Keywords

Summary



Keywords

1. Competition – Administrative procedure – Right to fair legal process – Article 6 of the European Convention on Human Rights not applicable

(Art. 81 EC; Charter of Fundamental Rights of the European Union, Art. 47)

2. Competition – Administrative procedure – Commission decision finding an infringement and imposing fines – Criminal-law nature – None

(Arts 81 EC and 229 EC; Regulation No 1/2003, Arts 23(5) and 31)

3. Competition – Administrative procedure – Commission decision finding an infringement – Use as evidence of statements made by other undertakings that have taken part in the infringement – Lawfulness – Conditions

(Arts 81 EC and 82 EC)

4. Acts of the institutions – Notification – Irregularities – Effects – Suspension of the period within which an action must be brought

(Arts 230, fifth para., EC, and 254(3) EC)

5. Competition – European Union rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Presumption of decisive influence exercised by the parent company over its wholly‑owned subsidiaries

(Art. 81 EC; Council Regulation No 1/2003, Art. 23(2))

6. Competition – European Union rules – Infringements – Attribution – Parent company and subsidiaries – Presumption of decisive influence exercised by the parent company over its wholly‑owned subsidiaries

(Art. 81 EC; Council Regulation No 1/2003, Art. 23(2))

7. European Union law – General principles of law – Legal certainty – Principle that penalties must have a proper legal basis – Scope

8. Competition – Fines – Amount – Determination – Discretion conferred on the Commission by Article 23(2) of Regulation No 1/2003 – Infringement of the principle that penalties must have a proper legal basis – No such infringement – Foreseeability of changes made by the Guidelines

(Art. 229 EC; Council Regulations No 17, Art. 15(2), and No 1/2003, Arts 23(2) and 31; Commission Notices 98/C 9/03 and 2002/C 45/03)

9. Competition – European Union rules – Infringements – Fines – Determination – Criteria – Raising of the general level of fines

(Regulations No 17, Art. 15(2), and No 1/2003, Art. 23(2))

10. Competition – Fines – Commission’s own powers under the Treaty

(Arts 81 EC, 82 EC, 83(1) and (2)(a) and (d) EC, 202, third indent, EC and 211, first indent, EC; Council Regulations No 17 and No 1/2003)

11. Competition – Fines – Amount – Determination – Application of the Guidelines on the method of setting fines – Breach of the principle of non-retroactivity of criminal provisions – No such breach

(Council Regulation No 1/2003, Art. 23; Commission Notice 98/C 9/03)

12. Competition – Fines – Amount – Determination – Application of the Guidelines on the method of setting fines – Lawfulness – Breach of the principles of protection of legitimate expectations, transparency and foreseeability – No such breach

(Commission Notice 1998/C 9/03)

13. Competition – Fines – Amount – Determination – Application of the Leniency Notice – Breach of the principles of non-retroactivity and protection of legitimate expectations – No such breach

(Commission Notice 2002/C 45/03)

14. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned – Breach of the right against self-incrimination and of the principles of the presumption of innocence and of proportionality – No such breach – Commission not acting ultra vires in adopting the Leniency Notice

(Art. 81 EC; Charter of Fundamental Rights of the European Union, Art. 48; Council Regulation No 1/2003, Arts 18 to 21 and 23; Commission Notice 2002/C 45/03, Points 11 and 23)

15. European Union law – Principles – Fundamental rights – Right to property – Restrictions – Lawfulness

(Arts 81 EC, 82 EC and 295 EC; Council Regulation No 1/2003, Art. 23(2))

16. Competition – Fines – Guidelines on the method of setting fines – Legal nature

(Commission Notice 98/C 9/03)

17. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Obligation to take account of the actual impact on the market – No such obligation – Primary role played by the criterion relating to the nature of the infringement

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A)

18. Competition – Fines – Decision imposing fines – Duty to state reasons – Scope

(Art. 253 EC; Commission Notice 98/C 9/03)

19. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Obligation to take account of the size of the market – No such obligation

(Commission Notice 98/C 9/03, Section 1A, second para., third indent)

20. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Account taken of the effective economic capacity of the undertaking to cause damage – Obligation to set the amount of the fine in a manner proportionate to the size of the undertaking – No such obligation – Setting the fine on the basis of a division of the cartel members into categories – Conditions – Judicial review

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A)

21. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances – Termination of the infringement before the Commission’s intervention – Case of serious infringement – Not included

(Art. 81 EC; Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 3, third indent)

22. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances – Obligation on the Commission to take into account a competition law compliance programme put in place by the undertaking concerned – No such obligation

(Art. 81 EC; Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03)

23. Competition – Fines – Amount – Determination – Criteria – Reduction of the fine for cooperation of the undertaking concerned

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 2002/C 45/03)

24. Competition – Fines – Amount – Determination – Criteria – Attitude of the undertaking during the administrative procedure – Appraisal of the extent of the cooperation shown by each of the undertakings participating in the cartel

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 2002/C 45/03)

25. Competition – Fines – Amount – Determination – Commission’s margin of discretion – Limits – Observance of the principle of proportionality – Conditions

(Council Regulation No 1/2003, Art. 23(2))

Summary

1. The principle that everyone is entitled to a fair legal process is a general principle of EU law which has been reaffirmed by Article 47 of the Charter of Fundamental Rights of the European Union and guaranteed by Article 6 of the European Convention on Human Rights. That principle is inspired by the fundamental rights which form an integral part of the general principles of EU law which the Court of Justice enforces, drawing inspiration from the constitutional principles common to the Member States and from the guidelines supplied, in particular, by the European Court of Human Rights. Although, by adopting an independent interpretation of the notion of ‘criminal charge’, the bodies of the European Convention on Human Rights laid the foundations for the progressive extension of the application of the criminal-head guarantees of Article 6 to areas which do not formally fall within the traditional categories of criminal law, such as pecuniary sanctions imposed for infringements of competition law, in relation, however, to the categories which do not form part of the ‘hard core’ of criminal law, the criminal-head guarantees of that provision will not necessarily apply with their full stringency.

(see paras 51-52)

2. Commission decisions imposing fines for the infringement of competition law are not of a criminal-law nature. Thus a procedure in which the Commission adopts a decision finding an infringement and imposing fines which may subsequently be subject to review by the Courts of the European Union satisfies the requirements of Article 6(1) of the European Convention on Human Rights. Although the Commission is not a tribunal within the meaning of Article 6 of the Convention, it must nevertheless observe the general principles of EU law during the administrative procedure.

Furthermore, the review of Commission decisions which the Courts of the Union carry out ensures that the requirements of a fair process, as enshrined in Article 6(1) of that convention are satisfied. In that regard, the undertaking concerned must be able to refer any decision adopted against it to a judicial body that has full jurisdiction and, in particular, the power to quash in all respects, on questions of fact and law, the challenged decision. Where the Courts of the Union review the legality of a decision finding an infringement of Article 81 EC, the applicants may call upon them to undertake an exhaustive review of both the substantive findings of fact and the Commission’s legal appraisal of those facts. Furthermore, in so far as concerns the fines, those Courts have unlimited jurisdiction under Article 229 EC and Article 31 of Regulation No 1/2003.

(see paras 53-56)

3. There is no provision or general principle of EU law that prohibits the Commission from relying, as against an undertaking, on statements made by other undertakings. If that were not the case, the burden of proving conduct contrary to Article 81 EC and Article 82 EC, which is borne by the Commission, would be unsustainable and incompatible with the task of supervising the proper application of those provisions which is entrusted to it by the Treaty. However, an admission by one undertaking accused of having participated in a cartel, the accuracy of which is contested by several other undertakings similarly accused, cannot be regarded as constituting adequate proof of an infringement committed by the latter unless it is supported by other evidence.

(see para. 57)

4. Irregularities in the procedure for notification of a decision are extraneous to that measure and cannot therefore invalidate it. Such irregularities can only, in certain circumstances, prevent the period referred to in the fifth paragraph of Article 230 EC, within which an application must be lodged, from starting to run. That is not the case where the applicant indisputably had knowledge of the content of the decision and exercised its right to bring proceedings within the period referred to in that article.

(see para. 61)

5. The conduct of a subsidiary may be imputed to the parent company in particular where, although it has a separate legal personality, that subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links between those two legal entities. In such a situation, the parent company and its subsidiary form a single economic unit and therefore form a single undertaking. Thus, the fact that a parent company and its subsidiary constitute a single undertaking within the meaning of Article 81 EC enables the Commission to address a decision imposing fines to the parent company, without having to establish the personal involvement of the latter in the infringement.

In the specific case in which a parent company has a 100% shareholding in a subsidiary which has infringed the EU competition rules, first, the parent company is able to exercise a decisive influence over the conduct of the subsidiary and, second, there is a rebuttable presumption that the parent company does in fact exercise a decisive influence over the conduct of its subsidiary.

