Judgment — ECLI:EU:C:2006:433
Date: 2006-06-29
Language of the case: German
Court formation: Second Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Agreements, decisions and concerted practices;Concerted practices
Concepts: Determining the amount of the fine;General;Hearing of persons concerned and of third parties / Access to the file;Ne bis in idem
Procedure: Action for annulment;Appeal - unfounded;Appeal against penalty
Origin: Germany

summary of documents containing secret or confidential matters. Thus, the Commission should have indicated the non‑accessible documents. 100. For the same reason, in SGL’s submission, the report of the Hearing Officer contains errors. According to the abovementioned Notice, as regards access to the file, the classification of internal files (non‑accessible) is subject to the control of a Hearing Officer, who will if necessary certify that the papers contained therein are ‘internal documents’. (38) The report makes no mention of the objections raised by SGL. Thus, the Court of First Instance was incorrect to find that the Hearing Officer is required to communicate to the College of Members of the Commission only the objections relevant to the assessment of the lawfulness of the conduct of the administrative procedure. In SGL’s submission, the final report would be superfluous if it had to contain only well‑founded objections. Assessment 101. In so far as SGL claims that its letter to the Commission contains, in addition to the request to have access to the Commission’s internal documents, a request for a list or a non‑confidential summary of documents containing secret or confidential matters, its claim must be rejected. The appellant is not disputing a point of law, but a finding of fact. In that regard, the Court of First Instance established that SGL’s request did not relate to a list or a non‑confidential summary. 102. In so far as SGL contends that the final report of the Hearing Officer contained errors, that submission must be rejected too. First, as regards what it alleges to have been the unjust classification of certain documents as internal documents, there was at the material time no need for the Hearing Officer to ascertain whether the classification as internal documents was correct or not. Such a control will be carried out only ‘if necessary’, as follows from the wording of point II.A.2 of the Notice. SGL did not raise that matter before the Hearing Officer, but merely criticised the Commission for not giving access to its internal file or providing a list of or summary of confidential documents. Second, the Court of First Instance has already dealt, in a correct way, with those pleas in paragraphs 50 to 54 of the judgment under appeal. SGL has not put forward any relevant new argument. 103. So far as the documents relating to cooperation by undertakings are concerned, it is relevant to bear in mind that the Court of First Instance used those documents in support of UCAR’s claim to a larger reduction in the fine, on account of the information which it had provided to the Commission, albeit orally (and which had been reported in an internal memorandum drawn up by officials of the Commission and was kept out of the Commission’s investigation file). In that regard, the Court of First Instance, which decided that non‑documentary information is also relevant in the context of the Commission’s leniency policy, did not use those incriminating documents against SGL. SGL did not explain how its right of defence could be affected in that regard. The same applies to the assumed internal document concerning the OLAF investigation. Moreover, it should be noted that SGL admitted its participation in the cartel to the Commission and itself cooperated with the Commission in the context of leniency. 104. Apart from that, even if the Commission was required to communicate those documents, or at least the existence thereof, it is settled case‑law that the failure to communicate a document constitutes a breach of the rights of the defence only if the undertaking concerned shows, first, that the Commission relied on that document to support its objection concerning the existence of the infringement and, second, that the objection could be proven only by reference to that document. Furthermore, if there were other documentary evidence of which the parties were aware during the administrative procedure that specifically supported the Commission’s findings, the fact that an incriminating document not communicated to the person concerned was inadmissible as evidence would not affect the validity of the objections upheld in the contested decision. The Court has also held that it is for the undertaking concerned to show that the result at which the Commission arrived in its decision would have been different if a document which was not communicated to that undertaking and on which the Commission relied to make a finding of infringement against it had to be disallowed as evidence. (39) 105. As stated above, SGL complains that it was given insufficient access to the file in relation to cooperation by other undertakings, but does not explain how that would have affected its position. F – Sixth plea (ability to pay) 106. By this plea, SGL challenges the categorical decision not to take account of its reduced financial capacity when the fine was being calculated. SGL claims that such a failure constitutes an infringement of the principle of proportionality and breaches its freedom to dispose of its property. SGL argues that penalties imposed under competition law may not jeopardise the existence of those on whom the penalties are imposed and that the operational undertaking must be the standard by which the appropriateness and propriety of sanctions in individual cases fall to be judged. It states that it is in general impermissible to concentrate on those parts of an undertaking which may still be salvageable after insolvency brought about by the imposition of a fine. Every fine, according to SGL, must be calculated in such a way that no economic ‘death sentences’ are passed. 