62004CC0308_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
1. The present case is an appeal brought by SGL Carbon AG (‘SGL’) against the judgment of the Court of First Instance of 29 April 2004 in Joined Cases T‑236/01, T‑239/01, T‑244/01 to T‑246/01, T‑251/01 and T‑252/01 Tokai Carbon Co. Ltd and Others
v Commission of the European Communities (‘the judgment under appeal’).
I – Relevant provisions
A – Article 81 EC and Regulation No 17
2. Article 81 EC prohibits ‘all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market’.
3. The Commission may penalise such conduct by imposing fines on undertakings which have engaged in it.
4. Article 15 of Council Regulation No 17 of 6 February 1962: First Regulation implementing Articles [81] and [82] of the Treaty (2) (‘Regulation No 17’) provides:
‘1. The Commission may by decision impose on undertakings or associations of undertakings fines of from 100 to 5 000 units of account where, intentionally or negligently:
…
(b) they supply incorrect information in response to a request made pursuant to Article 11(3) or (5) …
2. The Commission may by decision impose on undertakings or associations of undertakings fines of from 1 000 to 1 000 000 units of account, or a sum in excess thereof but not exceeding 10% of the turnover in the preceding business year of each of the undertakings participating in the infringement where, either intentionally or negligently:
(a) they infringe Article [81(1)] or Article [82] of the Treaty, …
…
In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’
B – The Guidelines
5. The Commission Notice entitled ‘Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty’ (3) (‘the Guidelines’), states in its preamble:
‘The principles outlined … should ensure the transparency and impartiality of the Commission’s decisions, in the eyes of the undertakings and of the Court of Justice alike, whilst upholding the discretion which the Commission is granted under the relevant legislation to set fines within the limit of 10% of overall turnover. This discretion must, however, follow a coherent and non-discriminatory policy which is consistent with the objectives pursued in penalising infringements of the competition rules.
The new method of determining the amount of a fine will adhere to the following rules, which start from a basic amount that will be increased to take account of aggravating circumstances or reduced to take account of attenuating circumstances.’
C – The Leniency Notice
6. In its Notice on the non-imposition or reduction of fines in cartel cases (4) (‘the Leniency Notice’), the Commission defined the conditions under which an undertaking which cooperates with the Commission during its investigation may be exempted from a fine or be granted a reduction in the amount of the fine which would otherwise have been imposed on it, as indicated in Section A, paragraph 3, of that notice.
7. Section A, paragraph 5, of the Leniency Notice provides:
‘Cooperation by an [undertaking] is only one of several factors which the Commission takes into account when fixing the amount of a fine. …’.
D – The European Convention for the Protection of Human Rights and Fundamental Freedoms
8. Article 4 of Protocol No 7 to the European Convention for the Protection of Human Rights and Fundamental Freedoms (‘the ECHR’) provides:
‘1. No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State.
2. The provisions of the preceding paragraph shall not prevent the reopening of the case in accordance with the law and penal procedure of the State concerned, if there is evidence of new or newly discovered facts, or if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the case.’
II – Facts and background to the adoption of the contested decision
9. In the judgment under appeal, the Court of First Instance summarised the facts of the action before it as follows:
‘1. By Decision 2002/271/EC … the Commission found that various undertakings had participated in a series of agreements and concerted practices within the meaning of Article 81(1) EC and Article 53(1) of the Agreement on the European Economic Area (“the EEA Agreement”) in the graphite electrodes sector.
2. Graphite electrodes are used primarily in the production of steel in electric arc furnaces. Electric arc furnace steelmaking is essentially a recycling process whereby scrap steel is converted into new steel, as opposed to the “traditional” blast furnace/oxygen process of production from iron ore. Nine electrodes, joined in columns of three, are used in the electric arc furnace to melt scrap steel. Because of the intensity of the melting process, one electrode is consumed approximately every eight hours. The processing time for an electrode is approximately two months. There are no product substitutes for graphite electrodes in this production process.
3. The demand for graphite electrodes is directly linked to the production of steel in electric arc furnaces. The customers are principally steel producers, which account for approximately 85% of demand. In 1998, world crude steel production was 800 million tonnes, of which 280 million tonnes was produced in electric arc furnaces …
…
5. During the 1980s, technological improvements led to a substantial decline in the specific consumption of electrodes per tonne of steel produced. The steel industry was also undergoing major restructuring in that period. The fall in demand for electrodes led to the restructuring of the world electrodes industry, with a number of factories being closed.
6. In 2001, nine Western producers supplied the European market with graphite electrodes: …
7. On 5 June 1997, acting under Article 14(3) of Council Regulation No 17 …, Commission officials carried out simultaneous and unannounced investigations ….
8. On the same date, Federal Bureau of Investigation (FBI) agents executed judicial search warrants at the premises of a number of producers. These investigations led to criminal proceedings for conspiracy being brought against SGL, … All the accused pleaded guilty to the charges and agreed to pay fines, which were set at USD 135 million for SGL, …
…
10. Civil proceedings were filed in the United States on behalf of a class of purchasers claiming triple damages against …, SGL, …
11. In Canada … [i]n July 2000, SGL pleaded guilty and agreed to pay a fine of CAD 12.5 million for the same offence. Civil proceedings were instituted by purchasers of steel in Canada in June 1998 against … SGL, … for conspiracy.
12. On 24 January 2000, the Commission sent a statement of objections to the undertakings concerned. The administrative procedure culminated in the adoption, on 18 July 2001, of the Decision, in which the applicant undertakings … are found to have been involved, on a worldwide scale, in price fixing and also in sharing the national and regional markets in the product in question according to the “home producer” principle: UCAR and SGL were responsible for the United States; in addition, UCAR was responsible for certain parts of Europe and SGL for the rest of Europe; …
13. Still according to the Decision, the basic principles of the cartel were as follows:
– prices for graphite electrodes should be set on a global basis;
– decisions on each company’s pricing had to be taken by the Chairman/General Manager only;
– the “home producer” was to establish the market price in its home area and the other producers would “follow” it;
– for “non‑home” markets, i.e. markets where there was no “home” producer, prices would be decided by consensus;
– non-home producers should not compete aggressively and would withdraw from the other producers’ home markets;
– there was to be no expansion of capacity (the Japanese were supposed to reduce their capacity);
– there should be no transfer of technology outside the circle of producers participating in the cartel.
