62009CJ0520_EN
Parties
Grounds
Operative part
Parties
In Case C‑520/09 P,
APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 14 December 2009,
Arkema SA,
established in Colombes (France), represented by M. Debroux, avocat,
appellant,
the other party to the proceedings being:
European Commission,
represented by A. Bouquet and F. Castillo de la Torre, acting as Agents, with an address for service in Luxembourg,
defendant at first instance,
THE COURT (Second Chamber),
composed of J.N. Cunha Rodrigues, President of the Chamber, A. Arabadjiev, A. Rosas, A. Ó Caoimh (Rapporteur) and P. Lindh, Judges,
Advocate General: P. Mengozzi,
Registrar: B. Fülöp, Administrator,
having regard to the written procedure and further to the hearing on 25 November 2010,
after hearing the Opinion of the Advocate General at the sitting on 17 February 2011,
gives the following
Judgment
Grounds
1. By its appeal, Arkema SA (formerly Elf Atochem SA, subsequently Atofina SA; ‘Arkema’) asks the Court to set aside the judgment of the Court of First Instance of the European Communities (now ‘the General Court’) of 30 September 2009 in Case T‑168/05 Arkema
v Commission (‘the judgment under appeal’), by which it dismissed Arkema’s application for annulment in part of Commission Decision C(2004) 4876 final of 19 January 2005 relating to a proceeding under Article 81 [EC] and Article 53 of the EEA Agreement (Case COMP/E-1/37.773 – MCAA) (‘the contested decision’) and, in the alternative, reduction of the amount of the fine imposed on it.
Background to the dispute and the contested decision
2. The facts giving rise to the dispute and the contested decision, as set out in paragraphs 2 to 31 of the judgment under appeal, may be summarised for the purpose of this appeal as follows.
3. By the contested decision, the European Commission found that the appellant and its parent company, Elf Aquitaine SA (‘Elf Aquitaine’), among others, had infringed Article 81 EC and Article 53 of the Agreement on the European Economic Area of 2 May 1992 (OJ 1992 L 1, p. 3) because the appellant had belonged to an unlawful cartel in the market for monochloroacetic acid (‘MCAA’).
4. The Commission imputed to Elf Aquitaine and to the appellant liability for the infringement from 1 January 1984 to 7 May 1999. Rejecting Elf Aquitaine’s arguments to the contrary, the Commission took the view that the fact that that company held 98% of the shares in Atofina SA was sufficient for the actions of its subsidiary to be imputed to it. It also considered that the fact that Elf Aquitaine had not participated in the production and sale of MCAA did not preclude it from being regarded as forming an economic unit with the operational units of the group.
5. The Commission set the amount of the fines on the basis of its Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) [ECSC] (OJ 1998 C 9, p. 3) (‘the 1998 Guidelines’) and the Commission notice on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4) (‘the Leniency Notice’).
6. Noting that Elf Atochem SA had already been an addressee of Commission Decision 94/599/EC of 27 July 1994 relating to a proceeding pursuant to Article [101 TFEU] (OJ 1994 L 239, p. 14), the Commission held that an increase for repeated infringement should be imposed solely on the appellant and not on Elf Aquitaine, since the latter did not control the appellant at the time of the first infringement.
7. Accordingly, in addition to the fine of EUR 45 million already imposed jointly and severally on Elf Aquitaine and the appellant, it imposed a separate fine of EUR 13.5 million on the appellant alone to take account of its repeated infringement.
Proceedings before the General Court and the judgment under appeal
8. As is apparent from paragraph 38 of the judgment under appeal, in its action before the General Court the appellant, in essence, claimed that that Court should annul the operative part of the contested decision in so far as it applied to Elf Aquitaine and, in the alternative, reduce the amount of the fines imposed on Elf Aquitaine and on itself.
9. It is apparent from paragraphs 40 to 42 of the judgment under appeal that the appellant put forward eight main pleas in support of its action before the General Court. The appellant raised, inter alia, a first plea, alleging failure to observe the rules on the imputability to the parent company of the practices of its subsidiary and discrimination against the Elf Aquitaine group, a second plea, alleging infringement of the principle of a subsidiary’s legal and commercial independence, and a fifth plea, alleging defective reasoning. The appellant also raised a ninth plea in the alternative, alleging infringement of the principle of proportionality in the determination of the multiplier for the purpose of deterrence, in that the Commission took Arkema’s turnover into account twice.
