т-Mobile, C-8/08, EU:C:2009;343, par. 27. ' Judgment in Cartes Bancaires, C-67/13 P, EU:C:2014:2204, par Judgment in Cartes Bancaires, C-67/13 P, EU:C:2014:2204, par. 57. II Judgment in Toshiba, C-373/14 P, EU:C:2016:26, par Judgment in Cartes Bancaires, C-67/13 P, EU:C:2014:2204, par. 69.

9 9 agreement has the object of restricting competition where there is no competition capable of restriction in the market to which the agreement relates, for example where competition is excluded by law. 25. It follows that while agreements need to be capable of restricting competition to constitute restrictions by object, the mere fact of such capacity is not, of itself, sufficient to find an anti-competitive object, without proof that the agreement discloses a sufficient degree of harm to competition such as to restrict competition by its very nature. 26. Having established the relevant legal test to determine if an agreement constitutes an infringement "by object", the Union Courts have also provided guidance as to how to ascertain if an agreement reveals a sufficient degree of harm to competition. 27. Agreements which reveal a 'sufficient degree of harm to competition' are those which are 'so likely to have negative effects' on the parameters of competition such as price, quantity or quality of goods or services that an analysis of their actual or potential effects is redundant. 13 In identifying restrictions which are 'so likely to have negative effects', the Court of Justice has consistently referred, by way of example, to horizontal price fixing, 14 market sharing, 15 customer sharing 16 or joint capacity 17 reductions. 28. The 'by object' category is not, however, limited to such obvious, established restrictions. Even agreements which fall outside the classically-recognised category of agreements found to restrict competition by object may reveal a sufficient degree of harm to competition where they are comparable to, or effectively amount to, one of the 'established' restrictions. The assessment of such agreement is based on 'experience' showing that such behaviour leads to falls in production and price increases, resulting in poor allocation of resources to the detriment, in particular, of Judgments in Cartes Bancaires, C-67/13 P, EU;C:2014:2204, par. 51; Clair, C-123/83, EU:C: 1985:33, par Judgments in Cartes Bancaires, C-67/13 P, EU:C:2014:2204, par. 51; Dole, C-286/12 P, EU:C:2015:184, par. 115; ING Pensii, C-172/14, EU:C:2015:484, par Judgment in Toshiba, C-373/14 P, EU:C;2016:26, par Judgment Ín ING Pensii, C-172/14, EU:C:2015:484, par. 32. Judgment in Beef Industry Development and Barry Brothers, C-209/07, EU:C;2008:643, par. 33 ff.

10 10 1 Я consumers. In such cases, closer inspection of the agreement may be required in order to find an anti-competitive object than in situations where, for example, parties have agreed simply to fix prices. This inspection does not, however, involve an analysis of the effects, actual or potential, of the agreement. 29. Both in case of long-established restrictions by object and in case of less obvious agreements, the criteria relied on by the Court of Justice in identifying whether an agreement reveals a 'sufficient degree of harm' require, firstly, an analysis of its content and the objectives it pursues. 19 Secondly, the Court of Justice will account for the legal and economic context of which the agreement forms part. 20 In addition to these criteria, the Court of Justice has held that 'although the parties' intention is not a necessary factor in determining whether an agreement between undertakings is restrictive, there is nothing prohibiting the competition authorities, the national courts, 91 or the Union Courts, from taking that factor into account.' 30. As to the content and the objectives an agreement actually pursues, its wording is particularly relevant. 22 However, the content refers not merely to the written clauses of an agreement, but the substance of what was agreed between the parties. Likewise, locating the objectives of an agreement requires reference not only to its stated objectives, but an assessment of whether the true purpose of the agreement is the restriction of competition. It is not necessary that an agreement has a restriction of competition as its sole aim. Indeed, agreements which pursue legitimate objectives may also have the object of restricting competition. 23 Judgment in Cartes Bancaires, C-67/13 P, EU:C:2014:2204, par. 51. Judgments in Beef Industry Development and Barry Brothers, C-209/07, EU:C:2008:643, par. 16; General Motors, C-551/03, EU:C:2006:229, par. 66; Т-Mobile, C-8/08, EU:C:2009:343, par. 27; Dole, C-286/12 P, EU:C:2015:184, par ' Judgments in Beef Industry Development and Barry Brothers, C-209/07, EU:C:2008:643, par. 16; General Motors, C-551/03, EU:C:2006:229, par. 66; Т-Mobile, C-8/08, EU:C:2009:343, par. 27; Dole, C-286/12 P, EU:C:2015:184, par Judgments in Cartes Bancaires, C-67/13 P, EU:C;2014:2204, par. 54; Allianz Hungária, C-32/11, EU:C:2013:160, par. 33. Judgments in Beef Industry Development and Barry Brothers, C-209/07, EU:C:2008:643, par. 21; General Motors, C-551/03, EU:C:2006:229, par. 64. Judgments in Beef Industry Development and Barry Brothers, C-209/07, EU:C:2008:643, par. 21; General Motors, C-551/03, EU:C:2006:229, par. 64.