In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to presume that the parent company exercises a decisive influence over the commercial policy of the subsidiary. The Commission will then be able to regard the parent company as jointly and severally liable for payment of the fine imposed on its subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to show that its subsidiary acts independently on the market.

(see paras 69-72, 82)

6. In the specific case in which a parent company has a 100% shareholding in a subsidiary which has infringed the EU competition rules, the attribution of a subsidiary’s infringement to the parent company does not require proof that the parent company influences its subsidiary’s policy in the specific area in which the infringement occurred. On the other hand, the organisational, economic and legal links between the parent company and its subsidiary may establish that the parent exercises an influence over the subsidiary’s strategy and therefore that they can be viewed as a single economic entity. Thus, if the Commission proves that the subsidiary is wholly owned by the parent company, it may hold the parent company jointly and severally liable for payment of the fi ne imposed on the subsidiary, unless the parent company proves that its subsidiary acts independently on the market. It is not because of a relationship between the parent company and its subsidiary in instigating the infringement or, a fortiori , because the parent company is involved in the infringement, but because they constitute a single undertaking for the purposes of Article 81 EC that the Commission is able to address a decision imposing fines to the parent company of a group of companies.

The fact that the parent company gave no instructions to its subsidiaries which might have authorised or encouraged contacts contrary to Article 81 EC, and had no knowledge of any such contacts, is not sufficient to demonstrate the independence of those subsidiaries. The fact that the subsidiaries participated in separate infringements of distinct nature, in four different countries, is equally incapable of rebutting the presumption of liability, where the Commission has not relied upon any similarities between the infringements found in order to impute liability for the subsidiaries’ conduct to the parent company. Similarly, the fact that the parent company has adopted 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. On the contrary, the implementation of that code rather suggests that the parent company has in fact supervised the commercial policy of its subsidiaries.

(see paras 82, 85, 87-88)

7. The principle that penalties must have a proper legal basis is a corollary of the principle of legal certainty, which constitutes a general principle of EU law and requires, inter alia, that any EU legislation, in particular when it imposes or permits the imposition of penalties, must be clear and precise so that the persons concerned may know without ambiguity what rights and obligations flow from it and may take steps accordingly.

The principle that penalties must have a proper legal basis, which is one of the general legal principles of EU law underlying the constitutional traditions common to the Member States, has also been enshrined in various international treaties, including in Article 7 of the European Convention on Human Rights.

That principle implies that legislation must define clearly offences and the penalties which they attract. That requirement is satisfied where the individual can know from the wording of the relevant provision and, if need be, with the assistance of the courts’ interpretation of it, what acts and omissions will make him criminally liable. In addition, according to the case-law of the European Court of Human Rights, the clarity of a law is assessed having regard not only to the wording of the relevant provision but also to the clarification provided by settled, published case-law.

The principle applies both to rules of a criminal law nature and to specific administrative instruments which impose administrative penalties or permit administrative penalties to be imposed. It applies not only to the rules which establish the elements of an offence, but also to those which define the consequences of contravening them.

Article 7(1) of the European Convention on Human Rights does not require the terms of the provisions pursuant to which penalties are imposed to be so precise that the potential consequences of an infringement of those provisions should be foreseeable with absolute certainty. Indeed, according to the case-law of the European Court of Human Rights, the fact that a law confers a discretion is not in itself inconsistent with the requirement of foreseeability, provided that the scope of the discretion and the manner of its exercise are indicated with sufficient clarity, having regard to the legitimate aim in question, to give the individual adequate protection against arbitrary interference. In that connection, apart from the text of the law itself, the European Court of Human Rights takes account of whether the indeterminate notions used have been defined by consistent and published case‑law.

(see paras 95-97, 99)

8. In so far as concerns the lawfulness of Article 23(2) of Regulation No 1/2003 in the light of the principle that penalties must have a proper legal basis, the EU legislature did not confer upon the Commission an excessive or arbitrary discretion in setting fines for infringements of the competition rules.

First of all, that provision limits the exercise of that discretion by establishing objective criteria to which the Commission must adhere. In that regard, first, any fine that may be imposed is subject to a quantifiable and absolute ceiling, calculated by reference to each undertaking, for each infringement, so that the maximum amount of the fine that can be imposed on a given undertaking can be determined in advance. Second, that provision requires the Commission to fix fines in each individual case having regard both to the gravity and to the duration of the infringement.

