62003TJ0013_EN
Parties
Grounds
Operative part
Parties
In Case T‑13/03,
Nintendo Co., Ltd,
established in Kyoto (Japan),
Nintendo of Europe GmbH,
established in Grossostheim (Germany),
represented by I. Forrester QC, J. Pheasant, M. Powell, C. Kennedy-Loest, Solicitors, and J. Killick, Barrister,
applicants,
v
Commission of the European Communities,
represented initially by O. Beynet and A. Whelan, and subsequently by X. Lewis and O. Beynet, acting as Agents,
defendant,
APPLICATION for cancellation or reduction of the amount of the fine imposed on the applicants by Article 3, first indent, of Commission Decision 2003/675/EC of 30 October 2002 relating to a proceeding pursuant to Article 81 [EC] and Article 53 of the EEA Agreement (COMP/35.587 PO Video Games, COMP/35.706 PO Nintendo Distribution and COMP/36.321 Omega – Nintendo) (OJ 2003 L 255, p. 33),
THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Eighth Chamber),
composed of M.E. Martins Ribeiro, President, S. Papasavvas and N. Wahl (Rapporteur), Judges,
Registrar: C. Kantza, Administrator,
having regard to the written procedure and further to the hearing on 19 May 2008,
gives the following
Judgment
Grounds
Background to the dispute
1. The undertakings involved
1. The first applicant, Nintendo Co., Ltd (‘NCL’ or ‘Nintendo’), a publicly quoted company whose registered office is in Kyoto (Japan), is the head of the Nintendo group of companies, which specialise in the production and distribution of video game consoles and game cartridges for use with those consoles.
2. Nintendo’s business in the European Economic Area (EEA) is conducted, in certain territories, by wholly owned subsidiaries, of which the main one is Nintendo of Europe GmbH (‘NOE’ or ‘Nintendo’), the second applicant. At the material time, NOE coordinated certain business activities of Nintendo in Europe and was its exclusive distributor for Germany.
3. In other sales territories, Nintendo had appointed exclusive independent distributors. Thus, The Games Ltd, a trading division of John Menzies Distribution Ltd, a wholly owned subsidiary of John Menzies plc, became Nintendo’s exclusive distributor for the United Kingdom and Ireland in August 1995 and remained so until 31 December 1997 at least.
2. Administrative procedure
Investigation into the video games sector (Case IV/35.587 PO Video Games)
4. In March 1995, the Commission opened an investigation into the video games industry (Case IV/35.587 PO Video Games). During that inquiry, on 26 June and 19 September 1995 the Commission sent requests for information to Nintendo under Article 11 of Regulation No 17 of the Council of 6 February 1962, First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition 1971 (III), p. 1035) in order to obtain information relating in particular to its distributors and subsidiaries, the formal distribution agreements with those undertakings and its general sales conditions. NOE replied to those requests by letters dated 31 July and 26 September 1995.
Additional investigation relating specifically to Nintendo’s distribution system (Case IV/35.706 PO Nintendo Distribution)
5. As a result of its preliminary findings, in September 1995 the Commission opened an additional investigation specifically into the distribution system of Nintendo (Case IV/35.706 PO Nintendo Distribution).
6. In the course of that investigation, on 9 October 1995 the Commission sent Nintendo a request for information. A number of meetings relating to Nintendo’s distribution policy were held between Nintendo representatives and the Commission. Nintendo also provided various versions of the agreements concluded by it with certain of its distributors.
Inquiry following the complaint lodged by Omega Electro BV (Case IV/36.321 Omega – Nintendo)
7. On 26 November 1996, Omega Electro, a company active in the import and sale of electronic games, lodged a complaint under Article 3(2)(b) of Regulation No 17 that primarily concerned the distribution of Nintendo game cartridges and consoles, on the ground inter alia that Nintendo was hindering parallel trade and was operating a resale price maintenance policy in the Netherlands. Following that complaint, the Commission extended its investigation (Case IV/36.321 Omega – Nintendo). On 7 March 1997, it sent a request for information to Nintendo and John Menzies. In its reply of 16 May 1997, Nintendo admitted that some of its distribution agreements and some of its general terms had contained certain restrictions on parallel trade within the EEA. In October 1997, the Commission sent John Menzies a fresh request for information, to which the latter replied on 1 December 1997, providing certain information on the restrictive agreements.
8. By letter of 23 December 1997, Nintendo indicated to the Commission that it had become aware of ‘a serious issue in relation to parallel trade within the Community’ and expressed the wish to cooperate with the Commission.
9. On 13 January 1998, John Menzies provided further information. On 21 January, 1 April and 15 May 1998, Nintendo forwarded several hundred documents to the Commission. On 15 December 1998, a meeting was held between the Commission and Nintendo representatives at which the question of possibly granting compensation to third parties injured by the restrictive agreements was discussed.
10. Following its admission, Nintendo also took measures designed to ensure future compliance with Community law and offered financial compensation to the third parties which had suffered financial harm as a result of its activities.
11. On 26 April 2000, the Commission sent a statement of objections to Nintendo and the other undertakings concerned, for infringement of Article 81(1) EC and Article 53(1) of the EEA Agreement (‘the EEA Agreement’). Nintendo and the other undertakings concerned submitted written observations in response to the Commission’s statement of objections, in which Nintendo and a number of those undertakings requested the application of the Commission Notice of 18 July 1996 on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4; ‘the Leniency Notice’). None of the parties asked for a formal hearing to be held. Nintendo did not substantially contest the facts set out in the statement of objections.
12. In the case more specifically of the applicants, the reply to the statement of objections was sent to the Commission on 7 July 2000.
3. The contested decision
13. On 30 October 2002, the Commission adopted Decision 2003/675/EC relating to a proceeding pursuant to Article 81 [EC] and Article 53 of the EEA Agreement (COMP/35.587 PO Video Games, COMP/35.706 PO Nintendo Distribution and COMP/36.321 Omega – Nintendo) (OJ 2003 L 255, p. 33) (‘the Decision’). The Decision was notified to NOE and NCL on 8 and 11 November 2002 respectively.
14. The Decision includes in particular the following provisions:
‘Article 1
The following undertakings have infringed Article 81(1) [EC] and Article 53(1) of the EEA Agreement by participating, for the periods indicated, in a complex of agreements and concerted practices in the markets for game consoles and game cartridges compatible with Nintendo manufactured game consoles with the object and effect of restricting parallel exports in Nintendo game consoles and cartridges:
– [NCL and NOE], from January 1991 to the end of December 1997,
…
Article 3
The following fines are imposed on the undertakings listed in Article 1 in respect of the infringement referred to therein:
– [NCL and NOE], jointly and severally liable, a fine of EUR 149,128 million,
…’
15. For the purpose of calculating the fines, the Commission applied in its Decision the method set out in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) [CS] (OJ 1998 C 9, p. 3) (‘the Guidelines’). On the other hand, it decided not to apply the Leniency Notice because of the vertical nature of the infringement.
16. First, the Commission determined the basic amount of the fines according to the gravity and duration of the infringement.
17. In that connection, the Commission took the view that the undertakings concerned had committed a very serious infringement, in view of its nature, its actual impact on the market and the size of the relevant geographical market.
18. Next, the Commission considered that because the single and continuous infringement concerned several undertakings of extremely different sizes it was necessary to treat the undertakings concerned differently in order to take account of the specific weight of each undertaking and, consequently, the real impact of its offending conduct on competition. To that end, the undertakings concerned were divided into three groups according to the relative importance of each undertaking with regard to Nintendo, as distributor of the relevant products in the EEA. The comparison was made by reference to each undertaking’s share in the total volume of Nintendo games consoles and cartridges purchased for distribution in the EEA in 1997, the last year of the existence of the infringement. On that basis, Nintendo alone was placed in the first group, whereas John Menzies was alone in the second group. For those undertakings, the Commission set the preliminary starting amount for gravity of the infringement at EUR 23 million in the case of Nintendo and EUR 8 million in the case of John Menzies. For the other undertakings concerned, a preliminary starting amount of EUR 1 million was decided upon.
19. Moreover, in order to ensure that the fine had a sufficiently deterrent effect, on the one hand, and in order to take account of the size and overall resources of Nintendo, John Menzies and Itochu Corp., on the other hand, the Commission increased those starting amounts. More specifically in Nintendo’s case, the Commission considered that, apart from its size, it being significantly smaller than Itochu, account had to be taken of the fact that it was the manufacturer of the products involved in the infringement. In view of those factors, the Commission increased by a factor of 3 the amounts set for Nintendo and Itochu, and a factor of 1.25 for John Menzies, so that the starting amounts were set at EUR 69 million in the case of Nintendo, EUR 10 million in the case of John Menzies and EUR 3 million in the case of Itochu.
20. As regards the duration of the infringement committed by each undertaking, the starting amount was increased by 10% a year, giving an increase of 65% for Nintendo and 20% for John Menzies.
21. Consequently, the Commission set the basic amount of the fine imposed on Nintendo at EUR 113.85 million.
22. Second, with regard to aggravating circumstances, the basic amount of the fine imposed on Nintendo was increased, first, by 50% on the ground that it had been the leader and instigator of the infringement and, second, by 25% because it had continued the infringement after the Commission started its investigation in June 1995. The basic amount of the fine imposed on John Menzies was increased by 20% corresponding, first, to an increase of 10% to take account of the fact that it continued the infringement after the start of the Commission investigation and, second, an increase of 10% because of its refusal to cooperate with the Commission.
23. Third, when considering attenuating circumstances, the Commission considered that it was justified to reduce the fine imposed on one of the undertakings concerned, namely Concentra – Produtos para crianças SA, Nintendo’s exclusive distributor for Portugal, by reason of its exclusively passive role in the infringement during most of the period in question. The Commission then granted Nintendo a reduction of EUR 300 000 to take account of the financial compensation offered by that undertaking to third parties harmed by the restrictive agreements who had been identified in the statement of objections. Finally, reductions of 40% and 25% respectively were granted to John Menzies and Nintendo for their effective cooperation with the Commission. However, no attenuating circumstances were established in the case of the other undertakings concerned.