11 As to the context, the Union Courts require that the categorisation of conduct as restrictive by object not take place in the abstract, without due regard for the economic П/ļ and legal context of which the conduct forms part. It is necessary to account for 'the nature of the goods or services affected, as well as the real conditions of the functioning or structure of the market.'" The Commission reiterates that this does not involve an analysis of the actual or potential effects of an agreement, or elements of such an analysis such as an assessment of the parties' market power. It may however involve investigating, for instance, whether the agreement is concluded between competitors or between undertakings not competing on the same market, whether the market is two sided or regulated, or whether the restriction is a functional part of a wider, lawful operation to which it is ancillary. The latter is the case where the restriction is 'objectively necessary' for, that is strictly indispensable to, the implementation of a main operation which is not anti-competitive. This is only the case where absent the restriction the otherwise lawful main operation would be impossible to be carried out. Moreover, the restriction must be proportionate to the underlying objectives of the main operation. 32. The Court of Justice has recently held that agreements which constitute particularly serious breaches of the competition rules, such as market sharing, have 'in themselves, an object restrictive of competition' and therefore 'cannot be justified by an analysis of the economic context of the anticompetitive conduct concerned.' 27 Moreover, in the assessment of such breaches of competition law 'the analysis of the economic and legal context of which the practice forms part may [...] be limited to what is strictly necessary in order to establish the existence of a restriction of competition by object.' The Commission submits that this reasoning should also be applied to other established, classically-recognised restrictions such as naked price-fixing agreements. It follows that in such cases the assessment of the economic and legal context of such 1 Judgment in Cartes Bancaires, C-67/13 P, EU:C:2014;2204, par Judgments in Allianz Hungária, C-32/11, EU:C:2013:160, par. 37; Cartes Bancaires, C-67/13 P, EU:C:2014:2204, par. 53; Dole, C-286/12 P, EU:C:2015:184, par See, as regards ancillary restraints, judgments in Pierre Fabre, C-439/09, EU:C:2011:649, par. 39 ff.; Mastercard, C-382/12 P, EU:C:2014:2201, par. 90 ff., 107. Judgment in Toshiba, C-373/14 P, EU:C;2016:26, par Judgment in Toshiba, C-373/14 P, EU:C:2016:26, par. 29.

12 12 an agreement 'may be limited to what is strictly necessary in order to establish the existence of a restriction of competition by object.' 29 Moreover, in those cases the analysis of the context cannot be relied on to justify anti-competitive conduct under Article 101 (1) of the Treaty. However, in order to show, for example, that other types of restrictions are comparable to, or effectively amount to, one of the 'established' restrictions, their economic and legal context will need to be assessed more thoroughly. 34. Finally, the Commission recalls that the degree of restriction or 'appreciability of restriction' in cases of restrictions of competition by object cannot be considered as a potentially exonerating factor. In Expedia, the Court of Justice held that 'an agreement that may affect trade between Member States and that has an anti-competitive object constitutes, by its nature and independently of any concrete effect that it may have, an appreciable restriction on competition.' 30 Question 2 - open cooperation 35. By its second question, the referring court seeks guidance on the legal significance for the consideration of whether a form of conduct constitutes an infringement by object, that the cooperation takes place openly vis-à-vis a procuring authority. 36. In the Commission's view, there is no legal significance in the fact that the cooperation in this case was conducted openly and with the knowledge of the procuring authority. 37. Since forms of cooperation which are not intended to restrict competition and, also, pursue other legitimate objectives, may be classified as restrictions by object, it follows that the "by object" classification is not limited to secretive agreements, such as those which are concluded within cartels. Indeed, cooperation conducted publicly has been found by the Court of Justice to have the object of restricting competition While it is true that the most serious forms of collusion are often kept secret, the fact that such collusion occurs openly does not remove the harm to competition, and does not, therefore, alter the application of Article 53 EEA to such conduct. The 5 Judgment in Toshiba, C-373/14 P, EU:C:2016:26, par. 29. Judgment in Expedia, C-226/11, EU:C:2012:795, par See judgment in Beef Industry Development and Barry Brothers, C-209/07, EU:C:2008:643.