14. The Decision goes on to state that those basic principles were implemented by meetings of the cartel, held at a number of levels: “Top Guy” meetings, “Working Level” meetings, “European group” meetings (without the Japanese undertakings), national or regional meetings dedicated to specific markets and bilateral contacts between undertakings.
…
16. On the basis of the findings of fact and the legal assessments made in the Decision, the Commission imposed on the undertakings concerned fines set according to the methodology described in [the Guidelines] …
17. Article 3 of the operative part of the Decision imposes the following fines:
– SGL: EUR 80.2 million;
…
18. In Article 4 of the operative part, the undertakings concerned are ordered to pay the fines within three months of the date of notification of the Decision, failing which interest of 8.04% will be payable.’
III – Proceedings before the Court of First Instance and the judgment under appeal
10. SGL, by application lodged at the Registry of the Court of First Instance on 20 October 2001, and other undertakings to which the contested decision was addressed brought actions against that decision.
11. In the judgment under appeal, the Court of First Instance held, inter alia, as follows:
‘…
(2) In case T‑239/01 SGL Carbon v Commission
[the Court]:
– sets the amount of fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 69 114 000;
– dismisses the remainder of the application;
…’
IV – The appeal
12. SGL claims that the Court should:
– u phold the pleas in law submitted at first instance and set aside in part the judgment in Case T‑239/01 to the extent to which it dismissed the action in so far as that action is directed against Articles 3 and 4 of the Commission’s decision of 18 July 2001,
– in the alternative, reduce as appropriate the fine imposed on the appellant in Article 3 of the Commission’s decision and the interest payable while any court proceedings were pending and the default interest fixed in Article 4 of the decision in conjunction with the letter of 23 July 2001 from the Commission,
– further in the alternative, refer the case back to the Court of First Instance for reconsideration in the light of the interpretation of the law made by the Court of Justice,
– order the Commission to pay all the costs of the proceedings.
13. The Commission contends that the Court should:
– dismiss the appeal;
– order the applicant to pay the costs.
V – Pleas in law and main arguments
14. SGL puts forward seven pleas in law:
– The first plea in law alleges infringement of the principle ne bis in idem .
– The second plea concerns the establishment of basic amount, more particularly the failure to make a downward adjustment.
– The third plea relates to the 25% increase in the basic amount (for an aggravating circumstance) on account of the warnings given to other members of the cartel before the 1997 investigation.
– The fourth plea concerns the failure to take into account the upper limit on fines of 10% of total turnover, as laid down in Article 15(2) of Regulation No 17.
– The fifth plea relates to a violation of the rights of the defence on the ground of insufficient access to documents.
– The sixth plea concerns the applicant’s ability to pay the fine (failure to take into account its reduced ability to pay).
– The seventh plea deals with the fixing of default interest.
VI – Analysis
Preliminary remarks
15. The appellant in the present case, as well as the appellant in Case C‑289/04 P, in which I also deliver my Opinion today, have submitted pleas relating to certain elements of the fine. In Case C‑289/04 P, the pleas focus in particular on the deterrence multiplier. In the present case, the pleas relate rather to certain aspects of the fine-setting process.
16. Therefore, I shall begin by making some general remarks about the case‑law with regard to the fine-setting policy of the Commission.
17. First of all, the Court stated in its much‑quoted judgment in Musique Diffusion française (5) that the Commission’s task certainly includes the duty to investigate and punish individual infringements, but also the duty to pursue a general policy designed to apply, in competition matters, the principles laid down by the Treaty and to guide the conduct of undertakings in the light of those principles. (6)
18. Furthermore, in assessing the gravity of an infringement for the purpose of fixing the amount of the fine, the Commission must take into consideration not only the particular circumstances of the case but also the context in which the infringement occurs and must ensure that its action has the necessary deterrent effect, especially as regards those types of infringement which are particularly harmful to the attainment of the objectives of the Community. (7)
19. Thus, the Court indicated in that judgment that the underlying rationale for the imposition of fines is to ensure the implementation of Community competition policy.
20. It became clear, from that and from subsequent judgments, that numerous factors must be taken into account; that the Commission is not required to apply a precise mathematical formula; that the Commission may have regard both to the total turnover of the undertaking and to the turnover in terms of territory and products, so long as one factor is not disproportionate by reference to other factors; and thus, that the fixing of the appropriate fine cannot be the result of a simple calculation of the total turnover.
21. Moreover, in its fining policy the Commission has a wide discretion, although it must take the general principles of Community law into account and may not exceed the turnover ceiling set in Article 15(2) of Regulation No 17. In addition, if the Commission publishes guidelines establishing rules of practice, it may not depart from those guidelines in an individual case without giving reasons that are compatible with the principle of equal treatment. Clearly, the Commission may adapt its guidelines, which can only be applied as from the date on which they were adopted.
22. In the meantime, the Commission has published the Guidelines. The Guidelines more or less reflect the case‑law of the Community judicature. The calculation method laid down in the Guidelines formed the subject‑matter of a recent judgment, the so‑called ‘ Pre‑insulated pipes ’ judgment. (8) In that regard, the Court observed that ‘since the calculation method recommended by the Guidelines envisages that numerous factors will be taken into account in assessing the gravity of the infringement for the purpose of determining the amount of the fine, including in particular the profits secured by the infringement or the need to ensure the deterrent effect of the fines, it seems to correspond better with the principles laid down by Regulation No 17 as interpreted by the Court of Justice, notably in its judgment in Musique Diffusion française and Others v Commission, than what is alleged to be the Commission’s earlier practice, referred to by the applicants, in which the relevant turnover played a predominant and relatively mechanical role.’ (9) It also said that ‘… the Guidelines display flexibility in a number of ways, enabling the Commission to exercise its discretion in accordance with Article 15 of Regulation No 17, as interpreted by the Court of Justice … ’. (10)
23. According to the Guidelines, the Commission assesses the fine in several steps. The first step is to fix the basic amount, based on the gravity of the infringement (minor, serious or very serious) and its duration (short, medium, long). The Commission begins by setting the starting amount according to the gravity of the infringement. Where there is a considerable disparity in size between the undertakings involved, it may group them according to their size and fix a different starting amount for each group, in order to take account of the special weight and therefore the real impact of the offending conduct of each undertaking. Having assessed the gravity of a given infringement, and before assessing its duration, the Commission may adjust the fine upwards in order to ensure that the fine has a sufficiently deterrent effect (thus applying the ‘deterrence multiplier’). After having increased the fine for duration, it proceeds with the next step, the aggravating or mitigating factors.
