OPINION OF ADVOCATE GENERAL

TIZZANO

delivered on 7 June 2005 1( )

Case C-397/03 P

Archer Daniels Midland Company

Archer Daniels Midlands Ingredients Ltd

v

Commission of the European Communities

(Competition – Prohibition of restrictive agreements – Lysine – Fines – Guidelines for the calculation of fines – Equal treatment – Proportionality – Non-retroactivity – Principle of non bis in idem)

1. The subject of these proceedings is the appeal lodged by Archer Daniels Midland Company (‘ADM Company’) and Archer Daniels Midland Ingredients Ltd (‘ADM Ingredients’) against the judgment of the Court of First Instance of 9 July 2003 in Case T-224/00 Archer Daniels Midland Company and Archer Daniels Midland Ingredients v Commission (‘the judgment under appeal’) ( ) which essentially upheld Commission Decision 2001/418/EC of 7 June 2000 ‘relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement’ (‘the contested decision’). ( )

I – Legislative background

2. As we know, Article 81 EC prohibits ‘all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market’.

3. The Commission may impose penalties for such arrangements in the form of fines on the undertakings which made them.

4. Article 15(2) of Council Regulation No 17 ( ) provides:

‘The Commission may by decision impose on undertakings or associations of undertakings fines of from 1 000 to 1 000 000 units of account, or a sum in excess thereof but not exceeding 10% of the turnover in the preceding business year of each of the undertakings participating in the infringement where, either intentionally or negligently:

(a) they infringe Article 85(1) or Article 86 of the Treaty; or

(b) …

In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’

5. In order to ensure that its own decisions on the subject were transparent and objective, in 1998 the Commission issued 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 Guidelines’). ( )

6. Under the method set out in the Guidelines, the amount of the fine is essentially determined in a number of successive stages.

7. First, the Commission fixes the basic amount of the fine ‘according to the gravity and duration of the infringement’ (Section 1 of the Guidelines). As regards the first element, infringements are classified as ‘minor infringements, serious infringements and very serious infringements’ ( ) in the light of their nature, their actual impact on the market and the size of the relevant geographic market. As regards duration, infringements are divided into infringements of short duration (less than one year), infringements of medium duration (one to five years) and infringements of long duration (more than five years).

8. Once the basic amount of the fine has been set, the Commission goes on to assess whether it should be increased because of aggravating circumstances ( ) or reduced because of mitigating circumstances. ( )

9. Section 5(a) of the Guidelines provides:

‘It goes without saying that the final amount calculated according to this method (basic amount increased or reduced on a percentage basis) may not in any case exceed 10% of the worldwide turnover of the undertakings, as laid down by Article 15(2) of Regulation No 17.’

10. Subject to that 10% limit, the amount thus calculated may be adjusted subsequently pursuant to Section 5(b) of the Guidelines, on the basis of the assessment by the Commission ‘of certain objective factors such as a specific economic context, any economic or financial benefit derived by the offenders … the specific characteristics of the undertakings in question and their real ability to pay in a specific social context’.

II – Facts and procedure

1. Factual background to the dispute

11. In the judgment under appeal the factual background to the dispute is described as follows:

‘1 The applicants, Archer Daniels Midland Company … and its European subsidiary Archer Daniels Midland Ingredients Ltd … operate in the cereals and oil seed processing sector. They entered the lysine market in 1991.

2 Lysine is the principal amino acid used for nutritional purposes in animal feedstuffs. Synthetic lysine is used as an additive in feedstuffs, such as cereals, which contain insufficient natural lysine; this enables nutritionists to formulate protein-based diets which meet the dietary requirements of animals. Feedstuffs to which synthetic lysine is added may also substitute for feedstuffs which do contain a sufficient quantity of lysine in the natural state, such as soybean.

3 In 1995, following a secret investigation by the Federal Bureau of Investigation (FBI), searches were carried out in the United States at the premises of several companies operating in the lysine market. In August and October 1996 ADM Company, together with Kyowa Hakko Kogyo Co. Ltd …, Sewon Corp. Ltd, Cheil Jedang Corp. … and Ajinomoto Co. Inc., were charged by the American authorities with having formed a cartel to fix lysine prices and to allocate sales of lysine between June 1992 and June 1995. Pursuant to agreements concluded with the American Department of Justice, the companies were fined by the judge in charge of the case. Kyowa Hakko Kogyo and Ajinomoto Co. Inc. were each fined USD 10 million, ADM Company was fined USD 70 million and Cheil USD 1.25 million. The fine imposed on Sewon Corporation Ltd was, it says, USD 328 000. In addition, three executives of ADM Company were sentenced to terms of imprisonment and fined for their part in the cartel.

4 In July 1996, on the basis of Commission Notice 96/C 207/04 on the non-imposition or reduction of fines in cartel cases, Ajinomoto Co. Inc. offered to cooperate with the Commission in proving the existence of a cartel in the lysine market and its effects in the European Economic Area (“EEA”).’

12. It is also apparent from the judgment that, following evidence from Ajinomoto, the Commission opened an administrative investigation to ascertain whether there had been any infringement of Article 85(1) of the EC Treaty (now Article 81(1) EC). Following that investigation, the Commission adopted the contested decision by which it:

– found that various undertakings, including ADM Company and ADM Ingredients, have infringed Article 85(1) of the EC Treaty and Article 53(1) of the EEA Agreement by participating ‘in agreements on prices, sales volumes and the exchange of individual information on sales volumes of synthetic lysine, covering the whole of the EEA’ (Article 1); ( )

– and imposed on ADM Company and ADM Ingredients, jointly and severally, a fine of EUR 47 300 000 (Article 2).

13. In the grounds for the decision the Commission found that between 23 June 1992 and 27 June 1995 ADM Company and ADM Ingredients had concluded a series of agreements concerning world trade in lysine with Asian producers of lysine. Those agreements were intended, essentially, (a) to regulate the market in lysine by fixing prices and partitioning sales volumes and (b) to coordinate the conduct of the participating undertakings so as to guarantee the success of the initiatives adopted by them as regards prices and sales quantities (points 50 to 234 of the contested decision).

14. As regards the specific aspect I am called upon to discuss in the present case, that is to say, the calculation of the fines imposed on the two companies, the Commission referred expressly to the provisions of the Guidelines (point 255 of the decision).

15. The Commission thus determined the basic amount of the fine according to the gravity and duration of the infringement.

16. As regards the first element, the Commission considered that the infringement perpetrated by the undertakings on the market in lysine was a very serious infringement (points 257 to 302 of the contested decision).

17. In particular, it took the view that in order to set the basic amounts of fines according to gravity it was necessary to take into account: (i) the effective economic capacity of the undertakings concerned to cause significant damage on the market in lysine in the European Economic Area, and (ii) the need to fix the amount of the fine at such a level as to ensure that it has a sufficiently deterrent effect.

18. To that end, the Commission divided the undertakings into two groups according to their respective sizes. The comparison was made on the basis of the total turnover and of the worldwide turnover on the lysine market of the undertakings concerned in the last year of the infringement. ( ) The Commission considered that that was the most appropriate yardstick for its assessment of the resources and actual size of the undertakings on the markets affected by the unlawful conduct.

19. Consequently, and on the basis only of the gravity of the infringement committed, the amount of the fine to be imposed on ADM Company and ADM Ingredients was set by the Commission at EUR 30 million.

20. As regards the duration of the infringement, the Commission took the view that it could be considered an infringement of medium duration. That entailed an increase of 10% per annum of the starting amounts of the fines set according to the gravity of the infringement. Accordingly, the amount of the fine imposed on ADM Company and ADM Ingredients had to be increased by 30%.

21. The basic amount of the fine to be imposed on ADM Company and on ADM Ingredients was thus fixed at EUR 39 million.

22. Having set the basic amount, the Commission went on to assess whether, in the light of the position of each undertaking, it was possible to establish any aggravating or mitigating circumstances.

23. In that regard, it concluded that ADM Company and ADM Ingredients had played the role of leader in the lysine cartel, with the result that the basic amount of the fine had to be increased by 50%.

24. On the other hand, the Commission considered that the amount thus set should be reduced (i) by 10% because ADM Company and ADM Ingredients ended their unlawful conduct as soon as the Commission began to investigate, and (ii) by a further 10% because both companies cooperated with the Commission after receiving the statement of objections.

