Case C-501/11 P

Schindler Holding Ltd and Others

v

European Commission

‛Appeal — Agreements, decisions and concerted practices — Market for the installation and maintenance of elevators and escalators — Liability of the parent company for infringements of the law on cartels committed by its subsidiary — Holding company — Internal compliance programme — Fundamental rights — Principles of the rule of law in the context of determination of the fines imposed — Separation of powers, and principles of legality, of non-retroactivity, of the protection of legitimate expectations and of fault — Regulation (EC) No 1/2003 — Article 23(2) — Validity — Legality of the 1998 Commission guidelines’

Summary — Judgment of the Court (Fifth Chamber), 18 July 2013

Appeals — Jurisdiction of the Court — Challenge on grounds of fairness to the General Court’s assessment as to the amount of fines imposed on undertakings which have infringed the competition rules of the Treaty — Excluded — Challenge to that assessment on grounds alleging breach of the principle of proportionality — Permissible

Competition — Fines — Amount — Determination — Application of the guidelines on the method of setting fines — Breach of the principle of non-retroactivity — None — Breach of the principle of the protection of legitimate expectations — None

Acts of the institutions — Guidelines on the method of setting fines for infringements of the competition rules — Legal nature — Rule of practice — Obligation to observe the principle of equal treatment — Competence of the institutions to adopt them

European Union law — Principles — Right to effective judicial protection — Judicial review of decisions adopted by the Commission in competition matters — Review of legality and unlimited jurisdiction, as regards both the law and the facts — Infringement — None

See the text of the decision. (see paras 31, 56, 65)

Whilst, as Article 6(3) TEU confirms, fundamental rights recognised by the European Convention on Human Rights constitute general principles of the European Union’s law and whilst Article 52(3) of the Charter of Fundamental Rights of the European Union requires rights contained in the Charter which correspond to rights guaranteed by that convention to be given the same meaning and scope as those laid down by that convention, the latter does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into European Union law. (see paras 32, 124)

The fact that decisions imposing fines in competition matters are adopted by the Commission is not in itself contrary to Article 6 of the European Convention on Human Rights. As regards the principle of effective judicial protection, a general principle of European Union law to which expression is now given by Article 47 of the Charter of Fundamental Rights of the European Union and which corresponds, in European Union law, to Article 6(1) of that convention, in the context of the review of legality provided for by the FEU Treaty the European Union judicature has the unlimited jurisdiction which it is afforded by Article 31 of Regulation No 1/2003, in accordance with Article 261 TFEU, and which empowers it to substitute its own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or periodic penalty payment imposed. As the review provided for by the Treaties involves review by the European Union judicature of both the law and the facts, and means that it has the power to assess the evidence, to annul the contested decision and to alter the amount of a fine, the review of legality provided for under Article 263 TFEU, supplemented by the unlimited jurisdiction in respect of the amount of the fine, provided for under Article 31 of Regulation No 1/2003, is not contrary to the requirements of the principle of effective judicial protection which is currently set out in Article 47 of the Charter. (see paras 33, 36, 38)

See the text of the decision. (see paras 43-45, 81, 84, 106)

See the text of the decision. (see paras 54, 55, 83, 106)

See the text of the decision. (see paras 56-58)

The guidelines on the method of setting fines for infringements of the competition rules are not legislation, delegated legislation for the purposes of Article 290(1) TFEU, or the legal basis for fines imposed in competition matters, which are adopted on the basis of Article 23 of Regulation No 1/2003 alone. They form rules of practice from which the administration may not depart in an individual case without giving reasons compatible with the principle of equal treatment and merely describe the method used by the Commission to examine infringements and the criteria that the Commission requires to be taken into account in setting the amount of a fine. No provision of the Treaties prohibits an institution from adopting such rules of practice. It follows that the Commission had competence to adopt those guidelines. (see paras 66-69)

See the text of the decision. (see para. 75)