10. In the judgment under appeal, the General Court rejected all the pleas and ordered the appellant to pay the costs.
11. In the first plea before the General Court, the appellant, in essence, challenged inter alia the imputation of liability for its infringement to Elf Aquitaine, its parent company at the time of the infringement, claiming that it had not followed a policy laid down by Elf Aquitaine.
12. In that regard, in paragraph 67 of the judgment under appeal, the General Court held as follows:
‘In the specific case of a parent company holding 100% of the share capital of a subsidiary which has committed an infringement, there is a rebuttable presumption that the parent company exercises decisive influence over the conduct of its subsidiary … and that they therefore constitute a single undertaking for the purposes of Article 81 EC … It is thus for a parent company which disputes before the Community judicature a Commission decision fining it for the conduct of its subsidiary to overturn that presumption by adducing evidence to establish that its subsidiary was independent … If the presumption is not rebutted, the Commission will then be able to hold the parent company jointly and severally liable for payment of the fine imposed on the subsidiary.’
13. In paragraph 71 of the judgment under appeal, the General Court held that, in so far as virtually all the appellant’s share capital was held by Elf Aquitaine at the time of the infringement, the Commission was entitled to presume that the appellant was not independent of its parent company and that it was for the latter to adduce evidence establishing that its subsidiary independently determined its conduct on the market.
14. As regards the body of information and evidence adduced by the appellant in order to establish its independence, the General Court found first of all, in paragraph 73 of the judgment under appeal, that the Commission set out, in recital 257 of the contested decision, the arguments put forward by Elf Aquitaine in its reply to the statement of objections. It also observed, in paragraph 74 of the judgment under appeal, that ‘the applicant’s arguments intended to establish its independence were also put forward by its parent company, in its reply to the statement of objections, in order to prove that the latter did not exercise decisive influence over the commercial policy of its subsidiary’.
15. The General Court held in that regard, in paragraph 75 of the judgment under appeal, that, in dismissing the arguments put forward by the parent company, the Commission gave an overall response to both companies and, in accordance with case-law, examined whether the parent company had, for the purposes of rebutting the presumption, adduced evidence establishing that its subsidiary independently determined its conduct on the market.
16. In paragraphs 76 to 80 of the judgment under appeal, the General Court continued its reasoning as follows:
‘76 With regard to the merits of the evidence adduced by the applicant to establish its independence, the claim that Elf Aquitaine is merely a non-operational holding company that rarely intervenes in the management of its subsidiaries is not sufficient to rule out the possibility that it exercises decisive influence over the applicant’s conduct by coordinating, inter alia, financial investments within the Elf Aquitaine group. In the context of a group of companies, a holding company that coordinates, inter alia, financial investments within the group is in a position to regroup shareholdings in various companies and has the function of ensuring that they are run as one, including by means of such budgetary control.
77 In that regard, it must be observed that it is not because of a parent-subsidiary relationship in which the parent company instigates the infringement nor, a fortiori, because of the parent company’s involvement in the infringement, but because they constitute a single undertaking … that the Commission is able to address the decision imposing fines to the parent company of a group of companies.
78 As for the fact that the applicant has never implemented a specific policy of reporting to Elf Aquitaine on the MCAA market, the absence of such reporting, even if established, would be insufficient to establish that the appellant was independent of its parent company.
79 The same applies as regards the argument that MCAA activity within the Elf Aquitaine group was minor, since it is not capable of proving the latter’s independence from its parent company.
80 Nor can any conclusion be drawn from the fact that the two companies operated on separate markets and had no links in terms of customer-supplier relationships. As the Commission correctly stated in recital 261 of the [contested decision], within a group such as Elf Aquitaine, division of tasks is a normal phenomenon which does not rebut the presumption that Elf Aquitaine and Atofina [SA] constitute a single undertaking for the purposes of Article 81 EC.’