25. The final fine imposed on ADM Company and ADM Ingredients was thus set at EUR 47 300 000.

2. Proceedings before the Court of First Instance and the judgment under appeal

26. By application lodged at the Registry of the Court of First Instance on 25 August 2000, ADM Company and ADM Ingredients sought the annulment of the contested decision or, in the alternative, the reduction of the amount of the fine imposed on them by the Commission.

27. In support of their application, ADM Company and ADM Ingredients relied on a number of pleas with regard to the contested decision, including, for present purposes, (a) infringement of the principle of non-retroactivity of penalties; (b) infringement of the principle of equal treatment; (c) infringement of the principle of non bis in idem; (d) infringement of the principle of proportionality; (e) wrong assessment of evidence by the Commission.

28. The Court of First Instance answered those pleas as follows.

29. (a) The Court first of all dismissed the plea alleging infringement of the principle of the non-retroactivity of penalties raised by the parties on the basis of the fact that the Guidelines were applied to conduct of the undertakings which occurred before their entry into force.

30. In that regard, the Court of First Instance acknowledged that that principle takes its place among the general principles of law whose observance is ensured by the Community judicature and at the same time requires that ‘the fines imposed on an undertaking for infringing the competition rules correspond with those laid down at the time when the infringement was committed’. ( )

31. However, it took the view that the application of the Guidelines for the calculation of fines to the present case does not constitute an infringement of the principle of non-retroactivity because those Guidelines do not go beyond the legal framework for fines set out in Article 15 of Regulation No 17.

32. According to that Article, when setting the amount of a fine for infringement of the competition rules, the Commission must have regard both to the gravity and to the duration of the infringement. The amount thus set may not, in any event, be more than 10% of the turnover in the preceding business year of each of the undertakings participating in the infringement.

33. The Guidelines in question require the Commission to set the basic amount of the fine according to the gravity and duration of the infringement. Furthermore they provide that the amount thus calculated may in no case exceed 10% of the worldwide turnover of the undertakings. It follows, in the view of the Court of First Instance, that ‘under the method laid down in the Guidelines, fines continue to be calculated according to the two criteria referred to in Article 15(2) of Regulation No 17, namely the gravity of the infringement and its duration, subject to the upper limit determined by reference to the turnover of each undertaking, as laid down in that provision’. ( )

34. (b) The Court of First Instance then dismissed the plea alleging infringement of the principle of equal treatment.

35. In that connection it stated: ‘[i]n so far as concerns combating infringements of the competition rules, the principle of equal treatment undoubtedly requires that undertakings guilty of infringements of a similar nature, committed at a similar time, should be liable to the same legal penalties irrespective of the date, which will necessarily vary, on which a decision is adopted against each of them. To that extent, the principle is closely connected with the principle of the non-retroactivity of penalties, in accordance with which penalties imposed on undertakings for infringement of the competition rules must correspond to the penalties contemplated at the time when the infringement was committed. However, in the instant case, the applicants cannot validly argue infringement of this principle on the sole ground that, in calculating the amount of their fine, the Commission applied the Guidelines … As the Court has already emphasised, the change in the Commission’s administrative practice brought about by adoption of the Guidelines did not amount to an alteration of the legal framework for determining the amount of the fines which may be imposed for infringement of the Community competition rules … It follows that application of the method set out in the Guidelines in calculating the fine imposed on ADM does not constitute discriminatory treatment of ADM by comparison with undertakings which infringed the Community competition rules at the same time but, for reasons pertaining to the time when the infringement was discovered or to the conduct of the administrative procedure initiated against them, were sanctioned before the Guidelines entered into force. In both cases, in fact, the fines which the undertakings risked incurring at the time of committing the infringement remained within the limits laid down in Article 15(2) of Regulation No 17.’ ( )

36. In the view of ADM Company and ADM Ingredients, the Commission infringed the principle of equal treatment by taking account of their total turnover rather than that relating to lysine sales in the EEA. In that way the two undertakings had suffered discrimination both as compared with undertakings which had been the subject of other Commission decisions and as compared with the other undertakings to which the contested decision was addressed.

37. In particular, ADM Company and ADM Ingredients had been unjustifiably compared to Ajinomoto despite the fact that their share of the lysine market in the EEA was 20% and thus much less than the 48% share of that market held by Ajinomoto.

38. That plea, too, was dismissed by the Court of First Instance.

39. As regards, first of all, the allegation of discrimination by comparison with undertakings the subject of other decisions prior or subsequent to the contested decision, the Court of First Instance observed that, when assessing the general level of fines, the Commission ‘is entitled to take account of the fact that clear infringements of the Community competition rules are still relatively frequent and that, accordingly, it may raise the level of fines in order to strengthen their deterrent effect’. ( )

40. In particular, the Court of First Instance held that, although in some recent decisions in which it had applied the Guidelines the Commission had taken account of turnover achieved in the market affected by the infringement, in the present case ‘no direct comparison can be made between the present decision and other decisions also applying the Guidelines. As has already been emphasised, the Guidelines do not explicitly provide that fines must be calculated by reference to specific turnover figures, merely that they should take account of various factors (the effective economic capacity of offenders to cause damage, the size of the undertaking, the specific weight and real impact of the offending conduct of each undertaking, and so on, in regard to which turnover may be relevant. Thus, in each individual case it is for the Commission to decide, subject to review by the Court of First Instance, whether reference should be made to one or other relevant turnover figure or to other factors such as market share. Consequently, the fact that the Commission did not take account of turnover achieved in the relevant market does not, in itself, constitute discrimination by comparison with the undertakings concerned by other decisions.’ ( )

41. In the view of the Court of First Instance, the Commission did not discriminate against ADM by comparison with Ajinomoto. In that connection, the Court of First Instance observed that, although the turnover achieved in 1995 by ADM in the relevant market was lower than that achieved by Ajinomoto in the same year, ‘ADM remains … a much more important operator than the group of three “small” producers, to which it cannot be compared, Sewon’s, Kyowa’s and Cheil’s turnover in 1995 from the sale of lysine in the EEA being EUR 15, 16 and 17 million respectively (paragraphs 13, 16 and 18 of the Decision). Furthermore, ADM’s total turnover, which remains an indicator of the size and economic power of the undertaking, clearly shows that ADM is twice as large as Ajinomoto, which both compensates the fact that it has a lesser influence in the EEA lysine market than Ajinomoto and explains why the starting amount of the fines is set at a sufficiently dissuasive level. That being so, the Commission was entitled to take the view that it was appropriate to set the starting amount of the fines imposed on ADM and Ajinomoto at the same level.’ ( )

42. (c) The Court of First Instance also dismissed the plea that in the contested decision the Commission had infringed the principle of non bis in idem.

43. In the view of ADM Company and ADM Ingredients, in the contested decision the Commission simply imposed a fine on them for their involvement in a cartel for which penalties had already been imposed by the American and Canadian authorities.

44. The Court of First Instance replied as follows to that argument: ‘suffice it to recall that the Community judicature has held that an undertaking may be made the defendant to two parallel sets of proceedings concerning the same infringement and, thus, incur concurrent sanctions, one imposed by the competent authority of the Member State in question, the other a Community sanction. That possibility is justified where the two sets of proceedings pursue different ends. That being so, the principle non bis in idem cannot, a fortiori, apply in the present case because the procedures conducted and penalties imposed by the Commission on the one hand and the American and Canadian authorities on the other clearly pursued different ends. The aim of the first was to preserve undistorted competition within the European Union and the EEA, whereas the aim of the second was to protect the American and Canadian markets. That conclusion is supported by the scope of the principle that a second penalty may not be imposed for the same offence, as laid down in Article 4 of Protocol 7 to the ECHR and applied by the European Court of Human Rights. It is clear from the wording of Article 4 that the intended effect of the principle is solely to prevent the courts of any given State from trying or punishing an offence for which the person concerned has already been acquitted or convicted in that same State. On the other hand, the non bis in idem principle does not preclude a person from being tried or punished more than once in two or more different States for the same conduct.’ ( )

45. The Court of First Instance also held that ‘at present, there is no principle of public international law that prevents the authorities or courts of different States from trying and convicting the same person on the basis of the same facts. Such a rule could arise today only through very close international cooperation leading to the adoption of common rules such as those contained in the Convention implementing the Schengen Agreement of 14 June 1985 between the Governments of the States of the Benelex Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders (OJ 2000 L 239, p. 19) signed in Schengen (Luxembourg) on 19 June 1990. The applicants have not pointed to any binding agreement between the Community and third countries such as the United States or Canada that lays down such a prohibition.’ ( )

46. On the other hand, ADM Company and ADM Ingredients complained that, by refusing to deduct from the fine set in the contested decision the amount of the fine already imposed on them in the United States and Canada, the Commission had disregarded the principle upheld by the Court of Justice in its judgment in Boehringer, ( ) according to which a general requirement of fairness obliged the Commission to take account of penalties imposed by the authorities of a third country where those penalties were imposed for the same infringements.

