Case T-39/06

Transcatab SpA

v

European Commission

(Competition – Agreements, decisions and concerted practices – Italian market for the purchase and first processing of raw tobacco – Decision finding an infringement of Article 81 EC – Price fixing and market sharing – Attributability of the unlawful conduct – Fines – Proportionality – Gravity and duration of the infringement – Mitigating circumstances – Cooperation)

Judgment of the General Court (Third Chamber), 5 October 2011

Summary of the Judgment

1. Competition – Community rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Presumption of decisive influence exercised by the parent company over its wholly-owned subsidiaries

(Art. 81 EC)

2. Competition – Administrative procedure – Observance of the rights of the defence – Statement of objections – Necessary content

(Art. 81 EC; Council Regulation No 1/2003, Art. 27(1))

3. Competition – Fines – Amount – Determination – Maximum amount – Calculation – Turnover to be taken into consideration

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

4. Acts of the institutions – Guidelines on the method of setting fines for infringements of the competition rules – Measure designed to produce external effects – Scope

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

5. Competition – Fines – Amount – Determination – Infringements classified as very serious on the basis of their nature alone

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

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

(Arts 81 EC and 253 EC; Council Regulation No 1/2003, Art. 23(2) and (3))

7. Competition – Administrative procedure – Observance of the rights of the defence – Statement of objections – Necessary content

(Council Regulation No 1/2003, Art. 27)

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

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

9. Competition – Fines – Amount – Determination – Criteria – Deterrent effect of the fine

(Council Regulation No 1/2003, Art. 23; Commission Notice 98/C 9/03, Section 5b))

10. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – Agreement not actually implemented

(Council Regulation No 1/2003, Art. 23; Commission Notice 98/C 9/03, Sections 1A, first para., and 3, second indent)

11. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – Ending of the infringement as soon as the Commission intervened – Scope

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

12. European Union law – Principles – Protection of legitimate expectations – Conditions

13. Agriculture – Competition rules – Regulation No 26 – Application of the derogation laid down for agreements, decisions and practices necessary to attainment of the objectives stated in Article 33 EC – Conditions

(Arts 33 EC and 81(1) EC; Council Regulation No 26, Art. 2)

14. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – Cooperation of the infringing undertaking outside the scope of the Leniency Notice – Conditions

(Council Regulation No 1/2003, Art. 23; Commission Notices 98/C/9/03, Section 3, sixth indent, and 2002/C 45/03)

15. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – First application of the competition rules to a particular economic sector – Commission’s margin of discretion

(Council Regulation No 1/2003; Commission Notice 98/C 9/03, Section 3)

16. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – Poor financial state of the sector in question – Commission’s margin of discretion

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

17. Procedure – Application initiating proceedings – Formal requirements

(Statute of the Court of Justice, Art. 21; Rules of Procedure of the General Court, Arts 44(1)(c) and 48(2))

18. Competition – Fines – Amount – Determination – Criteria – Reduction of the fine for cooperation of the fined undertaking – Conditions

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

19. Competition – Agreements, decisions and concerted practices – Agreements and concerted practices constituting a single infringement

(Art. 81(1) EC)

1. In competition law, the conduct of a subsidiary may be attributed to the parent company in particular where that subsidiary, despite having a separate legal personality, does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, regard being had in particular to the economic, organisational and legal links between those two legal entities. In such a situation, since the parent company and its subsidiary form a single economic unit and therefore form a single undertaking for the purposes of Article 81 EC, the Commission may address a decision imposing fines to the parent company, without having to establish the personal involvement of the latter in the infringement.

In the specific case where a parent company has a 100% shareholding in a subsidiary which has infringed the competition rules, the parent company is able to exercise decisive influence over the conduct of the subsidiary and there is a rebuttable presumption that the parent company does in fact exercise such influence. Thus, the Commission is entitled to presume that the parent company exercises decisive influence over the conduct of that subsidiary, and is not required to adduce additional evidence establishing that the parent company actually exercised such influence or was even aware of the infringement or of that subsidiary’s involvement in the infringement. The presumption in question is rebuttable and can be rebutted by evidence to the contrary. It is therefore for the parent company to rebut that presumption by producing evidence capable of showing that its subsidiary determines its course of action on the market autonomously and that the two companies therefore do not form a single economic entity. If the parent company fails to do so, the exercise of control is demonstrated by the fact that the presumption arising from 100% ownership of a subsidiary has not been rebutted.

The fact that a subsidiary has its own local management and its own resources does not prove, in itself, that that company decides upon its conduct on the market independently of its parent company. Entrusting the day-to-day business to the local management of a wholly-owned subsidiary is a common practice and is not therefore capable of proving that subsidiaries have real independence.

(see paras 92-94, 103, 106)

2. In competition law, respect for the rights of the defence requires that the undertaking concerned must have been afforded the opportunity, during the administrative procedure, properly to make known its views on the truth and relevance of the facts and circumstances alleged and on the documents used by the Commission to support its claim that there has been an infringement of the Treaty.

Article 27(1) of Regulation No 1/2003 reflects that principle in so far as it provides that the parties are to be sent a statement of objections which must clearly set out all the essential matters on which the Commission relies at that stage of the procedure, to enable the parties concerned properly to identify the conduct complained of by the Commission and to defend themselves properly before the Commission adopts a final decision. That obligation is satisfied if the final decision does not allege that the persons concerned have committed infringements other than those referred to in the statement of objections and takes into consideration only facts on which the persons concerned have had the opportunity of stating their views.

However, that may be done summarily and the final decision is not necessarily required to be a replica of the statement of objections, since the statement is a preparatory document containing assessments of fact and of law which are purely provisional in nature. Thus, it is permissible for the Commission to supplement the statement of objections in the light of the replies submitted by the parties, whose arguments show that they have actually been able to exercise their rights of defence. The Commission may also, in the light of the administrative procedure, revise or supplement its arguments of fact or of law in support of its objections.

Further, as regards the attributability to a parent company of an infringement committed by its wholly owned subsidiaries, the Commission is not required, at the stage of the statement of objections, to submit evidence other than proof of the shareholding of the parent company in its subsidiaries.

(see paras 115-117, 123)

3. The maximum amount of 10% of turnover provided for in Article 23(2) of Regulation No 1/2003 must be calculated on the basis of the total turnover of all the companies constituting the economic entity acting as an undertaking for the purposes of Article 81 EC, since only the total turnover of the component companies can constitute an indication of the size and economic power of the undertaking in question.

(see paras 129-130)

4. The Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS are an instrument designed to clarify, in compliance with superior rules of law, the criteria which the Commission intends to apply when exercising the discretion conferred on it by Article 23(2) of Regulation No 1/2003 for the purpose of setting fines. The Guidelines do not constitute the legal basis of a decision imposing fines, which is based on Regulation No 1/2003, but they determine, generally and abstractly, the method which the Commission has bound itself to use in assessing the fines imposed by that decision and, consequently, ensure legal certainty on the part of the undertakings.

Thus, although the Guidelines may not be regarded as rules of law which the administration is always bound to observe, they nevertheless form rules of practice from which the administration may not depart in an individual case without giving reasons.

The fact that the Commission has limited its own discretion by adopting the Guidelines is not however incompatible with its maintaining a significant discretion. The fact that, in the Guidelines, the Commission set out its approach to assessment of the gravity of an infringement does not prevent it from assessing infringements as a whole by reference to all the relevant circumstances of the case, including factors that are not expressly mentioned in the Guidelines.

(see paras 141-143)

5. It follows from the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS that the Commission may classify horizontal agreements aimed in particular at price fixing as ‘very serious’ solely on account of their nature, without being required to demonstrate an actual impact of the infringement on the market and without such classification being precluded by the limited extent of the geographic market concerned. That conclusion is supported by the fact that, while the description of ‘serious’ infringements expressly mentions market impact and effects over extensive areas of the common market, the description of ‘very serious’ infringements makes no mention of a requirement that there be an actual impact on the market or that there be effects in a particular geographic area.

In order to assess the gravity of the infringement of the competition rules, it is decisive to ascertain that the cartel members had done all they could to give concrete effect to their intentions. Since what then happened, so far as the market prices actually obtained were concerned, was liable to be influenced by other factors outside the control of the cartel members, the cartel members cannot benefit, by transforming them into factors that would justify a reduction of the fine, from external factors which counteracted their own efforts.

The Commission cannot be required, where the implementation of a cartel has been established, systematically to demonstrate that the agreements in fact enabled the undertakings concerned to achieve a higher level or, in the case of buying cartels, a lower level of transaction prices than that which would have prevailed in the absence of a cartel. It would be disproportionate to require such proof, which would absorb considerable resources, given that it would necessitate making hypothetical calculations based on economic models whose accuracy it would be difficult for the Court to verify and whose infallibility is in no way proved.