107. In the contested decision, the Commission, after having examined SGL’s financial position, concluded that it was not appropriate to adjust the amount of the fine. This finding was upheld by the Court of First Instance. It held, referring to settled case‑law, that the Commission is not required when determining the amount of the fine to take account of an undertaking’s financial losses since recognition of such an obligation would have the effect of conferring an unfair competitive advantage on undertakings least well adapted to the conditions of the market. The Court of First Instance pointed out that the obligation to take into account an undertaking’s real ability to pay, within the meaning of point 5(b) of the Guidelines, only applies in a ‘specific social context’ consisting of the consequences which payment of the fine would have, in particular, by leading to increase in unemployment or deterioration in the economic sectors upstream and downstream from the undertaking concerned. It also observed that the fact that a measure taken by a Community authority leads to the insolvency or liquidation of a given undertaking is not prohibited as such by Community law. (40) Assessment 108. In so far as SGL criticises the Court of First Instance for having rejected its argument that the Commission should have taken account of its ability to pay the fine and had set the amount of the fine at a level that threatened its survival, that plea cannot be upheld. As the Court of First Instance correctly held, the Commission is not required, when determining the amount of the fine, to take into account the poor situation of an undertaking concerned, since recognition of such an obligation would be tantamount to giving an unjustified competitive advantage to undertakings least well adapted to the market conditions. (41) 109. Furthermore, in so far as it maintains that the Commission should have taken into account the fines already imposed by authorities of non-member countries, which constituted the factor which caused the reduced ability to pay, that argument cannot be upheld either. Although ability to pay differs from the concept of ne bis in idem, in both cases the Commission is not obliged to take fines imposed by the authorities of non‑member countries into account. 110. Thus, ability to pay is not a relevant criterion for setting fines. That does not mean that the Commission cannot take account of a reduced ability to pay. In the judgments of the Court, dealing with the ability to pay, the Court only held that the Commission is not obliged to take into account the financial situation of the undertaking concerned. It did not forbid the Commission to do so. 111. The ability to pay is now specifically mentioned in the Commission’s Guidelines, in point 5(b), under the heading ‘General comments’. As the Court of First Instance correctly said in paragraph 371 of its judgment, that point does not call into question the line of decisions in that regard. Second, where the Guidelines state that account should be taken of the offenders’ real ability to pay in a specific context, and the fines adjusted accordingly, this is subject to the proviso ‘depending on the circumstances’ and, as the Court of First Instance correctly remarked, to the proviso ‘in a specific social context’. Thus, there is no automatism in that. 112. SGL also criticises the view that sanctions may lead to its exit from the market. It submits that that amounts to a violation of its freedom to dispose of its property, and refers in that regard to Articles 16 and 17 of the Charter on Fundamental Rights of the European Union. Second, it contests the parallel drawn with the case-law on State aid. 113. So far as the reference to the freedom to conduct business and the right of property are concerned, it should be remarked that this freedom and this right are subject to limitations. Thus, they certainly do not give ‘carte blanche’ to cartels and do not provide a defence where a cartel is detected. 114. So far as the parallel with State aid is concerned, the Court of First Instance merely made the general observation, referring in that regard to case‑law in the field of State aid, that the fact that a measure taken by a Community authority leads to the insolvency or liquidation of a given undertaking is not prohibited as such by Community law. That as such is correct and SGL cannot dispute it. Incidentally, I would add that the concept of effective free competition implies, inter alia, that less efficient market players will normally leave the market. It is also known that owing to cartels, such inefficient market players can survive longer. Thus, the State aid provisions and the competition provisions have the common feature that they both intended to guarantee competitive markets; in that regard, both policies try to prevent or undo the harm, albeit in different ways. The Commission, in its fining policy, may certainly take into account the effect of its fines, and, where appropriate, the reduced ability to pay. Indeed, a fine which exceeds a company’s ability to pay, resulting in default and finally in bankruptcy, becomes ineffective. In the present case, however, the Commission ascertained the appellant’s financial position but found no reason to depart from its proposed fine. In addition, the fact that a fine hurts because internal measures must be taken in order to make funds available is not the Commission’s concern. 115. The Court of First Instance also correctly held that SGL cannot derive an argument from the so‑called speciality graphites decision. (42) In that decision the Commission took account of the reduced ability to pay. SGL’s contention, that the Commission therefore is required to do likewise in the present case, misses the point. In this subsequent decision, the Commission took SGL’s ability to pay into account precisely because of the huge fine already imposed and because it did not appear necessary to impose the full amount of the fine in order to ensure efficient deterrence. The Court of First Instance thus correctly held that the Commission made no error of law or manifest error of assessment. 