17. In paragraph 82 of the judgment under appeal, the General Court responded to the appellant’s argument that it is impossible to adduce direct and irrefutable evidence of the independence of its conduct on the market and that such a requirement of proof should therefore be described as ‘probatio diabolica’. Paragraph 82 reads as follows:
‘... the parties concerned are not required to adduce direct and irrefutable evidence of the independence of the subsidiary’s conduct on the market but only to submit evidence capable of demonstrating that independence ... Moreover, the fact that in the present case the applicant did not submit evidence to rebut the presumption of the absence of independence does not mean that that presumption cannot under any circumstances be rebutted. The applicant’s argument is therefore unfounded.’
18. In rejecting the first part of the first plea before it, the General Court found, in paragraph 85 of the judgment under appeal, that ‘the Commission was entitled to find that Elf Aquitaine and Arkema constituted a single undertaking for the purposes of Article 81 EC and that they could therefore be held jointly and severally liable for the conduct in respect of which they were criticised, as the acts committed by Arkema were imputable to Elf Aquitaine and therefore deemed to have been committed by it’.
19. In rejecting the second plea, alleging infringement of the principle of a subsidiary’s legal and commercial independence resulting from the presumption of the exercise of decisive influence by the parent company over its subsidiary, the General Court held inter alia, in paragraph 100 of the judgment under appeal, that,
‘although ownership of all (or virtually all) of the share capital justifies the presumption that a parent company exercises decisive influence over the conduct of its subsidiary and, as a consequence, that they form part of the same undertaking, the presumption that the subsidiary is not independent is rebuttable by the party concerned, which must adduce adequate evidence ... That presumption, as applied in the present case, by no means casts doubt on the commercial independence of the subsidiary’.
20. In its rejection of the fifth plea, alleging that the contested decision contained deficient reasoning, the General Court found, in paragraph 126 of the judgment under appeal, that the Commission had responded to the main points of the arguments put forward by Elf Aquitaine. In paragraph 127 of that judgment, the General Court held as follows:
‘... the Commission was not required to reply to all the applicant’s objections. First, since the Commission’s response to the main points of Elf Aquitaine’s arguments ... would not differ according to whether the parent company or its subsidiary was concerned, the Commission was not required to respond separately to the arguments put forward by the applicant (see paragraph 75 above). …’
21. In paragraph 205 of the judgment under appeal, in its rejection of the ninth plea, the General Court held as follows:
‘The argument that the Commission took Arkema’s turnover into account twice in order to increase the fines for the purpose of deterrence must be rejected. It should be pointed out that the amount of the fine [EUR 13.5 million] imposed on Arkema under Article 2(d) of the [contested decision] corresponds only to the increase for repeated infringement applied to the hypothetical basic amount, less the 40% reduction granted by the Commission for cooperation. In order to do this, the Commission had no option, if it was not willing to depart from the method of calculation set out in the [1998 Guidelines], but to calculate another hypothetical basic amount as if [Arkema] alone had been held responsible for the infringement.’
Forms of order sought and procedure before the Court of Justice
22. The appellant claims that the Court should set aside the judgment under appeal and order the Commission to pay the costs.
23. The Commission contends that the Court should dismiss the appeal and order the appellant to pay the costs.
The appeal
The first ground of appeal: failure by the General Court to observe the rules on the imputability to the parent company of the anti-competitive practices of its subsidiary
Arguments of the parties
24. According to the appellant, the General Court contradicted itself in stating, on the one hand, in paragraph 67 of the judgment under appeal, that there is a ‘rebuttable’ presumption that the parent company exercises decisive influence over its subsidiary, which may be overturned if the parent company and/or the subsidiary adduce evidence to establish the independence of the subsidiary’s conduct, whilst stating, on the other hand, in paragraph 76 of the judgment under appeal, that a holding company has the function of ensuring that subsidiaries within a group of companies are run as one.
25. Consequently, according to Arkema, the presumption that a parent company exercises decisive influence is in reality irrebuttable. The General Court, by requiring the appellant to adduce evidence which the Court itself states is a legal impossibility, imposed on the appellant a ‘probatio diabolica’.
26. Moreover, Arkema claims that, by requiring it to adduce such evidence, the General Court infringed the appellant’s right to a fair hearing, which is guaranteed under Article 6(1) of the European Convention on Human Rights and Fundamental Freedoms, signed at Rome on 4 November 1950.