Further, the extent of the geographic market is not an autonomous criterion, in the sense that only infringements affecting the majority of Member States are capable of being classified as ‘very serious’ infringements. Neither the Treaty, nor Regulation No 1/2003, nor the Guidelines, nor the case-law support the conclusion that only geographically very extensive restrictions of competition may be so classified. Furthermore, agreements aimed in particular at fixing purchase prices and allocating quantities purchased may carry with them, on the sole basis of their actual nature, the classification of very serious infringement, without there being any need to characterise such conduct by a particular geographic extent. It follows that the size of the relevant geographic market, even on the assumption that it is limited, does not preclude the infringement found being classified as ‘very serious’.

(see paras 148-149, 168-169, 172)

6. As regards the determination of fines for infringement of competition law, the obligation to state reasons is satisfied where the Commission indicates in its decision the factors which enabled it to determine the gravity of the infringement and its duration.

In the context of analyses relating to infringements of Article 81 EC, Article 253 EC cannot be interpreted as requiring the Commission to explain in its decisions the reasons why, in relation to calculation of the amount of the fine, it did not adopt alternative approaches to the one in fact adopted in the final decision.

(see paras 175, 177)

7. Where the Commission expressly states in its statement of objections that it will consider whether it is appropriate to impose fines on the undertakings concerned and it indicates the main factual and legal criteria capable of giving rise to the imposition of a fine, such as the gravity and the duration of the alleged infringement and whether that infringement was committed intentionally or negligently, it fulfils its obligation to respect the undertakings’ right to be heard. In so doing, the Commission provides the undertakings with the elements necessary to defend themselves not only against the finding of an infringement but also against the imposition of a fine.

On the other hand, the Commission is not obliged, provided that it has indicated the elements of fact and of law on which it would base its calculation of the amount of the fines, to explain the way in which it would use each of those elements in determining the level of the fine. Furthermore, in its decision, the Commission may also, in the light of the administrative procedure, revise or add arguments of fact or of law in support of its objections.

It follows that, as regards the determination of the amount of fines, the rights of defence of the undertakings concerned are guaranteed before the Commission by the opportunity given to them to make submissions on the duration, the gravity and the anti-competitive nature of the alleged acts.

(see paras 180-182)

8. In the procedures initiated by the Commission in order to penalise infringements of the competition rules, the application of the principle of proportionality requires that fines must not be disproportionate to the objectives pursued, that is to say, by reference to compliance with those rules, and that the amount of the fine imposed on an undertaking for an infringement in competition matters must be proportionate to the infringement, seen as a whole, having regard, in particular, to the gravity thereof. In particular, the principle of proportionality requires the Commission to set the fine proportionately to the factors taken into account for the purpose of assessing the gravity of the infringement and also to apply those factors in a way which is consistent and objectively justified.

In that regard, neither Regulation No 1/2003 nor the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS provide that the amount of the fines must be fixed in direct proportion to the size of the relevant market, as that factor is not mandatory but just one among a number of other factors to be taken into account in evaluating the gravity of the infringement. Those provisions therefore do not as such require the Commission to take account of the limited size of the product market.

Nor does the applicable law contain any general principle that the fine must be proportionate to the undertaking’s turnover on the relevant market. It is permissible, for the purpose of fixing the fine, to have regard both to the total turnover of the undertaking, which gives an indication, albeit approximate and imperfect, of the size of the undertaking and of its economic power, and to the proportion of that turnover accounted for by the goods in respect of which the infringement was committed, which gives an indication of the scale of the infringement. It is important not to confer on one or the other of those figures an importance which is disproportionate in relation to other factors to be assessed and, consequently, the fixing of an appropriate fine cannot be the result of a simple calculation based on total turnover. That is particularly the case where the goods concerned account for only a small part of that figure. In addition, in so far as the amount of the final fine does not exceed 10% of the total turnover of the undertaking concerned during the last year of the infringement, the fine cannot be regarded as disproportionate solely because it exceeds the turnover achieved on the relevant market.

(see paras 189-190, 196-197, 199)

9. In the calculation of the fine for an infringement of the competition rules, since the objective of deterrence relates to the conduct of undertakings within the European Union, the deterrence factor is assessed by taking into account a large number of factors and not merely the particular situation of the undertaking concerned.

The Commission is not required, when determining the amount of the fine, to take into account of the financial losses of an undertaking, since recognition of such an obligation would be tantamount to conferring an unfair competitive advantage on the undertakings least well adapted to market conditions. Thus an undertaking cannot dispute the application of the multiplier for deterrence in reliance on the ground that it incurred losses during the period when the cartel was implemented, with the consequence that it has no longer been active on the market to which the cartel related since the initiation of the administrative procedure.

Furthermore, the fact that a measure adopted by an institution leads to the insolvency or liquidation of a given undertaking is not prohibited as such by European Union law. Although the liquidation of an undertaking in its existing legal form may adversely affect the financial interests of the owners, investors or shareholders, it does not mean that the personal, tangible and intangible elements represented by the undertaking would also lose their value.

(see paras 221-224)

10. The mitigating circumstance provided for in the second indent of Section 3 of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS, that there was no effective application of the unlawful agreements or practices, is based on the actual conduct of each undertaking. It follows that in order to assess that mitigating circumstance, it is necessary to take into account not the effects arising from the infringement as a whole, which must be taken into consideration in assessing the actual impact of an infringement on the market for the purposes of determining its gravity (first paragraph of Section 1A of the Guidelines), but the individual conduct of each undertaking, for the purposes of examining the relative gravity of the participation of each undertaking in the infringement.

In any event, in order to benefit from the second indent of Section 3 of the Guidelines, the offenders must show that they adopted competitive conduct or, at the very least, that they clearly and substantially breached the obligations relating to the implementation of the cartel to the point of disrupting its very operation and did not give the appearance of complying with the agreement, thereby encouraging other undertakings to implement the cartel in question.

(see paras 273, 275)

11. Under the third indent of Section 3 of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS, the basic amount of the fine set by the Commission may be reduced when the undertaking which is the subject of the complaint terminates the infringement as soon as the Commission intervenes.

However, such a reduction of the fine cannot be automatic, but depends on an assessment of the circumstances of the case by the Commission in the exercise of its discretion. The circumstances of the case may therefore lead the Commission not to grant such a reduction of the basic amount of the fine to an undertaking which is a party to an unlawful agreement.

To recognise a mitigating circumstance in situations where an undertaking is party to a manifestly unlawful agreement which it knew or could not be unaware constituted an infringement could encourage undertakings to continue a secret agreement as long as possible, in the hope that their conduct would never be discovered, while knowing that if it were discovered they could expect, by then curtailing the infringement, their fine to be reduced. Such a recognition would deprive the fine imposed of any deterrent effect and would undermine the effectiveness of Article 81(1) EC.

Furthermore, the fact that an intentional infringement was terminated cannot be regarded as an mitigating circumstance where it was terminated as a result of the Commission’s intervention.

(see paras 282-284)

12. The right to rely on the principle of protection of legitimate expectations assumes that three conditions are satisfied. First, precise, unconditional and consistent assurances originating from authorised and reliable sources must have been given to the person concerned by the authorities. Second, those assurances must be such as to give rise to a legitimate expectation on the part of the person to whom they are addressed. Third, the assurances given must comply with the applicable rules.

In competition law, the mere fact that the Commission considered in previous decisions that certain factors constituted mitigating circumstances for the purposes of determining the amount of the fine does not mean that it is obliged to make the same assessment in a subsequent decision. Accordingly, an undertaking cannot find support in the fact that that mitigating circumstance was applied in other cases of infringements for a claim of legitimate expectations in that regard.

(see paras 289, 291)

13. Regulation No 26, applying certain rules of competition to production of and trade in agricultural products, and in particular Article 2 thereof, establishes a derogation from the applicability of Article 81(1) EC for agreements, decisions and practices relating to production of or trade in the products listed in Annex I to the EC Treaty, which form an integral part of a national market organisation or are necessary for attainment of the objectives set out in Article 33 EC.

As a derogation from the general rule in Article 81(1) EC, Article 2 of Regulation No 26 must be interpreted strictly. Furthermore, the first sentence of Article 2(1) of Regulation No 26, which provides for the exception claimed, applies only if the agreement in question is conducive to attainment of all the objectives of Article 33 EC. In addition, as is clear from the very wording of the first sentence of Article 2(1) of Regulation No 26, the agreement in question must be ‘necessary’ for the attainment of those objectives.

In that regard, in the absence of notification and a formal procedure, an undertaking which has taken part in a manifest and very serious infringement of Article 81 EC in the tobacco sector cannot claim that it was in any doubt as to the possibility that the agreement concerned would fall within the scope of the derogation provided for by Regulation No 26. Furthermore, in a system such as that provided for by Regulation No 26, it must be precluded that private traders might substitute their own discretion for that of the Commission as to the most appropriate means of attaining the objectives determined by Article 33 EC and thus take unlawful initiatives that would be justified by the fact that the traders concerned pursued those objectives. Further, the maintenance of effective competition on the market for agricultural products is one of the objectives of the common agricultural policy and the common organisation of the relevant markets. Accordingly, such an undertaking cannot claim that the manifestly anti-competitive agreements to which it was party pursued the objectives referred to in Article 33(1) EC.