13 13 Commission recalls that the essential criterion in the classification of a restriction as "by object" is whether it reveals a sufficient degree of harm to competition. Whether or not this is the case is in principle not affected by the openness or secrecy or an agreement. Consequently, a finding that anti-competitive behaviour which would otherwise be deemed to be restrictive by object would not be so classified simply because it was not concealed or conducted in secret would undermine the effectiveness of the competition rules. Question 3 - joint tenders as restrictions by object 39. By its third question, the referring court seeks guidance on the legal criteria that must, in particular, be emphasised in considering whether cooperation such as that which has taken place between Ski Taxi and Follo Taxi in this case constitutes a restriction of competition by object. 40. The Commission would like to clarify at the outset that the application of the legal criteria employed in the classification of restrictions by object, as explained in the answer to question 1, does not vary depending on the circumstances of the case. Therefore, a situation where two competitors submit a joint tender, whereby both parties are to be subcontractors, falls to be considered with regard to the legal criteria expounded above. Indeed, the Commission notes that Article 101(1) of the Treaty applies equally to situations that concern the submission of joint tenders. 41. The Commission would, however, make some observations with regard to the categorisation of conduct, such as that which has taken place in this case, as restrictive by object. The alleged restriction in this case is the agreement and submission of a joint tender by Ski Taxi and Follo Taxi through the jointly-owned SFD. 42. At the outset, the Commission considers of particular relevance to this case the national court's finding that both Ski Taxi and Follo Taxi in this case could have submitted a tender application individually. In the Commission's view, this crucial fact can be of assistance in identifying the tme objective of the submission of a joint tender in this case. Indeed, the assessment of such cooperation would most likely be different Judgment in Cartes Bancaires, C-67/13 P, EU:C:2014:2204, par. 57.

14 14 if the joint bidding was objectively necessary to allow companies to enter a market it Q Q could not have entered individually. 43. The cooperation between Follo Taxi and Ski Taxi involved the establishment of a joint management company, SFD, that was to carry out common administrative functions, with the purpose of (i) securing and winning back major contracts; and (ii) taking measures to meet competition in the form of joint projects or marketing efforts. 44. As stated above, the assessment of whether such cooperation constitutes a restriction of competition by object requires proof that it reveals a sufficient degree of harm to competition, with regard to its content, objectives, and its legal and economic context. In addition, regard may be had to parties' intentions, though this is not required. 45. First, the Commission notes that the wording used by Ski Taxi and Follo Taxi themselves in identifying the basis for SFD might provide a useful indication as regards the content and objectives of their cooperation. Also, it might be useful in order to determine the parties' intentions in pursing the joint venture, which, as noted above, are not determinative in characterising conduct as restrictive by object, but are a relevant factor which may be taken into account The Strategy Document notes that the basis for SFD is to 'take measures to meet competition' and to 'strengthen [the parties'] market positions.' In addition, the Shareholder Agreement provides that the parties positions in relation to the functions assigned to SFD will mean that there will be 'less competition between them than there was previously. This applies to both price policy in tender and other strategic measures in relation to the market'. 47. Thus, by the wording of the above documents, it appears that the cooperative venture of SFD had the purpose of, firstly, reducing competition between Follo Taxi and Ski Taxi, including competition on price, and secondly, strengthening their market positions by comparison to undertakings not party to the cooperation See, Commission Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (OJ C 11/1, ), par Judgments in Allianz Hungária, C-32/11, EU:C:2013:160, par. 37; Cartes Bancaires, C-67/13 P, EU:C:2014:2204, par. 54.

