On 15 February 2019, the Court of Appeal dismissed Balmoral Tanks’ (Balmoral) appeal against the October 2017 CAT judgment upholding the CMA’s decision to fine Balmoral £130,000 for exchanging pricing information with three other suppliers of galvanised steel tanks at a single meeting in July 2012. Although Balmoral refused to join the cartel operated by the three other suppliers, its CEO nonetheless remained at the meeting and shared information about Balmoral’s current and future pricing intentions.
Balmoral appealed to the CAT, arguing that the purpose of the July 2012 meeting was not anti- competitive. Rather, Balmoral’s intention had been to stop unwelcome contacts from the cartel members. The CAT held that the relevant purpose of the meeting was not what a participant hoped to achieve, but what had been arrived at by the end of the meeting. Balmoral attended the meeting knowing or suspecting that the discussion was very likely to touch on problematic areas, which it in fact did. The CAT also found that in circumstances in which all suppliers other than Balmoral were accustomed to fixing prices and sharing pricing information regularly, an exchange of pricing intentions at a single meeting had the potential to affect future prices and therefore constituted an object infringement.
Balmoral appealed to the Court of Appeal on four grounds: (i) the CAT failed to recognise the inconsistency raised by the CMA’s finding that, on the one hand, Balmoral was not part of the main cartel but, on the other, it had unlawfully exchanged information with the members of that very same cartel; (ii) the CAT adopted too strict an approach to the test for object infringements in the context of information exchanges; (iii) the CAT did not properly analyse whether the information exchange at issue had reduced uncertainty; and (iv) the CAT was wrong to conclude that the CMA was entitled to fine Balmoral alone for the information exchange.
The Court of Appeal rejected all four arguments. First, despite having “elements in common”, the main cartel and the information exchange were separate infringements: that they both related to pricing did not make the information exchange a sub-set of the main cartel. Second, the CAT had properly applied the correct legal test for when an information exchange would constitute an object infringement and had explained why this applied to a one-off exchange of pricing information in these circumstances. Third, the CAT was not required to analyse participants’ states of mind before and after an information exchange to conclude on whether the exchange had reduced uncertainty between participants. Finally, the CMA was entitled to fine Balmoral for the information exchange, without fining the other participants, who had been sufficiently penalised for their role in the main cartel.