Procedure and forms of order sought
24. By application lodged at the Registry of the Court of First Instance on 16 January 2003, the applicants brought the present action.
25. Upon hearing the report of the Judge Rapporteur, the Court (Eighth Chamber) decided to open the oral procedure.
26. By letter of 7 May 2008, the applicants stated that they were withdrawing the plea alleging incorrect increase of the fine for the first year of the infringement.
27. The parties presented their oral arguments and their replies to oral questions put by the Court at the hearing on 19 May 2008. On that occasion, the Commission indicated that it had no observations to submit on that withdrawal.
28. At that hearing, the applicants produced to the members of the Court of First Instance and the Commission a document consisting of a corrected version of an annex to the rejoinder. By that annex, the Commission sought to draw attention to the respective cooperation of the undertakings concerned in its investigation. After the pa rties had been heard, the Court of First Instance decided to place that document in the file and set the Commission a time-limit in which to submit observations on it. Following the lodging of those observations, the oral procedure was closed.
29. The applicants claim that the Court of First Instance should:
– annul Article 3 of the Decision to the extent to which it imposes a fine on them;
– in the exercise of its unlimited jurisdiction, cancel or reduce the fine to such amount as may appear appropriate to the Court;
– take any other appropriate steps;
– order the Commission to pay the costs.
30. The Commission contends that the Court of First Instance should:
– dismiss the application in its entirety;
– order the applicants to pay the costs.
Law
31. In support of their application, the applicants claim that the Commission has infringed essential procedural requirements, the EC Treaty and the rules for its application by imposing on them a fine of almost EUR 150 million, being by far the largest fine imposed for a vertical infringement and, at the date of the Decision, the fourth largest ever imposed on an individual undertaking for a single infringement. According to the applicants, the fine is illegal on account, first, of its manifest disproportionate amount and, second, of defects vitiating each of the various steps by which it was calculated.
32. The arguments put forward by the applicants, which thus all relate to determination of the amount of the fine, concern, first, the gravity of the infringement, second, application of a multiplier for deterrence, third, the duration of the infringement, fourth, the increase of the fine for aggravating circumstances and, fifth, the existence of attenuating circumstances.
33. Before embarking on an examination of the pleas put forward by the applicants, it should be pointed out that it is clear from recitals 366 to 464 of the Decision that the fines imposed by the Commission in respect of the infringements of Article 81(1) EC and Article 53(1) of the EEA Agreement were imposed pursuant to Article 15(2) of Regulation No 17 and that the Commission, as it expressly confirmed, applied the method set out in the Guidelines when it set the fines.
34. Although the Guidelines may not be regarded as rules of law which the administration is always bound to observe, they nevertheless form 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 Case C‑397/03 P Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission
[2006] ECR I‑4429, paragraph 91 and the case-law cited).
1. The setting of the preliminary starting amount of the fine imposed on the applicants
Arguments of the parties
35. The applicants criticise the Commission for setting the starting point of the fine for gravity at EUR 23 million and put forward, in that regard, two pleas, alleging, first, a manifest error of assessment and, second, defective reasoning.
36. The applicants criticise the Commission primarily for setting the gravity element of the fine on the basis of ‘each party’s share in the total volume of Nintendo games consoles and cartridges purchased for distribution in the EEA’. The recourse to that factor, which is unprecedented, is arbitrary and inappropriate. First, the approach adopted by the Commission means that that amount would have been higher had Nintendo chosen to distribute its products through wholly owned subsidiaries and lower if it had chosen to distribute through independent distributors, whereas there is no logical connection between the relative or absolute levels of guilt of an infringing undertaking and the structure it has adopted for the distribution of its own products. Second, that approach takes no account of inter-brand and intra-brand competition. In that regard, the applicants observe that the supply of video games consoles and cartridges is characterised by intense inter-brand competition. Finally, Nintendo’s position as producer is taken into account twice, in so far as that position was also taken into account as an aggravating circumstance (recital 229 of the Decision).
37. In the alternative, the applicants claim that the Commission has failed to state reasons, or at the very least, sufficient reasons, for the methodology used and the amount thus arrived at. They submit that the explanations given by the Commission in its defence are similarly flawed, as they are incorrect and run counter to the reasoning followed both in the Decision and in the Guidelines.
38. In that regard, in the first place, the applicants submit that, by maintaining in its defence that the starting amount of EUR 23 million reflects only one aspect of the gravity of the infringement, namely the relations between Nintendo’s distribution subsidiaries and customers, whereas the multiplier reflects another aspect, namely the role of the applicants as manufacturer and supplier to their independent distributors, the Commission departed from the reasoning followed in the Decision. According to the latter, the multiplier reflects only the need to deter undertakings from committing infringements, whereas the amount of EUR 23 million was imposed in respect of gravity.
39. In any event, the Commission’s arguments in its defence are flawed. That defence gives the impression that the amount imposed for one aspect of the infringement was based on the amount imposed for another aspect, whereas separate amounts could have been calculated in respect of gravity, for each of those aspects, in the light of all the facts.
40. In the second place, the Commission also departed from its own Guidelines by applying a multiplier for deterrence to adjust the weighting of the initial amounts set for gravity, whereas the Guidelines establish a clear distinction between the application of weightings to take account of the real impact of the offending conduct of each undertaking in multi-party cases and adjusting the amount for gravity to ensure a sufficient deterrent effect.
41. In the third place, the applicants submit, in response to the Commission’s argument that they benefited from a considerable reduction as compared with fines imposed for cartels, that a fundamental distinction must be drawn between cases involving horizontal restrictions and those concerning vertical restrictions, a distinction confirmed by the applicability of the Leniency Notice only to horizontal restrictions.
42. The Commission contests all the arguments put forward by the applicant.
Findings of the Court
43. As is clear from the Decision, in the present case the Commission determined the amount of the fines imposed on the undertakings concerned on the basis of several factors, in accordance with the method set out in the Guidelines.
44. The Commission first stated that, taking account of the nature of the infringement, its impact on the market and the fact that it restricted parallel trade throughout the EEA, the undertakings concerned had committed a very serious infringement of Article 81(1) EC, for which the likely fine is above EUR 20 million, under Section 1 A, second paragraph, third indent, of the Guidelines (recitals 374 to 384 of the Decision).
45. Taking account of the fact that this case concerned a single and continuous infringement involving several undertakings of very different sizes, the Commission then applied differential treatment to them in accordance with Section 1 A, third paragraph, of the Guidelines (see recitals 385 to 391 of the Decision). In order to do so, it took account of each party’s share in the total volume of Nintendo game consoles and cartridges purchased for distribution in the EEA during the last year of the infringement, namely 1997 (see recital 386 of the Decision).
46. On that basis, the ‘preliminary starting amount’ of the fine determined for Nintendo was set at EUR 23 million (recital 391 of the Decision). Lastly, in order to ensure that the fine had a sufficient deterrent effect, the Commission multiplied that amount by three, in the light not only of the size and overall resources of Nintendo, but also of its position as manufacturer of the products. The starting amount of the fine imposed on Nintendo was thus set at EUR 69 million (recitals 392 to 396 of the Decision).
47. It follows from all those considerations that, contrary to what the applicants submit, the Commission did not rely exclusively on the figures corresponding to each party’s share in the total volume of Nintendo game consoles and cartridges during the reference year.
48. Furthermore, the applicants’ arguments must also be rejected in so far as they must be interpreted as seeking to criticise the recourse to those figures in the differential treatment effected by the Commission in recitals 385 to 391 of the Decision.
49. It should be borne in mind that differential treatment seeks, as the Commission stated in recital 385 of the Decision, to take account of the specific weight of each undertaking and, accordingly, the real impact of its offending conduct, particularly when there is considerable disparity between the sizes of the undertakings committing infringements of the same type.
50. In the case of a complex of agreements and concerted practices of a vertical nature with the object and effect of restricting parallel exports in game consoles and cartridges, the respective shares held by the parties in the distribution of the relevant products are representative of the specific weight of each undertaking in the distribution system in question. The Commission did not therefore commit a manifest error of assessment in referring to those shares for the purposes of the differential treatment applied when establishing the preliminary amounts of the fines imposed on the undertakings concerned.
51. Contrary to what the applicants claim, the Commission’s approach does not fail to have regard to the fact that the supply of video games consoles and cartridges is characterised by intense inter‑brand competition. It should be borne in mind that, as the Commission stated, the reference to the market shares of each of the undertakings involved in the distribution of the Nintendo products was used simply for the purposes of establishing the relative responsibility of each of them in the infringement in question. As is clear from the Decision (see, in particular, recital 374), the aim of the infringement was specifically to limit competition at the level of the distribution of the Nintendo products. Accordingly, the fact that the market for games consoles and cartridges is characterised more by intense inter‑brand competition than by intra‑brand competition – assuming that to be the case – is not a factor which the Commission was required to take into account for the purposes of determining the specific preliminary starting amount of the applicants’ fine.
52. The fact that the Commission had never until then had recourse to the contested data when categorising undertakings which had participated in a single infringement is explained by the fact that it is the first time that the Commission contemplated such a categorisation in a decision concerned with conduct of a vertical nature, as it indeed confirmed in its written pleadings.
53. As for the complaint alleging infringement of the obligation to state reasons, it is apparent from settled case‑law that, as regards the determination of fines for infringements of competition law, the Commission fulfils its obligation to state reasons where it indicates in its decision the factors on the basis of which the gravity and duration of the infringement were assessed, and it is not required to include in it a more detailed account or the figures relating to the method of calculating the fines (see, to that effect, Case C‑279/98 P Cascades v Commission
[2000] ECR I‑9693, paragraphs 38 to 47, and Joined Cases T‑191/98, T‑212/98 to T‑214/98 Atlantic Container Line and Others v Commission
[2003] ECR II‑3275, paragraph 1522).