(see paras 298-300, 303, 305)

14. According to the sixth indent of Section 3 of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS, the basic amount of a fine may be reduced to take account of effective cooperation by the undertaking in the proceedings, outside the scope of the notice on immunity from fines and reduction of fines in cartel cases (‘the Leniency Notice’). That specific mitigating circumstance applies only to infringements which do not fall within the scope of the Leniency Notice.

In that regard, the application of the sixth indent of Section 3 of the Guidelines cannot have the consequence of depriving the Leniency Notice of its practical effect. The Leniency Notice defines a framework for rewarding cooperation in the Commission investigation by undertakings which are or have been party to secret cartels affecting the European Union. It therefore follows from the wording and the structure of that notice that undertakings can, in principle, obtain a reduction of the fine for cooperation only where they satisfy the strict conditions laid down in that notice.

In order to preserve the practical effect of the Leniency Notice, therefore, the Commission can grant a reduction of the fine to an undertaking on the basis of the sixth indent of Section 3 of the Guidelines only in exceptional situations. That is the case, in particular, where cooperation provided by an undertaking, which goes beyond its legal obligation to cooperate, but does not give rise to the right to a reduction of the fine under the Leniency Notice, is of objective use to the Commission.

(see paras 327-330)

15. The Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS do not expressly provide for any mitigating circumstance relating to the absence of precedents on the market affected by the infringement. However, the final indent of Section 3 of the Guidelines provides that the Commission may take into account mitigating circumstances other than those set out in the preceding indents in order to grant a reduction of the basic amount of the fine. In that regard, it should be borne in mind that the Commission has a discretion as regards the application of mitigating circumstances. In particular, the Commission is not required to moderate fines when taking action for the first time in a particular sector.

(see paras 342-343)

16. When the Commission imposes a fine for an infringement of the competition rules, it is not required to regard as a mitigating circumstance the poor financial state of the sector in question. In general, cartels come into being at a time when a sector is experiencing difficulties. Thus, if the Commission were obliged to take those difficulties into consideration, the fine would have to be reduced in virtually all cartel cases.

While it is true that in the Commission’s practice in taking decisions structural crises have sometimes been regarded as mitigating circumstances, the fact that in previous cases the Commission has taken the economic situation of the sector into account as a mitigating circumstance does not mean that it must necessarily continue to observe that practice.

(see paras 352-353)

17. In order to ensure legal certainty and the sound administration of justice, if an action is to be admissible, the essential elements of fact and of law on which it is based must be apparent from the text of the application itself, at the very least in summary form, provided that the statement is coherent and comprehensible. In that regard, while the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed thereto, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential arguments in law which must appear in the application. Furthermore, it is not for the General Court to seek and identify, in the annexes, the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function.

Accordingly, to accept the admissibility of pleas not set out in sufficient detail in the application but referring to pleas hypothetically raised by a third party in a different case, to which reference is implicitly made in the application, would be to allow the mandatory requirements of Article 44(1)(c) of the Rules of Procedure of the General Court to be circumvented.

In any event, the General Court is obliged to reject as inadmissible a head of claim in an application brought before it if the essential matters of law and of fact on which the head of claim is based are not indicated coherently and intelligibly in the application itself, and the failure to state such matters in the application cannot be compensated for by putting them forward at the hearing.

(see paras 366, 371-372)

18. It is inherent in the logic of the Leniency Notice that the effect sought by the Leniency Notice is to create a climate of uncertainty within cartels by encouraging those participating in them to denounce the cartels to the Commission. That uncertainty results precisely from the fact that the cartel participants know that only one of them can benefit from immunity from fines by denouncing the other participants in the infringement, thereby exposing them to the risk that fines are imposed on them. In the context of that system, and according to the same logic, the undertakings that are quickest to provide their cooperation are supposed to benefit from greater reductions of the fines that would otherwise be imposed on them than those granted to the undertakings that are less quick to cooperate. The chronological order and the speed of the cooperation provided by the members of the cartel therefore constitute fundamental elements of the system put in place by the Leniency Notice.

The interpretation of the purpose of a provision of the Leniency Notice must be consistent with the specific logic of that notice. From that aspect, the final paragraph of point 23 of that notice must be interpreted as being aimed at rewarding an undertaking, even if it was not the first to submit an application for immunity in relation to the cartel concerned, if it is the first to provide the Commission with evidence concerning facts of which the Commission was not aware and which have a direct impact on the gravity or duration of the infringement. In other words, if the evidence supplied by an undertaking relates to facts which enable the Commission to modify the assessment which it then has of the gravity or duration of the infringement, the undertaking which provides that evidence is rewarded by immunity concerning the assessment of the facts which that evidence is capable of demonstrating.

Thus, the final paragraph of point 23 of the Leniency Notice does not concern cases in which an undertaking merely submits new or more complete evidence relating to facts of which the Commission is already aware. Nor does that paragraph apply to cases in which an undertaking informs the Commission of new facts which, however, are not capable of modifying the Commission’s assessment in relation to the gravity or duration of the infringement. That provision applies, on the contrary, exclusively to cases in which two conditions are satisfied: first, the undertaking in question is the first to prove facts of which the Commission was previously unaware; and, second, those facts, which have a direct impact on the gravity or the duration of the supposed cartel, enable the Commission to make new findings concerning the infringement.

(see paras 379-382)

19. An undertaking that has taken part in an infringement of the competition rules through conduct of its own which falls within the scope of an agreement or concerted practice having an anti-competitive object for the purposes of Article 81(1) EC and which is intended to help to bring about the infringement as a whole is also responsible, throughout the entire period of its participation in that infringement, for conduct of other undertakings in the context of the same infringement.

Likewise, an undertaking may be held responsible for an overall cartel even though it is shown that it participated directly only in one or some of the constituent elements of that cartel if it knew, or must have known, that the collusion in which it participated was part of an overall plan and that the overall plan included all the constituent elements of the cartel.

(see paras 394-395)

JUDGMENT OF THE GENERAL COURT (Third Chamber)

5 October 2011 ( )

(Competition – Agreements, decisions and concerted practices – Italian market for the purchase and first processing of raw tobacco – Decision finding an infringement of Article 81 EC – Price fixing and market sharing – Attributability of the unlawful conduct – Fines – Proportionality – Gravity and duration of the infringement – Attenuating circumstances – Cooperation)

In Case T‑39/06,

Transcatab SpA, established in Caserte (Italy), represented by C. Osti and A. Prastaro, lawyers,

applicant,

v

European Commission, represented initially by F. Amato, subsequently by V. Di Bucci, and finally by É. Gippini Fournier and L. Malferrari, acting as Agents, with F. Ruggeri Laderchi, lawyer,

defendant,

APPLICATION, first, for annulment in part of Commission Decision C(2005) 4012 final of 20 October 2005 relating to a proceeding under Article 81(1) [EC] (Case COMP/C.38.281/B.2 – Raw tobacco – Italy); second, for a reduction of the amount of the fine imposed on Transcatab by that decision; and, third, a counterclaim by the Commission seeking an increase of the amount of the fine,

THE GENERAL COURT (Third Chamber),

composed of J. Azizi, President, E. Cremona (Rapporteur) and S. Frimodt Nielsen, Judges,

Registrar: J. Palacio González, Principal Administrator,

having regard to the written procedure and further to the hearing on 30 November 2010,

gives the following

Judgment

Background to the dispute

1 The applicant, Transcatab SpA, is an Italian company, now in liquidation, whose main activity is the first processing of raw tobacco. At the time of the facts forming the subject-matter of the present case, Transcatab was the wholly-controlled Italian subsidiary of Standard Commercial Corp. (‘SCC’), one of the largest independent tobacco leaf traders in the world. On 13 May 2005, that is to say, during the administrative procedure, SCC merged with Dimon Inc. (‘Dimon’), thus creating a new entity, Alliance One International, Inc. (‘Alliance One’), which wholly controls Transcatab.

1. Administrative procedure

2 On 15 January 2002 the Commission of the European Communities sent requests for information, pursuant to Article 11 of Council Regulation No 17 of 6 February 1962: First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition 1959-1962, p. 87), concerning the Italian raw tobacco market, to the trade associations of Italian raw tobacco processors and producers, namely the Associazione professionale trasformatori tabacchi italiani (APTI, the Professional Association of Italian Raw Tobacco Processors) and the Unione italiana tabacco (Unitab, the Italian Tobacco Union) respectively.

3 On 19 February 2002 the Commission received an application for immunity from fines pursuant to the Commission notice on immunity from fines and reduction of fines in cartel cases (OJ 2002 C 45, p. 3; ‘the Leniency Notice’) from Deltafina SpA, an Italian processor and a member of APTI.

