# C_2017027EN.01001401.xml

| 27.1.2017 | EN | Official Journal of the European Union | C 27/14 |
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27.1.2017

EN

Official Journal of the European Union

C 27/14

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Final Report of the Hearing Officer (1)

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Smart Card Chips

(AT.39574)

(2017/C 27/11)

INTRODUCTION

INTRODUCTION

| 1. | This case concerns an alleged cartel in which four suppliers of smart card chips, namely Renesas (2), Samsung (3), Philips (4), and Infineon (5), through bilateral contacts, coordinated their market behaviour in relation to the sale of smart card chips in the EEA. |
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1.

This case concerns an alleged cartel in which four suppliers of smart card chips, namely Renesas (2), Samsung (3), Philips (4), and Infineon (5), through bilateral contacts, coordinated their market behaviour in relation to the sale of smart card chips in the EEA.

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| 2. | The proceedings started as a result of an application for immunity from fines by Renesas on 22 April 2008. In October 2008, the Commission carried out inspections at the premises of all main suppliers of smart card chips in the EU. On 27 October 2008, the Commission received a leniency application from Samsung (6). |
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2.

The proceedings started as a result of an application for immunity from fines by Renesas on 22 April 2008. In October 2008, the Commission carried out inspections at the premises of all main suppliers of smart card chips in the EU. On 27 October 2008, the Commission received a leniency application from Samsung (6).

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| 3. | On 28 March 2011, the Commission initiated proceedings against Renesas, Samsung and Philips. The Commission held settlement discussions with these parties (7). After the unsuccessful conclusion of these settlement discussions, the Commission, on 18 April 2013, also initiated proceedings against Infineon and against the joint owners of Renesas at the time of the infringement, Hitachi (8) and Melco (9). |
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3.

On 28 March 2011, the Commission initiated proceedings against Renesas, Samsung and Philips. The Commission held settlement discussions with these parties (7). After the unsuccessful conclusion of these settlement discussions, the Commission, on 18 April 2013, also initiated proceedings against Infineon and against the joint owners of Renesas at the time of the infringement, Hitachi (8) and Melco (9).

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Statement of Objections

Statement of Objections

| 4. | On 18 April 2013, the Commission adopted a Statement of Objections (‘SO’), which was notified to Renesas, Samsung, Philips, Infineon, Hitachi and Melco (together ‘the parties’) on 22 April 2013. |
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4.

On 18 April 2013, the Commission adopted a Statement of Objections (‘SO’), which was notified to Renesas, Samsung, Philips, Infineon, Hitachi and Melco (together ‘the parties’) on 22 April 2013.

| 5. | The SO alleged that Renesas, Samsung, Philips and Infineon had engaged in a single and continuous infringement of Article 101 TFEU. |
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5.

The SO alleged that Renesas, Samsung, Philips and Infineon had engaged in a single and continuous infringement of Article 101 TFEU.

Access to the file

Access to the file

| 6. | Between 26 April and 3 May 2013, the parties received access to the written documents in the file via CD-ROM and to the oral statements of the immunity and leniency applicants at the Commission’s premises. I received no complaints concerning this access. |
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6.

Between 26 April and 3 May 2013, the parties received access to the written documents in the file via CD-ROM and to the oral statements of the immunity and leniency applicants at the Commission’s premises. I received no complaints concerning this access.

Time limit to respond to the SO

Time limit to respond to the SO

| 7. | DG Competition initially granted a period of 8 weeks to respond to the SO. DG Competition granted an extension of 2 weeks to Infineon. I granted Infineon a further 2 weeks extension as it was the only party that had not taken part in the settlement proceedings and therefore had less prior knowledge of the case than the other parties. I also extended Philips’ deadline to reply to the SO by 2 weeks, to compensate for a delay in the response by DG Competition to a specific request. Both parties submitted written comments within the time limit thus set. |
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7.

DG Competition initially granted a period of 8 weeks to respond to the SO. DG Competition granted an extension of 2 weeks to Infineon. I granted Infineon a further 2 weeks extension as it was the only party that had not taken part in the settlement proceedings and therefore had less prior knowledge of the case than the other parties. I also extended Philips’ deadline to reply to the SO by 2 weeks, to compensate for a delay in the response by DG Competition to a specific request. Both parties submitted written comments within the time limit thus set.

Access to parts of the written replies to the SO and further written observations

Access to parts of the written replies to the SO and further written observations

| 8. | In accordance with paragraph 103 of the Best Practices (10), DG Competition disclosed to all parties a witness statement, which Philips had submitted with its reply to the SO. DG Competition also disclosed to Samsung non-confidential versions of passages of Philips’ and Infineon’s replies to the SO, in which they had called into question the authenticity of several pieces of the evidence provided by Samsung in October 2012, and requested Samsung’s written observations. In annex to its written observations of 6 September 2013, Samsung submitted additional evidence. |
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8.