24. Next, where cooperation by an undertaking with the Commission qualifies as cooperation for the purposes of the Leniency Notice, the next step will be the application of that Notice.
25. Where the 10% ceiling referred to in Article 15(2) of Regulation No 17 is exceeded, the Commission may first reduce the amount of the fine (resulting from the calculation based on the Guidelines) to that maximum level before applying the Leniency Notice in order to give that Notice its full effect.
26. In the present case, the Commission divided the undertakings concerned into three categories according to their relative importance in the market concerned, based on worldwide product turnover and market share. The appropriate starting points for the fines were set at EUR 40 million, EUR 16 million and EUR 8 million. SGL was placed in the highest category. The starting amount was increased by 55% on account of the duration of SGL’s infringement. In the next step, the Commission increased the basic amount by 85% for aggravating circumstances; of this, 25% was ascribed to the fact that SGL had warned other members of the cartel about the forthcoming investigation. There were no mitigating circumstances. The Commission then reduced the fine by 30% under the Leniency Notice. The Court of First Instance reduced the amount of the fine, because the Commission had failed to appreciate SGL’s cooperation correctly. That aspect forms the subject‑matter of the appeal in Case C‑301/04 P, in which I shall also deliver my Opinion today. The present appeal, as I have already said, focuses to a large extent on the various steps in the fine‑setting process.
27. Before dealing with the various pleas in law, I would observe that in the context of an appeal the purpose of review by the Court of Justice is, first, to examine to what extent the Court of First Instance took into consideration, in a legally correct manner, all the essential factors to assess the gravity of particular conduct in the light of Article 81 EC and Article 15 of Regulation No 17 and, second, to consider whether the Court of First Instance responded to a sufficient legal standard to all the arguments raised by the appellant with a view to having the fine cancelled or reduced.
28. Furthermore, it is not for the Court of Justice, when ruling on questions of law in the context of an appeal, to substitute, on grounds of fairness, its own assessment for that of the Court of First Instance exercising its unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements of Community law.
29. Thus, pleas must be declared inadmissible in so far as they seek a general re‑examination of fines.
A – First plea in law: infringement of the principle ne bis in idem
30. At first instance, SGL claimed that by refusing to deduct from the fine set by the contested Commission decision the amount of the fines already imposed in the Unites States and Canada, the Commission had breached the rule prohibiting concurrent sanctions for the same infringement.
31. In reply to this claim the Court of First Instance first referred to earlier case‑law in which it was held that the principle ne bis in idem
is a general principle of Community law, and that in the field of competition, that principle precludes an undertaking from being sanctioned by the Commission or made the defendant to proceedings brought by the Commission a second time in respect of anti‑competitive conduct for which it has already been penalised.
32. The Court of First Instance then found in paragraph 134 of the judgment under appeal that the principle ne bis in idem
did not apply in the present case because the procedures conducted and the penalties imposed by the Commission on the one hand and the United States and Canadian authorities on the other clearly had not pursued the same ends. The aim of the first was to preserve undistorted competition within the European Union or the EEA, whereas the aim of the second was to protect the United States or the Canadian market. The application of the principle ne bis in idem
is subject not only to the infringements and the persons sanctioned being the same, but also to the unity of the legal rights being protected. That conclusion is supported by the scope of the principle that a second penalty may not be imposed for the same offence, as laid down in Article 4 of Protocol No 7 to the ECHR. It is clear from the wording of Article 4 that the intended effect of the principle is solely to prevent the courts of any given State from trying or punishing an offence for which the person concerned has already been acquitted or convicted in that same State. On the other hand, the principle ne bis in idem
does not preclude a person from being tried or punished more than once in two or more different States for the same conduct. (11)
33. The Court of First Instance also emphasised that the applicants had relied on no convention or rule of public international law that prevents the authorities or courts of different States from trying and convicting the same person on the basis of the same facts and held that ‘such a prohibition could arise today only through very close international cooperation leading to the adoption of common rules such as those contained in the abovementioned Convention implementing the Schengen Agreement. The applicants have not pointed to any binding agreement between the Community and non-member countries such as the United States or Canada that lays down such a prohibition’. (12)
34. The Court of First Instance acknowledged that ‘Article 50 of the Charter of Fundamental Rights provides that no one may be tried or punished again in criminal proceedings for an offence of which he has already been finally acquitted or convicted within the Union in accordance with the law. However, that Charter is clearly intended to apply only within the territory of the Union and the scope of the right laid down in Article 50 is expressly limited to cases where the first acquittal or conviction was handed down within the Union.’ (13)
35. SGL also complained that the Commission had misconstrued the judgment in Boehringer, (14) in which it was held that the Commission has a duty to set off a penalty imposed by the authorities of a non‑member country if the actions alleged against the applicant by the Commission are the same as those alleged by those authorities.