54. In this instance, it is apparent from the foregoing considerations that the Commission sufficiently set out the various stages for determining the amount of the fines according to gravity and therefore satisfied its obligation to state reasons.
55. Consequently, all the complaints directed against the setting of the preliminary starting amount of the fine according to gravity must be rejected.
2. The increase of the preliminary starting amount of the applicants’ fine in order to ensure sufficient deterrent effect
56. The applicants object not only to the fact that the Commission multiplied by three the preliminary starting amount of the fine for deterrence, but also to the very principle of increasing the fine on that account. In that connection, the applicants put forward two pleas, alleging, first, a manifest error of law, a breach of the principles of proportionality and non bis in idem, breach of the rights of defence and lack of consistency with the Commission’s previous practice and, second, a defective statement of reasons, breach of the principle of equal treatment and misapplication of the methodology set out in the Guidelines.
The first plea: manifest error of law, breach of the principles of proportionality and non bis in idem, breach of the rights of the defence and lack of consistency with the Commission’s previous practice
Arguments of the parties
57. In the first place, the applicants claim that, as it was not necessary to apply a multiplier in order to ensure their future compliance with Community law, the Commission breached the principle of proportionality.
58. In their submission, the Commission must, before applying a multiplier in order to ensure that the fine has deterrent effect, consider whether, in the absence of such an increase, the offender could be expected to infringe the competition rules again. In this case, nothing in the statement of objections or in the Decision suggests that such a risk exists in the applicants’ case. Quite to the contrary, the Commission itself recognised, both in the statement of objections and in the Decision (recital 95), that ‘Nintendo [had] also [taken] what seemed to be credible steps to ensure compliance with EU law in the future’. The applicants recall, in that connection, that they adopted a number of measures, namely voluntarily admitting and terminating the infringement in December 1997, cooperating fully with the Commission, paying compensation to third parties, entering into non‑exclusive distribution agreements with their distributors and implementing a worldwide compliance programme.
59. As regards the distinction drawn by the Commission in its defence between general deterrence and specific deterrence and the argument that application of the multiplier may be justified in respect of the former, the applicants reply that such an argument is contrary both to the Guidelines and to previous Commission practice. Thus, in the ‘pre-insulated pipe’ case referred to by the Commission, the very objective of the multiplier was to prevent any repetition of the offence by ABB Asea Brown Boveri Ltd (‘ABB’) (Commission Decision 1999/60/EC of 21 October 1998 relating to a proceeding under Article [81 EC] (Case No IV/35.691/E-4 – pre-insulated pipe cartel) (OJ 1999 L 24, p. 1), recital 168). Moreover, contrary to the Commission’s contention, that case does not constitute a relevant precedent for the application of a multiplier to an undertaking which has adopted a competition law compliance programme in so far as the Commission had expressly doubted the effectiveness of ABB’s pre-existing compliance programme (pre-insulated pipe decision, recital 172).
60. In the second place, the applicants claim that, in applying a multiplier for deterrence for the first time in a case concerning restrictions of a vertical nature, the Commission departed from its previous practice.
61. In that regard, the applicants state that, in order to justify the application of a multiplier for the purpose of ensuring the deterrent effect of the fine in this case, the Commission relied, first, on Nintendo’s size and, second, on its position as a manufacturer. However, in earlier cases involving vertical infringements, no multiplier was applied to manufacturers for deterrence, despite the fact that, in each of those cases, a fine was imposed on those manufacturers and the undertakings fined were, with one exception, many times larger than the applicants. That was the case in the ‘Volkswagen I’ and Volkswagen II’, ‘Mercedes Benz’ and ‘Opel’ cases (respectively, Commission Decision 98/273/EC of 28 January 1998 relating to a proceeding under Article [81 EC] (Case IV/35.733 – VW) (OJ 1998 L 124, p. 60); Commission Decision 2001/711/EC of 29 June 2001 relating to a proceeding under Article 81 [EC] (Case COMP/F-2/36/693 – Volkswagen) (OJ 2001 L 262 p. 14); Commission Decision 2002/758/EC of 10 October 2001 relating to a proceeding under Article 81 [EC] (Case COMP/36.264 – Mercedes-Benz) (OJ 2002 L 257, p. 1); and Commission Decision 2001/146/EC of 20 September 2000 relating to a proceeding under 81 [EC] (Case COMP 36.653 – Opel) (OJ 2001 L 59, p. 1)). Moreover, none of the undertakings involved in those cases voluntarily brought its infringement to an end or cooperated with the Commission in any way. Some of those undertakings even offended again.
62. In response to the Commission’s contention that it is appropriate to apply a multiplier for deterrence only in cases where several parties are penalised, the applic ants observe that the elements relied on to justify the application of such a multiplier in this case, namely Nintendo’s size and its position as manufacturer, are common to both single-party and multi-party cases. The approach advocated by the Commission is therefore irrational and discriminatory.
63. As regards the Commission’s argument that the use of a multiplier for deterrence was justified by the need to set a low preliminary amount of fine in order not to penalise the other parties, in particular the small distributors, the applicants reply that, in the Decision, no direct legal or mathematical relationship between the amount for gravity set for Nintendo and the amount for gravity set for the distributors was established. In any event, the Commission was not obliged to increase the amount set for gravity for small distributors simply and solely because it had fixed a higher amount for Nintendo.
64. In the third place, the applicants claim that, by taking account, in recital 395 of the Decision, of Nintendo’s position as manufacturer of the relevant products in imposing a multiplier for deterrence, the Commission relied on an irrelevant factor and therefore committed a manifest error of law.
65. On that point, the judgment of the Court of Justice in Joined Cases 100/80 to 103/80 Music Diffusion française and Others v Commission
[1983] ECR 1825, paragraph 75, is not a relevant precedent. The Court does not suggest in that judgment that the mere fact that an undertaking is a manufacturer in itself justifies an increase of the fine. The Court held that the relevant factor to be taken into account in calculating the amount of the fine is the role played by the manufacturer in the infringement and not the fact that it is a manufacturer. Moreover, paragraph 75 of that judgment, mentioned by the Commission, does not concern calculation of the amount of the fine but the question whether the manufacturer had participated in a vertical infringement with its distributors.
66. In any event, according to the applicants, the fact that Nintendo was the manufacturer of the relevant products does not make Nintendo more likely than any other participant to commit further infringements of competition law.
67. The applicants take the view, in the fourth place, that the Commission has breached the principle non bis in idem
by taking account of Nintendo’s position as manufacturer not only when increasing the fine for deterrence but also with regard to the aggravating factor of the role of leader and instigator of the infringement played by Nintendo. They claim that in the case of a vertical infringement the roles of manufacturer and leader merge in practice. The manufacturer occupies a central position in that it appoints distributors, agrees the terms on which they are supplied and has a continuing commercial relationship with each of them. Any manufacturer involved in a vertical infringement in which its distributors also participate will therefore play a central role.
68. The applicants consider, in the fifth place, that the Commission has infringed their rights of defence by not mentioning in the statement of objections its intention to apply a multiplier for deterrence. They observe in particular that in the pre-insulated pipes case the Commission had specifically informed ABB that account would be taken of the need to ensure that the fine had a deterrent effect (Case T‑31/99 ABB Asea Brown Boveri v Commission
[2002] ECR II‑1881, paragraphs 64 and 83).
69. The Commission contests all the complaints put forward by the applicants.
Findings of the Court
70. It should be recalled that the Commission’s power to impose fines on undertakings which intentionally or negligently commit an infringement of Article 81(1) EC or Article 82 EC is one of the means conferred on the Commission in order to enable it to carry out the task of supervision entrusted to it by Community law. That task encompasses the duty to pursue a general policy 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 ( Musique Diffusion française and Others v Commission, paragraph 65 above, paragraph 105, and Case T‑43/02 Jungbunzlauer v Commission
[2006] ECR II‑3435, paragraph 297).
71. It follows that the Commission has the power to decide the level of fines in order to reinforce their deterrent effect when infringements of a particular type, although established as being unlawful at the outset of Community competition policy, are still relatively frequent on account of the profit that certain of the undertakings concerned are able to derive from them ( Musique Diffusion française and Others v Commission, paragraph 65 above, paragraph 108, and Jungbunzlauer v Commission, paragraph 70 above, paragraph 298). Since the objective of deterrence relates to the conduct of undertakings within the Community or the EEA, the deterrence factor is assessed by taking into account a large number of factors and not merely the particular situation of the undertaking concerned (Case C‑289/04 P Showa Denko v Commission
[2006] ECR I‑5859, paragraph 23; see also, to that effect, Jungbunzlauer v Commission, paragraph 70 above, paragraph 300).
72. Thus when assessing the need to increase the amount of fines in order to ensure that they have deterrent effect the Commission is in no way required to evaluate the likelihood that the undertakings in question will re-offend (see, to that effect, Joined Cases T‑101/05 and T‑111/05 BASF and UCB
v Commission
[2007] ECR II‑4949, paragraph 47).
73. In the present case, the applicants cannot therefore claim that the Commission infringed the principle of proportionality on the ground that the amount of the fine could be increased by the Commission in order to ensure its deterrent effect only if there were a risk that the undertakings concerned might infringe the competition rules again. As the Commission has stated, the pursuit of deterrent effect does not concern solely the undertakings specifically targeted by the decision imposing fines. It is also necessary to prompt undertakings of similar sizes and resources to refrain from participating in similar infringements of the competition rules.
74. The preventative measures taken by the applicants, consisting in particular of a competition-law compliance programme, their cooperation during the administrative procedure and the compensation that they offered to third parties, do not affect the reality of the infringement committed and do not have to be taken into account when evaluating the gravity of the infringement. Those factors may, where appropriate, be taken into account when examining whether there are any attenuating circumstances.
