Keywords

Summary



Keywords

1. Competition – Agreements, decisions and concerted practices – Undertaking – Meaning – Economic unit – Attribution of infringements

(Art. 81(1) EC; EEA Agreement, Art. 53)

2. Competition – Community rules – Infringements – Attribution

(Art. 81(1) EC; EEA Agreement, Art. 53)

3. Competition – Administrative procedure – Commission decision finding an infringement – Burden of proving the infringement and its duration on the Commission – Extent of the burden of proof

(Art. 81(1) EC; EEA Agreement, Art. 53)

4. Competition – Administrative procedure – Commission decision finding an infringement –Method of proof – Reliance on a body of evidence

(Art. 81(1) EC; EEA Agreement, Art. 53)

5. Competition – Agreements, decisions and concerted practices – Proof – Assessment of the probative value of a document – Criteria

(Art. 81(1) EC; EEA Agreement, Art. 53)

6. Community law – Principles – Fundamental rights – Presumption of innocence – Procedure in competition matters – Applicability

(Single European Act, preamble; Art. 6(2) EU; Art. 81(1) EC; EEA Agreement, Art. 53; Charter of Fundamental Rights of the European Union, Art. 47)

7. Competition – Agreements, decisions and concerted practices – Participation in meetings having an anti-competitive object

(Art. 81(1) EC; EEA Agreement, Art. 53)

8. Competition – Administrative procedure – Statement of objections – Obligation to respond – None

(Council Regulation No 1/2003, Art. 18)

9. Action for annulment – Admissibility – Natural or legal persons – Acceptance during the administrative procedure, by the undertaking to which the statement of objections is addressed, of facts or points of law justifying attribution of liability for an infringement to it – Restriction on the right to bring proceedings – Infringement of the fundamental principles of legality and respect for the rights of the defence

(Arts 81 EC and 230, fourth para., EC; Charter of Fundamental Rights of the European Union, Arts 47 and 52(1))

10. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision to apply competition rules

(Art. 81 EC; EEA Agreement, Art. 53)

11. Action for annulment – Pleas in law – Infringement of essential procedural requirements – To be considered of the Court’s own motion

(Arts 81 EC and 230 EC; EEA Agreement, Art. 53)

12. Competition – Community rules – Infringement committed by a subsidiary – Attribution of liability to the parent company – Burden of proof on the Commission

(Art. 81(1) EC; EEA Agreement, Art. 53)

13. Competition – Fines – Amount – Discretion of the Commission – Unlimited jurisdiction of the General Court – Whether possible to take into consideration additional information not mentioned in the decision imposing the fine

(Arts 263 TFEU and 264 TFEU; Council Regulations No 17, Art. 15(4) and No 1/2003, Art. 23(2)(a))

14. Competition – Administrative procedure – Observance of the rights of the defence – Statement of objections – Production of additional evidence after sending the statement of objections – Whether permissible – Conditions

(Art. 81(1) EC)

15. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned – Need for conduct which facilitated the Commission’s finding of an infringement

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 2002/C 45/03, Section 26)

Summary

1. In prohibiting undertakings from entering into agreements or participating in concerted practices 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 is aimed at economic units which consist of a unitary organisation of personal, tangible and intangible elements which pursues a specific economic aim on a long-term basis and can contribute to the commission of an infringement of the kind referred to in that provision.

In order to be applied and enforced, decisions taken pursuant to Article 81 EC must, however, be addressed to entities possessing legal personality. Thus, when the Commission adopts a decision pursuant to Article 81(1) EC, it must identify the natural or legal person or persons who can be held responsible for the conduct of the relevant undertaking and can be penalised for that conduct, and the decision will be addressed to them.

(see paras 56-57)

2. Where a number of persons may be held personally liable for the participation of one and the same undertaking, for the purposes of competition law, in an infringement, they must be considered to be jointly and severally liable for that infringement.

The person who had direct responsibility for or managed the undertaking at the time the infringement was committed, and the person who, by reason of actually exercising control over the undertaking and determining its conduct on the market, indirectly managed that undertaking at the time when the infringement was committed, may be held personally liable and jointly and severally liable for the participation of one and the same undertaking in an infringement.

It follows that the principle of personal liability, under which a person can be held liable only for his own acts, must be understood as also covering the personal liability of both the person directly managing the undertaking at the time when the infringement was committed and the person who, at the same time, indirectly managed that undertaking.