36. In that connection, the Court of First Instance recalled that, in that judgment, the Court of Justice had held (paragraph 3) that ‘[i]t is only necessary to decide the question whether the Commission may also be under a duty to set a penalty imposed by the authorities of a third State against another penalty if in the case in question the actions of the applicant complained of by the Commission, on the one hand, and by the [United States] authorities, on the other, are identical’ and observed that ‘it is clear from that passage that the Court [of Justice], far from deciding the question whether the Commission is required to set off a penalty imposed by the authorities of a non-member State where the facts with which the Commission charges an undertaking are the same as those alleged by those authorities, regarded the identity of the facts alleged by the Commission and the authorities of a non-member State as being a precondition of that question’. (15)
37. The Court of First Instance then pointed out that ‘it was in view of the particular situation which arises from the close interdependence between the national markets of the Member States and the common market and from the special system for the division of jurisdiction between the Community and the Member States with regard to cartels on the same territory, namely the common market, that the Court [of Justice], having acknowledged the possibility of dual sets of proceedings and having regard to the possibility of double sanctions flowing from them, held it to be necessary, in accordance with a requirement of natural justice, for account to be taken of the first decision imposing a penalty … The circumstances of the present case, however, are obviously different. Given that the applicants point to no express provision of a convention requiring the Commission, when determining the amount of a fine, to take into account penalties already imposed on the same undertaking in respect of the same conduct by the authorities or courts of a non‑member State, such as the United States or Can ada, they cannot validly complain that, in the present case, the Commission failed to satisfy any such alleged obligation.’ (16)
38. In any event, the Court of First Instance went on, ‘even if it should be inferred a contrario from the judgment in [ Boehringer ] that the Commission is in fact required to set off any penalty imposed by the authorities of a non‑member country where the facts alleged against the undertaking in question by the Commission are the same as those alleged by the first authorities, it must be emphasised that, notwithstanding that the judgment delivered against SGL in the United States states that the purpose of the graphite electrodes cartel was to limit production and increase the prices of those products “in the United States and elsewhere”, it has in no way been shown that the penalty imposed in the United States related to applications of the cartel or its effects other than in the United States (see, to that effect, [ Boehringer ], paragraph 6) and in the EEA in particular, an extension which, moreover, would have clearly encroached on the territorial jurisdiction of the Commission. That observation applies equally to the judgment handed down in Canada’. (17)
39. In the present appeal, SGL complains that the Court of First Instance did not find in its judgment that the Commission breached the principle ne bis in idem
(or, in the alternative, the general requirement of natural justice) by reason of the fact that no account was taken of the sanction which, before the adoption of the contested Commission decision, had already been imposed on SGL in the United States.
40. SGL submits that the Commission was obliged to set off the fines already imposed by the authorities of non-member countries for the same infringement. That follows from the principle ne bis in idem and, in any event, from the principle of proportionality. In that regard, SGL complains that the Court of First Instance misinterpreted the judgment in Boehringer . SGL argues that there are two ways of expressing the principle ne bis in idem, one strict and the other broader .
The strict interpretation – at least as applicable within the Community – concerns a real prohibition, in the sense that a second prosecution and sanctions are precluded where a prior sanction has been imposed for the same infringement. In the broader interpretation, relevant in particular to cases dealt with by the authorities of non-member countries, the principle ne bis in idem
translates as the obligation to set off or take into account the penalties imposed abroad.
41. Furthermore, SGL claims that the three conditions to be satisfied for the applicability of the principle ne bis in idem (the same offender, the same facts and a single right to be protected) are met. The fines are addressed to SGL, which is a single and autonomous legal person; the facts are the same (a global cartel) and the legally-protected interests in Europe and the United States are the same.
42. SGL contests the finding of the Court of First Instance that the procedures conducted and penalties imposed by the Commission on the one hand and the United States authorities on the other clearly did not pursue the same end. In that regard, SGL refers to the Opinion of Advocate General Ruiz‑Jarabo Colomer in the Italcementi case. (18) SGL maintains that this line of reasoning is transposable to third countries. In its view, both legal orders seek to ensure free competition. SGL contends that the territoriality principle is not relevant for the question whether there is an ‘idem’, but is relevant only for the Commission’s jurisdiction to prosecute infringements. While there is no doubt that there may be parallel competition enforcement procedures, fines already imposed by the authorities of non-member countries should be taken into account.
43. Even if ne bis in idem
does not apply in respect of non‑member countries, the Commission and the Court of First Instance should have taken into account the fines already imposed. That follows from the principle of proportionality or the natural‑justice‑based requirement formulated in the Walt Wilhelm (19) judgment.
44. SGL also contends that there is no requirement for an international treaty in order to apply the principle ne bis in idem . In that regard, it refers to several national legal orders in which the principle is recognised, where there is therefore no reciprocal international agreement.
45. The Commission agrees with the finding of the Court of First Instance.
Assessment
46. The issue of a probable infringement of the principle ne bis in idem
has been recently dealt with by Advocate General Tizzano in his Opinion in the Archer Daniels Midland case. (20) That case also concerned a situation in which penalties were imposed both by the Commission and also by the United States and Canadian authorities. In its judgment in that case, (21) the Court of First Instance came to the same conclusion as in the present case, namely that the principle ne bis in idem
did not apply and that there were no grounds requiring the Commission to set off the fines already imposed by those authorities.
47. In his Opinion, Advocate General Tizzano argued that it cannot be considered that there is any public international law that prevents the authorities or courts of different States from trying and convicting a person on the basis of the same facts and that the multilateral instruments which confirm the principle ne bis in idem
generally limit its applicability to judicial decisions within the same State. In that connection, he referred to Article 14(7) of the International Covenant on Civil and Political Rights of 1966, to Article 4 of Protocol No 7 to the ECHR and to the case-law of the International Criminal Tribunal for the former Yugoslavia and a number of national constitutional courts. He also pointed out that, even within an integrated framework such as that of the Community, the principle ne bis in idem
has only been upheld because it is provided for by rules to that effect in agreements such as, inter alia, the Convention implementing the Schengen Agreement.
48. But, Advocate General Tizzano continued, even if such a general principle of law existed (namely that a person may not be punished several times in different States for the same offence), the three conditions as laid down in the case‑law of the Court must be fulfilled. He agreed with the Court of First Instance that one of these conditions, the unity of the legal interest protected, was not met, because it cannot be said that United States antitrust law and Community competition law protect the same legal asset. He argued, and I agree, that the Commission’s fining policy seeks to protect free competition in the common market, which by definition is distinct from that protected by the authorities of non‑member countries.