27. The Commission considers that that ground of appeal is inadmissible since it does not challenge the findings made by the General Court in paragraphs 78 to 80 and 82 of the judgment under appeal.
28. Furthermore, as regards Arkema’s arguments alleging infringement of the right to a fair hearing, the appellant fails to explain the nature of the alleged infringement.
29. In any event, it is clear from the wording of the judgment under appeal that the presumption that a parent company exercises decisive influence over its subsidiary is not irrebuttable. According to the Commission, in reality the appellant would like to be able to rebut that presumption by merely stating that its parent company, Elf Aquitaine, was a ‘non-operational holding company’. In the view of the Commission, if the mere fact of having a ‘non-operational holding company’ at the head of a group is sufficient to rebut the presumption, the latter becomes ineffective. Moreover, the fact that a presumption is rebuttable does not mean that it should be easy to rebut it.
Findings of the Court
30. As regards the objection, set out in paragraph 27 above, that the present ground of appeal is inadmissible, in fact the Commission’s contention is that this ground is ineffective.
31. The issue of whether a ground of appeal is ineffective concerns its ability successfully to found an appeal and does not affect its admissibility (see, to that effect, Case C‑76/01 P Eurocoton and Others
v Council
[2003] ECR I‑10091, paragraph 52, and Case C‑203/07 P Greece
v Commission
[2008] ECR I‑8161, paragraphs 42 and 43). Accordingly, the objection of inadmissibility set out in paragraph 27 above must be rejected.
32. The Commission contends that the first ground of appeal must be rejected in so far as it does not expressly challenge paragraphs 78 to 80 and 82 of the judgment under appeal, which concern imputability to a parent company of practices of its subsidiary and which, according to the Commission, are in themselves sufficient to support the findings of the judgment under appeal.
33. That argument cannot be accepted.
34. It is apparent from the pleadings that Arkema’s argument is in essence that the General Court contradicted itself, in particular in paragraph 76 of the judgment under appeal, by stating that the principle of a rebuttable presumption that a parent company owning virtually all of the share capital of a subsidiary exercises decisive influence over the conduct of that subsidiary, whilst irrevocably preventing Arkema from demonstrating otherwise. If such a line of argument were to be accepted, the operative part of the judgment under appeal, and also the findings in paragraphs 78 to 80 and 82, would be tainted by the error of law alleged by Arkema.
35. Furthermore, it can be seen from a footnote in the application lodged by Arkema that the latter expressly called into question paragraph 82 of the judgment under appeal.
36. The first ground of appeal cannot therefore be rejected as being ineffective.
37. Next, it should be noted that the concept of an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed. The Court has stated that in this context the term ‘undertaking’ must be understood as designating an economic unit even if in law that economic unit consists of several natural or legal persons, and that when such an economic entity infringes the competition rules, it is for that entity, according to the principle of personal responsibility, to answer for that infringement (Case C‑90/09 P General Química and Others
v Commission
[2011] ECR I‑0000, paragraphs 34 and 35 and the case-law cited, and Joined Cases
C‑201/09 P and C‑216/09 P ArcelorMittal Luxembourg
v Commission and Commission
v ArcelorMittal Luxembourg and Others [2011] ECR I‑0000, paragraph 95).
38. It is clear from settled case-law that the conduct of a subsidiary may be imputed to the parent company in particular where, although having a separate legal personality, that subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links between those two legal entities (see Case C‑97/08 P Akzo Nobel and Others
v Commission
[2009] ECR I‑8237, paragraph 58, and General Química and Others
v Commission, paragraph 37).
39. In such a situation, since the parent company and its subsidiary form a single economic unit and therefore form a single undertaking for the purposes of Article 81 EC, the Commission may address a decision imposing fines on the parent company, without having to establish the personal involvement of the latter in the infringement (see, Akzo Nobel and Others
v Commission, paragraph 59, and General Química and Others
v Commission, point 38).