In accordance with paragraph 103 of the Best Practices (10), DG Competition disclosed to all parties a witness statement, which Philips had submitted with its reply to the SO. DG Competition also disclosed to Samsung non-confidential versions of passages of Philips’ and Infineon’s replies to the SO, in which they had called into question the authenticity of several pieces of the evidence provided by Samsung in October 2012, and requested Samsung’s written observations. In annex to its written observations of 6 September 2013, Samsung submitted additional evidence.

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| 9. | DG Competition sent this additional evidence to the other parties. Following a complaint from Infineon that it had only received the annexes to Samsung’s letter of 6 September 2013, not the letter itself, DG Competition issued a letter of facts to all parties in October 2013. The letter of facts contained a non-confidential version of the whole of Samsung’s letter of 6 September 2013 and its annexes, and invited written comments within 2 weeks. |
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9.

DG Competition sent this additional evidence to the other parties. Following a complaint from Infineon that it had only received the annexes to Samsung’s letter of 6 September 2013, not the letter itself, DG Competition issued a letter of facts to all parties in October 2013. The letter of facts contained a non-confidential version of the whole of Samsung’s letter of 6 September 2013 and its annexes, and invited written comments within 2 weeks.

| 10. | Infineon requested that the Commission grant it full access to information that was redacted in Samsung’s letter of 6 September 2013. The redacted information concerned a description of both the manner in which the Commission had presented its case and the progress made during the settlement process. It had been redacted pursuant to the rule in paragraph 7 of the Settlement Notice (11) that the parties to settlement proceedings may not disclose to any third party the contents of the discussions or of the documents to which they have had access in view of settlement. |
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10.

Infineon requested that the Commission grant it full access to information that was redacted in Samsung’s letter of 6 September 2013. The redacted information concerned a description of both the manner in which the Commission had presented its case and the progress made during the settlement process. It had been redacted pursuant to the rule in paragraph 7 of the Settlement Notice (11) that the parties to settlement proceedings may not disclose to any third party the contents of the discussions or of the documents to which they have had access in view of settlement.

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| 11. | However, in this specific situation of settlement discussions that have been discontinued and of a new party subsequently being drawn into the proceedings relating to the same alleged infringement, it appeared more appropriate to assimilate Infineon to a party to the proceedings than to a third party. Moreover, Samsung had informed me that it did not object to the disclosure of the redacted information. Following further confirmation by Samsung that it did not object to such disclosure and upon receiving a confidentiality statement from Infineon, DG Competition disclosed the redacted information to Infineon. |
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11.

However, in this specific situation of settlement discussions that have been discontinued and of a new party subsequently being drawn into the proceedings relating to the same alleged infringement, it appeared more appropriate to assimilate Infineon to a party to the proceedings than to a third party. Moreover, Samsung had informed me that it did not object to the disclosure of the redacted information. Following further confirmation by Samsung that it did not object to such disclosure and upon receiving a confidentiality statement from Infineon, DG Competition disclosed the redacted information to Infineon.

| 12. | Upon their request, I extended the time limit for Philips and Infineon to reply to the letter of facts by 3 weeks. They submitted written comments within the time limit thus set. |
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12.

Upon their request, I extended the time limit for Philips and Infineon to reply to the letter of facts by 3 weeks. They submitted written comments within the time limit thus set.

| 13. | In its reply to the SO, Infineon had claimed that the Commission had violated its right to equal treatment in that the Commission had conducted settlement discussions with the other involved parties for 18 months and never informed Infineon about the state of play or offered settlement talks. However, in its reply to the letter of facts, Infineon stated that, having been granted access to the redacted information in Samsung’s letter of 6 September 2013, it now understood that the reason for not being invited to the settlement discussions was that the Commission had initially not regarded Infineon as part of the alleged cartel. The disclosure of that information thus proved useful to take away Infineon’s perception of unequal treatment. |
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13.

In its reply to the SO, Infineon had claimed that the Commission had violated its right to equal treatment in that the Commission had conducted settlement discussions with the other involved parties for 18 months and never informed Infineon about the state of play or offered settlement talks. However, in its reply to the letter of facts, Infineon stated that, having been granted access to the redacted information in Samsung’s letter of 6 September 2013, it now understood that the reason for not being invited to the settlement discussions was that the Commission had initially not regarded Infineon as part of the alleged cartel. The disclosure of that information thus proved useful to take away Infineon’s perception of unequal treatment.

Oral hearing

Oral hearing

| 14. | All parties participated in the oral hearing, which was held on 20 November 2013. |
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14.