47. In that connection, the Court of First Instance held that, in its judgment in Boehringer, the Court had not settled the question whether the Commission had to take account of penalties imposed by a third State where the charges made against an undertaking by that institution and those authorities are the same. Rather, it held that in that judgment the Court of Justice merely regarded ‘the identity of the facts alleged by the Commission and by the authorities of the non-member country as being a precondition of the said question’. ( )

48. The Court of First Instance then pointed out that ‘it was in view of the particular situation which arises from the close interdependence between the national markets of the Member States and the common market and from the special system for the division of jurisdiction between the Community and the Member States with regard to cartels on the same territory, namely the common market, that the Court, having acknowledged the possibility of dual sets of proceedings and having regard to the possibility of double sanctions flowing from them, held it to be necessary, in accordance with a requirement of natural justice, for account to be taken of the first decision imposing a penalty. … The circumstances of the present case, however, are obviously different and given that the applicants point to no express provision of a convention requiring the Commission, when determining the amount of a fine, to take into account penalties already imposed on the same undertaking in respect of the same conduct by the authorities or courts of a third country, such as the United States or Canada, they cannot validly complain that, in the present case, the Commission failed to satisfy any such alleged obligation.’ ( )

49. In any event, the Court of First Instance went on, ‘even if it could be inferred a contrario from the judgment in [Boehringer] that the Commission is in fact required to set off any penalty imposed by the authorities of a non-member country where the facts alleged against the undertaking in question by the Commission are the same as those alleged by the first authorities, it remains for the applicants to prove that the facts are indeed the same, which, in the present case, they have failed to do. As regards the penalty imposed on ADM Company in the United States, it is clear from the judgment delivered on 15 October 1996 by the United States District Court, … that ADM Company was ordered to pay a fine of USD 70 million for its involvement in the lysine cartel and a fine of USD 30 million for its involvement in a cartel pertaining to citric acid. It is clear from the documents produced by the applicants that ADM Company was also ordered, in Canada, to pay a fine of CAD 16 million for its involvement in two cartels relating to lysine and citric acid. It is therefore apparent that the judgments delivered in the United States and Canada related to a larger group of agreements and concerted practices. It should be noted, in particular, that, in deciding the amount of the fine, the American court took account of the volume of commercial transactions carried out “in both the lysine market and the citric acid market.”’ ( )

50. Finally, the Court of First Instance made clear that ‘[e]ven if that judgment could be regarded as divisible into distinct parts, one concerning the lysine cartel, another concerning the citric acid cartel, and notwithstanding that the United States judgment states that the purpose of the lysine cartel was to limit lysine production and increase lysine prices “in the United States and elsewhere”, it has in no way been shown that the penalty imposed in the United States related to application of the cartel or its effects other than in the United States … and in the EEA in particular … . That observation applies equally to the judgment handed down in Canada. … That being so, the Court must reject the applicants’ complaint that the Commission failed to fulfil an alleged obligation to set off the fines imposed earlier by the authorities of non-member countries …’ ( )

51. (d) As regards the alleged infringement of the principle of proportionality, the Court of First Instance first of all pointed out that, in the contested decision, the Commission did not apply the Guidelines correctly in that, in the procedure for determining the gravity of the infringement, it failed to take account of the turnover of the two undertakings on the lysine market in the EEA and thus ‘disregarded the fourth and sixth paragraphs of Section 1.A of the Guidelines’. ( )

52. Despite that, the Court of First Instance considered that the failure to take account of the turnover on the relevant market could not constitute an infringement of the principle of proportionality. In response to the complaint by ADM Company and ADM Ingredients that the amount of the fine was disproportionate in that it represents 115% of their turnover in the EEA lysine market in the last year of the infringement, the Court observed that ‘[p]rovided that the final amount of the fine does not exceed 10% of ADM’s total turnover in the last year of the infringement, it cannot … be regarded as disproportionate simply because it is higher than the turnover which ADM achieved in the relevant market’. ( )

53. The Court of First Instance also rejected the argument of ADM Company and ADM Ingredients that the infringement of the principle of proportionality arose from the fact that the turnover made from the products to which the infringement related was relatively small compared with that on the total sales made by them. In that regard, it pointed out that ‘a comparison of the various turnover figures of the applicants for 1995 reveals two things. First, turnover from sales of lysine in the EEA can indeed be regarded as small in comparison with total turnover, the first representing only 0.3% of the second. Secondly, it appears, by contrast, that turnover from lysine sales in the EEA (EUR 41 million …) represents a relatively significant proportion, 20% in fact, of ADM’s sales in the worldwide lysine market (EUR 202 million …). Since sales of lysine in the EEA therefore represent not a small fraction but a significant proportion of worldwide turnover from lysine sales, it cannot validly be argued in this case that the principle of proportionality has been infringed, a fortiori because the starting amount of the fine was not set on the mere basis of a simple calculation based on total turnover, but also by reference to sectoral turnover and other relevant factors such as the nature of the infringement, its actual effect on the market, the extent of the market affected, the necessary deterrent effect of the sanction and the size and power of the undertakings.’ ( )

54. (e) Finally, the Court of First Instance dismissed the argument that, in the contested decision, the Commission did not adduce sufficient evidence that the cartel had had an actual impact on the market.

55. In that connection, the Court of First Instance held that the Commission had adduced sufficient evidence regarding the fact that the cartel at issue (i) limited sales volumes, (ii) allowed undertakings to preserve their own market shares and (iii) raised prices higher than they would otherwise have been. ( )

56. It followed, in the view of the Court of First Instance, ‘from all the foregoing considerations concerning the nature of the infringement and its actual effects that the Commission was entitled, particularly in view of the extent of the geographical market in question (the EEA), to conclude that the cartel constituted a “very serious infringement” within the meaning of the third indent of the second paragraph of Section 1.A of the Guidelines’. ( )

57. Concluding its analysis in the judgment under appeal, the Court of First Instance (a) essentially upheld the assessment of the infringement made in the contested decision of the Commission; (b) none the less held that, in order to ensure respect for the principle of equal treatment and in accordance with the wording of the Guidelines, the increases or reductions on the basis of aggravating or mitigating circumstances should be applied to the basic amount of the fine and not, as the Commission did in the contested decision, to the amount resulting from an initial increase in the light of other aggravating or mitigating circumstances; ( ) and (c) reduced the amount of the fine imposed on ADM Company and ADM Ingredients, fixing it at EUR 43 875 000.

3. Proceedings before the Court of Justice

58. By an appeal lodged on 19 September 2003, ADM Company and ADM Ingredients asked the Court of Justice to annul the judgment under appeal insofar as the Court of First Instance dismissed the action contesting the decision or, in the alternative, to annul or reduce the fines imposed on them, or, in the further alternative, to annul the judgment and refer the case back to the Court of First Instance, and to order the Commission to bear the costs incurred in the proceedings before the Court of First Instance and the Court of Justice.

59. The Commission contends that the Court should dismiss the appeal and order the appellant to bear the costs.

III – Legal analysis

60. The pleas raised by the appellants in support of their appeal against the judgment of the Court of First Instance concern:

(i) infringement of the principle of non-retroactivity as regards the application of the Guidelines to infringements committed before their adoption;

(ii) infringement of the principle of equal treatment in that different penalties were imposed on the appellants compared with undertakings which infringed competition law at the time the lysine cartel was in operation;

(iii) infringement of the principle of non bis in idem as regards the failure to take account of the penalties imposed on the appellants by the United States and Canadian authorities and the absence of grounds regarding that point in the judgment of the Court of First Instance;

(iv) distortion of evidence regarding the actual impact of the cartel on the market;

(v) infringement of the principle of proportionality as regards the failure to take account of the turnover of the appellants on the relevant market, the absence of grounds on that point in the judgment of the Court of First Instance and the error of law made by the Court of First Instance in failing to take account of the turnover on the relevant market after having held that the Commission had infringed the Guidelines;

(vi) infringement of the principle of equal treatment as regards the setting of the basic amount of the fine.