49. I agree with those findings. There is no international rule prohibiting the Community from imposing fines where another authority has already imposed fines for an infringement of competition provisions, or from imposing a reduced fine. Second, ne bis in idem
normally applies only within one State. Third, it cannot been said that there is a bilateral agreement between the Community and the United States or Canada. The existing cooperation agreements in relation to competition issues (22) do not deal with this aspect. But even if the principle ne bis in idem
should be applicable, the three conditions mentioned above must be satisfied cumulatively. I agree with the Commission and the Court of First Instance that the third condition, the same legal interest, is not satisfied. A cartel commits infringements in each of the jurisdictions in which it functions. Thus, the fact that a cartel operates on a worldwide scale does not alter the fact that United States antitrust law and Community competition law are primarily concerned with the effects of the cartel on their respective territories. Therefore, since the three conditions are not satisfied, SGL’s reference to a number of national legal orders in which a foreign decision would be treated as comparable to a domestic judgment is irrelevant.
50. So far as the natural general requirement of natural justice is concerned, I would like to point out that to my mind the judgments in Walt Wilhelm
or Boehringer
are not transposable without more to non-member country situations. Apart from the fact that, strictly speaking, Walt Wilhelm
does not deal with the issue of ne bis in idem
– and neither does Boehringer –, the peculiarity in that case, even given the fact that the authorities looked at it from a different angle, was that the infringement took place on Community territory. Thus there was a valid ground for taking the territorial overlap into account and thus requiring the second competition authority to take account of the first fine when subsequently imposing any further pecuniary sanction. (23) Such a reason does not exist in relation to non‑member countries, since from a territorial perspective they are distinct. The fact that the Commission is under no obligation to take into account earlier fines imposed in a non‑member country does not mean that it has no discretion to do so; however, provided that there is no reciprocity, it cannot be said that the Commission is obliged to set off such a fine.
51. As a final remark, I would like to underline that legal orders differ and that those different legal orders result in legal parameters for market behaviour having a different content and scope; thus, an infringement does not only have different or divergent consequences in the different legal orders, but even in the same legal order the consequences must be assessed according to their impact in that order.
52. The position advocated by SGL would imply that the concept of territoriality inherent in public economic law would lose its significance. It would mean that the regulations governing the conditions of market behaviour of undertakings would be identical worldwide, which for obvious reasons is not the case.
B – Second plea
53. By its second plea, which concerns the Court of First Instance’s findings with regard to the establishment of the basic amounts of the fine, SGL submits that the Court of First Instance erred in failing to make a downward adjustment of the basic amount in relation to SGL, even though this ought to have occurred had the definitive calculation criteria established by that Court been applied in a non‑discriminatory manner.
54. In that regard, SGL refers to the re‑categorisation of other members of the cartel, resulting in a lower starting amount of the fine. First of all, SGL questions whether the calculation of the average turnover and market shares within the same category is permissible, because, in its view, an assessment of the impact on the market of each undertaking should be weighted on an individual basis and not on a consolidated one. Second, SGL argues that the gap between its market share and UCAR’s is too substantial to justify its being placed in the same category as UCAR. The maximal difference in market shares which could be found is more than the percentage steps used by the Commission in the decision. Therefore, the starting amount should be adjusted. Third, the re‑classification of some other members would have taken place in circumstances where the gap between market shares was smaller.
Assessment
55. First of all, it must be borne in mind that the Commission has a wide margin of discretion when it sets the amounts of the fine and that it is under no obligation to apply a precise mathematical formula for that purpose. Nevertheless, it is for the Community judicature to ascertain that the Commission did not exceed its discretionary powers. Finally, it is also settled case‑law that it is not for the Court of Justice, where it is deciding questions of law in the context of an appeal, to substitute, on grounds of fairness, its own appraisal for that of the Court of First Instance adjudicating, in the exercise of its unlimited jurisdiction, on the amount of a fine imposed on an undertaking by reason of its infringement of Community law. (24)
56. In the judgment under appeal, the Court of First Instance held that, as such, the division into certain categories is allowed. It also held that where undertakings are divided into categories for the purpose of setting the amounts, the thresholds for each of the categories thus identified must be coherent and objectively justified. The Court of First Instance then examined whether the thresholds separating the three categories were determined in a manner that was coherent and objectively justified.
57. As explained by the Court of First Instance, and as is clear from the Commission’s decision, in establishing the three categories and setting the different starting amounts the Commission relied on a single criterion, namely the actual turnover and market shares which the members of the cartel achieved through sales of the relevant product on the world market. It used the turnover figures for 1998 and changes in the market share between 1992 and 1998. It used a method of calculation based on multiples of a certain market share percentage, which percentage thus corresponded to a fixed amount in euros. The starting amount thus increased in ‘steps’. The result was that SGL in the light of its market shares, as UCAR, was given a starting amount of EUR 40 million. The Court of First Instance concluded that the choice of amounts constituting the steps which resulted in a starting amount of EUR 40 million for undertakings in the first category, was not arbitrary and did not exceed the discretion which the Commission enjoys in that regard. The Court of First Instance further approved the fact that the Commission had placed SGL and UCAR in the same category, given their relevant turnover and their respective market shares.
58. SGL does not contest the starting amount of the first category, but, de facto, the fact that it was placed in the first category. It maintains that the Court of First Instance departed from its own established method, which constitutes either a violation of the non‑discrimination rule or an error of assessment.
59. I do not follow this point of view. First of all, the Court of First Instance did not replace the Commission’s method with its own. All that the Court of First Instance did was to ascertain whether the Commission had applied its method in a consistent and coherent way. As stated above, it approved a method whereby the members of a cartel are placed into several categories, resulting in a flat rate as a starting amount for all the undertakings in each particular category. It verified and approved the thresholds between the categories. It also examined whether the composition within a category appeared to be sufficiently coherent from the aspect of differences in size and by comparison with the next category. Thereby, it remained within the general logic of the system employed by the Commission for members of the cartel.
60. So far as the first category is concerned, the Court of First Instance approved, given the size ratios, the Commission’s classification of SGL and UCAR in the same category. It only re-classified certain members placed in the second category, because the size ratios differed too much by comparison with other members in that category. Consequently, those members were placed in the third category. In this way, the former third category had to be further divided to create a fourth category, in order to maintain the balance in the method employed by the Commission. That, however, does not affect SGL.