Secondly, in the exercise of its discretion in imposing fines pursuant to Article 23(2) of Regulation No 1/2003, the Commission is bound to comply with general principles of law, in particular the principles of equal treatment and proportionality.

Thirdly, in the interests of ensuring that its actions are predictable and transparent, the Commission has also limited the exercise of its own discretion by rules of conduct which it set for itself in the Notice on immunity from fines and reduction of fines in cartel cases and in 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. To that end, the notice and the guidelines lay down rules of conduct from which the Commission may not depart without risking being found in breach of general principles of law, such as equal treatment or the protection of legitimate expectations. They also ensure legal certainty for the undertakings concerned by defining the method which the Commission has bound itself to use in setting the fines imposed pursuant to Article 23(2) of Regulation No 1/2003.

Moreover, the Commission’s adoption of those guidelines and then of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003, inasmuch as it fell within the statutory limits laid down by Article 15(2) of Regulation No 17 and by Article 23(2) of Regulation No 1/2003, only contributed to defining the limits of the exercise of the discretion which the Commission already had under those provisions, and it cannot be inferred from their adoption that the limits on the Commission’s competence in the area in question were not initially defined sufficiently by the EU legislature.

Fourthly, under Article 229 EC and Article 31 of Regulation No 1/2003, the EU judicature has unlimited jurisdiction in actions challenging decisions whereby the Commission has fixed fines and may, accordingly, not only annul those decisions but also cancel, reduce or increase the fines imposed. As a result, the Commission’s well-known and accessible administrative practice is subject to unlimited review by the EU judicature. That review has made it possible, through a consistent and published body of case-law, to define any indeterminate concepts contained in Article 15(2) of Regulation No 17 and, subsequently, Article 23(2) of Regulation No 1/2003. Consequently, a prudent trader is able, if need be by taking legal advice, to foresee in a sufficiently precise manner the method of calculation and order of magnitude of the fines which he risks for a given line of conduct. The fact that such a trader cannot, in advance, know precisely the level of the fines which the Commission will impose in each individual case cannot constitute a breach of the principle that penalties must have a proper legal basis.

(see paras 101-102, 105-108)

9. As regards the increase in the level of fines following the adoption 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 may at any time adjust the level of fines if the proper application of the EU competition rules so requires, since such an alteration of an administrative practice may then be regarded as objectively justified by the objective of general prevention of infringements of the EU competition rules. The increase in the level of fines cannot therefore, in itself, be regarded as unlawful in light of the principle that penalties must have a proper legal basis, since it remains within the statutory limits laid down by Article 15(2) of Regulation No 17 and Article 23(2) of Regulation No 1/2003.

(see para. 112)

10. With regard to the Commission’s competence to impose fines for infringements of the EU competition rules, the power to impose such fines cannot be regarded as having originally belonged to the Council, with the Council then transferring it or delegating its exercise to the Commission, as provided for in the third indent of Article 202 EC. By virtue of Articles 81 EC, 82 EC, 83(1) and (2)(a) and (d) EC and 202, third indent, EC, that power is part of the Commission’s role of ensuring that EU law is applied, that role having been defined, framed and formalised, as regards the application of Articles 81 EC and 82 EC, by Regulations Nos 17 and 1/2003. The power to impose fines, which those regulations confer on the Commission therefore stems from the provisions of the Treaty itself and is intended to facilitate the effective application of the prohibitions laid down in those articles.

(see para. 115)

11. The principle of non-retroactivity of criminal laws, enshrined in Article 7 of the European Convention on Human Rights, constitutes a general principle of EU law which must be observed when fines are imposed for infringement of the competition rules and requires that the penalties imposed correspond with those fixed at the time when the infringement was committed. The adoption of guidelines capable of changing the Commission’s general competition policy in fining matters may, in principle, fall within the scope of the principle of non-retroactivity.

As regards compliance with the principle of non-retroactivity by 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 increase in the level of fines remains within the statutory framework set by Article 15(2) of Regulation No 17 and Article 23(2) of Regulation No 1/2003, inasmuch as Section 5(a) of the guidelines expressly provides that the fines imposed may in no case exceed the 10% of turnover ceiling laid down in those provisions.

The main innovation in those guidelines consists in taking as a starting point for the calculation a basic amount, determined on the basis of brackets, those brackets reflecting the various degrees of gravity of infringements but, as such, bearing no relation to the relevant turnover. The essential feature of that method is thus that fines are determined on a tariff basis, albeit one that is relative and flexible.