61. I will now consider those pleas individually in the above order.

1. Infringement of the principle of non-retroactivity

62. As I have just indicated, by their first plea, the appellant companies submit that the Court of First Instance erred in holding that, in the contested decision, the Commission did not infringe the principle of non-retroactivity.

63. In that regard they point out that, as demonstrated by its 1994 decisions concerning the cement and cartonboard cartels, before the adoption of the Guidelines the Commission usually calculated the amount of fines on the basis of the turnover made by the undertakings on the relevant market. That method of calculation generally resulted in an amount equivalent to between 2.5% and 9% of that turnover. The Guidelines, which make provision for a method of calculation which leaves the turnover of the undertakings participating in the infringement entirely out of consideration, thus entails a radical departure from the practice followed by the Commission until 1998.

64. As the Court of First Instance itself has acknowledged, the principle of non-retroactivity requires that the penalties imposed on an undertaking in respect of an infringement of the competition rules should be equivalent to those in force at the time it was committed. It would, therefore, follow that the Commission should have imposed penalties for the infringements of competition law committed by the appellants in accordance with the method of calculation applicable at the time the infringements in question were committed.

65. Moreover, the Commission could not apply the Guidelines to events occurring before their entry into force because, according to an established principle, it did not have the power to depart at its own discretion from rules which it had imposed on itself. That principle applied not only as regards written rules but also with regard to established practice such as that followed by the Commission before the adoption of the Guidelines.

66. Finally, in the view of the appellants, the Court of First Instance made an error of law in inferring from the case-law of the Court and, in particular, from the judgment in Musique diffusion française, ( ) that, in the procedure for fixing the amount of fines, the Commission was entirely free to increase the level of fines to meet the requirements of Community competition policy.

67. The appellants observe that, even if the Commission had such a power, it would be subject to the limits imposed by Community law itself. In particular:

– provisions concerning infringements and penalties have to be interpreted restrictively to the advantage of the party to which the infringement is attributed;

– when setting the amount of fines the Commission is required to respect the principle of legal certainty of which the principle of non-retroactivity is an expression and according to which undertakings must be able to foresee the consequences of their own conduct. Only in that way, moreover, can fines have a genuine deterrent effect.

– the discretion of the Commission must be limited to what is strictly necessary to achieve the objective sought;

– the Commission must act in accordance with the principle of non-discrimination. Allowing the Commission to apply a certain method of calculation retroactively discriminates unjustifiably between undertakings which infringed competition law in the same period but were subject to penalties at different times.

68. For its part, the Commission defends the reasoning of the Court of First Instance and replies as follows to the appellants’ arguments:

– there was never an established practice for setting the amount of fines for infringement of the competition rules which was followed consistently by the Commission before the Guidelines were issued;

– even if there had been such a practice, the judgment in Musique diffusion française recognised that the Commission had the power, albeit within the limits laid down by Article 15 of Regulation No 17 and subject to the general principles of Community law, to depart at its own discretion from its established practice as regards fines where it was necessary to do so to achieve the objectives of Community competition policy;

– in the absence of the Guidelines, therefore, nothing would have prevented the Commission from imposing the same fine as was actually imposed on the appellants;

– contrary to the contentions of the appellants, that power is not absolute. First, it is subject to the limits set out in Article 15(2) of Regulation No 17; secondly, undertakings are in a position to know the applicable penalties for infringements of competition law in that they are expressly set out in Article 15;

– although it is true that the Commission must act in accordance with the principle of legal certainty, that principle does not require that undertakings should be able to calculate in advance the precise amount of the fine which might be imposed on them for infringements of Community antitrust law.

69. The Commission also contends that the application of the Guidelines to events occurring before their entry into force is not contrary to Article 7 of the European Convention for Human Rights which is cited several times by the appellants.

70. In the case of Coëme v Belgium the European Court of Human Rights established that the principle of non-retroactivity is not infringed where the penalty imposed could also have been imposed at the time when the infringement was committed. Since, by virtue of the discretion it enjoys in the matter, the Commission could, in 1995 too, have imposed the fine which was subsequently in fact imposed on the appellants, no infringement of the principle of non-retroactivity can be made out.

71. In proposing a reply to the claims made by the applicants I cannot but draw the attention of the Court to my Opinion in Dansk Rørindustri and Others v Commission, ( ) in which I explained fully my position on those issues. In those cases too, the applicants argued that the application of the Guidelines to infringements of competition law committed at a time before their entry into force constituted a breach of the principle of non-retroactivity.

72. I refer to that Opinion for a fuller explanation of my position and confine myself here to pointing out that, in that Opinion, I proposed that the Court should dismiss the applicants’ submissions. I took the view, first, that the Guidelines remained within the limits laid down by Article 15 of Regulation No 17 in that the calculation of the fines continues to be based on the two criteria mentioned there, namely the gravity of the infringement and its duration, and within the maximum limit of 10%. Second, I recalled the settled case-law of the Court, according to which the Commission may, provided it remains within those limits, raise and increase the severity of fines to increase the effectiveness of competition policy. ( ) According to that case-law too, contrary to the submissions of the appellants, at the time the infringements giving rise to penalties were committed, an increase in the severity of the fines was not in any way unforeseeable for the traders concerned since the Court had already expressly recognised that the Commission had the option of making such increases. ( )

73. In the Opinion cited I thus took the view that there was no breach of the principle of non-retroactivity by the Commission because, although it applied the new method of calculation set out in the Guidelines, it none the less observed the limits laid down by Article 15 of Regulation No 17 as interpreted by the case-law of the Court.

74. As the Court has not yet delivered its judgment on that point, I see no reason to alter the view I took in relation to the facts in Dansk Rørindustri and Others.

75. I therefore take the view that the first ground of appeal must be rejected.

2. Breach of the principle of equal treatment

76. By their second ground of appeal, the appellants submit that the Commission breached the principle of equal treatment by calculating the penalties imposed for infringements committed in the same period of time using the new method contained in the Guidelines for some undertakings and in accordance with its previous practice for others.

77. In the judgment under appeal the Court of First Instance recognised that the principle of equal treatment required that undertakings which had committed infringements of the same type during the same period of time should have the same penalties imposed on them, regardless of the date on which a decision regarding them was adopted, which was necessarily arbitrary. None the less, it held that in this case there was no breach of that principle, again taking the view that the Guidelines had not altered the legal framework established by Article 15(2) of Regulation No 17.

78. The appellants argue that in so holding the Court of First Instance made an error of law. The alteration of a settled administrative practice constitutes an alteration of the legal framework, since it amounts to a change in the legal provisions which the Commission is required to observe.

79. For its part, the Commission counters that the arguments raised by the appellants are closely connected with those already expounded in connection with the plea alleging a breach of the principle of non-retroactivity. It follows, therefore, that they are unfounded for the same reasons as those set out previously.

80. The Commission argues that, even in the period before the adoption of the Guidelines it could have used the same method of calculating fines as was set out in them or impose penalties of an equivalent amount. In other words, the penalties for the breach of competition rules to which undertakings were subject before 1998 were exactly the same as those laid down by the Guidelines.

81. The fact that the fines imposed on undertakings before the adoption of the Guidelines were in practice lower is solely a result of a political choice made by the Commission, which could raise the amount of fines at its discretion in order to increase the effectiveness of Community competition policy, as recognised by the Court in its judgment in Musique diffusion française.

82. I must say at the outset that I share the Commission’s impression that the argument raised by the appellants in their second ground of appeal amounts to a rewording, in a different legal guise, of the arguments already set out in relation to the alleged beach of the principle of non-retroactivity. The appellants complain of a breach of equal treatment solely by reason of the fact that the treatment in terms of penalties imposed on them was not the same as that given by the Commission to other cartels concluded in the same period as the lysine cartel, but which were the subject of decisions pre-dating the issue of the Guidelines.

83. Once again, therefore, the appellants start from the premiss that the Guidelines could not be applied to breaches of competition law committed at a time before their adoption because they did not fall within the system of penalties in force at the time those infringements were committed.

84. However, that assumption is unfounded, as we have seen above. In that connection, I shall confine myself to referring to the considerations set out above in points 70 and 71, in which I pointed out that, in this case, the Commission did not breach the principle of non-retroactivity since (i) it was within its power to increase the general level of penalties at its own discretion provided it complied with the provisions relating to fines for breaches of competition law in force when the contested infringements were committed and (ii) the method of calculation laid down in the Guidelines is entirely consistent with the legal framework provided by Article 15 of Regulation No 17.