75. As regards the complaint that the Commission departed from its previous practice in that no increase for deterrence had previously been applied to fines imposed on participants in a vertical infringement, it is sufficient to recall that, according to settled case‑law, the Commission’s practice in previous decisions cannot itself serve as a legal framework for the imposition of fines in competition matters and decisions in other cases can give only an indication for the purpose of determining whether there might be discrimination, since the facts of those cases, such as markets, products, the undertakings and periods concerned, are not likely to be the same (Case C‑167/04 P JCB Service v Commission
[2006] ECR I‑8935, paragraphs 201 and 205, and Case C‑76/06 P Britannia Alloys & Chemicals v Commission
[2007] ECR I‑4405, paragraph 60).
76. In addition, those undertakings must in particular take account of the possibility that the Commission may decide at any time to raise the level of the fines above that applied in the past ( Britannia Alloys & Chemicals v Commission, paragraph 75 above, paragraph 61).
77. It follows that the complaint of a lack of consistency with the Commission’s previous practice must be rejected.
78. The claim that the Commission erred in law by referring, in the context of the increase for deterrence, to the fact that Nintendo was the manufacturer of the products in question must likewise be rejected.
79. Although it is true that the size of undertakings is generally a factor which must be taken into account when setting the amount of the fine, it cannot be ruled out that other factors may be taken into account in order to ensure that the fine has a sufficient deterrent effect. In that connection, the position of manufacturer of the products may, in the case of vertical infringements, in the same way as the size of an undertaking, relate to a factor which is representative of its effective capacity to cause significant damage to competition. In such a case, the manufacturer of the relevant products, which occupies a central position in the distribution system of those products, must display special vigilance and ensure that it observes the competition rules when concluding distribution agreements.
80. Consequently, when setting the amount of the fine at a level which ensures that it has sufficient deterrent effect, the Commission was entitled, without committing a manifest error of assessment, to take account of the fact that Nintendo occupied a unique position in the distribution system in the light of its position as manufacturer.
81. The applicants cannot, in order to invalidate that assessment, claim that the manufacturer of the relevant products is no more inclined than other undertakings to infringe competition law thereafter. As was pointed out at paragraph 72 above, the increase of the fine for deterrence is not connected to the likelihood that the undertakings in question will re-offend.
82. As regards the applicants’ claim that the Commission infringed the non bis in idem
principle by taking into account their position as manufacturer not only when increasing the fine for deterrence, but also in respect of aggravating circumstances, it must be stated first of all that that principle is not applicable in the present case. That principle prohibits the same person from being sanctioned more than once for the same unlawful conduct (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 v Commission
[2004] ECR I‑123, paragraph 338). However, the applicants were not sanctioned twice for the same conduct.
83. In any event, contrary to what the applicants claim, the Commission took account, in respect of aggravating circumstances, not of the fact that Nintendo was the manufacturer of the relevant products – which is an objective element – but of the fact that it had been the leader and instigator of the infringement – an element specific to Nintendo and characterising its role in the infringement in question. It cannot be claimed, in order to cast doubt on that conclusion, that in vertical infringements the role of leader is necessarily exercised by the manufacturer of the relevant products. It cannot be ruled out that a vertical infringement is led by an undertaking that is solely the distributor and not the manufacturer of the products in question.
84. As regards, lastly, the complaint alleging breach of the rights of the defence in that the Commission did not refer in the statement of objections to its intention to increase the fines imposed on the applicants in order to ensure that they had sufficient deterrent effect, it should be recalled that, according to settled case‑law, provided that the Commission indicates expressly in the statement of objections that it will consider whether it is appropriate to impose fines on the undertakings concerned and that it sets out the principal elements of fact and of law that may give rise to a fine, such as the gravity and the duration of the alleged infringement and the fact that it has been committed intentionally or negligently, it fulfils its obligation to respect the undertakings’ right to be heard. In doing so, it provides them with the necessary elements to defend themselves not only against a finding of infringement but also against the fact of being fined (Case T‑23/99 LR AF 1998 v Commission [2002] ECR II‑1705, paragraph 199; see also, to that effect, Musique Diffusion française and Others v Commission, paragraph 65 above, paragraph 21).
85. It follows that, so far as concerns the determination of the amount of the fines, the rights of defence of the undertakings concerned are guaranteed in proceedings before the Commission by virtue of the fact that they have the opportunity to make their submissions on the duration, the gravity and the anti-competitive nature of the matters of which they are accused. Moreover, the undertakings have an additional guarantee, as regards the determination of that amount, in that the Court of First Instance has unlimited jurisdiction and may in particular cancel or reduce the fine pursuant to Article 17 of Regulation No 17 ( LR AF 1998 v Commission, paragraph 84 above, paragraph 200).
86. In this instance, the Commission clearly indicated in the statement of objections the principal factors which it planned to take into account when setting the amount of the fines, factors which relate not only to the duration and gravity of the infringement (points 353 to 360 of the statement of objections), but also other parameters (point 361 of the statement of objections).
87. The fact that the Commission did not mention the possibility of the application of a multiplier to ensure the deterrent effect of the fines imposed on the applicants cannot constitute an infringement of their rights of defence. In accordance with the Guidelines, the deterrent effect of fines is one of the factors by reference to which the gravity of infringements must be determined (Case C‑219/95 P Ferriere Nord v Commission
[1997] ECR I‑4411, paragraph 33, and BASF and UCB
v Commission, paragraph 72 above, paragraph 45). The Commission cannot be required to state in more detail in the statement of objections all the factors which it intends to take into account when determining the amount of the fines.
88. Consequently, the complaint alleging infringement of the rights of the defence must also be rejected.
89. In the light of all the foregoing, this plea cannot succeed.
The second plea: breach of the principle of equal treatment and of the obligation to state reasons, and misapplication of the methodology set out in the Guidelines
Arguments of the parties
90. In the first place, the applicants claim that by applying a multiplier of 3 to the preliminary amount of the fine in order to ensure that it had deterrent effect, the Commission breached the principle of equal treatment. The multiplier for deterrence applied to the amount of the fine imposed on the applicants should have been the same as or close to the multiplier of 1.25 applied to John Menzies, Nintendo being, in terms of turnover, more than twenty times smaller than Itochu but only two times the size of John Menzies. In the present case, the increase of the fine imposed on the applicants for deterrence is proportionally the same as that imposed on Itochu and eight times that imposed on John Menzies. In absolute terms, that increase is 57 times the increase imposed on John Menzies.
91. In the second place, the applicants claim that the application of a multiplier for deterrence led to an increase of the total amount of the fine imposed on them of EUR 99.6 million. In that regard, they claim that, by failing to explain why a multiplier of 3 had to be applied to them, and for what reason such an increase was necessary, whilst an increase of EUR 1.73 million was considered sufficient in the case of John Menzies, the Commission failed in its obligation to state reasons.
92. In response to the Commission’s argument that the difference between the increase of the fine imposed on the applicants for deterrence and the one imposed on John Menzies is explained by the fact that Nintendo was the manufacturer of the relevant products, the applicants state that the increase of fines for deterrence should be based not on the position of the undertakings in the economic chain but on the need to ensure future compliance with competition law.
93. Lastly, the applicants submit that the Commission failed to comply with the Guidelines by applying a multiplier for deterrence as the second step in the calculation of the fine. In their submission, it is only in relation to the final amount of the fine, that is to say after the increase for duration and aggravating circumstances, that the Commission must consider whether the fine has sufficient deterrent effect.
94. The Commission contends that all the complaints put forward by the applicants must be dismissed.
Findings of the Court
95. As regards, in the first place, the claim that the Commission infringed the principle of equal treatment in that the multiplier applied to the applicants should have been identical to that applied to John Menzies, that is a multiplier of 1.25 instead of 3, it must be pointed out that under the principle of equal treatment, the Commission must not treat comparable situations differently or treat different situations in the same way, unless such treatment is objectively justified (see Case T‑38/02 Groupe Danone v Commission
[2005] ECR II‑4407, paragraph 453 and the case-law cited).
96. However, it must be stated that the positions of Nintendo and John Menzies are far from comparable: not only are their shares of the sales of the relevant products (respectively [ confidential ] (1) % and [ confidential ] %) very different, but their positions in the distribution system (respectively manufacturer and large exclusive distributor) are not comparable. For the purposes of ensuring the deterrent effect of the fines, the Commission did not therefore infringe the principle of equal treatment.
97. As regards the complaint alleging infringement of the obligation to state reasons, it is sufficient to recal l that, in the light of the requirements concerning statements of reasons for decisions on fines (see paragraph 53 above) and of its recitals 392 to 396, the Decision is not vitiated by any defective reasoning in relation to the deterrent effect of the fine imposed.
98. Lastly, the Court must also reject the claim that the Commission failed to comply with the Guidelines, in that the increase for deterrence should have been applied at the final stage of the determination of the amount of the fines.
99. That complaint is based on an incorrect reading of the Guidelines. The Guidelines mention the objective of deterrence in Section 1 A, according to which it ‘will … be necessary … to set the fine at a level which ensures that it has a sufficiently deterrent effect’. As the Court of First Instance has already had occasion to clarify, the need to ensure such an effect is a general requirement which must be a reference point for the Commission throughout the calculation of the fine and does not necessarily require that there be a specific step in that calculation in which an overall assessment is made of all relevant circumstances for the purposes of attaining that objective (see, to that effect, BASF and UCB v Commission, paragraph 72 above, paragraph 48, and the case‑law cited).
100. It follows from all those factors that the pleas directed against the determination of the starting amount according to the gravity of the infringement must be rejected.
3. The increase of the starting amount of the fine in respect of the duration of the infringement
101. In their application, the applicants put forward two pleas against the increase of the fine for duration, alleging, first, a manifest error of assessment, an error of law and a defective statement of reasons, in that the Commission increased the fine by 10% for each year of participation in the infringement, and, second, an error of law by reason of the increase of the fine for the first year of participation in the infringement.