15 Second, it is necessary also to have regard to the legal and economic context of which an agreement forms part, in order to determine whether it constitutes a restriction by object. 49. With regard to the context in cases such as the present one, the Commission observes that Ski Taxi and Follo Taxi were, to a greater or lesser extent, in direct competition in each of the seven municipalities that comprise the Folio region. Moreover, the Commission again stresses the importance of the national court's finding that both parties could have submitted a tender individually. 50. The Commission notes that, in their pleas, the parties submit that while their conduct oc may amount to price fixing, it forms part of 'wider legitimate cooperation'. In this regard, the Union Courts have held that a reduction in price competition may not fall within Article 101 of the Treaty where it constitutes an ancillary restraint. 36 As noted above, the submission of the joint tender in this case indeed operates in the context of the cooperative venture of the joint management company, SFD, the primary purpose of which is to undertake administrative functions in relation to each party's dispatch centres. Without pronouncing on the implications for competition of the main operation in this case, the Commission considers important to determine whether the submission of the joint tender is 'strictly indispensable' to this operation. 38 In particular, the Commission questions whether the pooling of administrative resources requires the cooperation on price, quality and capacity with which the submission of a joint tender is concerned. 51. Finally, the Commission would like to reiterate, furthermore, that the fact that an agreement may have additional legitimate aims (other than those that constitute ancillary restraints) cannot affect the finding that it restricts competition by object. In this regard, the Union Courts have consistently found that the additional legitimate objectives pursued by a restriction by object, such as price fixing, fall to be considered under Article 101(3) of the Treaty, but are not relevant to the analysis of whether the Page 8 of the Request for an Advisory Opinion. See paragraph 31 above. See par. 8, supra. Judgment in Mastercard, C-382/12 P, EU:C:2014:2201, par. 91.

16 16 OQ cooperation falls within Article 101(1) of the Treaty. ' Parties may, therefore, argue that Article 101(1) of the Treaty does not apply to an agreement which, for example, improves the production or distribution of goods, where the criteria in Article 101(3) of the Treaty are satisfied. However, these arguments are relevant only in relation to the application of Article 101(3) of the Treaty, which only comes into play once an agreement has been found to infringe Article 101(1) of the Treaty. V, CONCLUSION 52. The Commission thanks the EFTA Court for the opportunity to submit these Written Observations on the questions raised in the Request for an Advisory Opinion by the Supreme Court of Norway. For the reasons discussed above, the Commission respectfully submits that the questions should be answered as follows: Question 1: The legal test for determining whether an agreement constitutes a restriction of competition 'by object' within the meaning of Article 53 EEA is whether it reveals, in itself, a sufficient degree of harm to competition such as to be regarded, by its very nature, as being injurious to the proper functioning of normal competition. The criteria to be applied in making this assessment require an analysis of the content and objectives of the agreement, as well as the economic and legal context of which it forms part. Furthermore, the EFTA Court is not precluded, in its assessment of whether an agreement constitutes a restriction of competition by object, from having regard to the intentions of the parties to that agreement. Question 1 a): It is not sufficient, in order to categorise a form of conduct as restrictive by object pursuant to Article 53 EEA, that it is capable of restricting competition. While agreements need to be capable of restricting competition to constitute restrictions by object, the mere fact of such capacity is not, of itself sufficient to find an anti-competitive object, without proof that the agreement Judgments in IAZ International Belgium, C-96/82, EU:C: 1983:310, par. 25; Beef Industry Development and Barry Brothers, C-209/07, EU:C:2008:643, par. 21.

17 17 discloses a sufficient degree of harm to competition such as to restrict competition by its very nature. Question 2: The fact that cooperation is conducted openly is of no legal significance for the consideration of whether it constitutes a restriction by object. Question 3: The application of the legal criteria employed to determine if an agreement reveals a sufficient degree of harm to competition and thus constitutes a restriction by object does not vary depending on the circumstances of the case. Therefore, an agreement to submit a joint tender ought to be assessed with regard to its content and objectives, as well as the economic and legal context of which it forms part. In this regard, the Commission takes the view that particular consideration be given to (i) the wording used by the parties themselves in characterising their cooperation; (ii) the national court's finding that both parties could have submitted a tender application separately; and (in) the fact that joint tendering generally has the object of coordinating prices. Henning LEUPOLD Hubert VAN VLIET Teresa VECCHI Agents of the Commission