85. I therefore take the view that the second ground of appeal must also be rejected.

3. The breach of the principle of non bis in idem and the absence of any statement of reasons in that regard in the judgment of the Court of First Instance

86. By their third ground of appeal the appellants complain that the Court of First Instance did not hold in its judgment that the Commission breached the principle of non bis in idem by refusing to deduct from the fine set in the contested decision the amount of the fines already imposed on ADM Company in the United States and Canada.

87. By their fourth ground of appeal they argue further that the Court of First Instance did not give a proper answer to their argument that the Commission also breached that principle by taking account of the worldwide turnover of ADM Company, that is to say, a turnover already partly taken into account in the calculation of the penalties imposed by the United States and Canadian authorities.

88. (a) Taking the ground alleging beach of the non bis in idem principle first, the appellants infer from the judgments of the Court in Walt Wilhem and Boehringer that the Commission is obliged to take account of a penalty imposed by the authorities of a third country for the same offence. That obligation, they argue, is a general principle of law applicable in all situations of concurrent penalties, even where they are the result of the exercise of different powers of sanction in the international order. The Court of First Instance thus interpreted the case-law cited too restrictively when it stated that ‘at present, there is no principle of public international law’ ( ) that prevents concurrent penalties, and when it limited the scope of the principles set out in those judgments to penalties imposed within the European Union.

89. According to the appellants, moreover, the Court of First Instance distorted the evidence, breached the obligation to state reasons and infringed the rights of the defence of the appellants when it stated that the offences with which ADM was charged by the Commission, on the one hand, and by the United States and Canadian authorities, on the other, were not the same, although it was clear from both the Commission decision and from the evidence produced by the appellants that they were the same.

90. On the other hand, according to the Commission, the Court of First Instance correctly defined the scope of the non bis in idem principle in the light of the case-law of the Court of Justice, because, in its view, in the international order that principle can only be applied where expressly provided for by convention or treaty; however, at present, as the Court of First Instance observed, there is no convention which requires the Commission to set off or take account of penalties imposed abroad.

91. According to the Commission, the Court of First Instance was correct to hold that the facts prosecuted by the Commission and the United States and Canadian authorities were not identical. A distinction had to be made, as the Court recognised in Boehringer, between the agreements concluded at international level which are the basis for a cartel (the ‘facts’) and which may in some circumstances be the same, and their subject and scope. In the present case, the fine imposed by the Commission relates only to the operation of the cartel within the territory of the EEA, that is to say, to offences other than those focused on by the authorities of the third countries in question.

92. For my part, I must say straight away that I do not accept the arguments relied on by the appellants.

93. First of all, it seems to me that, as the Court of First Instance held in the judgment under appeal, at present, it cannot be considered that there is any principle of public international law that prevents the authorities or courts of different States from trying and convicting a person on the basis of the same facts. On the contrary, the exercise of the power to impose penalties is still considered by States as one of the most important expressions of their own sovereignty, so that they are unwilling to forgo the exercise of such a power in relation to offences which have any connection with their own legal order, even where such offences have been the subject of proceedings brought by the authorities of other States.

94. For the rest, the same multilateral instruments which confirm the principle of non bis in idem generally limit its applicability to judicial decisions within the same State.

95. I would refer in that connection, first to Article 14(7) of the International Covenant on Civil and Political Rights of 1966 which provides that ‘[n]o one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of each country’. Then, when called upon to rule on the scope of that rule, the Committee on Human Rights of the United Nations specified that it ‘prohibits double jeopardy only with regard to an offence adjudicated in a given State’. ( )

96. Clearer still is the wording of Article 4 of Protocol No 7 to the Convention for the Protection of Human Rights and Fundamental Freedoms, which provides that ‘[n]o one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State’. ( )

97. The position set out above is clearly confirmed in international case-law. In particular, the International Criminal Tribunal for the former Yugoslavia did not hesitate to acknowledge that ‘the principle of non bis in idem appears in some form as part of the internal legal code of many nations. Whether characterised as non bis in idem, double jeopardy or autrefois acquit, autrefois convict, this principle normally protects a person from being tried twice or punished twice for the same acts. This principle has gained a certain international status since it is articulated in Article 14(7) of the International Covenant on Civil and Political Rights as standard of fair trial, but it is generally applied so as to cover only a double prosecution within the same State. The principle is binding upon this International Tribunal to the extent that it appears in Statute, and in the form it appears there.’ ( )

98. That line of thought is expressly shared by some national constitutional courts. ( ) For example, by judgment of 31 March 1987, the German Bundesverfassungsgericht ruled that the principle in question could not be considered to be on a par with a generally recognised principle of international law. ( ) Similarly, in two judgments, the Italian Constitutional Court held that the mere fact that the principle is common to nearly all national legal orders is not a sufficient reason to classify it as a general principle of international law which is also applicable to foreign judgments. ( )

99. Finally, I would point out that, even within an integrated framework such as that of the Community, the principle of non bis in idem has only been upheld because it is provided for by rules to that effect in agreements such as the Convention implementing the Schengen Agreement (Article 54), ( ) the Convention on the Protection of the European Communities’ Financial Interests (Article 7) and the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union (Article 10).

100. However, even if the premiss for the applicants’ argument were sound, that is to say that there is a general principle of law according to which, even in the absence of rules laid down by agreement to that effect, the same person may not be punished several times in different States for the same offence, the application of that principle would none the less be subject, as the Court recently ruled, ‘to the threefold condition of identity of the facts, unity of offender and unity of the legal interest protected’. ( ) In other words, only in such circumstances could one talk of a situation of concurrent penalties for the purposes of the application of the principle in question. Thus, even if we were to accept that there is such a principle, it would be necessary to ascertain whether those conditions were met in the present case.

101. It seems clear to me that in the case at issue at least one of those conditions is not met, namely the unity of the legal interest protected. As the Court of First Instance rightly observed, ‘the procedures conducted and penalties imposed by the Commission on the one hand and the American and Canadian authorities on the other clearly pursued different ends. The aim of the first was to preserve undistorted competition within the European Union and the EEA, whereas the aim of the second was to protect the American and Canadian markets’. ( ) Such procedures were thus not designed to ‘protect the same legal asset’. ( )

102. In that connection, it is sufficient to remember that the pre-condition for the application of Community law on restrictive agreements and thus for action by the Commission is the existence of an agreement, a decision or a concerted practice which ‘may affect trade between Member States’ and have as their object or effect ‘the prevention, restriction or distortion of competition within the common market’ (Article 81(1) EC). If there is no evidence of one of those effects there is no infringement of Article 81(1) EC.

103. It follows that when the Commission imposes penalties for an offence, which may, as in the present case, derive from a single ‘international strategy’, it seeks to protect a specific ‘legal asset’, namely free competition in the common market and thus distinct from that protected by the authorities of third countries. The specific nature of the legal asset protected is reflected not only in the principles and rules which characterise Community competition law, but also in the assessments made by the Commission. Those assessments consist essentially in investigating in each case the effects of suspected anti-competitive conduct within the specific economic structure of the common market and may thus diverge considerably from the findings of foreign authorities.

104. I would add that the requirement of identity of the legal interest protected (a requirement which, moreover, the appellants’ argument leaves entirely out of consideration) represents, in my view, an essential aspect of the issue here, in so far as it is closely connected with the fundamental objective of any system of penalties: the identification of the interests and values which that legal order considers worthy of protection. For the reasons given above, I take the view that in this case, the question whether there is identity of such interests and values must be answered in the negative.

105. Nor does it seem to me that a different conclusion can be derived from the appellants’ reference to the principle laid down by the Court in its judgment in Walt Wilhelm according to which the Commission must take account, when setting the amount of the fine, of penalties already imposed on the undertaking for conduct in breach of the competition law of a Member State. According to the appellants, there is no reason not to extend the scope of that principle of fairness or ‘natural justice’ to decisions imposing penalties by the authorities of third States.