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 Regulations No 17 and 1/2003, if that is necessary to ensure the implementation of the European Union’s competition policy. On the contrary, the proper application of the competition rules requires that the Commission may at any time adjust the level of fines to the needs of that policy.

It follows that undertakings involved in an administrative procedure in which fines may be imposed cannot acquire a legitimate expectation either that the Commission will not exceed the level of fines previously imposed or in a method of calculating the fines. Consequently, the undertakings concerned must take account of the possibility that the Commission may decide at any time to raise the level of the fines by reference to that applied in the past.

That being so, the abovementioned guidelines, in that they may have led to the imposition of larger fines than those imposed in the past or in that the limits of foreseeability may have been exceeded, do not breach the principle of non-retroactivity. The guidelines and, in particular, the new method of calculating fines contained therein, on the assumption that this new method had the effect of increasing the level of the fines imposed, were in fact reasonably foreseeable.

(see paras 118-119, 123-128, 133)

12. The Commission published 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, in which it set out, with a view to transparency and to increasing legal certainty for the undertakings concerned, the calculation method that it would use in each case. In adopting such rules of conduct and, by publishing them, announcing that they would henceforth apply in the cases to which they relate, the Commission imposed a limit on the exercise of its discretion and rules from which it cannot depart without running the risk of suffering the consequences of being in breach of general principles of law, such as equal treatment and the protection of legitimate expectations. The guidelines determine, generally and abstractly, the method which the Commission has bound itself to use in setting fines and, consequently, ensure legal certainty for undertakings. Moreover, a prudent trader is able, if need be by taking legal advice, to foresee in a sufficiently precise manner the method of calculation and order of magnitude of the fines which he risks for a given line of conduct. Admittedly, a trader cannot, by reference to those guidelines, predict the precise amount of the fine which the Commission will impose in each individual case. However, owing to the gravity of the infringements which the Commission is required to penalise, the objectives of punishment and deterrence justify preventing undertakings from being in a position to assess the benefits which they would derive from their participation in an infringement by taking account, in advance, of the amount of the fine which would be imposed on them for that unlawful conduct.

(see paras 135-136, 201-202)

13. Neither the principle of non‑retroactivity nor the principle of the protection of legitimate expectations is infringed when, in the determination of the amounts of fines for infringement of the EU competition rules, account is taken of the Notice on immunity from fines and reduction of fines in cartel cases. Indeed, of those two principles, the first does not preclude the application of guidelines which, ex hypothesi , have the effect of increasing the level of fines, provided that the policy which they implement is reasonably foreseeable. As to the second, economic operators cannot have a legitimate expectation that an existing situation which is capable of being altered by the institutions within the limits of their discretionary power will be maintained.

(see paras 143-144)

14. Although it is true that, by virtue of the general principles of EU law, of which fundamental rights are an integral part and in the light of which all EU laws must be interpreted, undertakings have the right not to be compelled by the Commission to admit their participation in an infringement, the Commission is not on that account prevented from taking account, when setting the amount of the fine, of the assistance given by an undertaking, of its own volition, in order to establish the existence of the infringement. In this connection, cooperation under the Notice on immunity from fines and reduction of fines in cartel cases is a matter entirely within the will of the undertaking concerned. It is not in any way coerced to provide evidence of the presumed cartel. The degree of cooperation which the undertaking wishes to offer in the administrative procedure is therefore determined exclusively by its freedom of choice and is not in any circumstances imposed by the Leniency Notice. Moreover, no provision of that notice requires the undertaking in question to abstain from contesting or correcting untrue facts put forward by another undertaking.

Nor does that notice infringe the principle in dubio pro reo or the principle of the presumption of innocence, as it results in particular from Article 6(2) of the European Convention on Human Rights, which is also one of the fundamental rights which, according to the case-law of the Court of Justice, reaffirmed by Article 6(2) EU and by Article 48 of the Charter of Fundamental Rights of the European Union, are recognised in the legal order of the European Union. Cooperation under that notice, first, is a matter entirely within the will of the undertaking concerned and in no way implies any obligation upon an undertaking to provide evidence and, second, does not alter the duty of the Commission, which has the burden of proving the infringements found by it, to adduce evidence capable of demonstrating to the requisite legal standard the existence of the circumstances constituting the infringement. To that end, the Commission may rely, without breaching the principle of the presumption of innocence, not only upon documents which it has obtained during the course of inspections carried out under Regulations Nos 17 and 1/2003, or which it has received in response to requests for information made under those regulations, but also upon evidence which an undertaking has voluntarily submitted to it under the Leniency Notice.