4 On 4 April 2002 a meeting was held at APTI’s offices. In the context of that meeting, Deltafina informed the participants, including Transcatab and Dimon Italia Srl (a subsidiary of Dimon, now Mindo Srl), of its application for immunity and of the Commission’s decision to grant it conditional immunity.

5 On the same date the Commission received an application from Dimon Italia for immunity from fines under point 8 of the Leniency Notice and, in the alternative, an application for a reduction of any fine, under points 20 to 27 of the Leniency Notice, and also, several hours later, an application on the same basis from Transcatab for a reduction of any fine.

6 On 9 April 2002 the Commission acknowledged receipt of Transcatab’s application pursuant to point 25 of the Leniency Notice. Transcatab submitted a new application on 10 April 2002, consisting of an explanatory memorandum and 44 annexes. On 30 April 2002 the Commission also acknowledged receipt of that application pursuant to point 25 of the Leniency Notice.

7 On 18 and 19 April 2002 the Commission carried out investigations pursuant to Article 14 of Regulation No 17 at the premises of Dimon Italia and Transcatab and also at the premises of Trestina Azienda Tabacchi SpA and Romana Tabacchi SpA.

8 On 8 October 2002 the Commission informed Dimon Italia and Transcatab that they had been the first and second undertakings, respectively, to provide evidence of the infringement for the purposes of the Leniency Notice and that it thus proposed to grant them, at the end of the administrative procedure, a reduction of 30 to 50% and 20 to 30%, respectively, of the amount of the fines that would have been imposed on them with respect to any infringements found in the absence of cooperation.

9 On 25 February 2004 the Commission adopted a statement of objections, which it addressed to 10 undertakings or associations of undertakings, including Transcatab, Deltafina, Dimon Italia and Romana Tabacchi (together ‘the processors’) and the parent companies of certain of them, inter alia SCC, Dimon, and Universal Corp., the parent company of Deltafina. The addressees of the statement of objections had the opportunity to reply in writing and at a hearing, which was held on 22 June 2004.

10 Following the adoption, on 21 December 2004, of an addendum to the statement of objections concerning Deltafina’s breach of the obligation to cooperate laid down in the Leniency Notice, in connection with the disclosure of its application for immunity (see paragraph 4 above), a second hearing was held on 1 March 2005.

11 After consulting the Advisory Committee on Restrictive Practices and Monopolies, and in the light of the final report of the Hearing Officer, the Commission adopted on 20 October 2005 Decision C(2005) 4012 final relating to a proceeding under Article 81(1) [EC] (Case COMP/C.38.281/B.2 – Raw tobacco – Italy) (‘the contested decision’), a summary of which was published in the Official Journal of the European Union of 13 February 2006 (OJ 2006 L 353, p. 45).

2. The contested decision

12 The contested decision relates, first of all, to a horizontal agreement implemented by the processors on the Italian raw tobacco market.

13 In the context of that agreement, during the period 1995 to the beginning of 2002 the processors fixed the trading conditions for the purchase of raw tobacco in Italy in respect of both direct purchases from producers and purchases from ‘third packers’, in particular by price fixing and market sharing.

14 The contested decision also concerns two other infringements separate from the cartel implemented by the processors, which took place between the beginning of 1999 and the end of 2001 and consisted, for APTI, in fixing the contract prices which it would negotiate, on behalf of its members, for the conclusion of interprofessional agreements with Unitab and, for the latter, in fixing the prices which it would negotiate with APTI, on behalf of its members, for the conclusion of the same agreements.

15 In the contested decision, the Commission found that the practices of the processors constituted a single and continuous infringement of Article 81(1) EC (see, in particular, recitals 264 to 269 to the contested decision).

16 In Article 1(1) of the contested decision, the Commission attributed liability for the cartel to the processors and also to Universal and Alliance One, as the company resulting from the merger between Dimon and SCC.

17 In Article 2 of the contested decision, the Commission imposed fines on the undertakings referred to in the preceding paragraph and also on APTI and Unitab (see paragraph 71 below).

Addressees of the contested decision

18 Recitals 325 to 351 to the contested decision deal with the determination of the addressees of that decision.

19 The Commission referred, by way of a preliminary point, to the settled case-law that the term ‘undertaking’ must be understood in competition law as designating an economic unit for the purpose of the subject‑matter of the agreement in question even if, in law, that economic unit consists of several persons, natural or legal (recital 325 to the contested decision).

20 Next, the Commission stated that it was established that Deltafina, Dimon Italia, Transcatab and Romana Tabacchi, as well as APTI and Unitab, had participated, during the respective periods of the infringements, directly in the infringements found and that, consequently, each of those undertakings and associations was an addressee of the contested decision (recital 327 to the contested decision).

21 The Commission continued its analysis by examining the question of the attributability of the unlawful conduct of certain subsidiaries (Deltafina, Dimon Italia and Transcatab) to their respective parent companies. In that regard, the Commission observed that, during the infringement period, Deltafina was a wholly-owned subsidiary of Universal, Dimon Italia a wholly-owned subsidiary of Dimon and Transcatab a wholly-owned subsidiary of SCC (recital 328 to the contested decision).

22 The Commission stated inter alia that, according to case-law, a parent company could be held liable for the unlawful conduct of its subsidiary where the subsidiary is not capable of determining its conduct on the market independently. In that regard, the Commission recalled that it could be presumed that where a parent company holds the entire share capital of a subsidiary it exercises decisive influence over the conduct of that subsidiary when the subsidiary infringes Article 81(1) EC (recitals 329 and 330 to the contested decision).

23 At recital 331 to the contested decision, the Commission concluded that, in the case of Deltafina, Dimon Italia and Transcatab, it could be legitimately presumed that they ‘[lacked] autonomy’ given that they were or, in the case of Dimon Italia, had been wholly owned by their respective parent companies.

24 While rejecting the argument, put forward by those companies in their replies to the statement of objections, that further elements are necessary, other than that of 100% ownership, in order to indicate the exercise of a decisive influence, the Commission stated that any presumption of such influence in the case of a wholly-owned subsidiary remained rebuttable. Proof to the contrary must be adduced by the party wishing to rebut such a presumption in the form of ‘solid evidence’, which cannot be merely general assertions unsupported by convincing evidence (recital 334 to the contested decision).

25 In that regard, the Commission examined, in turn, the arguments submitted by the parent companies to which the contested decision was addressed.

26 The Commission rejected, first of all, the general argument put forward by the parent companies concerned that the local management was wholly responsible for the activities of their respective subsidiaries. The Commission maintains that the fact that Dimon and SCC left the existing management in place when they wholly acquired their respective subsidiaries cannot preclude their having exercised decisive influence over their respective Italian subsidiaries, since it is common practice to entrust the day-to-day business to the local management of a wholly-owned subsidiary (recital 338 to the contested decision).

27 In the Commission’s submission, none of those undertakings demonstrated, in general, any specific feature within its group which would have rendered the activities of its subsidiary significantly independent of the parent company’s influence (recital 339 to the contested decision).

28 In that regard, the Commission examined the solidity of the economic links between Deltafina, Dimon Italia and Transcatab and their respective parent companies, which, it found, show that the Italian subsidiaries constituted an economic unit with the rest of their group. The Commission noted in that regard that the groups in question were the largest tobacco leaf merchants in the world and that they often acquired and marketed the tobacco bought by their Italian subsidiaries (recital 340 to the contested decision).

29 As regards SCC, the Commission observed that before acquiring the whole of Transcatab’s capital it already controlled the latter jointly with its Italian partner. The fact that SCC had ‘not change[d] the management’ of its subsidiary after acquiring it could not therefore be regarded as evidence that it had not exercised any influence over the management after becoming the sole owner. As concerns, in particular, the delegation of executive powers to the chief executive officer of Transcatab, the Commission stated that it had no information enabling it to find that he was not appointed by SCC, like the other members of the board (recitals 341 and 342 to the contested decision).

30 The Commission then rejected SCC’s argument that there were no lines of communication between it and its subsidiary (recitals 343 and 344 to the contested decision).

31 It observed in that regard that Transcatab’s activities had been regarded as being the activities of Standard Commercial Tobacco Co., Inc. (SCTC), a holding company within the SCC group and wholly owned by SCC, and that they had been analysed within the scope of the group’s activities, including the SCC group’s sales to cigarette manufacturers. The Commission inferred that the results of Transcatab’s activities had been reported to higher levels within the group and had then been consolidated (recital 344 to the contested decision).

32 The Commission stated that, since the groups to which Transcatab and Dimon Italia belonged during the infringement period had ceased to exist following their merger in the new entity Alliance One, that entity, as the legal successor of those two groups, was the addressee of the contested decision (recital 349 to the contested decision).