61. In fact, though, SGL seeks to contest a system of categorisation, because in its submission each difference in market share or turnover should be translated into a discrete ‘category’ for each undertaking participating in the cartel, and thus an individual starting amount. That, however, would undermine the use of a system of categories, which implies the use of certain ranges. As the Court of First Instance correctly stated, there is nothing wrong in dividing the members of a cartel into categories when determining the gravity of the infringements, even though such an approach ignores the differences in size between undertakings in the same category, so long as the method used for building categories complies with the principle of equal treatment and thus the requirement that the thresholds for each of the categories identified are coherent and objectively justified.
62. The second plea must be dismissed.
C – Third plea
63. SGL contends that the specific 25% increase in the basic amount, which equals EUR 15.5 million, of the fine because of the warnings given to other members of the cartel before the commencement of the Commission’s inspection was unlawful. By upholding the Commission’s finding, the Court of First Instance violated the principle nulla poena sine lege, the principle in dubio pro reo
and the principle of equal treatment.
64. Those pleas are related to paragraphs 312 to 317 and 436 to 438 of the judgment under appeal. In its decision the Commission increased the basic amount by 25% as it considered that SGL’s attempts to obstruct the Commissions proceedings by warning other companies about the forthcoming investigations constituted a substantial aggravating circumstance.
65. Before the Court of First Instance, SGL pleaded that the warnings given could not be penalised by an increase in the fine, since they did not constitute a breach of the law. Furthermore, it emphasised that the warnings were based on information leaked by a Commission official. In addition, UCAR, which, following the warnings, had reviewed its files and destroyed or removed the incriminating documents, was not punished by the Commission for that conduct.
66. The Court of First Instance found that ‘[t]he fact that SGL warned other undertakings of the forthcoming investigations may also be properly characterised as an aggravating circumstance (see, to that effect, Case T‑334/94 Sarrió
v Commission
[1998] ECR II‑1439, paragraph 320). Contrary to SGL’s assertion, that conduct does not constitute a specific and autonomous infringement for which no provision is made in the Treaty or in Regulation No 17, but conduct which added to the gravity of the initial infringement. By thus warning other members of the cartel, SGL sought to conceal the existence of the cartel and to keep it in operation, an aim which was successfully achieved until March 1998.’ (25)
67. In that context, it also held that SGL’s reference to Article 15(1)(c) of Regulation No 17 was irrelevant, because that provision is aimed at obstructions qua autonomous infringements, independent of the existence of a cartel, while the warnings given by SGL sought to ensure the continuation of a cartel which was accepted as having constituted a flagrant and undisputed breach of Community competition law. (26)
68. As regards SGL’s reliance on the principle of equal treatment by comparison with UCAR, whose destruction of documents was not taken into consideration as an aggravating circumstance, the Court of First Instance held that that was not capable of altering the characterisation of warnings as an aggravating circumstance. According to the Court of First Instance: ‘As they were issued to other undertakings, the warnings went beyond the purely internal sphere of SGL and sought to frustrate the Commission’s entire investigation in order to ensure that the cartel could continue, whereas UCAR had destroyed its documents in order to prevent its involvement in the cartel from being discovered. Those are two completely different types of conduct and for that reason the Commission cannot be criticised for having treated similar situations differently.’
69. As mentioned above, in support of its claim that this part of the judgment under appeal should be annulled, SGL relies on three pleas in law.
70. With regard to the alleged violation of the principle nulla poena sine lege, SGL refers to Article 7 ECHR and Article 49(1) of the Charter of Fundamental Rights. It also refers to the case‑law of the Court in which it is established that a penalty, even of a non‑criminal nature, cannot be imposed unless it rests on a clear and unambiguous legal basis. SGL argues that the increase in the basic amount for warning other members of the cartel is in violation of this principle, as those warnings do not violate any prohibitive rule. It is neither an element of Article 15(1)(c) of Regulation No 17 nor can it be considered as an element of the prohibition rule laid down in Articles 81 EC and 82 EC and of Article 15(2) of Regulation No 17. The appellant contends that Regulation No 17, and the new Regulation No 1/2003, provide for sanctions only in the event of obstructions during an on‑the‑spot investigation. So long as there is no order for an inspection, there is no rule prohibiting the destruction of documents. There is no rule at all that prohibits warning other cartel members. Thus, the Commission and the Court of First Instance may not circumvent that legal situation by increasing the fine by unjustly classifying this conduct as an aggravating circumstance.
71. SGL submits that the Court of First Instance also violated the principle in dubio pro reo, because it based its assessment on assumptions. In that regard, it points out that the Sarrió
judgment is non‑transposable to the present case, because the concealment is not an element of the cartel arrangements between its members. Second, the assumptions of the Court of First Instance, namely that SGL warned other members of the cartel in an attempt to conceal the existence of the cartel and to keep it in operation, and succeeded in doing so until March 1998, have not been proven, nor is it plausible.
72. Finally, SGL submits that the increase in the fine for warning other cartel members, by comparison with the fact that UCAR was not fined for destroying documents, amounts to discrimination.
73. In the Commission’s contention, the first and third pleas are inadmissible. In any event, the three pleas should be rejected. As far as the alleged absence of a legal basis is concerned, the Commission contends that SGL forgets that the Commission did not specifically impose a fine for warning the other cartel members, but that it regarded that conduct as an aggravating circumstance for the purpose of calculating the fine. So far as the alleged discriminatory treatment is concerned, the Commission points out that warning other cartel members is not comparable with the destruction of documents. In that regard, the Commission submits that SGL did not restrict itself to concealing or destroying its own documents, or avoiding the drawing up of compromising documents, but also helped to frustrate the investigation into other undertakings. Finally, the Commission argues that the plea concerning the alleged assumptions made by the Court of First Instance is not convincing.
Assessment
74. In an appeal, it is for the Court to ascertain that the Court of First Instance did not make any errors of law or reasoning or distort the evidence.
75. In the judgment under appeal, the Court of First Instance held that the increase in the fine for warning other undertakings did not appear disproportionate or discriminatory and it upheld the Commission’s qualification given to SGL’s obstructive conduct.