All parties participated in the oral hearing, which was held on 20 November 2013.

| 15. | Philips and Samsung were each unable to answer one question during the oral hearing and agreed to provide their responses in writing on 4 December 2013. However, they subsequently requested — and were granted — an extension until 11 and 18 December 2013 respectively. They both provided their responses within these new deadlines. I subsequently forwarded these responses to all participants to the oral hearing. Samsung’s response caused Philips and Infineon to react, on 13 and 16 January 2014 respectively. |
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15.

Philips and Samsung were each unable to answer one question during the oral hearing and agreed to provide their responses in writing on 4 December 2013. However, they subsequently requested — and were granted — an extension until 11 and 18 December 2013 respectively. They both provided their responses within these new deadlines. I subsequently forwarded these responses to all participants to the oral hearing. Samsung’s response caused Philips and Infineon to react, on 13 and 16 January 2014 respectively.

Requests for disclosure of information on the file to a non-addressee of the SO

Requests for disclosure of information on the file to a non-addressee of the SO

| 16. | On 4 April 2014, Philips sent a letter to DG Competition in which it, inter alia, pointed out that the letter of facts that was sent to it in October 2013 appeared to contain misinterpretations of the submissions of a leniency applicant against which no proceedings had been initiated (12). It requested permission to share its letter of 4 April 2014 with the leniency applicant in question. DG Competition rejected Philips’ request on the basis that (i) it would take due account of Philips’ comments concerning the leniency applicant’s submissions; and (ii) the leniency applicant was no party to the proceedings. |
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16.

On 4 April 2014, Philips sent a letter to DG Competition in which it, inter alia, pointed out that the letter of facts that was sent to it in October 2013 appeared to contain misinterpretations of the submissions of a leniency applicant against which no proceedings had been initiated (12). It requested permission to share its letter of 4 April 2014 with the leniency applicant in question. DG Competition rejected Philips’ request on the basis that (i) it would take due account of Philips’ comments concerning the leniency applicant’s submissions; and (ii) the leniency applicant was no party to the proceedings.

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| 17. | After Philips had referred the matter to me, I concluded that I did not have any decisional powers under Decision 2011/695/EU to grant its request. However, especially since the letter provided more reasoning as to why Philips had an interest in disclosing its letter of 13 January 2014 to the leniency applicant in the exercise of its rights of defence, I asked DG Competition to reassess Philips’ request. By letter of 6 May 2014, DG Competition informed Philips that it no longer had any objection against Philips forwarding its letter of 4 April 2014 to the leniency applicant, provided that Philips would implement appropriate confidentiality arrangements. |
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17.

After Philips had referred the matter to me, I concluded that I did not have any decisional powers under Decision 2011/695/EU to grant its request. However, especially since the letter provided more reasoning as to why Philips had an interest in disclosing its letter of 13 January 2014 to the leniency applicant in the exercise of its rights of defence, I asked DG Competition to reassess Philips’ request. By letter of 6 May 2014, DG Competition informed Philips that it no longer had any objection against Philips forwarding its letter of 4 April 2014 to the leniency applicant, provided that Philips would implement appropriate confidentiality arrangements.

| 18. | In May 2014, the leniency applicant addressed itself to DG Competition directly, requesting access to the letter of facts that had been sent to Philips in October 2013. DG Competition rejected its request on the basis that the leniency applicant was no party to the proceedings. |
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18.

In May 2014, the leniency applicant addressed itself to DG Competition directly, requesting access to the letter of facts that had been sent to Philips in October 2013. DG Competition rejected its request on the basis that the leniency applicant was no party to the proceedings.

| 19. | In July 2014, the leniency applicant referred the matter to me pursuant to Article 7 of Decision 2011/695/EU. It submitted that DG Competition’s refusal to grant it access to the letter of facts and to hear its views on the letter of facts was unjustified and contrary to the general principle of the right to a hearing. The leniency applicant argued that this general principle applied to it because a misinterpretation of its submissions would expose it to potential liability, in particular vis-à-vis third parties in follow-on damages actions and vis-à-vis the addressees of the Commission decision that could sue it for not clarifying information submitted by it that may incorrectly lead to liability for those addressees. |
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19.

In July 2014, the leniency applicant referred the matter to me pursuant to Article 7 of Decision 2011/695/EU. It submitted that DG Competition’s refusal to grant it access to the letter of facts and to hear its views on the letter of facts was unjustified and contrary to the general principle of the right to a hearing. The leniency applicant argued that this general principle applied to it because a misinterpretation of its submissions would expose it to potential liability, in particular vis-à-vis third parties in follow-on damages actions and vis-à-vis the addressees of the Commission decision that could sue it for not clarifying information submitted by it that may incorrectly lead to liability for those addressees.

| 20. | I concluded that neither Article 7 nor any other provision of Decision 2011/695/EU provided a legal basis which enabled me to grant its request. Although I did share the leniency applicant’s view that non-addressees of the SO may be entitled to access certain documents or passages of documents and to be heard on them in a procedure which may result in a Commission decision perceptibly affecting their interests (13), I did not have any reason to believe that a final decision in the present case would perceptibly affect its interests as it was excluded that a final decision would contain any express or implied finding of an infringement by the leniency applicant. Potential damage claimants would thus not be able to use the final decision against it in follow-on damages litigation. Moreover, the leniency applicant could not be held liable for any incorrect reading of its leniency submissions by the Commission. |
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20.