(see paras 58-59, 153)

3. In relation to the burden of proof, it is for the party or the authority alleging an infringement of the competition rules to prove its existence by establishing, to the requisite legal standard, the facts constituting an infringement, and it is for the undertaking invoking the benefit of a defence against a finding of an infringement to demonstrate that the conditions for applying such defence are satisfied, so that that authority will then have to resort to other evidence.

The duration of the infringement is an intrinsic element of an infringement under Article 81(1) EC, the burden of proof of which is borne principally by the Commission.

That apportionment of the burden of proof may vary, however, inasmuch as the evidence on which a party relies may be of such a kind as to require the other party to provide an explanation or justification, failing which it is permissible to conclude that the burden of proof has been discharged.

(see paras 84-85)

4. As regards the evidence on which the Commission can rely, the principle which prevails in competition law is that of the unfettered evaluation of evidence.

In most cases, the existence of an anti-competitive practice or agreement must be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules. Such indicia and coincidences may reveal not just the existence of anti-competitive practices or agreements, but also the duration of a continuous anti-competitive practice or the period of application of an agreement concluded in breach of competition law.

In any event, the Commission must produce sufficiently precise and consistent evidence to support the firm conviction that the alleged infringement took place. However, it is not necessary for every item of evidence produced by the Commission to satisfy those criteria in relation to every aspect of the infringement. It is sufficient if the body of evidence relied on by the institution, viewed as a whole, meets that requirement.

As regards the duration of the infringement, if there is no evidence directly establishing the duration of an infringement, the Commission should adduce at least evidence of facts sufficiently proximate in time for it to be reasonable to accept that that infringement continued uninterruptedly between two specific dates.

(see paras 86-87)

5. As regards the probative value to be accorded to various pieces of evidence assembled in relation to an infringement of the competition rules, the only relevant criterion for the purpose of assessing the evidence adduced relates to its reliability. According to the general rules of evidence, the reliability and therefore the probative value of a document depends on the person from whom the document originates, the circumstances in which it came into being, the person to whom it was addressed and its content. It is necessary, in particular, to attach great importance to the fact that documents were drawn up in close connection with the events, or by a direct witness of those events. Documents from which it is evident that contacts took place between a number of undertakings and that they in fact pursued the aim of removing in advance any uncertainty as to the future conduct of their competitors demonstrate, to the requisite legal standard, the existence of a concerted practice. Further, statements which run counter to the interests of the declarant must in principle be regarded as particularly reliable evidence.

(see para. 88)

6. Where, in the case of an application for annulment brought against a Commission decision finding an infringement of the competition rules and imposing fines on the addressees, there is doubt, the benefit of that doubt must be given to the parties to whom the decision is addressed, and consequently the court cannot conclude that the Commission has established the infringement at issue to the requisite legal standard if it still entertains doubts on that point. In the latter situation, it is necessary to take account of the principle of the presumption of innocence resulting in particular from Article 6(2) of the Convention for the Protection of Human Rights, which is one of the fundamental rights which, according to the case-law of the Court of Justice, and as reaffirmed in the preamble to the Single European Act, by Article 6(2) of the Treaty on European Union and by Article 47 of the Charter of Fundamental Rights of the European Union, are protected in the legal order of the European Union. Given the nature of the infringements in question and the nature and degree of severity of the ensuing penalties, the principle of the presumption of innocence applies in particular to the procedures relating to infringements of the competition rules that may result in the imposition of fines or periodic penalty payments.

(see para. 89)

7. An undertaking which does not publicly distance itself from the results of a meeting which it has attended or an agreement to which it has been a party remains, as a general rule, wholly liable for its participation in the cartel. It would be too easy for undertakings to reduce the risk of being required to pay a heavy fine if they were able to take advantage of an unlawful agreement and then benefit from a reduction in the fine on the ground that they had played only a limited role in implementing the infringement, when their attitude encouraged other undertakings to act in a way that was more harmful to competition. It follows that, even if the undertaking concerned did not comply with all of the agreements entered into within the cartel, that fact is not enough, without evidence that it publicly distanced itself from the other cartel members, to exempt it from the liability it incurs as a consequence of its participation in those agreements and, through those agreements, in the infringement which has been found.