76. The question which must be asked is whether SGL is correct where it states that there is no legal basis for sanctioning obstructions, except in the case of an inspection by the Commission ordered by a decision pursuant to Article 14(3) of Regulation No 17.
77. In my view, the Court of First Instance was correct to hold that the conduct in question was not a specific and autonomous infringement, but conduct that added to the gravity of the initial infringement. The fact that Article 15(1) refers to certain obstructions in a specific context, which constitute autonomous infringements, does not mean that conduct outside that context cannot contribute to the gravity of an infringement of Article 81 EC or Article 82 EC.
78. Indeed, as regards the latter conduct, the legal basis for an increase in the fine is to be found in Article 15(2) of Regulation No 17. (27) Thus, SGL is wrong in so far as the alleged absence of a legal basis is concerned. There is no infringement of the principle nulla poena sine lege .
79. In this context, I recall the settled case‑law, according to which the amount of the fine is set according to the gravity of the (initial) infringement, the gravity of the infringement has to be determined by reference to numerous factors, the Commission has a margin of discretion when fixing (elements of the) fines and it may also at any time adjust the level of the fines in order to ensure compliance with the competition rules. To take into account aggravating circumstances when fixing the fine is consistent with the Commission’s task of ensuring compliance with the competition rules. In this context, I also refer to the list of examples of aggravating circumstances set out in point 2 of the Guidelines.
80. The list of aggravating circumstances justifying an increase in the fine is not exhaustive, as may be seen from the last indent, but that need not be the case. The answer to the question whether there is an aggravating circumstance justifying an increase of the fine will depend on each individual case. It is self-evident that the aggravating circumstance justifying an increase of the fine must be [an element of or] sufficiently related to the infringement. Thus, by way of illustration, in a case of recidivism, it must be clear that the undertaking concerned has already committed an infringement of the same type. Where that is so, its involvement for a second time in a similar infringement adds to the gravity of the infringement at issue. The same applies to profits made as a result of the infringement. Those profits constitute one of the factors to be considered in assessing the gravity of the infringement. When it is objectively possible to estimate the amounts of gains improperly made, they will be translated into an increase of the fine. The same may be said concerning obstructive reactions or warnings to other cartel members which have an obstructive effect.
81. A cartel member which is informed, in any way whatsoever, about a possible forthcoming investigation may react in various ways: (1) it may warn the other members and suggest putting an end to the cartel, (2) it may warn the other members and suggest continuing the cartel, which then implies adopting measures designed to conceal the cartel, too, such as for example destroying incriminating documents, and (3) instead of warning the other members, it may decide to take advantage of the Commission’s leniency policy by cooperating with the Commission.
82. Thus, it cannot be said that warning the other cartel members about the forthcoming investigation inevitably adds to the gravity of an infringement; however, to my mind, in the present case the Commission and the Court of First Instance were entitled to find that it did. In its earlier case‑law, the Court of First Instance upheld the Commission’s findings that the fact that undertakings were not only aware of the unlawfulness of their conduct but also took steps to conceal it, added to the gravity of the infringement. The warnings given in the present case are in line with that. In the present case, the warnings about a forthcoming investigation were given by SGL, an important European member of the cartel, to other (European) members of the cartel. It is also established that those warnings had an impact on the Commission’s investigation into that cartel, since by the time the Commission carried out dawn raids at the premises of the undertakings involved in the cartel much evidence had been lost. For the Commission, those facts constituted objective reasons to qualify the warnings as an aggravating circumstance which justified an increase in the fine. To my mind, SGL’s suggestion that its sole purpose in warning the other cartel members was to impress them lacks conviction. The effect of the warnings points strongly in another direction. Thus, the Court of First Instance was entitled to conclude that the warnings were intended to conceal the cartel and to ensure that it could continue, and that up to a certain point in time they succeeded in doing so, without violating the principle in dubio pro reo . Incidentally, as I observed in the preceding point, SGL could also have decided, upon hearing about a possible forthcoming investigation, to cooperate with the Commission in the context of the Leniency Notice, in which case it could have benefited from a much higher reduction. Its decision to cooperate was taken at a much later stage. It also decided only at a later stage to put an end to the cartel.
83. The plea alleging discrimination must also be dismissed. It is important to draw a distinction, as the Court of First Instance did, between external and internal effects of conduct. Indeed, there is no general obligation as such to keep incriminating documents on file. Thus, in order to prevent discovery of its involvement in a cartel, the undertaking concerned, as an internal matter, may decide to destroy such documents (unless, as in the Sarrió
case, the systematic concealment is part of a plan). That conduct cannot as such be considered an aggravating circumstance. However, warnings to other members of the cartel produce effects which go beyond the purely internal sphere. They are intended to frustrate the Commission’s entire investigation. Therefore, the Court of First Instance was correct to hold that these are completely different types of conduct and thus that the Commission cannot be criticised for having treated similar situations differently.
D – Fourth plea
84. By this plea, SGL submits (1) that the Court of First Instance failed to take into account, in paragraphs 366 to 368 of the judgment under appeal, that the (intermediate level of the) fine fixed by the Commission exceeds the upper limit of a fine as laid down in Article 15(2) of the Regulation; (2) that this amounts to a violation of the principle nulla poena sine lege
and (3) of the principle of equal treatment; and, moreover, that in that regard (4) the reasoning is inadequate.
85. SGL contends that the Court of First Instance failed to take into account that a part of the turnover in 2000 had to be ascribed to another company, which SGL acquired early in 2000, and therefore after the infringement had come to an end (in March 1998). In that regard, SGL refers to the Cement
judgment. (28) SGL also refers to its complaint concerning the length of the administrative procedure, the resulting delay adversely affecting its financial interests. Therefore, the Commission should have considered the 1999 turnover figures.
