62022TJ0181_RES
Case T‑181/22
Pharol, SGPS SA
v
European Commission
Judgment (Sixth Chamber) of 2 October 2024
(Competition – Agreements, decisions and concerted practices – Portuguese and Spanish telecommunications markets – Non-compete clause with respect to the Iberian market inserted in the contract for the acquisition by Telefónica of Portugal Telecom’s share in the Brazilian mobile telephone operator Vivo – Annulment in part of the initial decision – Decision amending the amount of the fine – Res judicata – Non-adoption of a supplementary statement of objections – Determination of the value of sales – Exclusion of sales of services for which the parties are not in potential competition)
Judicial proceedings – Res judicata – Scope
(see paragraphs 23-29)
Competition – Administrative procedure – Observance of the rights of the defence – Statement of objections – Annulment in part of a decision imposing a fine – Adoption of a decision amending the decision annulled in part without a supplementary statement of objections – Whether permissible – Conditions – Sending, by letter of facts, of information of a new element related to the method for determining the amended amount of the fine – Whether permissible – Obligation to organise a new hearing – Absence
(Council Regulation No 1/2003, Art. 27(1); Commission Regulation No 773/2004, Art. 12(1); Commission notice 2011/C 308/06, paragraph 111)
(see paragraphs 33-53)
Competition – Fines – Amount – Determination – Determination of the basic amount – Determination of the value of sales – Sales carried out in direct or indirect relation to the infringement – Limited to sales actually affected by the cartel – Absence – Sales made on a market on which there is no competition, even potential, between the parties to the cartel – Exclusion from the value of sales – Assessment of the existence of potential competition – Criterion – Absence of insurmountable barriers – Burden of proof
(Art. 101 TFEU; Council Regulation No 1/2003, Art. 23(2); Commission notice 2006/C 210/02, point 13)
(see paragraphs 69-73, 79-87, 98, 100, 102, 113, 126, 132, 137, 156, 169, 177, 191, 201)
Competition – Fines – Amount – Determination – Judicial review – Unlimited jurisdiction of the EU judicature – Scope – Determination of the amount of the fine imposed – Criteria for assessment
(Arts 101(1) and 261 TFEU; Council Regulation No 1/2003, Arts 23(3) and 31)
(see paragraph 212)
Résumé
By its judgment, the General Court dismissed the action for annulment brought by Pharol, SGPS SA against a decision of the European Commission (
1
) amending a decision by which the Commission imposed a fine for infringement of Article 101 TFEU on two telecommunications operators, including the applicant. In so doing, the Court provides clarification as to the method of calculating the basic amount of the fine by endorsing the Commission’s approach of excluding, for the purposes of determining the value of sales, sales of services for which the parties are not in potential competition. The Court also clarifies the circumstances in which the Commission must adopt a supplementary statement of objections and the principle of res judicata attaching to an earlier judgment of the Court (
2
) by which it annulled in part the Commission’s initial decision (
3
) relating to the same anticompetitive practice.
In July 2010, Portugal Telecom, SGPS SA (subsequently renamed ‘Pharol, SGPS SA’) and Telefónica, SA signed an agreement whereby Telefónica would acquire Portugal Telecom’s share in the Brazilian mobile telephone operator Vivo Participações, SA. Under a clause of that agreement, the parties undertook not to engage or invest, directly or indirectly, through any affiliate, in any project in the telecommunications business that can be deemed to be in competition with the other party on the Iberian market, for a period from the definitive conclusion of the transaction until 31 December 2011 (‘the clause’). Taking the view that that clause constituted a non-compete agreement contrary to Article 101 TFEU, the Commission adopted a decision in 2013 imposing a fine on them.
That decision was annulled in part by two judgments of the Court of 28 June 2016, (
4
) in so far as the amount of the fines imposed had been set on the basis of the value of sales taken into account by the Commission. According to the Court, in order to determine the value of sales, the Commission should have defined the services for which the parties were not in potential competition within the Iberian market, by examining the material put forward by them in their replies to the statement of objections in order to demonstrate the absence of such competition between them with respect to certain services during the period of application of the clause.
Following those judgments, the Commission adopted a new decision in which it recalculated the value of sales and amended the amount of the fine imposed on the applicant. It was in that context that the applicant brought an action before the Court for annulment of that decision.
Findings of the Court
First, the applicant submits that, by interpreting the clause in the contested decision as prohibiting the parties from taking steps in preparation for market entry, the Commission infringed the principle of res judicata attaching to the judgment in Portugal Telecom v Commission, (
5
) in so far as such an interpretation of the clause was not envisaged by the 2013 Decision, nor was it discussed in the context of the case which gave rise to that judgment.
In that regard, the Court notes, on the one hand, that res judicata extends only to the matters of fact and law actually or necessarily settled by the judicial decision in question and, on the other, that the force of res judicata attaches to both the operative part of that decision and the ratio decidendi of that decision which is inseparable from it.