102. Since the applicants declared that it had withdrawn their second plea (see paragraph 26 above), only the first plea will be examined below.
Arguments of the parties
103. First, the applicants claim that the Commission committed a manifest error of assessment and an error of law, by applying the maximum increase of 10% for each full year’s participation in the infringement, namely a total increase of 65%.
104. According to the applicants, that approach would have been appropriate only if the gravity of the infringement had been the same each year. However, that was not the case. According to the Decision, the intensity, effect and geographic scope of the infringement evolved over time. Thus, the infringement was less grave during the period of four years and three months between January 1991 and March 1995 than it was in the period of two years and eight months from April 1995 to December 1997. Furthermore, the Commission did not take account of the request made to that effect by the applicants in the reply to the statement of objections.
105. The applicants also maintain that, by applying the maximum increase of 10% for each full year’s participation in the infringement, the Commission departed from the practice which it was following until then in respect of the determination of fines for vertical infringements of long duration, a practice whereby such an increase was applied only for those years in which the infringement was at its gravest. For example, in Volkswagen I, the Commission applied the maximum increase of 10% only for the 4 years in which the infringement was most intense, despite the fact that the infringement, lasting a total of 10 years, adversely affected parallel trade throughout that period.
106. Second, the Commission failed to give any, or any sufficient, reasons for thus departing from its earlier policy and practice.
107. Third, in response to the Commission’s explanation that the maximum increase of 10% was justified by the very serious nature of the infringement at every stage of its implementation, the applicants state that, under the Guidelines, the very serious nature of an infringement should be taken into account only when setting the initial amount for gravity (Section 1 A of the Guidelines).
108. Finally, with regard to the Commission’s argument that a maximum increase on account of duration was necessary to compensate for the relatively low amount set in respect of gravity, the applicants reply that such reasoning is contrary to the Guidelines and involves a triple taking into account of gravity, resulting, first, from setting the starting amount at EUR 23 million in respect of gravity, second, from the application of a multiplier for deterrence which, according to the Commission, also related to gravity and, third, from the application of that maximum increase of 10% on account of duration to offset the overly low amount set initially.
109. The Commission disputes the merits of all those arguments.
Findings of the Court
110. In accordance with Section 1 B of the Guidelines, the Commission may, in respect of long‑term infringements (over five years), apply an increase of up to 10% per year of infringement in the amount set to reflect its gravity.
111. In the present case, the Commission found, at recital 397 of the Decision, that the applicants had participated in an infringement for a period of six years and eleven months, a ‘long duration’ within the meaning of the Guidelines, and it increased the fine on account of duration by 65%. In so doing, the Commission complied with the rules which it imposed on itself in the Guidelines. Moreover, in the light of the duration of the infringement, that increase of 65% is not inappropriate in the present case.
112. The mere fact that the Commission has reserved for itself a possibility of applying an increase of up to 10% per year of infringement in no way obliges it to set that rate according to the intensity of the infringement or the varying degrees of involvement of each of the offenders.
113. Consequently, the Court cannot uphold the claim that, since the alleged infringement was of very variable gravity, the Commission was required to apply a significantly lower level of increase, at least in respect of a part of the period taken into account. The increase in the fine by reference to the duration of the infringement is not limited to a situation in which there is a direct relation between the duration and serious harm caused to the Community objectives referred to in the competition rules (Joined Cases T‑202/98, T‑204/98 and T‑207/98 Tate & Lyle and Others v Commission
[2001] ECR II‑2035, paragraph 106, and Case T‑203/01 Michelin v Commission
[2003] ECR II‑4071, paragraph 278).
114. Contrary to what the applicants submit, the Commission at no point stated in its defence that a maximum increase of the fine on account of duration was necessary to compensate for the relatively low amount set in respect of gravity, but only that it had taken account of the peaks and troughs in intensity of the infringement when setting the starting amount of the fine for gravity.
115. As regards the applicants’ reference to earlier Commission decisions, in particular that in the Volkswagen I case, it should be recalled that the Commission’s practice in previous decisions cannot itself serve as a legal framework for the imposition of fines in competition matters (see the case‑law cited in paragraph 75 above).
116. In such circumstances, the Commission was not required to explain why the rate of increase for the duration of the infringement applied in the present case was different from that decided on in its earlier decisions. In this respect, the Commission did not fail in its obligation to state reasons under Article 253 EC.
117. It follows from all those considerations that the plea concerning the increase of the amount of the fine for duration must be rejected as unfounded.
4. The increase, on account of aggravating circumstances, of the basic amount of the applicants’ fine
The taking into account of the role of leader and instigator of the restrictive agreement
118. The applicants contest the role attributed to them by the Commission of leader and instigator of the infringement. In that regard, they put forward two pleas, alleging, first, a manifest error of assessment and, second, lack of consistency with the Commission’s previous practice and breach of the principle of non-discrimination and of the obligation to state reasons.
The first plea: manifest error of assessment and error of law in attributing to the applicants a role of leader and instigator of the infringement
– Arguments of the parties
119. The applicants allege that the Commission committed a manifest error of assessment and an error in law by determining that the role that they played in the infringement constituted an aggravating circumstance and by consequently increasing the amount of the fine.
120. In that regard, they state, first, that, in vertical infringements, the roles of manufacturer and leader merge in practice. The applicants go on to say that, for the role played by an undertaking to constitute an aggravating circumstance, it must make the infringement or its participation in it more serious than it would otherwise have been without its intervention as leader.
121. In this case, nothing in the Decision indicates that Nintendo’s role, first, went beyond the role that it assumes as a manufacturer and, second, aggravated the infringement.
122. More specifically, the facts attesting to Nintendo’s role as leader and instigator of the restrictive agreement, as set out in recitals 228 to 238 of the Decision, refer to three types of conduct, namely, ‘monitoring’ of, ‘implementation’ of, and ‘compliance’ with, the infringement. ‘Monitoring’ relates to the monitoring of parallel trade, whilst ‘compliance’ relates to the fact that NOE on occasions sought the support of other Nintendo group companies. Neither of those categories of behaviour increases the seriousness of the infringement or Nintendo’s role in it. As far as ‘implementation’ of the infringement is concerned, the facts set out in recital 237 of the Decision, which relate thereto, show that Nintendo was strongly influenced by its independent distributors. Those facts thus indicate, at least in part, a reaction to requests for action from distributors and not ‘an extreme case of organisation and enforcement of an infringement’, as the Commission contends in its defence.
123. Finally, in their reply, the applicants state that the Commission referred to its previous decisions in cases involving restrictive horizontal agreements. In so doing, the Commission is accepting that the applicants should be treated as if they had participated in a cartel, yet it refused to grant them the benefit of the Leniency Notice.
124. The Commission contests all the applicants’ arguments.
– Findings of the Court
125. It is important to emphasise, first of all, that the taking into consideration of the role of ringleader is consistent with the case‑law and the Guidelines.
126. As regards the case‑law, it has been held that, where an infringement has been committed by several undertakings, it is appropriate, when setting the amount of the fines, to consider the relative gravity of the participation of each of them (Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 113/73 and 114/73 Suiker Unie and Others v Commission
[1975] ECR 1663, parargraph 623), which implies in particular that the roles played by each of them in the infringement for the duration of their participation in it should be established (see, to that effect, Case C‑49/92 P Commission v Anic Partecipazioni
[1999] ECR I‑4125, paragraph 150). It follows, in particular, that the role of ‘ringleader’ played by one or more undertakings in a restrictive agreement must be taken into account in setting the fine, in so far as undertakings which have played such a role must for that reason bear a special responsibility by comparison with the other undertakings (see, to that effect, Joined Cases 96/82 to 102/82, 104/82, 105/82, 108/82 and 110/82 IAZ International Belgium and Others
v Commission
[1983] ECR 3369, paragraphs 57 and 58, and Case C‑298/98 P Finnboard v Commission
[2000] ECR I‑10157, paragraph 45; Case T‑347/94 Mayr-Melnhof v Commission
[1998] ECR II‑1751, paragraph 291).
127. Regarding the Guidelines, they provide, at Section 2, under aggravating circumstances, a non-exhaustive list of circumstances which can lead to an increase in the basic amount of the fine and includes in particular ‘the role of leader in or instigator of the infringement’.
128. In this instance, it should be borne in mind that the Commission referred to a number of factors in finding that Nintendo had been the leader and instigator of the infringement in question (see recitals 228 to 238 and 406 of the Decision). The Commission argued that Nintendo supervised, implemented, and ensured compliance with, a number of measures designed to limit parallel trade.
129. It must be held that the Commission did not err in considering that those facts, whose existence was not contested by the applicants, indicated that Nintendo had been the leader and instigator of the infringement.
130. Contrary to what the applicants submit, in order to classify an undertaking as a ‘leader’ and to increase the amount of the fine imposed on it, it is not necessary to prove that, in the absence of the role played by that undertaking, the infringement committed would have been less serious. Such an argument is based on confusion between the assessment of the gravity of the infringement in absolute terms and the examination of the gravity in relative terms of the participation of each of the undertakings concerned when examining aggravating and attenuating circumstances.
131. Similarly, the applicants cannot claim that such a role of leader or instigator of the infringement can be found only in restrictive horizontal agreements but not in a restrictive vertical agreement such as that at issue here. The fact that, in the latter case, that role generally merges with that of the manufacturer does not preclude that such an aggravating circumstance can be taken into account for the purposes of calculating the amount of the fine.
132. As regards lastly the argument that the finding that Nintendo was leader of the agreements is incompatible with the Commission’s refusal to apply the Leniency Notice, the applicants have not stated how, in the context of the calculation of the amount of the fines, the application of that notice is linked to the assessment of aggravating circumstances in respect of the undertakings.