40. In that regard, the Court has stated that, in the specific case where a parent company has a 100% shareholding in a subsidiary which has infringed the competition rules of the European Union, first, the parent company can exercise a decisive influence on the conduct of the subsidiary and, second, there is a rebuttable presumption that the parent company does in fact exercise such a decisive influence (see, inter alia, Case 107/82 AEG-Telefunken
v Commission
[1983] ECR 3151, paragraph 50; Akzo Nobel and Others
v Commission, paragraph 60;
General Química and Others
v Commission, paragraph 39; and ArcelorMittal Luxembourg
v Commission and Commission v ArcelorMittal Luxembourg and Others, paragraph 97).
41. In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to presume that the parent company exercises a decisive influence over the commercial policy of the subsidiary. The Commission will then be able to regard the parent company as jointly and severally liable for the payment of the fine imposed on its subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to show that its subsidiary acts independently on the market (see Case C‑286/98 P Stora Kopparbergs Bergslags
v Commission
[2000] ECR I‑9925, paragraph 29; Akzo Nobel and Others
v Commission, paragraph 61; General Química and Others
v Commission, paragraph 40; and ArcelorMittal Luxembourg
v Commission and Commission v ArcelorMittal Luxembourg and Others, paragraph 98).
42. In the present case, Arkema does not dispute the lawfulness of the presumption of the actual exercise of decisive influence described in paragraphs 40 and 41 above. Nor does it dispute the applicability of such a presumption in the present circumstances where a parent company holds 98% of the share capital of its subsidiary.
43. Arkema does, however, maintain that the reasoning of the judgment under appeal misconstrues the case-law set out in paragraphs 38 to 41 above in that it renders irrebuttable the presumption that the parent company exercises decisive influence over its subsidiary.
44. In that context, Arkema considers in essence that, by stating in the second sentence of paragraph 76 of the judgment under appeal that a holding company ‘has the function’ of ensuring that subsidies ‘are run as one’, the General Court made the presumption that the parent company exercises decisive influence over the conduct of its subsidiary irrebuttable in law, since any attempt to demonstrate the independence of the subsidiary’s conduct on the market would run counter to the very function which the Court finds holding companies to have, and would therefore be bound to fail.
45. It is true that paragraph 76 is worded in a way that is difficult to reconcile with the case-law set out in paragraphs 38 to 41 above.
46. However, the appellant’s argument set out in paragraphs 43 and 44 above results from a misreading of the judgment under appeal as a whole.
47. According to the wording of the first sentence of paragraph 76, that paragraph concerns the ‘merits of the evidence adduced by the applicant to establish its independence’ from the parent company, in particular, ‘the claim that Elf Aquitaine is merely a non-operational holding company that rarely intervenes in the management of its subsidiaries’. The documents in the file submitted to the General Court show, moreover, that Arkema claimed inter alia in that regard that it enjoyed ‘independence in financial matters, the control exercised by Elf Aquitaine being limited to investment or divestment operations by Arkema having an impact on its long-term financing operations’, which would never have concerned MCAA activity.
48. In the passage in paragraph 76 at issue, the General Court merely states that the possibility cannot be ruled out that a ‘non-operational holding company’, despite the fact that it does not act directly in the market, may exercise decisive influence over the commercial policy of its subsidiaries, in view in particular of its function of coordination and financial management, and that therefore the exercise of such influence may be presumed actually to take place where all or virtually all the share capital of the subsidiary are held by the
parent company. That is why, to follow the General Court’s reasoning, it is not sufficient to claim that the parent company is non-operational in order to rebut the presumption that it actually exercises decisive influence over the commercial policy of subsidiaries, which remains a rebuttable presumption.
49. In that regard, it is apparent from a number of paragraphs of the judgment under appeal, including paragraphs 67 and 82, that the General Court considered that the presumption in question is capable of being overturned.
50. It is clear from the above considerations that the ground of appeal alleging failure to observe the rules on the imputability to the parent company of the practices of its subsidiary in that the General Court applied an irrebuttable version of the presumption based on ownership by the parent company of the total share capital of its subsidiary is unfounded, since it is based on a misreading of the judgment under appeal.
51. In those circumstances, the argument alleging infringement of the right to a fair hearing deriving from Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms cannot be accepted since it is based on an incorrect premise.
52. The first ground of appeal must therefore be rejected.
The second ground of appeal: infringement of the principle of non-discrimination
Arguments of the parties
53. According to the appellant, the assertion by the General Court that the presumption that the parent company exercises decisive influence over the subsidiary is rebuttable also amounts to an infringement of the principle of non-discrimination as between the members of a cartel, according to whether or not they belong to a group of companies.