Nor does the Leniency Notice infringe the principle of proportionality. The notice appears to be an appropriate instrument for establishing the existence of secret horizontal cartels and thus for directing the conduct of undertakings towards compliance with the competition rules. Indeed, indeed, even though the means provided for in Articles 18 to 21 of Regulation No 1/2003, namely requests for information and inspections, are indispensable measures in the prosecution of infringements of competition law, secret cartels are often difficult to detect and investigate without the cooperation of the undertakings concerned. Thus, a cartel member that wishes to terminate its involvement in a cartel might be dissuaded from informing the Commission by the risk of receiving a heavy fine. By making provision for the grant of immunity from fines, and for a significant reduction in the amount of any fines for undertakings providing the Commission with evidence of the existence of a horizontal cartel, the Leniency Notice seeks to prevent such cartel members from deciding not to inform the Commission of the existence of a cartel.

Finally, the Commission did not exceed the powers conferred on it by Regulation No 1/2003 by adopting rules of practice in the Leniency Notice to direct the exercise of its discretion concerning the fixing of fines in order to take account, inter alia, of the conduct of undertakings during the administrative procedure and thus to better ensure equal treatment of the undertakings concerned. The Commission has the right, but no obligation, to impose a fine upon an undertaking that has infringed Article 81 EC. Moreover, paragraphs 2 and 3 of Article 23 of Regulation No 1/2003 do not set out an exhaustive list of the criteria which the Commission may take into account when fixing the amount of a fine. The conduct of the undertaking during the administrative procedure may therefore be one of the factors to be taken into account when fixing the fine.

(see paras 149-150, 153, 155, 160, 162-163, 168-169, 171, 174-176)

15. The Community must respect international law in the exercise of its powers. The right to property is not only protected by international law but is also one of the general principles of EU law. However, the primacy of international law over EU law does not extend to primary law, in particular to the general principles of which fundamental rights form a part. In this regard the right to property is not absolute but must be considered in relation to its function in society. Consequently, its exercise may be restricted, provided that the restrictions in fact correspond to objectives of public interest pursued by the Community and do not constitute, in relation to the objective pursued, a disproportionate and intolerable interference, impairing the very substance of the right guaranteed. Given that the application of Articles 81 EC and 82 EC constitutes one of the aspects of public interest in the Community, restrictions may be applied, pursuant to those articles, on the exercise of the right to property, provided that they are not disproportionate and do not impair the substance of that right.

(see paras 187-190)

16. Although 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 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. In adopting such rules of conduct and announcing through their publication that they would henceforth apply to the cases to which they relate, the Commission imposed a limit on the exercise of its discretion and cannot depart from those rules without running the risk of suffering the consequences of being in breach of general principles of law, such as equal treatment or the protection of legitimate expectations. Furthermore, those guidelines determine, generally and abstractly, the method which the Commission has bound itself to use in setting fines and, consequently, ensure legal certainty for undertakings.

(see paras 200-202)

17. The gravity of infringements of EU competition law must be determined by reference to numerous factors such as, in particular, the specific circumstances and context of the case and the deterrent effect of fines, although no binding or exhaustive list of the criteria to be applied has been drawn up.

Under the first paragraph of Section 1A 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 must, when assessing the gravity of the infringement, undertake an examination of the actual impact on the market only where it is apparent that that impact can be measured. In order to assess that impact, the Commission must take as a reference the competition that would normally have existed had there been no infringement. Thus, where the applicants do not show that the actual impact of the infringements could have been measured, the Commission is not obliged to take account of the actual impact of the infringements for the purpose of assessing their gravity. The effect of an anti-competitive practice is not a conclusive criterion for assessing the gravity of an infringement. 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. Accordingly, the nature of the infringement plays a primary role, in particular in classifying infringements as ‘very serious’. It is clear from the description of very serious infringements given in the guidelines that agreements or concerted practices which are mainly designed to share markets may, on the basis of their nature alone, be categorised as ‘very serious’, without there being any need to distinguish such conduct by reference to a particular impact or geographic area, while the fact that the actual impact of the infringements was not taken into consideration cannot give rise to any breach of the principle of the presumption of innocence.