133. In the light of the foregoing, this plea must be rejected.
The second plea: lack of consistency with the Commission’s earlier decisions and breach of the principle of non-discrimination and of the obligation to state reasons
– Arguments of the parties
134. The applicants claim that by applying an increase of 50% of the fine on account of Nintendo’s role as leader and instigator of the infringement the Commission departed from its previous practice concerning vertical infringements. That departure is so substantial that it constitutes a breach of the principle of non-discrimination. Nintendo’s role was no more important than that of the manufacturers in question in the earlier cases on vertical agreements, cases in which much lower increases for aggravating circumstances were imposed, such as the increase of 20% in the Volkswagen I and II cases.
135. Furthermore, the Commission has not given any, or any sufficient, reasons for that departure from its earlier policy and practice.
136. The Commission disputes all the arguments put forward by the applicants.
– Findings of the Court
137. As regards the complaint that the Commission departed from its previous practice concerning vertical infringements, it is sufficient to recall that the Commission’s practice in previous decisions cannot itself serve as a legal framework for the imposition of fines in competition matters (see the case-law cited in paragraph 75 above). It follows that the complaint alleging infringement of the principle of non‑discrimination, which is based on the difference between the increase imposed in the present case and those applied in other cases, must also be rejected.
138. Similarly, in such circumstances, the Commission was not required to explain why the increase in the present case was different from that applied in its earlier decisions. In any event, the Decision (see recitals 228 to 238 and 406) clearly states the factors which the Commission took into account and thus satisfies the requirements concerning statements of reasons as set out in the case‑law (see paragraph 53 above). The Commission did not therefore fail in its obligation to state reasons under Article 253 EC.
139. Accordingly, this plea must be rejected.
Increase of the applicants’ fine for continuation of the infringement
140. For the sake of completeness, the applicants observe that the Commission has never imposed either such a high percentage (25%) or such a high financial penalty (EUR 28.5 million) for the aggravating circumstance of continuing the infringement. Such an increase is plainly excessive, especially when compared with the starting amount of EUR 23 million for gravity of the infringement.
141. The Commission rejects all those claims.
142. The Court points out that the Commission is entitled to take account of the fact that an undertaking continued an infringement after the beginning of the investigation as an aggravating circumstance, since such conduct shows that the parties to the restrictive agreement were particularly determined to continue their infringement in spite of the risk of fines ( LR AF 1998
v Commission, paragraph 84 above, paragraph 369).
143. In the present case, the applicants do not contest the principle of such an increase, but the rate of that increase.
144. The 25% increase of the fine imposed on Nintendo for continuation of the infringement appears justified by the circumstances of the present case. It is apparent from the facts set out by the Commission in the Decision, which are not substantially contested, that NOE and NCL continued their illegal conduct after they had become aware of the Commission’s investigation. The facts referred to in recital 410 of the Decision demonstrate moreover the particular determination of NOE and NCL in continuing the infringement during 1996 and 1997, that is for nearly two years after they had become aware of the Commission’s investigation, which dates back to June 1995 at the latest.
145. In such circumstances, the Commission was entitled to regard the applicants’ continuation of the infringement as an aggravating circumstance and therefore increase the amount of their fine by 25%.
146. This plea must therefore be rejected.
5. The reduction of the applicants’ fine granted for attenuating circumstances
147. The applicants maintain that their cooperation and the totality of the attenuating circumstances merited a reduction of the fine considerably in excess of the 25% accorded to them. There are several bases upon which a more substantial deduction could have been made, namely application of the Leniency Notice in this case, equal treatment with John Menzies, fair characterisation of the cooperation offered by the applicants and proper consideration of the compensation paid to third parties and the programme for compliance with Community law adopted by the applicants.
The first plea: error of law and manifest error of assessment, in that the Commission refused to apply the Leniency Notice
Arguments of the parties
148. The applicants claim that, by refusing to apply the Leniency Notice and thereby depriving them of any opportunity to benefit from the maximum reduction of 50% provided for in Section D of the Leniency Notice, the Commission erred in law and committed a manifest error of assessment.
149. The applicants submit that they voluntarily admitted the infringement and cooperated totally with the Commission as from 23 December 1997. Nintendo was thus the first undertaking to make a voluntary confession and, therefore, the first to cooperate with the Commission. To the applicants’ knowledge, there has been no other example of cooperation as substantial and spontaneous as that which they provided in this case.
150. As regards, more specifically, the Commission’s refusal to apply the Leniency Notice on the ground that this case involves a vertical infringement and not a secret cartel, the applicants contend that such a refusal is incompatible with the fact of treating the infringement in question as such a secret cartel as regards punishment. In their submission, the Commission cannot assert at the same time that the size of the fine was justified on the basis that the infringement was akin to a horizontal cartel and deny that it is such a cartel when examining attenuating circumstances. Moreover, any behaviour qualifying for a reduction of the fine under the Leniency Notice should be regarded as ‘attenuating circumstances’ under the Guidelines. Accordingly, the Commission is bound, when setting the fine, to have regard to all attenuating factors, including those specified in the Leniency Notice.
151. In that regard, the applicants submit that they fall at the very least within the provisions of Section D, paragraph 2, indents 1 and 2, of the Leniency Notice, which provide for a reduction of 10% to 50% of the fine if (i) before a statement of objections is sent an undertaking provides the Commission with information, documents or other evidence which materially contribute to establishing the existence of the infringement committed and if (ii) after receiving the statement of objections an undertaking informs the Commission that it does not substantially contest the facts on which the Commission bases its allegations.
152. The documentation provided voluntarily by the applicants before the statement of objections included 74% of the documents relied on by the Commission in the statement of objections and 84% of the documents relied on by the Commission in the Decision. Indeed, the Commission acknowledged this in point 216 of the statement of objections. Moreover, the applicants accepted not only the facts established by the Commission in the statement of objections but also the conclusions drawn from them.
153. In view of all those considerations, the applicants take the view that they should have been granted the maximum reduction of 50% provided for in Section D of the Leniency Notice. That, moreover, would be in line with Commission practice, whereby substantial reductions of fines, of between 30 and 50%, have been granted to undertakings whose cooperation has been manifestly less full and extensive than that provided by the applicants.
154. They refer inter alia to the ‘Nathan Bricolux’ case (Commission Decision 2001/135/EC of 5 July 2000 relating to a proceeding pursuant to Article 81 [EC] (Case COMP.F.1. 36.516 - Nathan-Bricolux (OJ 2001 L 54, p.1), recital 134), in which the Commission granted a 40% reduction for cooperation that did not extend to the voluntary production of documentary evidence. They also refer to the pre‑insulated pipes case, in which the Court of Justice granted ABB a reduction of 30% for having provided the Commission with information on the origins of the cartel and having assisted in establishing the facts of the infringement, and a separate reduction for not contesting the facts after the statement of objections was sent.
155. Finally, in the applicants’ submission, the Commission’s argument that the value of the applicants’ evidence was reduced by the failure to cooperate promptly cannot be upheld. They had already been penalised by an increase of 25% for aggravating circumstances in that they had continued the infringement, so that a small reduction of the fine for belated cooperation results in a double counting in breach of the principle non bis in idem . In any event, the reduction for cooperation does not depend on the chronological order in which evidence is submitted (see, to that effect, Commission Decision 2001/418/EC of 7 June 2000 relating to a proceeding pursuant to Article 81 [EC] and Article 53 of the EEA Agreement (Case COMP/36.545/F3 – Amino Acids) (OJ 2001 L 152, p. 24) and Commission Decision 2002/742/EC of 5 December 2001 relating to a proceeding pursuant to Article 81 [EC] and Article 53 of the EEA Agreement (Case COMP/E-1/36.604 – Citric Acid) (OJ 2002 L 239, p. 18)).
156. The Commission contests all the complaints put forward by the applicants.
Findings of the Court
157. In the first place, the application to the present case of the Leniency Notice must be rejected. It is apparent from that notice, the aim of which is to encourage undertakings to disclose the existence of restrictive agreements that are particularly difficult to detect, that it is applicable only in cases where infringements of a horizontal nature are involved, such as cartels. That notice refers at Section A(1), first subparagraph, to the case of ‘[s]ecret cartels … aimed at fixing prices, production or sales quotas, sharing markets or banning imports or exports’.
158. The applicants’ arguments must also fail in so far as they are to be construed as a claim to a right to the application by analogy of that notice to the extent that the infringement concerned in the present case was treated like a cartel in terms of the sanction imposed. As the Commission makes clear, the classification of the infringement in question as very serious and the assessment of the cooperation provided during the administrative procedure are unconnected. Similarly, it cannot be submitted that the Commission was obliged to grant a larger reduction of the fine, since it found continuation of the infringement to be an aggravating circumstance.
159. Accordingly, the applicants cannot rely on the Leniency Notice or the rules in it in order to claim a right to a larger reduction of the fine for their cooperation.
160. In the second place, as regards the extent of the applicants’ cooperation, it should be recalled that, according to settled case‑law, a reduction in the fine on grounds of cooperation during the administrative procedure is based on the consideration that such cooperation facilitates the Commission’s task of identifying an infringement (Case T‑311/94 BPB de Eendracht v Commission
[1998] ECR II‑1129, paragraph 325, and Case T‑338/94 Finnboard v Commission
[1998] ECR II‑1617, paragraph 363). Accordingly, in order to justify reduction of the fine for cooperation, an undertaking’s conduct must facilitate the Commission’s task of identifying and penalising infringements of the Community competition rules (see Joined Cases T‑67/00, T‑68/00, T‑71/00 and T‑78/00 JFE Engineering and Others v Commission
[2004] ECR II‑2501, paragraph 499 and the case-law cited).
161. Although in appraising the cooperation provided by parties to restrictive agreements, the Commission is not entitled to disregard the principle of equal treatment – a question which will be examined subsequently – it has a wide discretion in assessing the quality and usefulness of the cooperation provided by them (Case C‑328/05 P SGL Carbon v Commission
[2007] ECR I‑3921, paragraph 88). Accordingly, only a manifest error of assessment can be censured.