(see para. 100)

8. The competition rules cannot be interpreted as meaning that the person concerned in an administrative procedure is under an obligation to reply to the statement of objections sent to him by the Commission. Neither the rules setting out the rights and duties of undertakings within the administrative procedure provided for by competition law nor any general principle of law oblige those undertakings to do any more than supply the Commission with such information as it has requested from them under Article 18 of Regulation No 1/2003. Such a duty would, in the absence of any legal basis, be difficult to reconcile with the principle of respecting the rights of the defence, since it would create difficulties for a person who, having failed for whatever reason to reply to a statement of objections, wished to bring legal proceedings before the courts of the European Union.

Thus, while the legality of the Commission decision finding that a person has infringed competition law and consequently imposing a fine on that person can be assessed only in relation to the facts and points of law pertaining at the date when the decision was adopted, it does not follow that the person concerned is under an obligation to supply to the Commission, at the stage of the administrative procedure, all the material on which it may wish to rely in support of an action for annulment, brought before the courts of the European Union, of the decision adopted at the conclusion of the administrative procedure.

(see paras 124, 158)

9. In proceedings concerning infringement of the competition rules, where the person concerned decides voluntarily to cooperate and, within the administrative procedure, accepts explicitly or implicitly facts or points of law which justify the attribution of liability for the infringement to that person, the actual exercise of its right to bring proceedings under the fourth paragraph of Article 230 EC is not thereby restricted.

In the absence of a specific legal basis, such a restriction is contrary to the fundamental principles of the rule of law and of respect for the rights of the defence. Further, the right to an effective remedy and of access to an impartial court is guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union and, under Article 52(1) of the Charter, any limitation on the exercise of the rights and freedoms recognised by the Charter must be provided for by law.

(see para. 159)

10. The statement of the reasons on which a decision having adverse effect is based must make it possible to carry out an effective review of its legality and must provide the party concerned with details sufficient to allow that party to ascertain whether or not the decision is well founded, and the adequacy of such a statement of reasons must be assessed in the context of the circumstances of the case, and in particular the content of the measure, the nature of the reasons relied on and the interest which addressees may have in obtaining explanations.

In order to perform those functions, an adequate statement of reasons must disclose in a clear and unequivocal fashion the reasoning followed by the authority of the European Union which adopted the measure in question.

Where a decision pursuant to Articles 81 EC and Article 53 of the EEA Agreement relates to several addressees and raises a problem of attribution of liability for the infringement, it must include an adequate statement of reasons with respect to each of the addressees, in particular those of them who, according to the decision, must bear the liability for that infringement.

(see para. 162)

11. In an action for annulment of a decision under Article 81 EC and Article 53 of the EEA Agreement, the fact that the applicant has relied on a substantive plea, alleging a manifest error of assessment, and not a failure to state reasons or a failure to state adequate reasons, in other words a plea relating to an infringement of an essential procedural requirement, within the meaning of Article 230 EC, does not deprive the Courts of the European Union of the possibility of raising such a plea of their own motion, since such a plea is a matter of public policy which may, or even must, be raised by the Courts of their own motion, provided that the rule that the parties should be heard is respected.

(see para. 163)

12. For the purposes of applying the competition rules, the fact that a subsidiary has separate legal personality is not sufficient to exclude the imputation of its conduct to the parent company, especially where the subsidiary does not determine its market conduct independently but in all material respects carries out the instructions given to it by the parent company.

Against that background, it is, as a rule, for the Commission to demonstrate that the parent company or companies actually exercised a decisive influence on the market conduct of their subsidiary, on the basis of a body of factual evidence, including, in particular, any management power exercised by the parent company or companies over their subsidiary. It is generally the case that if a parent company holds a majority interest in the subsidiary’s share capital, that can enable it actually to exercise a decisive influence on its subsidiary and, in particular, on the subsidiary’s market conduct.

None the less, a minority interest may enable a parent company actually to exercise a decisive influence on its subsidiary’s market conduct, if it is allied to rights greater than those normally granted to minority shareholders in order to protect their financial interests and which, when considered in the light of a set of consistent legal or economic indicia, are such as to show that a decisive influence is exercised over the subsidiary’s market conduct. Proof of the actual exercise of a decisive influence may therefore be adduced by the Commission by relying on a body of evidence, even if each of those indicia taken in isolation does not have sufficient probative value.