I concluded that neither Article 7 nor any other provision of Decision 2011/695/EU provided a legal basis which enabled me to grant its request. Although I did share the leniency applicant’s view that non-addressees of the SO may be entitled to access certain documents or passages of documents and to be heard on them in a procedure which may result in a Commission decision perceptibly affecting their interests (13), I did not have any reason to believe that a final decision in the present case would perceptibly affect its interests as it was excluded that a final decision would contain any express or implied finding of an infringement by the leniency applicant. Potential damage claimants would thus not be able to use the final decision against it in follow-on damages litigation. Moreover, the leniency applicant could not be held liable for any incorrect reading of its leniency submissions by the Commission.

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Letter of facts

Letter of facts

| 21. | On 25 July 2014, the Commission sent a second letter of facts to the parties, giving them a time limit of 1 week to reply. Following Philips’ request for an extension, DG Competition granted it 2 working days. On the basis of its arguments, I also granted Philips an extension so that it had 2 weeks in total to provide comments on the letter of facts. All parties replied within the time limit. |
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21.

On 25 July 2014, the Commission sent a second letter of facts to the parties, giving them a time limit of 1 week to reply. Following Philips’ request for an extension, DG Competition granted it 2 working days. On the basis of its arguments, I also granted Philips an extension so that it had 2 weeks in total to provide comments on the letter of facts. All parties replied within the time limit.

| 22. | When submitting its response to the letter of facts, Infineon expressed the concern that the Commission would not have sufficient time to take its submissions properly into account. By letter of 12 August 2014, DG Competition responded that all the arguments Infineon had made in its response to the letter of facts were indeed being carefully scrutinised. |
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22.

When submitting its response to the letter of facts, Infineon expressed the concern that the Commission would not have sufficient time to take its submissions properly into account. By letter of 12 August 2014, DG Competition responded that all the arguments Infineon had made in its response to the letter of facts were indeed being carefully scrutinised.

The draft decision

The draft decision

| 23. | Pursuant to Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with the objections in respect of which the parties have been afforded the opportunity of making known its views, and I have come to a positive conclusion. |
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23.

Pursuant to Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with the objections in respect of which the parties have been afforded the opportunity of making known its views, and I have come to a positive conclusion.

| 24. | Overall, I conclude that all parties have been able to effectively exercise their procedural rights in this case. |
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24.

Overall, I conclude that all parties have been able to effectively exercise their procedural rights in this case.

Brussels, 2 September 2014.

Wouter WILS

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(1)  Pursuant to Articles 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29) (‘Decision 2011/695/EU’).

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(2)  Renesas Electronics Corporation and Renesas Electronics Europe Limited.

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(3)  Samsung Electronics Co., Ltd and Samsung Semiconductor Europe GmbH.

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(4)  Philips France SAS and Koninklijke Philips NV Until 15 May 2013, the name of the latter company was Koninklijke Philips Electronics NV

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(5)  Infineon Technologies AG.

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(6)  A few hours earlier on the same day, another undertaking had also submitted a leniency application. However, no proceedings were initiated against that undertaking.

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(7)  In accordance with Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ L 123, 27.4.2004, p. 18). See also Commission Notice on the conduct of settlement procedures in view of the adoption of Decisions pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in cartel cases (OJ C 167, 2.7.2008, p. 1).

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(8)  Hitachi, Ltd

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(9)  Mitsubishi Electric Corporation.

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(10)  Commission notice on best practices for the conduct of proceedings concerning Articles 101 and 102 TFEU (OJ C 308, 20.10.2011, p. 6).

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(11)  Commission Notice on the conduct of settlement procedures in view of the adoption of Decisions pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in cartel cases (OJ C 167, 2.7.2008, p. 1).

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(12)  See footnote 6 above.

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(13)  Case 17/74 Transocean Marine Paint v Commission EU:C:1974:106, paragraph 15; and Case C-315/99 P Ismeri Europa v Court of Auditors EU:C:2001:391, paragraph 28. Access to the file in proceedings under Council Regulation (EC) No 1/2003 is, in principle, only available to addressees of the SO, so as to enable them to express their views on the conclusions which the Commission provisionally reached in the SO. See, to that effect, Case T-25/95 etc. Cimenteries and Others v Commission EU:T:2000:77, paragraph 142.

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Transocean Marine Paint

Commission

Ismeri Europa

Court of Auditors

Cimenteries and Others

Commission

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