Albany revisited: the Court directs NCA to carry a more social tune

By Laurens Ankersmit

In C-413/13 FNV Kunsten Informatie en Media, the Court decided that competition law does not apply to arrangements among freelance substitute orchestra musicians that aim to improving their working conditions if they can be qualifed as ‘workers’. In so doing, the Court significantly expanded the scope for taking social interests into account within competition law analysis and rejected the more narrow and liberal approach taken by the Dutch National Competition Authority (NCA), the Dutch government and—not surprisingly—the European Commission. This is a significant case, not only because the Court for the first time had to deal with the increasingly more common phenomenon of the ‘false self-employed’ when interpreting competition law, but also because the Court once again demonstrated its willingness to take public interests other than economic efficiency into account when applying competition law (a holistic approach that, I argue, is fundamentally more in line with the EU treaties).

The facts

 In 2006 and 2007, Dutch associations representing contractual and self-employed workers in the performing arts sector and an association representing orchestras in the Netherlands concluded an agreement that included a minimum fee for self-employed musicians who temporarily replaced other musicians in orchestras. The Dutch NCA objected to this arrangement, considering that it was essentially a price-fixing scheme. As a result, the agreement was terminated by one of the parties, which led to the current preliminary reference procedure. The question put before the Court was whether competition law applies to such arrangements, which quite clearly have a social aim and seek to address the increasingly common issue of the ‘false self-employed’ in today’s society.

 

The Court’s reasoning

 The Court started its analysis by essentially finding that Albany (in which the Court determined that collective bargaining agreements fell outside the scope of competition law) does not prima facie apply to the case at hand. It noted that

 a provision of a collective labour agreement, such as that at issue in the main proceedings, in so far as it was concluded by an employees’ organisation in the name, and on behalf, of the self-employed services providers who are its members, does not constitute the result of a collective negotiation between employers and employees, and cannot be excluded, by reason of its nature, from the scope of Article 101(1) TFEU (para 30).

 Thankfully, the Court did not stop here and introduced a non-formalistic reasoning expanding the scope of Albany to include collective bargaining agreements among the ‘false self-employed’. The Court decided that an agreement would fall outside the scope of article 101 TFEU if self-employed are in a comparable situation to a worker and if the agreement contributes to social policy.

 The Court first observed that ‘ it is not always easy to establish the status of some self-employed contractors as ‘undertakings’, such as the substitutes at issue in the main proceedings.’ (para 32). It then subsequently set out how undertakings should be distinguished from employees, taking the functional and unformalistic reasoning from its free movement case law. In short, employees are those that cannot independently determine their conduct on the market and do not bear the financial and economic risks of their activities, but are instead in a subordinate relationship towards an employer (paras 33-36).

Applying these criteria to the case at hand, the Court held that the national court must ascertain whether these substitute musicians are ‘false self-employed’ or ‘undertakings’, in particular by investigating whether

 ‘their relationship with the orchestra concerned is not one of subordination during the contractual relationship, so that they enjoy more independence and flexibility than employees who perform the same activity, as regards the determination of the working hours, the place and manner of performing the tasks assigned, in other words, the rehearsals and concerts.’ (para 37)

 If the substitute musicians could not be classified as ‘undertakings’ but rather as ‘false self-employed’, the Court considered that the agreement itself could be excluded from the application of the EU competition rules, as ‘the collective labour agreement directly contribute[s] to the improvement of the employment and working conditions of those substitutes’ (para 39). According to the Court,

 ‘Such a scheme not only guarantees those service providers basic pay higher than they would have received were it not for that provision but also, as found by the referring court, enables contributions to be made to pension insurance corresponding to participation in the pension scheme for workers, thereby guaranteeing them the means necessary to be eligible in future for a certain level of pension.’ (para 40)

Comment

 The Court’s reasoning will no doubt be criticized by commentators from both the left and the right. Critics from the left might argue that under the Court’s case law, individuals may be too easily conceived as ‘undertakings’ and not as ‘workers’. From the right, the criticism will no doubt be that this judgment undermines the effectiveness of EU competition law and does not allow substitute musicians to effectively compete with each other to the benefit of the consumer (translated in terms of lower ticket prices to orchestra performances).

 Nonetheless, the approach taken by the Court is sound. It not only acknowleges the changing nature of labour relationships in today’s economy, but it is also an approach that is line with one of the fundamental purposes of the EU treaties: to create a social market economy which is sufficiently reflective of other societal interests than just protecting effective competition. The Treaties demand the integration and recognition of other interests in applying EU law, in the Charter and in the TFEU, and the approach taken by the Court does just this.

Leave a Reply