The actual exercise of management power by the parent company or parent companies over their subsidiary may be capable of being inferred directly from the implementation of the applicable statutory provisions or from an agreement between the parent companies, entered into under those statutory provisions, in relation to the management of their common subsidiary. The extent of the parent company’s involvement in the management of its subsidiary may also be proved by the presence, in leading positions of the subsidiary, of many individuals who occupy managerial posts within the parent company. Such an accumulation of posts necessarily places the parent company in a position to have a decisive influence on its subsidiary’s market conduct since it enables members of the parent company’s board to ensure, while carrying out their managerial functions within the subsidiary, that the subsidiary’s course of conduct on the market is consistent with the line laid down at management level by the parent company. That objective can be attained even though member(s) of the parent company who take on managerial functions within the subsidiary do not have authority as agents of the parent company. Lastly, the involvement of the parent company or companies in the management of the subsidiary may follow from the business relationship which they have with each other. Accordingly, where a parent company is also the supplier or customer of its subsidiary, it has a very specific interest in managing the production or distribution activities of the subsidiary, in order to take full advantage of the added value created by the vertical integration thus achieved.

Further, there is no requirement, in order to attribute to a parent company liability for the acts undertaken by its subsidiary, to prove that that parent company was directly involved in, or was aware of, the offending conduct. The reason why the Commission is able to address a decision imposing fines to the parent company of a group of companies is not that the parent company instigated its subsidiary to commit the infringement nor, a fortiori, that the parent company was involved in the infringement, but that the parent company and the subsidiary adopted the same course of conduct on the market when the infringement was committed.

(see paras 179-184, 196)

13. More than a simple review of legality within an action for annulment under Article 263 TFEU, which merely permits dismissal of the action for annulment or annulment of the contested measure, as provided in Article 264 TFEU, the unlimited jurisdiction conferred on the Courts of the European Union authorises them to vary the contested measure, even without annulling it, by taking into account all the factual circumstances, so as to amend, for example, the amount of the fine imposed for infringement of the competition rules.

It follows that, in areas where the Commission has retained a margin of discretion, such as determining the scale of the increase of the fine according to the duration of the infringement or the need to ensure that the penalty has a deterrent effect, or assessing the quality and usefulness of the cooperation provided by an undertaking in the administrative procedure, in particular by reference to the contributions made by other undertakings, the fact that the review of legality within an action for annulment under Article 263 TFEU is limited to determining the absence of manifest error of assessment does not, in principle, preclude the Courts of the Union from exercising their unlimited jurisdiction.

In the context of their unlimited jurisdiction, the Courts of the European Union have the power to assess the appropriateness of the amounts of fines in the light of the criteria set out, as the case may be, in Article 15(4) of Regulation No 17 or in Article 23(2)(a) of Regulation No 1/2003. That assessment may justify the production and taking into account of additional information which is not mentioned in the Commission decision imposing the fine.

(see paras 208-209)

14. The statement of objections must enable the parties concerned properly to identify the conduct complained of by the Commission, that requirement being satisfied if the final decision does not allege that those concerned have committed infringements other than those referred to in the statement of objections and only takes into consideration facts on which the parties concerned have had the opportunity of making known their views.

While the infringements which an undertaking is alleged in a decision to have committed cannot be other than those stated in the statement of objections, the same cannot be said of the facts taken into consideration, since it is sufficient, with regard to those facts, that the undertakings subject to the proceedings have had the opportunity to make known their views on the facts considered to inculpate them. There is no provision which prevents the Commission from sending to the parties after the statement of objections fresh documents which it considers support its argument, provided that it gives the undertakings the necessary time to submit their views on them.

(see para. 238)

15. While it is correct that the date when evidence is delivered to the Commission has an effect on whether that evidence is to be classified as having significant added value, since that classification is dependent on what evidence is already held by the Commission at the date of delivery, the mere fact that such evidence has been delivered after the notification of the statement of objections does not mean that it may not still constitute, notwithstanding the advanced stage of the administrative proceedings, significant added value. In particular, in an application pursuant to the notice on immunity from fines and reduction of fines in cartel cases submitted after the statement of objections has been sent, an undertaking may focus on the facts which, in its opinion, have not been proved to the requisite legal standard in order to provide significant added value compared with the evidence already in the Commission’s possession.

Further, point 26 of the Leniency Notice does no more than state a procedural obligation which must be met by the Commission. It does not provide that any cooperation by an undertaking in proving the infringement is necessarily deprived of any value if it occurs only after notification of the statement of objections. Further, such cooperation may be very useful where the material provided was previously unknown to the Commission and where it has a direct effect on the gravity or duration of the presumed cartel.

(see paras 239-240)