162. In this instance, there is nothing to support the conclusion that the Commission committed a manifest error of assessment by granting the applicants a reduction of 25% of their fine for cooperation. In particular, and in common with the situations in which the Leniency Notice applies, it is not decisive that cooperation goes beyond not substantially contesting the facts, since the Commission has a wide discretion to assess the level of the reduction of the fine which it intends to grant in this respect.
163. It remains however to be assessed whether the Commission disregarded the principle of equal treatment in granting John Menzies a reduction of its fine which was significantly higher than the reduction granted to the applicants.
The second plea: breach of the principle of equal treatment and of the obligation to state reasons
Arguments of the parties
164. The applicants allege, first, that the Commission breached the principle of equal treatment by granting them a reduction of 25% for cooperation as against 40% for John Menzies, even though their voluntary cooperation was earlier and more extensive than that of John Menzies.
165. In response to the Commission’s argument that the letter of 23 December 1997 was only an offer of cooperation, the applicants state that, both in the statement of objections (point 217) and in the Decision (recital 458), the Commission asserts that Nintendo admitted the infringement in December 1997. In any event, a party does not need to be the first to provide evidence to qualify for a 50% reduction under Section D(2), second indent, of the Leniency Notice. The percentage reduction depends in fact on the value of the evidence provided. In that connection, the applicants append to their reply the evidence supplied to the Commission, which in their view by itself justifies a reduction of at least 50%.
166. The applicants also submit that the difference of treatment as compared with John Menzies is nowhere adequately explained in the Decision.
167. As regards the applicants’ argument that their contribution preceded that of John Menzies, the Commission observes that it is based solely on the letter of 23 December 1997 from the applicants to the Commission. However, that letter only offers cooperation, which materialised later, more specifically on 21 January 1998, that is to say, after John Menzies cooperated on 13 January 1998. That letter does not contain either a renunciation of previous written representations or an admission of an infringement. In it, the applicants admit something but give no indication of what it might be so as to permit the Commission to rely on that letter alone as evidence of the applicants’ involvement in the infringement.
168. As regards the complaint of lack of reasoning, it is unfounded as the Decision sets out the reasons for which a lesser reduction was granted to the applicants, namely the earlier contribution by John Menzies and the lesser value of the applicants’ submissions of 21 January 1998 (Decision, recitals 455 to 460).
Findings of the Court
169. It follows from Section 3, sixth indent, of the Guidelines, the applicable provision in this case, that the basic amount of the fine imposed on an undertaking may be reduced where that undertaking has effectively cooperated in the proceedings, outside the scope of the Leniency Notice.
170. It is clear from the case-law that when appraising the cooperation provided by undertakings during the administrative procedure initiated in respect of a prohibited agreement, the Commission must comply with the principle of equal treatment, a general principle of Community law which, according to settled case-law, is infringed where comparable situations are treated differently or different situations are treated in the same way, unless such treatment is objectively justified (see the case-law cited in paragraph 95 above).
171. The appraisal of the extent of the cooperation provided by undertakings cannot depend on purely random factors. A difference in the treatment of the undertakings concerned must therefore be capable of being ascribed to differences in the degree of cooperation provided, particularly where different information was provided or that information was supplied at different stages in the administrative procedure or in dissimilar circumstances (see Groupe Danone v Commission, paragraph 95 above, paragraph 454 and the case-law cited).
172. Thus, in so far as undertakings supply the Commission, at the same stage of the administrative procedure and in similar circumstances, with similar information concerning the matters of which they are accused, the degrees of cooperation afforded by them must be regarded as comparable, with the consequence that those undertakings must be treated equally when the amount of the fine imposed on them is determined (see, to that effect, JFE Engineering and Others v Commission, paragraph 160 above, paragraphs 501 and 573 and the case-law cited).
173. In this instance, the Commission stated, as regards the extent of John Menzies’s cooperation in the investigation, as follows:
– John Menzies’s submission of 13 January 1998 was spontaneously made (recital 455 of the Decision);
– that submission contributed significantly to establishing the extensive collaboration between John Menzies and Nintendo to tighten the control of parallel exports (recital 456, first sentence, of the Decision);
– that submission supplied information on approaches made to John Menzies for passive export sales (recital 456, second sentence, of the Decision).
174. As regards, on the other hand, the cooperation offered by Nintendo, the Commission stated that:
– Nintendo had made an admission on 23 December 1997 (recital 94 and recital 458 of the Decision);
– Nintendo had spontaneously provided the Commission, after John Menzies, with numerous documents on 21 January, 1 April and 15 May 1998, which had ‘contributed’ to substantiating the existence of the infringement, improving the Commission’s knowledge of the facts based on its own investigations and on documents provided by John Menzies (recitals 458 and 459, first sentence, of the Decision);
– those documents had also ‘helped’ in establishing the participation of several undertakings and the geographical scope of the infringement (recital 459, second sentence, of the Decision).
175. It follows from those findings that the Commission clearly set out the factors it took into account when reducing the fines on account of the undertakings’ cooperation and that the obligation to state reasons was complied with as regards the application of that attenuating circumstance.
176. As regards compliance with the principle of equal treatment, in order to conclude that there is material difference between the respective degrees of cooperation provided by the undertakings, the cooperation provided must be compared from both a chronological point of view, which first entails an examination of the stage at which the cooperation was provided, and a qualitative point of view, which then leads to a comparison of the circumstances in which the undertakings cooperated and the intrinsic value of the information communicated by each of them as part of that cooperation (see paragraph 172 above).
177. As regards, first of all, the stages of the administrative procedure at which the undertakings in question cooperated, it is not disputed in the present case that John Menzies’s effective cooperation slightly precedes that of the applicants’. John Menzies’s spontaneous cooperation began with its statement of 13 January 1998, whilst the applicants’ began on 21 January 1998. However, the fact that the applicants in fact began to cooperate with the Commission eight days after John Menzies does not alone justify the fact that the reduction of the fine for cooperation granted to John Menzies is higher than that granted to Nintendo.
178. In this respect, it should be borne in mind that, in order to be considered comparable, the undertakings’ cooperation does not necessarily have to commence on the same day, but it must commence at the same stage of the procedure.
179. There is nothing in the Decision or in the documents before the Court to indicate that the date at which John Menzies cooperated and that at which the Commission received information from Nintendo correspond to different stages of the Commission’s investigation. Indeed the Commission confirmed at the hearing, in reply to a question put by the Court, that the information provided by Nintendo on the existence of the restrictive agreements had been communicated at the same stage of the administrative procedure as that provided by John Menzies.
180. It follows from the foregoing that the Court cannot accept the Commission’s argument that the information and documents submitted by Nintendo were of less value than those submitted by John Menzies, as they were provided at a later time. There was thus nothing from a chronological point of view which could be considered to be determinative for a comparative assessment of the value of the cooperation (see, to that effect, Groupe Danone v Commission, paragraph 95 above, paragraph 467).
181. As regards, next, the circumstances in which the undertakings in question cooperated with the Commission, it is clear from the Decision that Nintendo, like John Menzies, spontaneously communicated the documents which helped to establish the existence and geographic scope of the infringement.
182. As regards, lastly, the content of the information provided by John Menzies and Nintendo respectively, it must be observed that, according to the Commission, the letter of 4 April 1996 sent by NOE to John Menzies and John Menzies’s reply of 11 April 1996 ‘contributed significantly to establishing the extensive collaboration … to tighten the control of parallel exports’ (see recital 456 of the Decision). It is apparent from the case‑file, in particular from the document lodged by the applicants at the hearing, on which the Commission had the opportunity to submit observations (see paragraph 28 above), that those two letters, referred to in recitals 127 to 131 of the Decision, were produced spontaneously not only by John Menzies, but also by Nintendo.
183. Nintendo’s cooperation in the procedure initiated by the Commission must therefore be regarded as having been comparable to that provided by John Menzies. Nintendo should therefore have benefited in this respect from the same level of reduction of fine as that granted to John Menzies, namely 40%, since both undertakings produced the relevant documents at the same stage of the procedure.
184. As regards whether the applicants ought, as they claim, to have benefited from a rate of reduction of the fine of more than 40%, it must be held, as the Commission stated at recital 459 of the Decision, that the other documents provided spontaneously by the applicants on 21 January, 1 April and 15 May 1998 had not only contributed to improving the Commission’s knowledge of the facts based on its own investigations but ‘also helped in establishing the participation of several parties and the geographical scope of the infringement’.
185. It follows in particular from the document lodged by the applicants at the hearing, on which the Commission had the opportunity to submit observations, that a number of findings set out in the Decision at recitals 103 to 108, 110, 116 to 119, 122 to 125, 127 to 130, 132, 133, 136, 138 to 150, 152 to 157, 160, 164 and 167 (concerning the events identified in the United Kingdom and Ireland); in recitals 170 to 181 (concerning the events identified in Spain); in recitals 182, 184 and 185 (concerning the events in the Netherlands); in recitals 187 to 189 (concerning the events in France); in recitals 190 to 197 (concerning the events in Belgium and Luxembourg); in recitals 199 to 201 (concerning the events in Germany); recitals 204 and 206 to 209 (concerning the events in Greece); in recitals 210, 211 and 213 (concerning the events in Portugal); in recitals 214, 215 and 217 to 219 (concerning the events in Italy) and in recitals 223, 224, 226 and 227 (concerning the events in Denmark, Norway, Sweden, Finland and Iceland) are based on information provided by Nintendo. In that connection, it must also be noted that Nintendo, in its position as a party to all the distribution agreements in question, was in a position to provide specific information on the terms and implementation of those agreements.