33 In the light of those various elements, the Commission concluded, at recital 351 to the contested decision, that Deltafina, Universal, Mindo (formerly Dimon Italia), Transcatab, Alliance One, Romana Tabacchi, APTI and Unitab had to be held liable for the infringements and had to be the addressees of the contested decision.

Determination of the amount of the fine

34 At recitals 356 to 404 to the contested decision, the Commission examined the question of the fines to be imposed on the addressees of the decision.

35 The amounts of the fines were determined by the Commission by reference to the gravity and duration of the infringements in question, that is to say, the two criteria expressly mentioned in Article 23(3) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the competition rules laid down in Articles 81 [EC] and 82 [EC] (OJ 2003 L 1, p. 1) and in Article 15(2) of Regulation No 17 (recitals 356 and 357 to the contested decision).

Determination of the starting amounts of the fines

36 As regards the gravity of the infringement in question, the Commission observed that, in assessing that factor, account must be taken of its nature, its actual impact on the market, where this can be measured, and the size of the relevant geographic market (recital 365 to the contested decision).

37 Next, the Commission stated that the production of raw tobacco in Italy accounted for some 38% of the European Union (‘EU’) in-quota production, which represented EUR 67.338 million in 2001, the last full year of the infringement (recital 366 to the contested decision).

38 As for the nature of the infringement, the Commission stated that it was a very serious infringement, as it had consisted in fixing the purchase prices of the varieties of raw tobacco in Italy and sharing the purchased quantities. The Commission added, referring to the part of the contested decision relating to the analysis of the restriction of competition (recital 272 et seq.), that a buying cartel could distort producers’ willingness to generate output as well as limit competition among processors in downstream markets. The Commission also asserted that that was particularly so where, as in the present case, the product affected by the cartel, in this case raw tobacco, constituted a substantial ‘input’ of the activities carried out by participants downstream, in this case the first processing of tobacco and sale of processed tobacco (recitals 367 and 368 to the contested decision).

39 At recital 369 to the contested decision, the Commission concluded from the foregoing considerations that the processors’ infringement must be qualified as very serious.

40 Next, at recitals 370 to 376 to the contested decision, the Commission examined the question of ‘specific weight’ and ‘deterrence’. In that regard, the Commission stated that the ‘specific weight of each undertaking and the likely effect of its unlawful behaviour’ should be considered in determining the amount of the fine (recital 370 to the contested decision).

41 Thus, the Commission considered that the fines should be set according to the market position enjoyed by each party involved (recital 371 to the contested decision).

42 In that regard, the Commission considered that Deltafina should receive the highest starting amount of the fine because it appeared to be the biggest purchaser, with a market share of around 25% in 2001 (recital 372 to the contested decision).

43 Since Transcatab, Dimon Italia and Romana Tabacchi held smaller shares in the market in question, around 9% to 11% in 2001, the Commission considered that they ‘should be grouped together’ and that the starting amount of their fines should be lower (recital 373 to the contested decision).

44 The Commission considered, however, that a starting amount merely reflecting the market position would not be a sufficient deterrent in respect of Deltafina, Dimon Italia (Mindo) and Transcatab because, in spite of their relatively small turnovers, these three companies belonged – or, in the case of Mindo, had belonged – to multinational groups of considerable economic and financial strength, representing the biggest tobacco merchants in the world and operating at different levels of business in the tobacco industry and in different geographic markets (recital 374 to the contested decision).

45 Therefore, in order to ensure that the fine was deterrent, the Commission considered that it was necessary to apply a multiplier of 1.5 – an increase of 50% – to the starting amount of the fine set for Deltafina, and of 1.25 – an increase of 25% – to the starting amount of the fine set for Dimon Italia (Mindo) and Transcatab (recital 375 to the contested decision).

46 Thus, at recital 376 to the contested decision, the Commission set the starting amounts of the fines as follows:

– Deltafina: EUR 37.5 million;

– Transcatab: EUR 12.5 million;

– Dimon Italia (Mindo): EUR 12.5 million;

– Romana Tabacchi: EUR 10 million.

Determination of the basic amount of the fines

47 At recitals 377 and 378 to the contested decision, the Commission examined the question of the duration of the infringement.

48 The Commission considered that the restrictive practice involving the processors had begun on 29 September 1995 and had ceased to exist, according to their statements, on 19 February 2002. Thus, the Commission considered that the starting amounts of the fines imposed on the processors, apart from Romana Tabacchi, whose participation had been of shorter duration, should be increased by 60%.

49 The basic amounts of the fines imposed on the addressees of the contested decision were therefore set as follows:

– Deltafina: EUR 60 million;

– Transcatab: EUR 20 million;

– Dimon Italia (Mindo): EUR 20 million;

– Romana Tabacchi: EUR 12.5 million.

Attenuating circumstances

50 At recitals 380 to 398 to the contested decision, the Commission considered whether any attenuating circumstances should be taken into account.

51 As regards, in particular, Transcatab, the Commission rejected all the arguments alleging attenuating circumstances in its case.

52 First of all, the Commission observed that the establishment of the processors’ cartel had no link with the conclusion of the interprofessional agreements by APTI. It inferred that the Italian regulatory framework had not encouraged the behaviour of the processors, which could not therefore benefit from any reduction of the amounts of their fines on the basis of that argument (recital 381 to the contested decision).

53 Next, the Commission rejected the processors’ argument that they should receive a reduction on the ground that they had terminated the infringement before the intervention of the Commission. In that regard, the Commission referred to the case-law according to which in cases of serious infringements of the competition rules where the parties knew or should have known that their conduct was fundamentally illegal, termination before the intervention of the Commission should not, as a matter of principle, lead to a reduction of the amount of the fine when it is being calculated (recital 382 to the contested decision).

54 The Commission also asserted that it was unable to consider that the cartel was never implemented, since it was apparent from the description of the facts that the parties had secured the implementation of the cartel through, in particular, their participation at regular meetings as well as regular exchanges of information regarding prices and quantities during the buying period (recital 383 to the contested decision).

55 The Commission, last, rejected Transcatab’s argument that the specific social and economic circumstances of the market for raw tobacco in Italy ought to be taken into account in determining the amount of the fine, in application of Section 5(b) of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) [CS] (OJ 1998 C 9, p. 3; ‘the Guidelines’). The Commission observed that the application of Section 5(b) of the Guidelines was exceptional and that the present case did not have the same or similar features as those of the case cited by Transcatab in support of its argument. The Commission added that it was not accepted that the existence of illegal practices affecting the tobacco sector in certain Italian regions could have had a decisive effect in causing the practices at issue and that the effects of the reform of the common organisation of the markets were too uncertain and remote to justify the application of an attenuating circumstance (recital 384 to the contested decision).

56 Last, the Commission took Deltafina’s particular situation into account and concluded that its fine should be reduced by 50% on account of its cooperation (recitals 385 to 398 to the contested decision).

57 The Commission set the amounts of the fines, following the application of the attenuating circumstances, as follows (recital 399 to the contested decision):

– Deltafina: EUR 30 million;

– Dimon Italia (Mindo): EUR 20 million;

– Transcatab: EUR 20 million;

– Romana Tabacchi: EUR 8.75 million.

58 Last, the Commission observed that, according to Article 23(2) of Regulation No 1/2003, for each undertaking and association of undertakings participating in the infringement the fine is not to exceed 10% of its total turnover in the preceding business year. It further observed that in cases where the undertakings in question belong to a group, where it is established that those undertakings were under the decisive influence of their parent companies and where, consequently, the latter are jointly and severally liable for the fines imposed on the subsidiary, it is the worldwide group turnover that must be taken into account for the purpose of determining the limit of 10% referred to above (recitals 400 and 401 to the contested decision).

59 On that basis, the Commission stated that the fine to be imposed on Romana Tabacchi was not to exceed EUR 2.05 million and that there was no need to reduce the other fines by reference to that provision (recitals 402 and 403 to the contested decision).

Application of the Leniency Notice

60 At recitals 405 to 500 to the contested decision, the Commission dealt with the application of the Leniency Notice in the present case.

61 Deltafina, Dimon Italia and Transcatab all applied for leniency under the Leniency Notice. As regards Deltafina, the Commission observed that it had already granted that undertaking conditional immunity. The Commission further stated that it had reached the preliminary conclusion that Dimon Italia and Transcatab had been, respectively, the first and second undertakings to submit evidence of the suspected infringement which represented significant added value with respect to the evidence already in its possession, within the meaning of point 22 of the Leniency Notice (recitals 405 to 407 to the contested decision).

62 After examining Deltafina’s situation and concluding that it could not be granted immunity owing to its breach of the obligation to cooperate laid down in the Leniency Notice (see recitals 408 to 484 to the contested decision and paragraphs 4 and 10 above), the Commission examined the cases of Dimon Italia and Transcatab.

63 First, the Commission concluded that the fact that Deltafina had not been granted definitive immunity had no direct effect on the way in which the Leniency Notice should be applied to Dimon Italia and Transcatab (recitals 485 to 491 to the contested decision).