106. However, as the Court of First Instance rightly pointed out, ( ) the Court upheld that principle in view of the particular situation obtaining in the Community which arises from the close interdependence between the national markets of the Member States and the common market and from the special system for the division of jurisdiction between the Community and the Member States with regard to restrictive agreements. In particular, Community competition law and national laws on competition consider restrictive agreements from different, though complementary, points of view: ‘[w]hereas Article [81] regards them in the light of obstacles which may result for trade between Member States, each body of national legislation proceeds on the basis of the considerations peculiar to it and considers cartels only in that context’. ( ) And it is thus in that specific context, in which the same action ‘committed on Community territory’ ( ) may give rise to parallel proceedings before national and Community authorities, that the Court has ruled that if ‘the possibility of two procedures being conducted separately were to lead to the imposition of consecutive sanctions, a general requirement of natural justice … demands that any previous punitive decision must be taken into account in determining any sanction which is to be imposed’. ( )

107. In that connection, it should be pointed out that since the Court delivered its judgment in Walt Wilhelm (more than 30 years ago) the degree of interdependence and integration of Community and national systems for safeguarding competition on which that judgment was based has significantly increased, in particular with the decentralisation of the application of Community antitrust law introduced by the recent Regulation No 1/2003. ( ) A very original system has thus been created, in which the Commission and the authorities of the Member States, acting according to the extent and limits of their respective powers, in practice jointly safeguard freedom of competition within the Community. ( )

108. However, a situation such as that which concerns us here, of penalties imposed by authorities operating in very different contexts, is another matter altogether. It seems to me that that explains why the Commission’s obligation to take account of penalties already imposed was expressly recognised by the Court of Justice only as regards decisions of authorities of the Member States. ( )

109. I therefore take the view that the Court of First Instance was right to find, in paragraph 100 of the judgment under appeal, that the facts of the present case are not the same as those of cases in which, according to Community case-law, the Commission is subject to such an obligation.

110. However, one might raise the question whether, outside that specific context of the relationship between Community competition law and the law of the Member States, the Commission ought not, in other circumstances too, to take account, for reasons of fairness, of other decisions imposing penalties adopted by foreign authorities. I am thinking particularly of the somewhat unusual but not altogether improbable situation of a product market which is entirely integrated worldwide, that is to say characterised by perfectly uniform conditions of competition at international level. In such a case, concurrent penalties could be considered excessive given that the fines imposed by the various authorities would all in practice be intended to condemn the damage caused to a single, worldwide, competitive structure.

111. However, I must say that even if we were to go down that road, I do not think that the conclusion we reached above would change, because the hypothetical situation described does not obtain in the present case. In this case, without its analysis being disputed by the Court of First Instance, the Commission (i) expressly referred to the ‘lysine market in the EEA’ and (ii) condemned the participation of the appellants in price agreements and sales quantities which related specifically and expressly to that market, even if they form part of a network of agreements and concerted practices concluded worldwide. ( )

112. (b) By their fourth ground of appeal, as stated above, the appellants submit that the Court of First Instance did not comply with the obligation to state reasons incumbent on it pursuant to Article 36 of the Statute of the Court. It failed to address the argument raised by the appellants to the effect that the Commission also infringed the principle of not imposing concurrent penalties by taking account of the worldwide turnover of ADM Company, that is to say a turnover which includes the turnover achieved in the United States although that turnover had already been taken into account by the United States and Canadian authorities in calculating the respective fines.

113. To begin with, I think I should point out that, according to settled case-law, the grounds of a judgment must be sufficiently clear and complete to enable those concerned to ascertain their content and to consider, where necessary, whether it is appropriate to challenge the lawfulness of the decision, and to allow the Court to carry out its own review. ( ) However, the Court has also made clear that ‘the obligation to state reasons does not require the Court of First Instance to provide an account that follows exhaustively and one by one 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’. ( )

114. That point having been clarified, it must be observed that the question under consideration was dependent on the solution found by the Court of First Instance to the wider question of the existence and applicability of a principle precluding concurrent penalties. It is clear that if the application of that principle had been ruled out in this case, the Commission could not have breached it by taking account of the worldwide turnover of ADM Company.

115. The Court of First Instance ruled out the application of the non bis in idem principle following a detailed analysis in paragraphs 85 to 104 of the judgment under appeal, of the arguments put forward by the parties. Having reached that conclusion it quite logically inferred that neither was there any breach of that principle in relation to the fact that the Commission had taken account of turnover already partially taken into account in the calculation of the penalties imposed by the authorities of third countries. ( )

116. It seems to me that it follows that the judgment sets out clearly and completely, in accordance with the requirements of the case-law cited, the reasoning which led the Court of First Instance also to reject the arguments of the appellants regarding the taking into account of the total turnover of ADM Company.

117. I therefore conclude that there was no breach of the obligation to state reasons by the Court of First Instance.

118. In the light of the foregoing considerations, I therefore propose that the Court of Justice should reject the third and fourth grounds of appeal.

4. The distortion of evidence as regards the actual impact of the cartel on the market

119. By the fifth ground of appeal the appellants submit that the Court of First Instance distorted evidence relating to the impact of the cartel on the lysine market in the EEA. In particular, the Commission had not proved, as required by the Community case-law, that the prices charged by the members of the cartel were higher than those which would have been charged in the absence of any infringement of competition law. The Court of First Instance was therefore wrong to conclude that the Commission had ‘proved to a sufficient legal standard that the cartel had an adverse effect on the market’. ( )

120. Before turning to the analysis of that ground, I would observe that, under Article 225 EC and Article 51 of the Statute of the Court of Justice, judgments of the Court of First Instance may be appealed ‘on points of law only’. It follows that the appraisal of the facts by the Court of First Instance does not constitute, save where the clear sense of the evidence produced before it is distorted, a question of law which is subject, as such, to review by the Court of Justice. ( )

121. On the question of the distortion of evidence by the Court of First Instance, the case-law subsequently made clear that ‘Article 225 EC, Article 51, first paragraph, of the EC Statute of the Court of Justice and Article 112(1)(c) of the Rules of Procedure of the Court of Justice provide, in particular, that where the appellant alleges distortion of the evidence by the Court of First Instance, he must indicate precisely the evidence alleged to have been distorted by that Court and show the errors of appraisal which, in his view, led to that distortion’. ( )

122. In particular, the requirements resulting from those provisions are not satisfied by an appeal which, without even including an argument specifically identifying the alleged distortion of evidence, simply repeats or reproduces verbatim the pleas in law and arguments already put forward before the Court of First Instance, including those which were based on facts expressly rejected by that Court. Such an appeal amounts in reality to no more than a request for re-examination of the application submitted to the Court of First Instance, which the Court of Justice does not have jurisdiction to undertake. ( )

123. That point having been made, it must first be noted that, in their appeal, the appellants breach the requirements laid down by the case-law cited in that they do not explain how the Court of First Instance distorted the evidence put before it but confine themselves essentially to stating that the Commission did not prove that the level of prices on the lysine market following the conclusion of the cartel was higher that that which would have prevailed in the absence of the agreement. They argue that, faced with that lack of evidence the Court of First Instance should have upheld the arguments put forward by the appellants, in particular those contained in two economic studies presented to the Commission during the administrative proceedings which allegedly served to demonstrate that the cartel did not have anti-competitive effects.

124. The criticism levelled by the appellants at the reasoning followed by the Court of First Instance seems to me to be unfounded. It is clear from a reading of the decision and the judgment under appeal that the Commission produced a number of items of evidence on the price increases caused by the cartel and that evidence was minutely examined by the Court of First Instance, which, moreover, pointed out that some of that evidence was not disputed by the appellants either. ( ) I would point out, further, that the Court of First Instance also analysed the counter-arguments presented by the appellants before concluding that they did not suffice to rebut the evidence produced by the Commission. ( )

125. It follows that the ground of appeal raised by the appellants includes no argument capable of establishing that the Court of First Instance distorted such evidence. Most importantly of all that ground of appeal, by repeating arguments already rejected by the Court of First Instance, in practice seeks to dispute the analysis made by that court of the anti-competitive effect of the cartel, and thus to dispute an assessment of the facts which, as I pointed out above, cannot be called into question in the present appeal.

126. In the light of the foregoing considerations, I therefore propose that the Court should declare this ground of appeal inadmissible.

5. Breach of the principle of proportionality

127. By their sixth, seventh and eighth grounds of appeal, the appellants raise various issues relating to an alleged breach of the principle of proportionality. It seems most appropriate to me to consider the claim made by the eighth ground of appeal first.