116. This plea must be rejected. G – Seventh plea (plea relating to the default interest) 117. In the proceedings before the Court of First Instance, SGL disputed the legality of the rate of interest and also the legality of the rate of interest applied where an undertaking constituted a bank guarantee. SGL acknowledged that the Commission is entitled to apply interest rates, in order to prevent abusive actions and to ensure that the undertakings which pay ‘late’ are not put at an advantage, but only as far as the rates in question are those actually applied in practice. In SGL’s submission there are no grounds for applying a further 3.5 percentage points to such market rates. 118. By its seventh plea, SGL submits that the Court of First Instance did not address all the complaints which it raised, but adjudicated instead on the basis of a head of complaint that SGL had not raised. 119. This plea is unfounded. 120. The Court of First Instance referred in its judgment to settled case-law, in which it is established that the power conferred on the Commission by Article 15(2) of Regulation No 17 covers the power to determine the date on which the fines are payable and that on which default interest begins to accrue, the power to set the rate of such interest and the power to determine the detailed arrangements for implementing its decision by requiring, where appropriate, the provision of a bank guarantee covering the principal amount of the fines imposed plus interest. In the absence of such a power, undertakings might be able to take advantage of late payments, thereby weakening the effect of penalties. Therefore default interest on fines is justified. 121. The Court of First Instance went on to refer to case-law in which it approved default interest at the market rate plus 3.5 percentage points and, where a bank guarantee is provided, at the market rate plus 1.5 percentage points, and in which it approved default rates of up to 13.75%, holding that the Commission is entitled to adopt a point of reference higher than the applicable market rate offered to the average borrower, to an extent necessary to discourage dilatory behaviour (see paragraphs 475 and 476). Finally, the Court of First Instance concluded that the Commission did not exceed its discretion when setting the default interest rates. 122. In my view, the Court of First Instance did not err in law. VII – Conclusion 123. In the light of the foregoing considerations, I propose that the Court should: – dismiss the application; – order SGL to pay the costs. 1 – Original language: English. 2 – OJ, English Special Edition 1959‑1962, p. 87. 3 – OJ 1998 C 9, p. 3. 4 – OJ 1996 C 207, p. 4. 5 – Joined Cases 100/80 to 103/80 Musique Diffusion française and Others v Commission [1983] ECR 1825. 6 – Musique Diffusion française and Others v Commission, paragraph 105. 7 – Musique Diffusion française and Others v Commission, paragraph 106. 8 – Joined Cases C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P Dansk Rørindustri A/S and Others [2005] ECR I‑0000. 9– Paragraph 260. 10– Paragraph 267. 11 – See paragraphs 134 and 135. 12 – Paragraph 136. 13 – Paragraph 137. 14 – Case 7/72 Boehringer v Commission [1972] ECR 1281. 15 – Paragraphs 139 and 140. 16 – Paragraphs 141 and 142. 17 – Paragraph 143. 18 – See points 91 to 94 of the Opinion, Joined Cases C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P [2004] ECR I‑123. 19 ‑ Case 14/68 Walt Wilhelm [1969] ECR 1. 20 – Opinion of 7 June 2005 in Case C‑397/03 P Archer Daniels Midland v Commission. 21 – Case T‑224/00 Archer Daniels Midland Company and Archer Daniels MidlandIngredients v Commission [2003] ECR II‑2597. 22 – Agreement between the European Communities and the Government of the United States of America on the application of positive comity principles in the enforcement of their competition laws of 4 June 1998, OJ 1998 L 173, p. 28, and the 1991 Agreement, OJ 1995 L 95, p. 47. 23 – Since the entry into force of Regulation No 1/2003, this case‑law has to a large extent been superseded. See also Wouter P.L. Wils, ‘The principles of Ne Bis inIdem in EC Antitrust Enforcement: A Legal and Economic Analysis’, in World Competition 2003. 24 – See Joined Cases C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P Dansk Rørindustri A/S and Others, footnote 8 above, paragraphs 244 and 245, and the case‑law cited there. 25 – See paragraph 312 of the judgment. 26 – See paragraph 313. 27 – See paragraph 293 of the Pre‑insulated pipes judgment. 28 – Joined Cases T‑25/95, T‑26/95, T‑30/95 to T‑32/95, T‑34/95 to T‑39/95, T‑42/95 to T‑46/95, T‑48/95, T‑50/95 to T‑65/95, T‑68/95 to T‑71/95, T‑87/95, T‑88/95, T‑103/95 and T‑104/95 Cimenteries CBR and Others v Commission [2000] ECR II‑491, paragraph 5045. 29 – Paragraph 367 of the judgment under appeal. 30 – Joined Cases C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P cited in footnote 8. 31 – See paragraph 278 of the judgment. 32 – Paragraph 41 of the judgment under appeal. 33 – Paragraphs 430 to 433 of the judgment under appeal. 34 – See paragraph 437 of the judgment under appeal. 35 – OJ 1997 C 23, p. 3. 36 – Case T‑30/91 Solvay v Commission [1995] ECR II‑1775. 37 – See paragraph 39 of the judgment under appeal. 38 – See point II.A.2 of the Notice. 39 – Joined Cases C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P Aalborg Portland and Others [2004] ECR I‑123 (‘the Cement judgment’), paragraphs 71 to 73 and the case‑law cited there. 40 – See paragraphs 370 to 372 of the judgment under appeal. 41 – See the judgment in Pre‑insulated pipes, paragraph 327 and the reference therein to the judgment in Joined Cases 96/82 to 102/82, 104/82, 105/82, 108/82 and 110/82, IAZ v Commission [1983] ECR 3369. 42 – Decision C(2002) 5083 final of 17 December 2002.