64 Second, it determined the reduction of the fines that could be granted, inter alia, to Transcatab under that notice.

65 In that regard, the Commission found, first of all, that Transcatab had complied with the conditions imposed on it, namely that it had ended its involvement in the infringement no later than the time when it submitted evidence (recitals 492 and 493 to the contested decision).

66 Next, the Commission asserted that, in order to determine the level of the reduction, it took into account the time at which the evidence was submitted, the extent to which it constituted added value and also the extent and continuity of the cooperation provided by the undertakings after the date on which the evidence was submitted (recital 494 to the contested decision).

67 Thus, in the first place, the Commission observed that Transcatab had applied for leniency before the Commission had taken any active investigation measures, that its application had covered the entire period of the infringement and that the evidence supplied had corroborated in many respects the evidence which the Commission already possessed (recital 495 to the contested decision).

68 In the second place, as specifically regards the documents supplied by Transcatab, the Commission accepted that the resulting account of the facts was particularly thorough and that it had been particularly useful in the understanding of the infringement and, in particular, some elements thereof (such as the conclusion of an interprofessional agreement in 1999 for the 1998 surplus tobacco production). However, the Commission observed that it was not unaware of any of the facts in respect of which Transcatab had supplied evidence (recital 497 to the contested decision).

69 Last, the Commission also recognised that Transcatab had proved to be cooperative with the Commission throughout the procedure and that it had not contested the facts on which the Commission had relied in the statement of objections (recital 498 to the contested decision).

70 The Commission thus concluded that Transcatab should receive the highest reduction of the fine within the corresponding band, namely a reduction of 30% (recital 499 to the contested decision).

71 In accordance with Article 23(2) of Regulation No 1/2003, the Commission eventually set (see Article 2 of the contested decision) the amounts of the fines to be imposed on the undertakings and associations of undertakings to which the contested decision was addressed as follows:

– Deltafina and Universal, jointly and severally: EUR 30 million;

– Dimon Italia (Mindo) and Alliance One: EUR 10 million, Alliance One being responsible for the whole fine and Mindo being jointly and severally responsible for only EUR 3.99 million;

– Transcatab and Alliance One, jointly and severally: EUR 14 million;

– Romana Tabacchi: EUR 2.05 million;

– APTI: EUR 1 000;

– Unitab: EUR 1 000.

Procedure and forms of order sought by the parties

72 By application lodged at the Court Registry on 24 January 2006, Alliance One brought an action for, in particular, annulment in part of the contested decision (Case T‑25/06). By application lodged at the Court Registry on 3 February 2006, Transcatab brought the present action.

73 In the application, Alliance One requested that that case be joined with the present case. That request was also set out by Transcatab in its application.

74 The Court did not grant the request for joinder.

75 On 24 November 2009 the Court, in the context of the measures of organisation of procedure provided for in Article 64 of its Rules of Procedure, put a written question to Transcatab, which replied within the prescribed period. On 4 February 2010 the Commission submitted its observations on Transcatab’s reply.

76 Upon hearing the report of the Judge-Rapporteur, the Court decided to open the oral procedure and, in the context of measures of organisation of procedure, requested Transcatab to produce a document. The document was produced within the prescribed period.

77 The parties presented oral argument and answered questions put by the Court at the hearing, which took place on 30 November 2010.

78 At the hearing, the Court requested Transcatab to produce another document, pursuant to Article 64 of the Rules of Procedure. Transcatab produced that document on 22 December 2010.

79 Transcatab claims that the Court should:

– annul the contested decision in part;

– reduce the fine imposed on it;

– order the Commission to pay the costs.

80 The Commission contends that the Court should:

– dismiss the action;

– set the fine at EUR 15 million, in exercise of the powers conferred on the Court by Article 229 EC;

– order Transcatab to pay the costs.

Law

81 In support of its action, Transcatab raises five pleas in law, some of which can be divided into several parts. In the first plea, Transcatab claims, in substance, that the Commission made errors of law in declaring that Alliance One was liable for its conduct; that the Commission did not state sufficient reasons for its position in that regard; and that it also breached the applicant’s rights of defence. The second plea alleges an error of law, failure to state reasons and illogical reasoning, breach of the rights of the defence and breach of the principles of proportionality, equal treatment and the protection of legitimate expectations when setting the fine. The third plea alleges error of law and failure to state reasons in setting the amount of the fine, by reference to the evaluation of the duration of the infringement, breach of the principle ne bis in idem in relation to the fine imposed on APTI and also breach of the principle of equal treatment. In the context of the fourth plea, Transcatab claims that the Commission wrongly concluded in the contested decision that none of the attenuating circumstances on which Transcatab relied was applicable. In the context of the fifth plea, it claims, last, that the Commission erred in the application of the Leniency Notice.

82 The Commission contends that by its third plea Transcatab has gone back on its earlier cooperation, consisting in not substantially contesting the facts established in the statement of objections. Thus, by way of counterclaim, the Commission requests the Court to reduce the reduction of the fine imposed on Transcatab from 30% to 25% and thus, in the exercise of its unlimited jurisdiction, to set the fine at EUR 15 million.

1. First plea, concerning the imputation of the infringement to Transcatab’s parent company

First part of the first plea, alleging misreading of the case-law, failure to understand the evidence supplied and breach of the rights of the defence

Arguments of the parties

83 In the first place, Transcatab challenges the finding made in the contested decision that the mere fact that during the infringement period SCC held 100% of Transcatab’s capital is sufficient for it to be presumed liable for its subsidiary’s unlawful conduct. Such a presumption is, it maintains, contrary to the case-law. In Transcatab’s submission, the Commission must prove the existence of other indicia which support the view that a parent company actually exercised decisive influence over its subsidiary. In the present case, the Commission merely presumed that SCC was liable and provided no other indicia capable of substantiating such liability. The Commission thus reversed the burden of proof, which is not borne by Transcatab or its parent company but by the Commission itself.

84 In the second place, Transcatab claims that SCC provided the Commission with sufficient evidence to prove that it had no connection with Transcatab’s conduct. That evidence related both to the description of the local reality of the Italian market and to the characteristics of the structure of the SCC group, which show that its subsidiaries are independent. Furthermore, the evidence deals with the autonomy of its board and its chief executive officer.

85 In the reply, Transcatab claims, moreover, that the Commission’s assertion that it is possible to rebut the presumption of decisive influence only where the participation is exclusively financial is contrary to the case-law. In its submission, the Commission has not carefully examined the evidence submitted during the administrative procedure and has confined itself to refuting all the arguments on the basis of unsubstantiated prejudices. First, the assertion that it is unlikely that a parent company can wholly delegate the management of a subsidiary is unfounded. As Transcatab demonstrated during the administrative procedure, the ramified structure of the group meant that a single management was not possible. Second, the Commission applied the presumption of decisive influence even for the period when SCC held only 50% of Transcatab’s capital, although Transcatab and SCC had proved that Transcatab’s board and chief executive officer, to whom all power to manage the company was entrusted, had been appointed before SCC obtained exclusive control of Transcatab. Third, the fact that certain documents were drawn up in English is not sufficient to prove that the parent company influenced the management of Transcatab’s business activity. In conclusion, the Commission was wrong to reject the evidence submitted, without sufficient or logical reason and without raising against it other documents having at least equivalent probative value. Thus, the Commission did not comply with its obligation to conduct the case impartially.

86 In the third place, the Commission failed to have regard for Alliance One’s rights of defence, in so far as it used in the contested decision documents from the file that were not mentioned in the statement of objections, thus preventing SCC from commenting on their content and thereby breaching the legitimate expectation of its legal successor, Alliance One. Transcatab acknowledges that the documents in question were known to the parties. However, as they had not been mentioned in the statement of objections, the parties were entitled to take the view that they had no importance for the purposes of the case and that there was thus no need to express their opinion with respect to them. In the reply and at the hearing, Transcatab asserted that it was relying on a breach of its own rights of defence.

87 The Commission contends that Transcatab’s arguments should be rejected. As regards, in particular, the allegation of breach of Alliance One’s rights of defence, the Commission expresses doubt as to its admissibility, since Transcatab is not relying on a breach of its own rights, but of the rights of another party. The extension of the complaint to Transcatab’s own rights of defence is out of time and thus inadmissible.

Findings of the Court

– Failure to observe the rules governing the imputability to the parent company of the practices of its subsidiary

88 As regards the first complaint raised by Transcatab, it should be observed that competition law refers to the activities of ‘undertakings’ (Joined Cases C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P Aalborg Portland and Others v Commission [2004] ECR I‑123, paragraph 59) and that the concept of an undertaking refers to any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed (Joined Cases C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I‑5425, paragraph 112, and Case C-97/08 P Akzo Nobel and Others v Commission [2009] ECR I‑8237, paragraph 54).