128. (a) By that ground, the appellants submit that the Court of First Instance breached the principle of proportionality by holding that the fine imposed on them was not disproportionate to the turnover made by them on the relevant market, that is to say the lysine market in the EEA.

129. In their view, it is clear from the case-law of the Court of First Instance and the Court of Justice, in particular from the KNP( ) and Parker Pen( ) judgments, that, in the procedure for setting the amount of fines the Commission is obliged to take account of the turnover made by undertakings on the relevant market.

130. It follows, they argue, that in a case where the Commission has not taken account of that turnover, the fine is necessarily disproportionate. That is demonstrated precisely by the present case in which the fine imposed on ADM Company and ADM Ingredients is equivalent to 115% of their turnover on the relevant market.

131. For its part, the Commission contends that neither the Guidelines nor the Community case-law obliges it to take account of the turnover made by undertakings on the relevant market for the purposes of setting the amount of fines. Rather, such turnover is merely one of the factors which the Commission may take into account for that purpose.

132. Moreover, according to the Commission, requiring that fines should be proportionate to the turnover made on the relevant market would not result in a fine which was actually proportionate to the duration and gravity of the offence as required by Article 15(2) of Regulation No 17. Rather, the Commission must take account of a series of factors to assist it in setting the amount of the fine at a level which will serve as a sufficient deterrent. In the present case, such factors were taken into account.

133. Finally, the Commission contends that the case-law cited by the appellants in support of their claims is not relevant.

134. As regards KNP, although the Court did rule in its judgment in that case that fines should be proportionate to turnover on the relevant market, it must be pointed out that the Court of First Instance was right to consider that that ruling was determined by the particular facts of that case and cannot be taken as a general principle binding on the Commission.

135. As regards the judgment in Parker Pen, the Commission points out that the Court of First Instance did not, in that case, in any way lay down a requirement that turnover made by undertakings on the relevant market had to be taken into account. The Court of First Instance merely cautioned the Commission against attaching disproportionate importance to worldwide turnover when turnover on the relevant market makes up a very small share of the total. None the less, the Court of First Instance confirmed that turnover on the relevant market is only one of many factors which the Commission may take into account when determining the amount of the fine.

136. Moreover, the facts of Parker Pen are completely different from those of the present case. As it was a vertical agreement that was at issue, it was logical to take into account the turnover made by the distributor, Parker Pen, on the product market to which the cartel related. That case-law cannot be applied by analogy to the present case, which concerns a horizontal agreement.

137. I, for my part, think that it should be made clear, to begin with, that the assessment of the proportionality of a fine with the gravity of an offence falls within the power of judicial review conferred on the Court of First Instance by Article 17 of Regulation No 17. Thus, the Court of First Instance alone has jurisdiction to examine how in each particular case the Commission appraised the gravity of unlawful conduct. ( )

138. In an appeal, therefore, the review by the Court of Justice may only extend to examining whether the Court of First Instance took into consideration, in a legally correct manner, all the essential factors to assess the unlawful conduct and whether it made errors in considering the arguments raised by the appellants. ( )

139. In particular, as regards the allegedly disproportionate nature of the fine, it should be remembered that it is not for the Court of Justice to substitute, on grounds of fairness, its own assessment for that of the Court of First Instance exercising its jurisdiction to rule on the amount of fines imposed on undertakings for infringements of Community law. ( )

140. It follows that, in the present case too, the Court’s analysis is limited to the question whether, by approving the criteria used by the Commission in setting the fines and by reviewing their application, and indeed by correcting that application, the Court of First Instance failed to have regard to the principle of proportionality. ( )

141. Bearing in mind the limits set by the settled case-law of the Court of Justice, I now turn to the consideration of the plea raised by the appellants.

142. In that connection, I must acknowledge that the assessment of that particular point made by the Court of First Instance in the judgment under appeal is not very clear. When examining whether the Commission observed the principle of proportionality:

– it pointed out that, under the Guidelines, the gravity of an infringement is established by reference to a number of factors (paragraph 183);

– it observed that the Guidelines do not provide that fines are to be calculated according to the total turnover of undertakings or their turnover on the relevant market, and that they do not preclude such turnover from being taken into account in the determination of the amount of fines (paragraph 187);

– it held it to be established that, in the procedure for setting the amount of fines, the Commission did not take account of the turnover of the undertakings on the lysine market in the EEA but of the total worldwide turnover and the worldwide turnover on the lysine market (paragraphs 191 to 192);

– it pointed out that the Commission made no explicit reference to taking account of the specific weight and, therefore, the real impact on competition of the offending conduct of each undertaking (paragraph 194);

– it observed that it is clear from the case-law of the Court that ‘the proportion of turnover derived from the goods in respect of which the infringement was committed is likely to give a fair indication of the scale of the infringement on the relevant market’ ( ) (paragraph 196);

– it concluded that, by failing to take into consideration turnover on the relevant market, the Commission disregarded the Guidelines in so far as they required the ‘effective economic capacity’ and the ‘specific weight’ of the undertakings concerned to be taken into account (paragraph 197).

143. None the less, substituting its own assessment for that of the Commission, the Court of First Instance held that, in any event, the Commission did not breach the principle of proportionality given that (i) the case-law does not imply the existence of a principle requiring the Commission to take account of turnover made by undertakings on the relevant market; (ii) the turnover corresponding to sales of lysine in the EEA represented a relatively large share of the turnover made by the appellants on the worldwide lysine market and (iii) the basic amount of the fine was not determined according to a simple calculation based on total turnover but also according to other relevant factors (paragraphs 200 to 205).

144. The reasoning of the Court of First Instance thus appears contradictory. Initially, the Court of First Instance appears to have held that the Commission had to calculate the amount of the fine taking account of the turnover made by the undertakings on the relevant market. Subsequently, however, it held without hesitation that the case-law of the Court of Justice did not imply the existence of such an obligation and that the fine had therefore been correctly calculated.

145. In the light of the uncertainty created by the reasoning of the Court of First Instance, I therefore think that it should be assessed whether that uncertainty has led to errors of assessment such as to undermine the conclusion reached by the Court of First Instance.

146. I will begin this analysis by pointing out, as I did in my Opinion in Dansk Rørindustri and Others, ( ) that, according to settled case-law, the Commission has a particularly wide discretion as regards the choice of factors to take into account in order to set the amount of fines. As the Court has observed ‘[t]he gravity of infringements has to be determined by reference to numerous factors, such as the particular circumstances of the case, its context and the dissuasive effect of fines; moreover, no binding or exhaustive list of the criteria which must be applied has been drawn up’. ( ) Those numerous factors may include, by way of example, the size and economic power of the undertakings committing the infringement, the role played by each of them in the infringement, the economic and legal background to the infringement. ( )

147. In particular, as regards the taking into account of the turnover of an undertaking, in its judgment in Musique diffusion française, the Court of Justice pointed out that ‘it is permissible, for the purpose of fixing the fine, to have regard both to the total turnover of the undertaking … and to the proportion of that turnover accounted for by the goods in respect of which the infringement was committed [without it being necessary] to confer on one or the other of those figures an importance disproportionate in relation to the other factors’. ( )

148. It appears from those statements that, although it may be a useful and relevant indicator of the economic power of the undertaking, total turnover and turnover on the relevant market represent only two of the various factors of which the Commission may take account in the assessment of the gravity of the infringement. However, it is not obliged to take account of the turnover made by the undertakings on the relevant market.

149. The above comments are not contradicted, in my view, by the findings of the Court in KNP, to which the appellants referred several times in their appeal. In that regard, I would point out that, in that case, the applicant submitted that the Commission had erred in taking into account when setting the fine sales within the group in question, that is to say, part of the turnover on the relevant market. It is that fact which justifies the Court’s statement in paragraphs 61 and 62 of that judgment, that taking account of turnover on the relevant market, including that from sales internal to a group, is important in order to guarantee the proportionate nature of the fine and in particular so as not to give an unjustified advantage to vertically integrated companies.

150. Contrary to what the Court of First Instance appears to rule, that obligation is not entailed by the Guidelines at all.

151. In that regard, the Guidelines merely call on the Commission ‘to take account of the effective economic capacity of offenders to cause significant damage to other operators, in particular consumers’ (Section 1.A, fourth paragraph) and to bear in mind that ‘[w]here an infringement involves several undertakings (e.g. cartels), it might be necessary in some cases to apply weightings to the amounts determined within each of the three categories in order to take account of the specific 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’ (Section 1.A, sixth paragraph).

