Keywords

Summary



Keywords

1. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement

(Art. 81 EC and 82 EC; Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

2. Competition – Fines – Amount – Determination – Criteria – Discretion of the Commission

(Council Regulation No 17; Commission Notice 98/C 9/03)

3. Appeals – Pleas in law – Inadequate or contradictory grounds – Admissibility

4. Competition – Fines – Amount – Discretion of the Commission – Judicial review – Unlimited jurisdiction

(Art. 229 EC; Council Regulation No 17, Art. 17)

5. Appeals – Jurisdiction of the Court

(Arts 81 EC and 82 EC; Council Regulation No 17, Art. 15; Commission Notice 98/C 9/03)

6. Community law – Principles – Protection of legitimate expectations

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

Summary

1. The gravity of an infringement of the Community competition rules, which is to be taken into account when setting the amount of the fines to be imposed, is determined by reference to numerous other factors, in respect of which the Commission has a wide discretion. To take into account aggravating circumstances when setting the fine is consistent with the Commission’s task of ensuring that undertakings’ conduct complies with the competition rules.

Any repeated infringement is among the factors to be taken into consideration in the analysis of the gravity of the infringement in question.

In those circumstances, the contention that before the entry into force of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty the Commission’s practice in setting fines lacked clarity and foreseeability misconstrues the legal relationship between Article 15(2) of Regulation No 17, which constitutes the legal basis of the contested decision, and the Guidelines.

The Guidelines do not constitute the legal basis for setting the amount of the fine but merely clarify the application of Article 15(2) of Regulation No 17. In that context, even in the absence of the Guidelines undertakings have always been able to foresee the legal consequences of their conduct.

Accordingly, the Commission, in the exercise of its discretion, is entitled to regard the element associated with the repeated infringement as relating to the gravity of the infringement committed and may characterise that repeated infringement as an aggravating circumstance, without being in breach of the principle nulla poena sine lege .

(see paras 25-30)

2. Although neither Regulation No 17 nor the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty specifies a maximum period in relation to the finding of repeated infringement, this cannot be ruled out by virtue of the principle of legal certainty.

The Commission has a discretion as regards the choice of factors to be taken into account for the purposes of determining the amount of fines, such as, inter alia, the particular circumstances of the case, its context and the dissuasive effect of fines, without the need to refer to a binding or exhaustive list of the criteria which must be taken into account.

The finding and the appraisal of the specific characteristics of a repeated infringement, where such repetition of unlawful conduct is separated by a relatively brief lapse of time between infringements, come within the Commission’s discretion and the latter cannot be bound by any limitation period when making such a finding.

Repeated infringement is an important factor which the Commission must appraise, since the purpose of taking repeated infringement into account is to induce undertakings which have demonstrated a tendency towards infringing the competition rules to change their conduct. The Commission may therefore, in each individual case, take into consideration the indicia which confirm such a tendency, including, for example, the time that has elapsed between the infringements in question.

(see paras 36-40)

3. The question whether the grounds of a judgment of the Court of First Instance are contradictory or inadequate is a point of law which is amenable, as such, to judicial review on appeal.

In order to fulfil its obligation to state reasons, the Court of First Instance is not required to provide in its judgment an account that follows exhaustively and point by point all the reasoning articulated by the parties to the case. The reasoning may therefore be implicit on condition that it enables the persons concerned to know why the measures in question were taken and provides the competent court with sufficient material for it to exercise its power of review.

In that regard, for the purpose of taking the circumstances into account, the repeated infringement is not only a relevant factor but also a particularly important factor and a very significant indication of the gravity of an infringement for the purpose of assessing the amount of the fine in the context of effective deterrence. Repeated infringement is evidence that the sanction previously imposed on the applicant had not had sufficiently deterrent effects.

For the purpose of assessing the gravity of the infringement, the Court of First Instance may thus have recourse to the concept of deterrence without its judgment being vitiated by contradictory reasoning.

(see paras 43, 45-48)

4. In accordance with Article 229 EC, regulations adopted jointly by the European Parliament and the Council of the European Union, pursuant to the provisions of the Treaty, may give the Court of Justice unlimited jurisdiction with regard to the penalties provided for in such regulations.

Such jurisdiction was conferred on the Community judicature by Article 17 of Regulation No 17. The Community judicature is therefore empowered, in addition to carrying out a mere review of the lawfulness of the penalty, to substitute its own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or penalty payment imposed.

It follows that the Community judicature is empowered to exercise its unlimited jurisdiction where the question of the amount of the fine is before it and that that jurisdiction may be exercised to reduce that amount as well as to increase it.

(see paras 60-62)

5. In all proceedings in which sanctions, especially fines or penalty payments, may be imposed observance of the rights of the defence is a fundamental principle of Community law which has been emphasised on numerous occasions in the case-law of the Court.

In the context of an appeal against a judgment of the Court of First Instance which has set the amount of the fine imposed on an undertaking that has infringed the Community competition rules, the purpose of review by the Court of Justice is, first, to examine to what extent the Court of First Instance took into consideration, in a legally correct manner, all the essential factors to assess the gravity of particular conduct in the light of Articles 81 EC and 82 EC and Article 15 of Regulation No 17 and, second, to ascertain whether the Court of First Instance responded to the requisite legal standard to all the arguments raised by the appellant with a view to having the fine cancelled or reduced.

Since, in the exercise of its unlimited jurisdiction, the Court of First Instance relied exclusively on the provisions of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty and applied no other factors, circumstances or criteria which the undertaking in question could not foresee would be taken into account, that undertaking could not allege that the rights of the defence had been infringed.

(see paras 68-69, 82-83)

6. The principle that penal provisions may not have retroactive effect is one that is common to all the legal orders of the Member States and forms an integral part of the general principles of law whose observance is ensured by the Community judicature.

In particular, Article 7(1) of the European Convention for the Protection of Human Rights, signed in Rome on 4 November 1950, which enshrines in particular the principle that offences and punishments are to be strictly defined by law ( nullum crimen, nulla poena sine lege ), may preclude the retroactive application of a new interpretation of a rule establishing an offence.

That is particularly true of a judicial interpretation which produces a result which was not reasonably foreseeable at the time when the offence was committed, especially in the light of the interpretation put on the provision in the case-law at the material time.

However, the fact that the Commission, in the past, imposed fines of a certain level for certain types of infringement does not mean that it is estopped from raising that level within the limits indicated in Regulation No 17 if that is necessary to ensure the implementation of Community competition policy. On the contrary, the proper application of the Community competition rules requires that the Commission may at any time adjust the level of fines to the needs of that policy.

Undertakings involved in an administrative procedure in which fines may be imposed cannot therefore acquire a legitimate expectation that a particular method of calculating the fines applied in the past will be used.

(see paras 87-91)