54. The Commission contends that the second ground of appeal is difficult to understand and that it does not relate to any aspect of the judgment under appeal. It should therefore be rejected as inadmissible.
Findings of the Court
55. Since it stems from the same misreading of the judgment under appeal as the first ground of appeal is based on, the second ground of appeal must also be rejected.
The third ground of appeal: infringement of the principle of equal treatment and the right of the appellant to a fair hearing
Arguments of the parties
56. The appellant claims that, in response to the fifth plea raised before the General Court, the latter examined only the arguments put to it by Elf Aquitaine and not those put to it by the appellant, ‘thus infringing the principle of equal treatment and the right to a fair hearing’.
57. The Commission questions first of all the clarity of the arguments put forward by the appellant in support of this ground of appeal. Furthermore, according to the Commission, the appellant did not complain at first instance that the contested decision mainly responded to the arguments raised by Elf Aquitaine. It contends that the third ground of appeal therefore constitutes a new plea, which is inadmissible at the appeal stage.
58. As to the substance, the Commission contends that the fact that the General Court examined the reasoning for the contested decision only in the light of Elf Aquitaine’s arguments did not adversely affect the appellant. Since Arkema’s arguments would be rejected in any event, the present ground of appeal is ineffective.
Findings of the Court
59. It is settled case-law that it follows from Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice and indent (c) of the first subparagraph of Article 112(1) of its Rules of Procedure that an appeal must indicate precisely the contested elements of the judgment which the appellant seeks to have set aside and also the legal arguments specifically advanced in support of the appeal (see, inter alia, Case C‑407/08 P Knauf Gips
v Commission [2010] ECR I‑0000, paragraph 43 and case-law cited).
60. In the present case, the appeal does allow the contested element of the judgment under appeal to be identified, namely paragraphs 121 to 129 of that judgment.
61. However, the argument supporting the present ground of appeal is not sufficiently clear and precise to enable the Court to exercise its judicial review. The essential points on which the present ground of appeal is based are not indicated sufficiently coherently and intelligibly in the text of the present appeal, which is worded in a vague and ambiguous manner in that regard. In those circumstances, the Court is not in a position to exercise its judicial review without running the risk of ruling ultra petita (see, inter alia, by analogy, Case C‑194/99 P Thyssen Stahl
v Commission
[2003] ECR I‑10821, paragraph 106; Case C‑227/04 P Lindorfer
v Council
[2007] ECR I‑6767, paragraph 83; Case C‑343/08 Commission
v Czech Republic
[2010] ECR I‑275, paragraph 26; and Case C‑67/09 P Nuova Agricast and Cofra
v Commission [2010] ECR I‑0000, paragraphs 48 and 49).
62. Even assuming that the present ground of appeal must be construed as claiming that the General Court omitted to condemn the Commission’s alleged failure to take into account the evidence submitted by the appellant, it must be held that such a claim constitutes a new plea capable of changing the subject-matter of the dispute before the General Court.
63. As is apparent from the file in the case before the General Court, by its action at first instance, the appellant did not argue that the contested decision mainly responded to the arguments put forward by Elf Aquitaine.
64. According to Article 113(2) of the Rules of Procedure of the Court of Justice, the subject-matter of the proceedings before the General Court may not be changed in the appeal. Thus, the Court’s jurisdiction in an appeal is confined to a review of the findings of law on the pleas argued before the General Court. A party may not, therefore, change the subject-matter of the dispute by putting forward for the first time before the Court of Justice a plea in law which it could have raised before the General Court but has not raised, since to do so would be to allow it to bring before the Court of Justice, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the General Court (see, to that effect, inter alia, Case C‑136/92 P Commission
v Brazzelli Lualdi and Others
[1994] ECR I‑1981, paragraph 59; Case C‑266/97 P VBA
v VGB and Others
[2000] ECR I‑2135, paragraph 79; and Case C‑280/08 P Deutsche Telekom
v Commission
[2010] ECR I‑0000, paragraph 34). Such a plea in law must therefore be regarded as inadmissible at the appeal stage.