152. In other words, in setting the amount of the fine, the Commission must ensure that the fine is proportionate to the specific weight and the actual impact which the conduct of the individual undertaking has had on the market. However, in so doing, it is not bound to consider the turnover made by that undertaking on the relevant market, which is, moreover, not expressly mentioned by the Guidelines. As I said above, that turnover is merely one of the various factors which the Commission may take into consideration. And in fact, in this case, the Commission, as the Court of First Instance rightly points out, adjusted the amount of the fine according to the size and resources of the undertakings concerned, taking account of other relevant factors such as their total turnover and their worldwide turnover in the lysine sector. On the basis of those criteria, the Commission then divided the participants in the cartel into two categories ‘[i]n order to take account of the effective capacity of the undertakings concerned to cause significant damage to the lysine market in the EEA and the need to ensure that the amount of the fine has a sufficiently deterrent effect’ ( ) imposing different basic amounts of fine for each category.

153. For the rest, it should be borne in mind that, in many cases, it is indeed the worldwide turnover (total or sectoral) which constitutes the main indicator of the economic power of an undertaking and entails the imposition of a proportionately larger fine on it. In my view, that is exactly what happens in the case of multi-national undertakings operating worldwide, which may have a very high worldwide turnover and a much smaller turnover on the relevant market.

154. Finally, we must not forget that the assessment of turnover on the relevant market is not even required by Article 15 of Regulation No 17, which, on that point, refers only to total turnover made by the undertakings in the previous financial year.

155. The above considerations show that the Court of First Instance erred, if its reasoning is to be understood in that way, in holding that the Commission breached the Guidelines by not taking account of the turnover of the undertakings concerned on the relevant market.

156. However, the question must be raised whether the error of law made by the Court of First Instance is such as to call into question the conclusion it reached that the amount of the fine must be held to be proportionate on the basis of the other factors taken into account by the Commission. Indeed, as we know, according to settled case-law, ‘where the grounds of a judgment of the Court of First Instance disclose an infringement of Community law but the operative part of the judgment is shown to be well founded for other legal reasons, the appeal must be dismissed’. ( )

157. As I pointed out above, the calculation of the fines imposed by the Commission and upheld by the Court of First Instance rightly took account of the differences in the size and resources of the participants in the cartel. It must therefore be concluded that, even if the judgment is held to be vitiated by an error of law on that point, its operative part is none the less well founded.

158. I therefore take the view that the eighth ground of appeal must also be rejected.

159. (b) By their sixth ground of appeal, the appellants argue that, having held that the Commission breached the Guidelines, the Court of First Instance made an error of law in failing to take account of the turnover made by them on the relevant market and failing, as a result, to set the fine at the correct amount.

160. In that connection, given that I said above that there was no breach of the Guidelines by the Commission, the obvious reply seems to me to be that in assessing the procedure followed for setting the amount of the fine, the Court of First Instance may also review the substance. Thus it has the option of substituting its own assessment for that of the Commission where it considers that the Commission breached rules or principles of law.

161. That is exactly what has happened in this case. Having held that the Commission misapplied the Guidelines, the Court of First Instance made its own assessment and found that, in any event, the fine imposed was not disproportionate.

162. It follows that the sixth ground of appeal must also be rejected.

163. (c) Finally, by their seventh ground of appeal, the appellants argue that the Court of First Instance breached the requirement to state reasons for its own decisions when it held that the fine imposed on them was proportionate despite the fact that the Commission misapplied the Guidelines.

164. The Commission, of course, disagrees.

165. In that connection, I would point out that, according to the case-law of the Court of Justice, and as I observed above (point 109), the reasoning may 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. ( )

166. That said, it seems to me that, although the Court of First Instance may not have replied specifically to one or another of the arguments, the judgment under appeal none the less complies with the requirement to state reasons. Having found that the Commission had breached the provisions of the Guidelines, the Court of First Instance considered whether that breach entailed an infringement of the principle of the proportionality of fines. In that regard, it held that that principle had been observed by the Commission and set out clearly the reasons why it was possible to reach that conclusion.

167. The Court of First Instance first observed that Article 15 of Regulation No 17 provided that the final amount of the fine was not to exceed 10% of the total turnover of the undertaking precisely to ensure that the fine is proportionate to the economic power of the undertaking. It follows that where, as here, the amount of the fine does not exceed that limit, the fine must be held to be proportionate.

168. Second, the Court of First Instance dismissed the appellants’ view that Community case-law required the Commission to take account of turnover on the relevant market, amply refuting their arguments.

169. Finally, the Court of First Instance took care to demonstrate that, even if there were such an obligation, the method for setting fines followed by the Commission in the contested decision did not result in a disproportionate fine. The turnover from sales of lysine in the EEA represented a relatively large share of the turnover made by the appellants on the worldwide market in lysine. In any event, the basic amount of the fine was not calculated only on the basis of total turnover but also by reference to other factors such as sectoral turnover, the nature of the infringement, its actual impact on the market, the extent of the relevant geographical market, the need for the penalty to have a deterrent effect, the size and power of the undertakings. ( )

170. It seems to me, therefore, that the seventh ground of appeal must also be rejected.

6. Breach of the principle of equal treatment in setting the amount of the fine

171. By their ninth ground of appeal, finally, the appellants argue that the Court of First Instance breached the principle of equal treatment in endorsing the Commission’s setting, for the purposes of calculating the fine, of the same basic amount for ADM and Ajinomoto, despite the fact that, on the relevant market, the latter held a share almost double that of ADM. Undertakings of different sizes were thus treated the same. In the light of that difference in size and of the fact that the Court of First Instance has, they allege, held that the Commission must always take account of turnover on the relevant market, the Court of First Instance should have reduced the basic amount of ADM’s fine.

172. For my part, I would observe first that the ground under consideration is based on a premiss which is, in my view, mistaken, that is to say that in the procedure for setting the amount of fines, the Commission is obliged to take account of the turnover made on the relevant market. As I have endeavoured to demonstrate above (points 142 to 151), no such obligation can be inferred either from the Community case-law or from Article 15 of Regulation No 17 or even from the wording of the Guidelines.

173. It follows that, contrary to the submissions of the appellants, the basic amounts in question cannot be considered discriminatory solely because they were not set according to turnover on the relevant market.

174. That said, it would have been possible to speak of a breach of the principle of equal treatment if the Court of First Instance had held the basic amount applied to ADM Company lawful despite the fact that it was in a different position from Ajinomoto, that is to say, from the undertaking for which an identical basic amount was calculated. According to the settled case-law of the Court, the principle of equal treatment is breached if comparable situations are treated differently and different situations are treated in the same way unless such treatment is objectively justified. ( )

175. However, it seems to me that the principle of equal treatment would not be breached even in those circumstances.

176. In that regard, it must be observed that the Court of First Instance found that the basic amount of the fine was set by the Commission according to a series of factors including, notably, the size and economic power of the undertakings concerned. ( ) In order to take account of that latter factor, the Commission subdivided the participants into two categories by reference to both their total worldwide turnover and to their worldwide turnover in the lysine sector ( ) and held, on the basis of that division, that the higher basic amount should be applied to ADM Company and Ajinomoto.

177. It is thus by reference to the two criteria used by the Commission (total worldwide turnover and worldwide turnover in the lysine sector), and accepted by the Court of First Instance, for the purposes of delimiting those two groups that it must be ascertained whether the appellants suffered discrimination.

178. Consideration of the information produced by the appellants in their written pleadings reveals that for both types of turnover considered by the Commission the sales made by ADM Company were clearly greater than those of all the other undertakings participating in the cartel, including, although to a lesser extent, Ajinomoto. ( )

179. It seems to me that I can therefore conclude that the setting of the basic amounts, which complies with objective criteria and is internally consistent, ( ) did not entail a breach of the principle of equal treatment to the detriment of the appellants.

180. That ground must therefore also be rejected.

181. In conclusion, none of the claims made by the appellants is founded, and their appeal cannot therefore be upheld.

IV – Costs

182. In the light of Article 69(2) of the Rules of Procedure, and having regard to the conclusion I have reached that the appeal should be dismissed, I take the view that the appellants should be ordered to bear the costs.

V – Conclusion

183. In the light of the foregoing arguments, I propose that the Court should:

– dismiss the appeal;

– order Archer Daniels Midland Company and Archer Daniels Midland Ingredients Ltd to bear the costs.