89 It follows from the case-law that, in the same context, the concept of an undertaking must be understood as denoting an economic unit even if in law that economic unit consists of several persons, natural or legal (Case C‑217/05 Confederación Española de Empresarios de Estaciones de Servicio [2006] ECR I‑11987, paragraph 40; Akzo Nobel and Others v Commission, paragraph 88 above, paragraph 55; and Case T‑325/01 DaimlerChrysler v Commission [2005] ECR II‑3319, paragraph 85).

90 Where such an economic entity infringes the competition rules, it falls to that entity, in accordance with the principle of personal responsibility, to answer for that infringement (see, to that effect, Case C‑49/92 P Commission v Anic Partecipazioni [1999] ECR I‑4125, paragraph 145; Case C‑280/06 ETI and Others [2007] ECR I‑10893, paragraph 39; and Akzo Nobel and Others v Commission, paragraph 88 above, paragraph 56).

91 The infringement of competition law must be attributed unequivocally to a legal person on whom fines may be imposed. For the purposes of applying and enforcing Commission competition law decisions, it is necessary to identify, as addressee, an entity having legal personality (see, to that effect, Joined Cases T‑305/94 to T‑307/94, T‑313/94 to T‑316/94, T‑318/94, T‑325/94, T‑328/94, T‑329/94 and T‑335/94 Limburgse Vinyl Maatschappij and Others v Commission [1999] ECR II‑931 (‘PVC II’), paragraph 978).

92 It is clear from settled case-law that the conduct of a subsidiary may be attributed to the parent company in particular where that subsidiary, despite having a separate legal personality, does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, regard being had in particular to the economic, organisational and legal links between those two legal entities (see Akzo Nobel and Others v Commission, paragraph 88 above, paragraph 58 and the case-law cited).

93 In such a situation, since the parent company and its subsidiary form a single economic unit and therefore form a single undertaking for the purposes of Article 81 EC, the Commission may address a decision imposing fines to the parent company, without having to establish the personal involvement of the latter in the infringement (see, to that effect, Akzo Nobel and Others v Commission, paragraph 88 above, paragraph 59).

94 It is also apparent from the case-law that, in the specific case where a parent company has a 100% shareholding in a subsidiary which has infringed the competition rules, the parent company is able to exercise decisive influence over the conduct of the subsidiary and there is a rebuttable presumption that the parent company does in fact exercise such influence (see Akzo Nobel and Others v Commission, paragraph 88 above, paragraph 60 and the case-law cited).

95 In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to presume that the parent company exercises a decisive influence over the subsidiary’s commercial policy. The Commission will then be able to regard the parent company as jointly and severally liable for payment of the fine imposed on its subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to show that its subsidiary acts independently on the market (see, to that effect, Case C‑286/98 P Stora Kopparbergs Bergslags v Commission [2000] ECR I‑9925, paragraph 29, and Akzo Nobel and Others v Commission, paragraph 88 above, paragraph 61).

96 While it is true that at paragraphs 28 and 29 of Stora Kopparbergs Bergslags v Commission, paragraph 95 above, the Court of Justice referred, not only to the fact that the parent company owned 100% of the capital of the subsidiary, but also to other circumstances, such as the fact that it was not disputed that the parent company exercised influence over the commercial policy of its subsidiary or that both companies were jointly represented during the administrative procedure, the fact remains that those circumstances were mentioned by the Court of Justice for the sole purpose of identifying all the elements on which the General Court had based its reasoning, and not to make the application of the presumption referred to in paragraph 94 above subject to the production of additional indicia relating to the actual exercise of influence by the parent company (see Akzo Nobel and Others v Commission, paragraph 88 above, paragraph 62 and the case-law cited, and Case T‑69/04 Schunk and Schunk Kohlenstoff-Technik v Commission [2008] ECR II‑2567, paragraph 57).

97 It is apparent from the contested decision that, in order to attribute liability to a parent company for the infringement on the part of its subsidiary, the Commission took as its starting point the premiss that such attribution is possible where the parent company and its subsidiary form a single economic unit and, as a consequence, constitute a single undertaking for the purposes of Article 81 EC (recital 325 to the contested decision).

98 The central feature on which the Commission relied in order to establish that the parent company could be held liable for the unlawful conduct of its subsidiary is the subsidiary’s lack of independence in deciding upon its own conduct on the market. That lack of independence is the corollary of the exercise by the parent company of ‘decisive influence’ over the conduct of the subsidiary, and the actual exercise of such an influence can be presumed, according to the case-law, where a parent company holds the entire share capital of its subsidiary (see recitals 329 and 330 to the contested decision).

99 At recital 331 to the contested decision, the Commission thus considered that, in the present case, Transcatab ‘lack[ed] autonomy’ since it was wholly controlled by its parent company, SCC.

100 Contrary to Transcatab’s contention in the reply, namely that in the present case the Commission transformed a presumption iuris tantum into a presumption iuris et de iure, the Commission’s reasoning does not depart from the logic of a rebuttable presumption. Thus, as in the case of other rebuttable presumptions in competition law, if a fact can be lawfully presumed by the Commission, it is considered to be established, provided that the undertaking concerned does not rebut the presumption by adducing conclusive evidence to the contrary (see Commission v Anic Partecipazioni, paragraph 90 above, paragraphs 121 and 126, and Case C‑199/92 P Hüls v Commission [1999] ECR I‑4287, paragraphs 162 and 167). Moreover, given its rebuttable nature, that presumption, which may be rebutted in an individual case, does not lead to the automatic attribution of liability to a parent company holding 100% of the capital of its subsidiary, which would be contrary to the principle of personal liability on which competition law is based.

101 The Commission therefore did not breach the rules governing the imputability to a parent company of the conduct of its subsidiary by holding, essentially, SCC, to which Alliance One is the legal successor, liable for the infringement committed by Transcatab.

102 That conclusion cannot be called in question by the arguments put forward by Transcatab in reply to the Court’s written question regarding the consequences to be inferred from Akzo Nobel and Others v Commission, paragraph 88 above. According to Transcatab, first, in that judgment, the Court of Justice misinterpreted the earlier case-law, in particular the judgment in Stora Kopparbergs Bergslags v Commission, paragraph 95 above, and, in any event, the case-law is not unequivocal in that respect. Second, according to Transcatab, the facts of Akzo Nobel and Others v Commission, paragraph 88 above, can be distinguished from the facts of the present case, since in that case a number of subsidiaries were involved in the cartel and, consequently, it was more difficult to show that the parent company was not aware of the anti‑competitive activities. With respect to the first argument, it is sufficient to note that it is apparent from Akzo Nobel and Others v Commission, paragraph 88 above (see also, to that effect, the Opinion of Advocate General Kokott in that case, ECR I‑8241, points 60 and 61), that the Court of Justice not only took into consideration the case-law on which Transcatab bases a large part of its main reasoning, and, in particular, Stora Kopparbergs Bergslags v Commission, paragraph 95 above, but also gave an unequivocal interpretation of the earlier case‑law (Akzo Nobel and Others v Commission, paragraph 88 above, paragraphs 58 to 62). With respect to the second argument, it is sufficient to observe that the alleged difference between the two cases is wholly irrelevant, since the test of the imputability of liability in Akzo Nobel and Others v Commission, paragraph 88 above, was not the parent company’s direct or indirect knowledge of the activities implemented by the subsidiary or subsidiaries. In any event, as the Commission correctly observes, such a factor was not taken into consideration at all in that judgment.

– Failure to have regard to the evidence produced for the purposes of rebutting the presumption

103 As was recalled at paragraphs 94 and 95 above, where a subsidiary is wholly owned by the parent company, the Commission is entitled to presume that the parent company exercises decisive influence over the conduct of that subsidiary, and is not required to adduce additional evidence establishing that the parent company actually exercised such influence or was aware of the infringement or of that subsidiary’s involvement in the infringement. The presumption in question is rebuttable and can be rebutted by evidence to the contrary. Contrary to Transcatab’s contention, it is therefore for SCC – which, at the time of the infringement, held 100% of Transcatab’s capital (see recital 336 to the contested decision) – to rebut that presumption by producing evidence capable of showing that its subsidiary determines its course of action on the market autonomously and that the two companies therefore do not form a single economic entity. If the parent company fails to do so, the exercise of control is demonstrated by the fact that the presumption arising from 100% ownership of a subsidiary has not been rebutted (see, to that effect, Akzo Nobel and Others v Commission, paragraph 88 above, paragraphs 60 to 62 and the case-law cited, and judgment of 30 September 2009 in Case T-175/05 Akzo Nobel and Others v Commission, not published in the ECR, paragraph 93).

104 In the present case, the Commission devoted recitals 335 to 344 to the contested decision to examining the arguments and evidence put forward by SCC in its reply to the statement of objections in order to prove that it had not exercised decisive influence over Transcatab’s commercial policy and did not consider them capable of rebutting the presumption.