65. In those circumstances, the third ground of appeal must be rejected.
The fourth ground of appeal: infringement of the principle of proportionality
Arguments of the parties
66. According to the appellant, the General Court infringed the principle of proportionality in upholding the calculation method used by the Commission to determine the component of the financial penalty in respect of Arkema’s repeated infringement. That method involved taking Arkema’s turnover into account twice in the calculation of the respective bases to which the multipliers for Elf Aquitaine and Arkema were applied for the purpose of deterrence. The General Court did not deny the existence of such double counting but justified it on the ground that the Commission was required to follow the calculation method laid down in the 1998 Guidelines, thereby conferring on the latter ‘an absolute binding force’ which they do not have.
67. According to the Commission, the fourth ground of appeal is based on a misunderstanding of the contested decision.
Findings of the Court
68. This ground of appeal is based in essence on the complaint that the General Court failed to censure an illicit ‘double counting’ of Arkema’s turnover in the contested decision.
69. However, that complaint is based on a misreading both of the contested decision and of the judgment under appeal.
70. As is apparent from paragraph 6 above, in the contested decision the Commission held, in essence, that the appellant alone should be penalised for repeated infringement and not its parent company, Elf Aquitaine, since the latter did not control the appellant at the time of the first infringement. The Commission therefore imposed, in addition to the fine of EUR 45 million jointly and severally imposed on Elf Aquitaine and on the appellant, a separate fine of EUR 13.5 million on the appellant alone in order to take into account its repeated infringement.
71. As is apparent in particular from paragraph 204 of the judgment under appeal, in setting the amount of the latter fine, the Commission followed a method based on that set out in the 1998 Guidelines.
72. According to that method, the components of a fine relating to aggravating circumstances such as repeated infringement are calculated according to a ‘basic amount’ which is in turn calculated on the basis of a ‘starting amount’ that is increased by a multiplier related to the
duration of the infringement.
73. That starting amount is set essentially by reference to the gravity of the infringement and to the real impact on competition of the offending conduct of the entity concerned. Where appropriate that amount may be adjusted, in the light of the economic capacity of the entity concerned, to ensure that the fine has a sufficient deterrent effect.
74. It can be seen, in substance, from paragraph 199 of the judgment under appeal, that, in calculating the amount of the fine imposed solely on the appellant, the Commission was careful to avoid taking into account, in order to adjust the starting amount forming the basis of that fine for the purpose of deterrence, a multiplier which did not reflect the appellant’s actual economic capacity assessed independently from its parent company, Elf Aquitaine.
75. Thus, footnote 222 to the contested decision, reproduced in paragraph 199 of the judgment under appeal, reads:
‘... The multiplying factor applied to Elf [Aquitaine], namely 2.5 is not included in the calculation. Instead a multiplying factor of 1.5, which would have been applied had [Arkema] been the sole addressee of the [contested decision] (given its worldwide turnover of EUR 17.8 thousand million), will be used for the purposes of calculating recidivism.’
76. In other words, in setting the starting amount for calculating the fine to be imposed solely on Arkema, the Commission used a hypothetical multiplier of 1.5 – which was different from the multiplier of 2.5 used in calculating the fine imposed jointly and severally on Elf Aquitaine and on Arkema – in order to take into account the lesser economic capacity of the latter entity considered on its own, independently of its parent company.
77. Also, as is apparent in essence from paragraphs 9, 16 to 21 and 203 of the judgment under appeal, the Commission applied that hypothetical multiplier of 1.5, referred to in paragraph 203 of that judgment as a ‘multiplier for deterrence’ to a starting amount – also hypothetical in the context of calculation of the fine imposed solely on Arkema – of EUR 12 million, which was set by reference to the gravity of the infringement in question and to Arkema’s relative weight compared to the other participants in the infringement in question. The product of those two figures (EUR 18 million) was then increased by 150%, to reflect the duration of the infringement, which in the appellant’s case, was regarded as being from 1 January 1984 to 7 May 1999.
78. The ‘basic amount’ resulting from the operations described in the preceding paragraph, namely EUR 45 million, is, as the General Court noted in paragraph 203 of the judgment under appeal, hypothetical. It is used merely to calculate the amount of the fine to be imposed solely on Arkema for repeated infringement.