186. However, it must be held that, despite the considerable volume of information provided, those documents were not essential to enable the Commission to establish the existence of the agreements and concerted practices in question and, therefore, the existence of the alleged infringement. The information provided by Nintendo could not, unlike the letters of 4 and 11 April 1996 (see paragraph 182 above), be used as such as the principal evidential basis of the decision finding an infringement on the market for video games consoles manufactured by Nintendo and game cartridges compatible with those game consoles. In that connection, it should be recalled that the information on which the findings set out in recitals 103 to 108, 110, 116 to 119, 122 to 125, 127 to 130, 132, 133, 136, 138 to 150, 152 to 157, 160, 164, 167, 170 to 182, 184, 185, 187 to 197, 199 to 201, 204, 206 to 211, 213 to 215, 217 to 219, 223, 224, 226 and 227 were based only made it possible to clarify the identity of the distributors involved in the infringement and its geographic scope.
187. It is further apparent from the contents of the documents before the Court that a number of those items of information, namely those which, in the Decision, form the basis of recitals 103 (existence, duration and terms of the distribution agreement between Nintendo UK Ltd and Nintendo), 108, 110, 123, 167 (facts concerning the distribution agreements between Nintendo and The Games), 170, 171, 176 (existence, duration and terms of the distribution agreement between Nintendo España, SA and Nintendo), 182 (terms of the formal agreements between Nintendo Netherlands BV and its customers), 189 (letter sent by Nintendo France SARL concerning the risk of exports from France), 190, 191, 194, 196 (existence and terms of the distribution agreements in Belgium and Luxembourg), 199 (parallel exports from Germany), 204 (terms of the agreement between Itochu Hellas EPE and Nintendo), 210, 211 (terms and duration of the distribution agreements between Nintendo and its distributors in Portugal), 214, 215 (terms and duration of the distribution agreements between Nintendo and its distributor in Italy), were obtained by the Commission in reply to the requests for information that it had sent to the applicants (see, inter alia, recitals 86 to 93 of the Decision and, in particular, recitals 86 and 87, which refer to the Commission’s request to provide information relating in particular to distributors and subsidiaries and to the content of the formal distribution agreements concluded between Nintendo and its distributors in France, Germany, Italy, the United Kingdom, Greece and Portugal), replies for which a reduction of the fine in respect of cooperation is precluded since they were given in compliance with the applicants’ obligations under Article 11(4) and (5) of Regulation No 17 (see, to that effect, Groupe Danone v Commission, paragraph 95 above, paragraph 451 and the case-law cited). Accordingly, the information concerning the geographic scope of the restrictive agreements and the identity of the distributors involved in them did not justify a further reduction of the fine under the heading of Nintendo’s effective cooperation. The Commission was able to establish the geographic scope of the restrictive agreements and the identity of the distributors involved in them even in the absence of the information provided spontaneously by the applicants.
188. It follows from those considerations that Nintendo’s cooperation did not justify a reduction beyond 40% of the amount of the fine imposed on it.
189. In the light of all the foregoing, this plea must be upheld in part and it is therefore necessary to vary the Decision by granting the applicants a rate of reduction of the fine identical to that granted to John Menzies. The specific consequences of that variation will be clarified below.
The third plea: breach of the rights of the defence through the mischaracterisation of Nintendo’s efforts
Arguments of the parties
190. The applicants consider that the Commission breached their rights of defence by changing, to their detriment, its assessment of the facts of the case and/or the legal conclusions to be drawn from them. They observe that in point 216 of the statement of objections the Commission stated that it had taken note of the ‘applicants’ material contribution to establishing the existence of an infringement’, whereas in the Decision it stated that the documents provided by them merely contributed to substantiating the existence of the infringement.
191. The Commission contends that this plea should be rejected.
Findings of the Court
192. It must be borne in mind that, by their action, the applicants seek exclusively to obtain cancellation or a reduction of the fine imposed on them.
193. This plea must therefore be declared ineffective in so far as the applicants do not state how the terminological difference between the statement of objections and the Decision regarding their contribution to establishing the existence of the infringement could have influenced the amount of the fine imposed on them.
194. In any event, Article 19(1) of Regulation No 17 and Article 7 of Commission Regulation (EC) No 2842/98 of 22 December 1998 on the hearing of parties in certain proceedings under Articles [81 EC] and [82 EC] (OJ 1998 L 354, p. 18), expressly provide that, where the Commission proposes to impose a fine, the undertakings concerned must have the opportunity to make their submissions on the matters to which the Commission has taken objection. It is thus by way of their submissions on the duration, the gravity and the foreseeability of the anti-competitive nature of the infringement that the rights of the defence of the undertakings concerned are guaranteed before the Commission in relation to setting the amount of the fine (Case T‑83/91 Tetra Pak v Commission [1994] ECR II‑755, paragraph 235).
195. This plea must therefore be rejected.
The fourth plea: breach of the principle of the protection of legitimate expectations through failure to attach sufficient weight to the compensation paid to the third parties and failure to take account of the compliance programme
Arguments of the parties
196. According to the applicants, the Commission breached the principle of the protection of legitimate expectations (i) by not reducing the fine by an amount equivalent to the payment of the compensation that they offered to the third parties identified in the statement of objections and (ii) by not taking account of the programme for compliance with competition law that they put in place.
197. As regards the compensation paid to third parties, the applicants state, first, that such compensation, described as ‘substantial’ in the decision, amounted to EUR 375 000.
198. Second, the applicants emphasise that the compensation was paid only following an assurance given by the Commission at the meeting of 15 December 1998 that the adoption of those measures would be taken into account for calculation of the amount of the fine. In that regard, the applicants state that a legitimate expectation arises when a senior Commission official, charged by the Commission with dealing with a particular case, makes precise assurances in the course of a formal investigation which he knows will be relied upon by the undertaking, at significant financial cost to that undertaking.
199. Third, the Commission recognised that the payment of compensation to third parties constitutes an ‘attenuating circumstance’ within the meaning of the Guidelines (Decision, recitals 421 to 464). However, it did not, as a matter of economic reality, grant the applicants any reduction, the fine being reduced by only EUR 300 000.
200. Finally, the way the Commission treated the applicants would not encourage other undertakings voluntarily to pay such compensation in the future.
201. The Commission contests all those arguments.
Findings of the Court
202. By this plea, the applicants suggest that, contrary to the assurances given to them at the meeting of 15 December 1998, the Commission did not or did not take sufficient account of the compensation that they offered to the third parties or of the compliance programme which they set up for their employees.
203. In that connection, it must be borne in mind that the right to rely on the principle of the protection of legitimate expectations extends to any individual in a situation where the Community authorities have caused him to entertain legitimate expectations. A person may not plead infringement of the principle unless he has been given precise assurances by the administration (see Case T‑220/00 Cheil Jedang v Commission
[2003] ECR II‑2473, paragraph 33 and the case-law cited).
204. In respect, first of all, of the compensation offered by Nintendo to the third parties harmed, it must be recalled that the Commission decided to reduce the fine imposed on NOE and NCL by EUR 300 000 in order to take account of the compensation that they offered to third parties identified in the statement of objections as having suffered financial harm as a result of the unlawful conduct (see recitals 440 and 441 of the Decision).
205. The documents before the Court reveal that the total amount of the payments made to the third parties is EUR 375 000.
206. However, contrary to what the applicants maintain, the Commission never gave them an assurance that the entire amount of those payments would be deducted from the amount of the fine imposed on them.
207. As is apparent from the minutes of the meeting of 15 December 1998, the Commission’s representative stated merely that the payment of compensation to the third parties ‘would be relevant in the calculation of any fine’. That statement cannot, in any case, be described as a precise and unconditional assurance that all that compensation would be deducted from the final amount of the fine.
208. In any event, in order to be able to give rise to a legitimate expectation, the assurances provided must emanate from authorised and reliable sources (see, to that effect, in the case of a statement by the Director‑General competent for competition matters, Joined Cases T‑236/01, T‑239/01, T‑244/01 to T‑246/01, T‑251/01 and T‑252/01 Tokai Carbon and Others v Commission
[2004] ECR II‑1181, paragraphs 152 and 153). In the light of the exclusive competence of the College of Commissioners to adopt a decision imposing a fine, a Commission official cannot have provided Nintendo, at an informal meeting with its representatives, with precise assurances from an authorised, reliable source that the compensation offered to the third parties would be deducted from the final amount of the fine.
209. It follows that the Court cannot uphold the complaint alleging infringement of the principle of the protection of legitimate expectations in relation to the taking into account of the compensation offered to third parties by Nintendo.
210. Those considerations also apply as regards the taking into account of the competition law compliance programme set up by Nintendo.
211. In any event, the Commission was under no obligation whatsoever to take account of the setting up of the compliance programme which, on the assumption that it can be regarded as a form of cooperation, was initiated by the undertaking on its own initiative, and not in response to precise assurances provided by the Commission.
212. This plea must therefore be rejected.
6. The determination of the final amount of the fine
213. As is apparent from paragraphs 169 to 189 above, it is necessary to vary the Decision inasmuch as it sets a reduction rate of only 25% in respect of the applicants’ cooperation.
214. The Commission’s findings in the Decision and the method of calculating the fines applied in the present case are otherwise unchanged.
215. The final amount of the fine is thus calculated as follows: the basic amount of the fine (EUR 113.85 million) is increased by 75% on the basis, first, of Nintendo’s role of leader in the restrictive agreements (50%) and, second, of continuation of the infringement (25%), that is an amount of EUR 199.2375 million. That amount is reduced by 40% for cooperation and an amount of EUR 300 000 on account of the compensation offered by the applicants to third parties, resulting in a total amount of EUR 119.2425 million.
Costs
216. Under Article 87(3) of the Rules of Procedure of the Court of First Instance, where each party succeeds on some and fails on other heads, the Court of First Instance may order that costs be shared or that each party bear its own costs. In the circumstances of this case, each party must bear its own costs.
(1) .
(1)
–	Confidential data omitted.
Operative part
On those grounds,
THE COURT OF FIRST INSTANCE (Eighth Chamber)
hereby:
1. Sets the amount of the fine imposed on Nintendo Co., Ltd and Nintendo of Europe GmbH at EUR 119.2425 million;
2. Dismisses the action as to the remainder;
3. Orders each party to bear its own costs.