Sel-Imperial Ltd v The British Standards Institution

An agreement for the purposes of Article 101(1) TFEU requires a concurrence of wills concerning the impugned restriction. A genuinely unilateral interpretation does not suffice, but an agreement to delegate interpretation of a technical standard to one body may be capable of restricting competition and requires factual investigation. A body is an “association of undertakings” only where it is a representative or co-operative entity whose rules or decisions coordinate the conduct of members or persons subject to its authority. Common implementation of a standard, without more, is insufficient. An abuse under Article 102 TFEU need not necessarily confer an economic advantage on the dominant undertaking, and related-market effects may be relevant. Competition claims must nevertheless identify the conduct, arrangement and alleged infringement with sufficient clarity.

BSI developed PAS 125, a vehicle body repair specification, and operated a Kitemark certification scheme based on compliance with it. SEL-Imperial supplied replica vehicle body parts and alleged that BSI’s interpretation of “safety-related” parts was over-inclusive, restricting competition.

SEL-Imperial pleaded claims under Articles 101 and 102 TFEU and the equivalent provisions of the Competition Act 1998. BSI applied under Civil Procedure Rules 1998 rules 3.4(2)(a) and 24.2(a)(i) to strike out or obtain summary judgment. The issues were whether the pleaded arrangements could constitute an agreement or decision within Article 101, and whether BSI’s conduct could amount to an abuse of dominance under Article 102.

1. Application and pleading. The court applied the established summary judgment approach: a realistic prospect of success is required, the court must avoid a mini-trial, and caution is appropriate where competition law is developing. Competition allegations must identify the specific conduct, agreement or decision complained of and explain how it infringes the law. Paragraphs 21(1), 21(2) and 21(4) of the Particulars of Claim were insufficient and were struck out.
2. Article 101: delegation and concurrence of wills. The relevant question is whether the impugned conduct was the subject of a concurrence of wills, rather than merely unilateral conduct. The allegation that the PAS 125 participants agreed to delegate interpretation of “safety-related” to BSI was capable of meaning that they surrendered their independent freedom to adopt another interpretation or use another certification body. If proved, that arrangement could restrict competition. The issue was factual and could not be resolved summarily. The pleading was to be amended to articulate the allegation clearly.
3. Association of undertakings. An “association of undertakings” under Article 101(1) is a representative or co-operative body or entity, usually with members, whose rules or decisions coordinate the conduct of members or persons subject to its authority. A group of undertakings cooperating on a project is not itself such an association. The claim based on paragraphs 21(1) and 21(2) was therefore unsustainable.
4. Licence agreements. The Kitemark agreements were agreements between undertakings. It was reasonably arguable that a repairer aware of BSI’s interpretation would regard itself as bound to comply with it under the licence terms. The existence and competitive effect of any resulting restriction required factual examination. The principles in Delimitis v Henninger Bräu would be relevant if the individual agreements, considered as a network, did not appreciably restrict competition.
5. Common implementation. The mere fact that several undertakings implemented PAS 125, even in the same way, did not establish an agreement or concerted practice. The allegation in paragraph 21(4) was struck out.
6. Article 102. The examples in Article 102 are illustrative rather than exhaustive. An abuse may involve conduct by a dominant undertaking in one market producing effects in a related market. The court declined to hold that an abuse necessarily requires an economic advantage to the dominant undertaking. The pleaded case that BSI’s interpretation was over-inclusive and objectively unjustified was sufficiently arguable. Evidence concerning whether additional inspections increased BSI’s revenue disclosed a factual issue unsuitable for summary determination.
7. The application was otherwise dismissed. SEL-Imperial was directed to amend paragraph 21 consistently with the judgment.