In the judgment in Portugal Telecom v Commission, the Court did not rule on whether or not the clause prohibited preparatory steps, the scope of that clause having been defined not in relation to the type of measures which it prohibits, but in relation to the services covered by it. Thus, it cannot be considered that, by interpreting the clause as prohibiting those steps, the Commission infringed the principle of res judicata attaching to that judgment.
Second, by interpreting the clause as prohibiting preparatory steps, the Commission, according to the applicant, infringed, inter alia, its rights of defence, owing to the failure to adopt a supplementary statement of objections. In the applicant’s view, such an interpretation of the clause extends its scope and amends the 2013 Decision, thus constituting a new matter which is unfavourable to the applicant, on which it should have had the opportunity to comment.
The Court notes, as a preliminary point, that a supplementary statement of objections is necessary only if new objections are raised or if the intrinsic nature of the infringement in question is altered. By contrast, a simple letter of facts is sufficient if the objections raised against the undertakings concerned in the initial statement of objections are only corroborated by new evidence that the Commission intends to rely on.
In the present case, the Commission adopted a statement of objections (‘the 2011 statement of objections’) in the context of the procedure which led to the 2013 Decision. Following the annulment in part of that decision by the Court, the Commission did not issue a supplementary statement of objections before adopting the contested decision, but sent the companies in question a letter of facts. In that regard, the annulment of an EU act does not necessarily affect the validity of the preparatory measures. The validity of the 2011 statement of objections is not called into question by the judgment in Portugal Telecom v Commission, which annulled the 2013 Decision only in so far as it set the amount of the fine imposed on the applicant on the basis of the value of sales taken into account by the Commission. Accordingly, that judgment does not preclude the information provided in the 2011 statement of objections concerning the scope of the clause from being taken into consideration in order to review whether the applicant’s rights of defence were respected.
The Court finds that the interpretation of the clause as prohibiting preparatory steps cannot be regarded as a new objection in relation to the objections notified in the 2011 statement of objections, an alteration of those objections or an alteration of the intrinsic nature of the infringement. Although the 2011 statement of objections does not state that the clause prohibits preparatory steps, such an interpretation is necessary in view (i) of the duration of the clause which is too short to allow actual entry to the markets in question and (ii) of the wording of the clause in its English-language version.
Moreover, the Commission interpreted the clause as prohibiting preparatory steps in order to recalculate the value of sales in accordance with the judgment in Portugal Telecom v Commission. The determination of the value of sales is not one of the matters in respect of which the Commission is required to hear the parties, since the right to be heard does not cover such an element related to the method for determining the amount of the fine.
As regards the applicant’s line of argument that the Commission did not give it the opportunity to develop its arguments at an oral hearing, the Court observes that the right to an oral hearing exists only after the Commission has issued a statement of objections. (
6
) Therefore, since the Commission was not required to adopt a supplementary statement of objections instead of the letter of facts, it was not required to hold an oral hearing before adopting the contested decision.
Third, the applicant claims that the Commission erred in law by assessing the existence of potential competition between the parties on the basis of the criterion of insurmountable barriers to entry. The Court considers that the Commission did not make such an error.
In the judgment in Portugal Telecom v Commission annulling the 2013 Decision, the Court held that sales which did not directly or indirectly relate to the infringement, namely sales of services for which the parties were not in potential competition, should be excluded from the determination of the value of sales. However, the Court did not specify the criterion for assessing the existence of such competition for the purposes of calculating the fine, whereas it stated that, for the purposes of establishing the infringement, the criterion for assessing the existence of such competition was that of insurmountable barriers to entry to the market.
In the contested decision, the Commission considered that the criterion of insurmountable barriers to entry should also be used for the purpose of calculating the amount of the fine. To require the Commission, in order to determine the value of sales, to go beyond the examination of whether there are insurmountable barriers to entry in order to determine whether the parties have real and concrete possibilities of entering the market would amount to imposing on it, for the purposes of calculating the fine, an obligation which it does not have for the purposes of establishing the infringement where the infringement at issue has an anticompetitive object.
Accordingly, the Court rejects the latter plea in law.
(
1
)	Commission Decision C(2022) 324 final of 25 January 2022 amending Decision C(2013) 306 final of 23 January 2013 relating to a proceeding under Article 101 TFEU (Case AT.39839 – Telefónica and Portugal Telecom) (‘the contested decision’).
(
2
)	Judgment of 28 June 2016, Portugal Telecom v Commission (T‑208/13, EU:T:2016:368). No appeal was brought against this judgment.
(
3
)	Commission Decision C(2013) 306 final of 23 January 2013 relating to a proceeding under Article 101 TFEU (Case AT.39.839 – Telefónica/Portugal Telecom) (‘the 2013 Decision’).
(
4
)	Judgments of 28 June 2016, Portugal Telecom v Commission (T‑208/13, EU:T:2016:368), and of 28 June 2016, Telefónica v Commission (T‑216/13, EU:T:2016:369). The latter judgment was the subject of an appeal which was dismissed by the Court of Justice by judgment of 13 December 2017, Telefónica v Commission (C‑487/16 P, not published, EU:C:2017:961).
(
5
)	See footnote 2.
(
6
)	Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles [101] and [102 TFEU] (OJ 2004 L 123, p. 18).