In those circumstances, irrespective of any alleged differences in the structures of the cartels, the infringements found in a Commission decision are, by their very nature, among the most serious violations of Article 81 EC where their purpose is secret collusion between cartel participants to share markets or freeze market shares by allocating projects for the sale and installation of new elevators and/or escalators, as well as not to compete with each other for the maintenance and modernisation of elevators and escalators. Apart from the serious distortion of competition which they entail, such agreements, by obliging the parties to respect distinct markets, often delimited by national frontiers, cause the isolation of those markets, thereby thwarting the Treaty’s main objective of integrating the Community market. Thus, infringements of this type, especially where horizontal cartels are concerned, are classified as particularly serious or obvious infringements.

(see paras 198, 214-215, 221-223, 234-235, 254)

18. As regards Commission decisions finding infringements of the EU competition rules and imposing fines, the essential procedural requirement to state reasons is satisfied where, in its decision, the Commission indicates the factors which enabled it to determine the gravity of the infringement and its duration, there being no requirement for any more detailed explanation or indication of the figures relating to the method of calculating the fine. If the Commission, in the contested decision, explains that the starting amounts of the fines have been determined taking into account the nature of the infringements and the size of the relevant geographic markets and that it has analysed the gravity of the infringements with reference to the characteristics of the participants, applying, for each infringement, a differential treatment to each of the undertakings involved, depending on its turnover in the products subject to the cartel in the country concerned, the factors which enabled the Commission to measure the gravity of the established infringements are sufficiently explained in the contested decision in compliance with Article 253 EC.

(see paras 203, 240, 243-245)

19. As regards Commission decisions finding infringements of the EU competition rules and imposing fines, the size of the relevant market is not as a rule a factor which must be taken into account, but just one among a number of other factors for evaluating the gravity of the infringement, since the Commission is not obliged to define the market concerned or to assess its size where the infringement in question has an anti-competitive object. 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 do not provide that fines are to be calculated according to the overall turnover of undertakings or their turnover in the market affected. However, nor do they preclude the Commission from taking either figure into account in determining the amount of the fine in order to ensure compliance with the general principles of EU law and where circumstances demand it.

Accordingly, starting amounts for fines set for an infringement committed in Luxembourg which amount to half the minimum level normally envisaged by the guidelines for a very serious infringement are not disproportionate.

(see paras 247-248)

20. In the context of calculating fines imposed under Article 23(2) of Regulation No 1/2003, differentiated treatment of the undertakings concerned is inherent in the exercise of the Commission’s powers under that provision. In exercising its discretion, the Commission is required to fit the penalty to the individual conduct and specific characteristics of the undertakings concerned in order to ensure that, in each case, the EU competition rules are fully effective. Thus, 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 state that, where an infringement is sufficiently serious, it may be necessary in cases involving several undertakings, such as cartels, to apply weightings to the general starting amount in order to establish a specific starting amount taking account of the weight and, therefore, the real impact of the offending conduct of each undertaking on competition, particularly where there is considerable disparity between the sizes of the undertakings committing infringements of the same type. In particular, it is necessary to take account of the effective economic capacity of offenders to cause significant damage to other operators, in particular consumers.

Moreover, EU law contains no general principle that the penalty must be proportionate to the undertaking’s size on the product market in relation to which the infringement is committed.

Finally, as regards the assessment of the gravity of the infringement on the basis of the division of the cartel members into categories, in order to ascertain whether such a division is in keeping with the principles of equal treatment and proportionality, the EU judicature, as part of its review of the lawfulness of the exercise of the Commission’s discretion in the matter, must confine itself to checking that the division is coherent and objectively justified. Furthermore, the abovementioned guidelines on the method of setting fines state that the principle of equal punishment for the same conduct may lead to different fines being imposed on the undertakings concerned without this differentiation being governed by arithmetical calculation.

(see paras 255-258, 263, 265)

21. The benefit of a mitigating circumstance cannot be granted under the third indent of Section 3 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 where the infringement has already come to an end before the date on which the Commission first intervenes. Logically, there can be a mitigating circumstance within the meaning of that provision only if the undertakings concerned are encouraged to cease their anti-competitive conduct by the Commission’s actions. The purpose of that provision is to encourage undertakings to terminate their anti-competitive conduct as soon as the Commission launches an investigation into it; consequently the fine cannot be reduced on that basis where the infringement has already come to an end before the date on which the Commission first intervenes. A reduction applied in such circumstances would duplicate the reduction for duration which is applied in calculating the fines.