Whilst the principle of personal liability of legal persons is of particular importance as regards liability in the sphere of civil law, it cannot be relevant for defining the perpetrator of an infringement of competition law, which is concerned with the actual conduct of undertakings. The authors of the Treaties chose to use the concept of an undertaking to designate the perpetrator of an infringement of competition law, and not the concept of a company or firm or of a legal person, used in Article 54 TFEU. The concept of an undertaking designates an economic unit even if in law that economic unit consists of several natural or legal persons. It follows that, when an economic entity infringes the competition rules, it falls to that entity to answer for that infringement. (see paras 101-104, 129)

The presumption that decisive influence is exercised over a subsidiary wholly or almost wholly owned by its parent company is intended, in particular, to strike a balance between, on the one hand, the importance of the objective of combatting conduct contrary to the competition rules, in particular to Article 81 EC, and of preventing a repetition of such conduct and, on the other hand, the requirements flowing from certain general principles of European Union law such as the principle of the presumption of innocence, the principle that penalties should be applied solely to the offender and the principle of legal certainty as well as the rights of the defence, including the principle of equality of arms. That presumption is, however, rebuttable. The entities wishing to rebut it may adduce all factors capable of demonstrating that the subsidiary and the parent company do not constitute a single economic entity, but that the subsidiary acts independently on the market. In order to ascertain whether a subsidiary determines its conduct on the market independently, account must be taken of all the relevant factors relating to economic, organisational and legal links which tie a subsidiary to its parent company, which may vary from case to case and cannot therefore be set out in an exhaustive list. In this context, commercial policy is only one of a number of factors and, moreover, must not be interpreted restrictively. Furthermore, the adoption by the parent company of a code of conduct to prevent its subsidiaries from infringing competition law, along with related guidelines, does not alter the reality of the infringement found against it and, moreover, does not demonstrate that those subsidiaries determined their commercial policy independently. The implementation of that code of conduct suggests rather that the parent company did in fact supervise the commercial policy of its subsidiaries. Also, the fact that certain employees of its subsidiaries did not comply with the code of conduct is not sufficient to demonstrate independence of the commercial policy of the subsidiaries in question. (see paras 108-110, 112-114)

See the text of the decision. (see paras 115, 158, 159)

See the text of the decision. (see paras 124, 128)

In the context of setting the amount of a fine imposed for an infringement of the Community competition rules, while the actual impact of an infringement on the market is a factor to be taken into account in assessing the gravity of the infringement, it is one of a number of criteria, such as the nature of the infringement and the size of the geographic market. It follows from this that the effect of an anti-competitive practice is not, in itself, a conclusive criterion for assessing the proper amount of a fine. In particular, factors relating to the intentional aspect may be more significant than those relating to the effects, particularly where they relate to infringements which are intrinsically serious, such as market sharing. Furthermore, it is apparent from the first paragraph of Section 1.A of the guidelines on the method of setting fines for infringements of the competition rules that that impact is to be taken into account only where this can be measured. Consequently, if the European Union judicature takes account of the actual impact of the infringement at issue on the market, assuming that that impact can in fact be measured, it does so for the sake of completeness. (see paras 134-136)

When the European Union judicature reviews the legality of a decision imposing fines for infringement of the competition rules, it cannot use the Commission’s margin of discretion — either as regards the choice of factors taken into account in the application of the criteria mentioned in the guidelines on the method of setting fines for infringements of the competition rules or as regards the assessment of those factors — as a basis for dispensing with the conduct of an in-depth review of the law and of the facts. Such a rule also applies where the judicature determines whether the Commission applied correctly the notice on immunity from fines and reduction of fines in cartel cases in return for the cooperation of the undertakings involved (Leniency Notice). In any event, the principle of equal treatment does not prevent according favourable treatment only to the undertaking which provides significant added value within the meaning of point 21 of the 2002 Leniency Notice since the aim of that provision is legitimate. (see paras 155, 159)