86. Furthermore, despite the extensive pleas before the Court of First Instance, that Court left open the question whether the Commission should have referred to 1999 (EUR 980 million) or 2000 (EUR 1.08 or 1.26 billion) turnover figures. By replying that all that matters is that the fine ultimately imposed does not exceed 10% of worldwide turnover, that is to say, after any aggravating or mitigating circumstances have been taken into account and any reduction for leniency has been applied, and that the arguments put forward concerning the excessively long administrative procedure and the Cement
judgment were irrelevant, (29) the Court of First Instance overlooked the fact that the Commission applied the 10% ceiling of turnover in the preceding business year to UCAR before it applied the Leniency Notice. Thus, the Court of First Instance erroneously took the view in paragraph 353 of the judgment under appeal that SGL was not in the same position as UCAR. SGL submits that the presumption of the Court of First Instance is incorrect. SGL’s total turnover in 1999 as well as its turnover in 2000, reduced by the turnover ascribed to Keramchemie, was such that the 10% ceiling was exceeded before the Leniency Notice was applied. Thus, the Court of First Instance was not entitled to leave open the question of the relevant turnover year.
87. Second, SGL disputes the findings of the Court of First Instance in paragraph 368 of the judgment under appeal, where it said that no provision of Community law lays down administrative sanctions, either minimum or maximum, for the various categories of infringements and that the Commission is therefore free, in principle, to determine the amount of the fines according to the gravity and duration of the infringements, provided that the final amount of the fine does not exceed the 10% limit referred to in Article 15(2) of Regulation No 17. In that regard, SGL submits, with reference to Article 7 ECHR and Article 49(1) of the Charter on Fundamental rights, that the 10% ceiling, which constitutes a strict maximum sanction, must not be exceeded in any circumstances and that it applies to the intermediate calculations of the fine as well.
88. Third, SGL also claims a violation of equal treatment because the Commission reduced the amount in excess of the 10% limit of the turnover before applying the Leniency Notice in UCAR’s case. In that regard, SGL refers to the point, also made by the Court of First Instance in paragraph 232 of the judgment under appeal, that the Commission must apply its own method in a manner which is correct, coherent and, in particular, non-discriminatory. Thus, the Commission was wrong to state that it was only in UCAR’s case that the basic amount fixed before application of the Leniency Notice exceeded the maximum permitted limit.
89. Finally, SGL submits that the Court of First Instance erred in law by denying that there had been a violation of the obligation to state reasons. Contrary to the view expressed by the Court of First Instance, SGL maintains that the Commission should have stated in the decision the reasons why it applied a reduction before leniency to UCAR and did not do so in SGL’s case. It claims that the Commission’s approach placed SGL at a disadvantage because its situation was similar. Therefore, the Commission violated Article 253 EC.
90. The Commission remarks that the Court of First Instance already, correctly, rejected these arguments in paragraphs 366 to 368 of the judgment under appeal. It submits that neither the fine imposed by the Commission, nor the reduced fine by the Court of First Instance, exceeds the 10% threshold of Article 15(2) of Regulation No 17.
Assessment
91. So far as the alleged misinterpretation by the Court of First Instance is concerned, I would make the following observations. The Commission’s approach in setting the fines has already been explained. As the Court of First Instance correctly said, the division into three groups was based on turnover figures for 1998, the year in which the infringement came to an end, and market shares in previous years. Therefore, it cannot be said that the Court of First Instance did not address this point. Furthermore, as the Commission has also pointed out, there is a distinction between the calculation of the fine, on the one hand, and ensuring on completion of the calculation that the fine does not exceed the 10% ceiling laid down in Regulation No 17, on the other. The reference year for that calculation need not be the same. As already explained, the calculation of the fine is based on figures for 1998. In order to ascertain whether the upper ceiling was reached, the Commission took account of the 2000 turnover figures, which was the correct reference point pursuant to Article 15(2) of Regulation No 17. Thus, there is no inconsistency with the Cement
judgment either.
92. The Court of First Instance dismissed the claim that the procedure was excessively long. SGL does not adduce any convincing new argument as to how the Court of First Instance erred in that regard.
93. So far as the arguments concerning the violation of the principle nulla poena sine lege
are concerned, I refer to the recent judgment on appeal in the Pre‑insulated pipes
case. (30) That judgment makes clear that Article 15(2) of Regulation No 17 does not prohibit the Commission from referring, for the purpose of its calculation, to an intermediate amount in excess of that limit, nor does it preclude intermediate calculations that take account of the gravity and duration of the infringement from being applied to an amount above that limit. (31) Thus, it is only the amount ultimately imposed on an undertaking that cannot exceed the 10% limit.
94. There is no violation of the non‑discrimination rule either. The Court of First Instance simply found that, on the basis of turnover figures of SGL and those of UCAR, SGL’s position was not similar.
95. The fact that the Commission did not explain in the decision itself that it reduced the amount of UCAR’s fine before applying the Leniency Notice does not affect SGL.
E – Fifth plea
96. By this plea, SGL criticises the fact that insufficient attention was paid to the significance of certain documents to which it was not given access. Further to its submission at first instance, SGL contends that new incriminating documents, of which it was unaware and on which it had not previously had an opportunity to comment, were even used for the first time in the decision by the Court of First Instance.
97. SGL claims that the findings of the Court of First Instance are contradictory. First, it held that the documents relating to cooperation by the undertakings did not form part of the internal file but were in the Commission’s investigation file to w hich the undertakings had access. (32) Subsequently, however, it appeared that the internal file contained information provided by UCAR and relating to cooperation by undertakings, which had evidential value, or which at any event the Court of First Instance used as evidence, and which could have been useful for its defence. (33)
98. It was only during the proceedings before the Court of First Instance that SGL became aware that UCAR had informed the Commission that the European Anti‑Fraud Office had intervened with regard to the official alleged to be responsible for leaking information and that criminal proceedings against the official concerned had been commenced in Italy. (34) SGL assumes that that information too formed part of the Commission’s internal file and constitutes elements which would have been useful for its defence.
99. Those documents too, according to SGL, cannot be classified as internal, and thus non‑accessible, documents. That follows from the Commission Notice on the internal rules of procedures for processing requests for access to the file. (35) SGL also infers from that Notice, and from the case‑law, (36) that evidential documents must be made accessible, in good time. Thus, contrary to the view expressed by the Court of First Instance, (37) there was no need to request a list or a non‑confidential 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) .
(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 Midland Ingredients
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 in Idem
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.