(see para. 274)

22. The adoption, by an undertaking that has infringed the EU competition rules, of a compliance programme does not oblige the Commission to grant a reduction in the fine on that account. Moreover, whilst it is important that an undertaking take steps to prevent fresh infringements of EU competition law from being committed in the future by members of its staff, the taking of such steps does not alter the fact that an infringement has been committed. The Commission is not, therefore, bound to consider such a factor as a mitigating circumstance, all the more so when the infringements found in the contested decision are a clear infringement of Article 81 EC.

(see para. 282)

23. The Notice on immunity from fines and reduction of fines in cartel cases constitutes an instrument intended to define, while complying with higher-ranking law, the criteria which the Commission proposes to apply in the exercise of its discretion in setting fines imposed for infringements of the EU competition rules. That discretion is thus subject to a self-imposed limitation which is not, however, incompatible with the Commission retaining a considerable margin of assessment.

Thus, the Commission enjoys a broad margin of assessment when it is required to determine whether the evidence provided by an undertaking that has stated that it wishes to benefit from the Leniency Notice represents significant added value for the purposes of point 21 of the notice.

Similarly, the Commission, once it has found that the evidence represents significant added value within the meaning of point 21 of the Leniency Notice, has a margin of assessment when it is required to determine the exact level of the reduction of the fine to be granted to the undertaking concerned. The first paragraph of point 23(b) of the Leniency Notice in fact provides for fine-reduction bands for the various categories of undertakings concerned. In view of the abovementioned margin of assessment, it is only where the Commission manifestly goes beyond the bounds of that margin that it may be criticised by the EU judicature.

Accordingly, the Commission does not manifestly go beyond the bounds of its margin of assessment when it considers not to represent significant added value a statement which merely corroborates to a certain degree a statement which the Commission already had at its disposal, since such a declaration does not facilitate its task significantly and is therefore insufficient to justify a reduction in the fine for cooperation.

(see paras 295-296, 298-300, 309, 311)

24. In its appraisal of the cooperation provided by cartel members during the administrative procedure, the Commission is not entitled to disregard the principle of equal treatment. Where the positions of various undertakings which have been fined for an infringement of the EU competition rules are not comparable, the Commission does not breach the principle of equal treatment by granting certain undertakings reductions in the amounts of the fines, according to the added value of their respective cooperation, and by refusing another undertaking the benefit of such a reduction under the Notice on immunity from fines and reduction of fines in cartel cases. In that regard, the assessment of the added value of cooperation is carried out by reference to the evidence already in the Commission’s possession. Thus, when an undertaking provides evidence which is not decisive in establishing the existence of a cartel but merely strengthens the Commission’s ability to find the infringement by corroborating the evidence already in its possession, or when such an undertaking sends evidence of significant added value to the Commission only several months after the communications sent by other undertakings and in any event does not provide any contemporaneous documentary evidence, the Commission does not manifestly go beyond the bounds of its margin of assessment by setting a very low percentage reduction in the amount of such an undertaking’s fine.

(see paras 313, 315, 319, 335-336, 344, 347)

25. As regards observance of the principle of proportionality in the determination of the amounts of fines for infringements of the EU competition rules, such fines must not be disproportionate to the aims pursued, that is to say, to compliance with the competition rules, and the amount of the fine imposed on an undertaking for such an infringement of competition law must be proportionate to the infringement, viewed as a whole, account being taken, in particular, of the gravity of the infringement. Furthermore, in determining the amounts of fines, the Commission is entitled to take into account the need to ensure that fines have a sufficient deterrent effect.

In that regard, firstly, infringements consisting primarily of secret collusion between cartel participants to share markets or freeze market shares by allocating projects for the sale and installation of new elevators and/or escalators, as well as not to compete with each other for the maintenance and modernisation of elevators and escalators, are, by their very nature, among the most serious infringements of Article 81 EC.

Second, when calculating fines, the Commission may take into account, inter alia, the size and economic strength of the economic unit which, for the purposes of Article 81 EC, is acting as an undertaking. However, the relevant undertaking to which the Commission must have regard is not each of the subsidiaries involved in the infringement, but the parent company and its subsidiaries. Third, as regards the proportionality of the fines by comparison with the size and economic strength of the economic units concerned, the Commission is bound by the 10% ceiling referred to in Article 23(2) of Regulation No 1/2003, the purpose of which is to ensure that fines are not disproportionate in relation to the size of the undertaking. A total amount of fines that represents approximately 2% of the aggregated turnover of the undertaking concerned in the financial year preceding the adoption of the contested decision cannot be regarded as disproportionate in relation to the size of that undertaking.

(see paras 367-370)