79. Further, as the Commission correctly points out, it is mere coincidence that that hypothetical basic amount is the same as the final amount of the separate fine that was imposed jointly and severally on the appellant and on Elf Aquitaine.
80. It is only from that hypothetical basic amount that the Commission was able to calculate the amount payable by reason of repeated infringement solely on the part of the appellant, considered independently of its parent company.
81. As the General Court observed in paragraph 201 of the judgment under appeal, according to points 2 and 3 of the 1998 Guidelines, the Commission, having determined the basic amount of the fine taking into account the gravity and duration of the infringement, subsequently increases or decreases that amount, as appropriate, according to aggravating or attenuating circumstances.
82. In the present case, as the General Court found, in essence, in paragraph 203 of the judgment under appeal, the Commission in effect applied a coefficient of 50% to that hypothetical basic amount of EUR 45 million, in order to take account of the appellant’s repeated infringement.
83. That operation gave a figure attributable to the repeated infringement by the appellant considered on its own, independently of Elf Aquitaine, of EUR 22.5 million.
84. As is apparent from paragraphs 26 to 28 of the judgment under appeal, the Commission, considering that the appellant was entitled to receive a significant reduction in the amount of its fine, under the first and second indents of point D 2 of the Leniency Notice, granted it a reduction of 40% of the amount of the fine that would have been imposed if it had not cooperated with the Commission’s services.
85. On the basis of an amount of EUR 22.5 million, the amount of the fine which was finally imposed on Arkema, under Article 2(d) of the contested decision, was EUR 13.5 million.
86. In those circumstances, in so far as Arkema’s turnover was taken into account, first, for the purpose of calculating the basic amount for the fine imposed jointly and severally on Elf Aquitaine and on the appellant and, secondly, in order to calculate the amount of the fine imposed solely on the applicant on account of its repeated infringement, the Commission did not, contrary to the claims of the appellant, engage in disproportionate ‘double counting’ which should have been censured by the General Court.
87. The appellant moreover claims that, in paragraph 205 of the judgment under appeal, the General Court erred in law in interpreting the 1998 Guidelines as having absolute binding force.
88. It is apparent from the case-law, as Arkema points out, that the 1998 Guidelines merely constitute rules of practice from which the administration may not depart in an individual case without giving reasons that are compatible with the principle of equal treatment (see, to that effect, 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 and Others
v Commission
[2005] ECR I‑5425, paragraphs 209 and 210).
89. However, contrary to the appellant’s claims, in paragraph 205 of the judgment under appeal the General Court by no means unlawfully attributed ‘absolute binding force’ to those guidelines.
90. In reality, such a criticism is based on a selective – even incorrect – reading of paragraph 205.
91. It is clear from the wording of paragraph 205, set out in paragraph 21 above, that the General Court merely held, in essence, that ‘if it was not willing to depart from the method of calculation set out in the [1998 Guidelines]’, the Commission was required to follow the methodology set out above, calculating another ‘hypothetical basic amount’.
92. The General Court thus in no way ruled out the possibility that the Commission, in compliance with European Union law and giving adequate reasons for so doing, may, where appropriate, use another methodology for calculating fines in the area of European Union competition law.
93. Moreover, in paragraph 207 of the judgment under appeal, the General Court held that although the Commission is not required to apply a precise mathematical formula and has a margin of discretion when determining the amount of each fine, it was entitled to take into consideration the difference in economic capacity in applying a multiplier of 1.5 for Arkema and 2.5 for the Elf Aquitaine group as a whole, without infringing the principle of proportionality.
94. As regards the choice of the multipliers 1.5 and 2.5, the appellant does not dispute the way in which they were determined, nor their level; it merely argues, in essence, that applying them led to an illicit double counting of its turnover.
95. The fourth ground of appeal must therefore be rejected as unfounded.
96. In the light of all the above considerations, the appeal must be dismissed in its entirety.
Costs
97. Under Article 69(2) of the Rules of Procedure, which applies to appeal proceedings by virtue of Article 118 thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and Arkema has been unsuccessful, the latter must be ordered to pay the costs.
Operative part
On those grounds, the Court (Second Chamber) hereby:
1. Dismisses the appeal;
2. Orders Arkema SA to pay the costs.