105 It must be emphasised that in the application Transcatab merely asserts, without substantiating its allegations, that SCC proved during the administrative procedure that it had a decentralised structure, with its own wholly independent local management, to which all functions were delegated, in the specific light of the special features of the Italian raw tobacco market, and that the members of its board and its chief executive officer were autonomous and had no direct or indirect link with SCC. However, Transcatab did not identify any errors which the Commission had made in the contested decision in evaluating that evidence. Only in the reply, in response to certain arguments raised by the Commission, did the applicant put forward a number of arguments designed to criticise, indirectly, the contested decision.

106 In any event, it should be observed, first of all, that, as the Commission rightly stated at recital 338 to the contested decision, the fact that a subsidiary has its own local management and its own resources does not prove, in itself, that that company decides upon its conduct on the market independently of its parent company. Entrusting the day-to-day business to the local management of a wholly-owned subsidiary is a common practice and is not therefore capable of proving that subsidiaries have real independence. The same applies to the argument based on the alleged characteristics of the Italian raw tobacco market, since those characteristics do not prevent a parent company from fully exercising effective control over its subsidiary.

107 It should further be observed that at recitals 341 and 342 to the contested decision the Commission stated, first, that before acquiring the entire capital of Transcatab SCC already controlled that company with its Italian partner and that the fact that it had not changed the management of that company after taking control of it could not therefore be regarded as evidence that it did not exercise any influence over its subsidiary after becoming sole owner of it. Second, the Commission maintained that the delegation of executive powers to Transcatab’s chief executive officer, who, in the absence of evidence to the contrary, could be reasonably presumed to be an appointee of SCC, had not prevented other members of the board from holding executive positions and exercising executive functions.

108 The Court observes that the Commission was correct, in the absence of any explanation by SCC, to attribute significance to the fact that SCC, which, when it became sole shareholder, had all the powers necessary to renew the board in whole or in part, took no steps to do so. It follows that the fact that the members of the board and, in particular, the chief executive officer remained in office can be attributed only to a decision by SCC, as sole shareholder of Transcatab.

109 Furthermore, the fact that one person alone, namely the chief executive officer, has considerable powers which were delegated to him by the board might, on the contrary, demonstrate that the parent company wished to simplify the exercise of its control over its subsidiary, precisely by confining the role of the board to marginal activities and by concentrating all the powers in the hands of a ‘man they trust’. It is not credible that a multinational company would delegate all the powers of a subsidiary operating on a national market, as is the case with Transcatab, or would accept a delegation of powers pre-dating the acquisition of sole control, to a natural person who, operating with complete independence and without allegedly having been appointed by the sole shareholder, in turn chooses the members of the board, thereby depriving any other person of any influence whatsoever over the management of the company, and who would not, de facto, be accountable for his actions to anyone.

110 Thus, and given also that a delegation of powers to the chief executive officer of a subsidiary is not at all uncommon, that argument is not capable of rebutting the presumption of control exercised by the parent company over Transcatab.

111 As regards, next, the argument whereby the applicant takes issue with what it claims to be the Commission’s inference from the fact that certain documents were drafted in English, it is sufficient to observe that, contrary to Transcatab’s contention, those documents, referred to at recitals 343 to 346 to the contested decision, were not intended either to prove that the parent companies were in a position to influence or did in fact influence the conduct of their Italian subsidiaries or, still less, to prove that the parent companies were aware of the cartel in question. On the contrary, the Commission merely used certain documents forming part of the administrative file in order to establish the degree of credibility of the evidence and arguments put forward by SCC in its reply to the statement of objections in order to rebut the presumption that it exercised decisive influence over Transcatab.

112 Last, it should be observed that, contrary to Transcatab’s assertion in the reply, it does not follow from the contested decision that the presumption of decisive influence can be rebutted only if the parent company’s participation is exclusively financial.

113 It follows that the complaint alleging failure to have regard to the evidence produced for the purposes of rebutting the presumption must be rejected.

– Breach of the rights of the defence

114 As regards Transcatab’s third complaint, it should be recalled that respect for the rights of the defence in the conduct of administrative procedures relating to competition policy constitutes a general principle of EU law whose observance the EU Courts ensure (see Case C‑534/07 P Prym and Prym Consumer v Commission [2009] ECR I‑7415, paragraph 26 and the case-law cited).

115 According to consistent case-law, respect for the rights of the defence requires that the undertaking concerned must have been afforded the opportunity, during the administrative procedure, to make known its views on the truth and relevance of the facts and circumstances alleged and on the documents used by the Commission to support its claim that there has been an infringement of the Treaty (Joined Cases 100/80 to 103/80 Musique Diffusion française and Others v Commission [1983] ECR 1825, paragraph 10, and Case C‑310/93 P BPB Industries and British Gypsum v Commission [1995] ECR I‑865, paragraph 21).

116 Article 27(1) of Regulation No 1/2003 reflects that principle in so far as it provides that the parties are to be sent a statement of objections which must clearly set out all the essential matters on which the Commission relies at that stage of the procedure (see, to that effect, Aalborg Portland and Others v Commission, paragraph 88 above, paragraph 67) to enable the parties concerned properly to identify the conduct complained of by the Commission and to defend themselves properly before the Commission adopts a final decision. That obligation is satisfied if the final decision does not allege that the persons concerned have committed infringements other than those referred to in the statement of objections and takes into consideration only facts on which the persons concerned have had the opportunity of stating their views (see, to that effect, Case T‑213/00 CMA CGM and Others v Commission [2003] ECR II‑913, paragraph 109 and the case-law cited).

117 However, that may be done summarily and the final decision is not necessarily required to be a replica of the statement of objections (see, to that effect, Musique Diffusion française and Others v Commission, paragraph 115 above, paragraph 14), since the statement is a preparatory document containing assessments of fact and of law which are purely provisional in nature (see, to that effect, Joined Cases 142/84 and 156/84 British American Tobacco and Reynolds Industries v Commission [1987] ECR 4487, paragraph 70). Thus, it is permissible for the Commission to supplement the statement of objections in the light of the replies submitted by the parties, whose arguments show that they have actually been able to exercise their rights of defence. The Commission may also, in the light of the administrative procedure, revise or supplement its arguments of fact or of law in support of its objections (see, to that effect, Case T‑86/95 Compagnie générale maritime and Others v Commission [2002] ECR II‑1011, paragraph 448, and Case T‑310/01 Schneider Electric v Commission [2002] ECR II‑4071, paragraph 438).

118 Moreover, the Court of Justice has stated that the taking into account of an argument put forward by an undertaking during the administrative procedure, without it having been given the opportunity to express an opinion in that respect before the adoption of the final decision, cannot as such constitute an infringement of its rights of defence (order in Case C‑497/99 P Irish Sugar v Commission [2001] ECR I‑5333, paragraph 24).

119 Last, it should also be recalled that, according to the case-law, the rights of the defence are breached where it is possible that the outcome of the administrative procedure conducted by the Commission might have been different as a result of an error committed by it. An applicant undertaking establishes that there has been such a breach where it adequately demonstrates, not that the Commission’s decision would have been different in content, but rather that it would have been better able to ensure its defence had there been no error, for example because it would have been able to use for its defence documents to which it was denied access during the administrative procedure (see, to that effect, Case C‑194/99 P Thyssen Stahl v Commission [2003] ECR I‑10821, paragraph 31 and the case-law cited, and Case C‑407/08 P Knauf Gips v Commission [2010] ECR I‑6375, paragraph 28).

120 In the present case, it should be observed that, in the statement of objections, the Commission, in order to justify attributing to SCC liability for the cartel offence of its wholly-owned subsidiary Transcatab, could, in principle, in the light of the case-law set out at paragraphs 94 to 96 above, limit itself to establishing the distribution of the capital between subsidiaries and parent companies (see paragraphs 336 to 338 of the statement of objections). Pursuant to that case-law, in its final decision, the Commission was required to adopt a position on the arguments relied on by the parties in reply to that statement of objections (see recital 335 et seq. to the contested decision), whereby they sought to rebut the presumption in question.

121 Furthermore, as regards Transcatab’s claim that the Commission used in the contested decision documents not referred to in the statement of objections, it should be observed that it is only when assessing the arguments and evidence put forward by the parties during the administrative procedure that the Commission, at recitals 335 to 344 to the contested decision, actually addresses certain specific aspects and documents concerning the relationship between SCC and Transcatab and, when doing so, refers to certain documents in the administrative file. The assessment of those aspects and documents was thus not capable of affecting the efficacy of the exercise of Transcatab’s rights of defence, especially as it had access to those documents – which were in any event already in its possession – during the administrative procedure.

122 Moreover, it is apparent from the file that both SCC and Transcatab were able to respond to the objection expressly set out in the statement of objections addressed to them and to set out their defence at the administrative hearing before the Hearing Officer. The rule that the parties should be heard was therefore observed during the administrative procedure.

123 In any event, it should also be recalled that, as the Court of Justice has held, since the Commission is not required, as regards the imputability of the infringement, to submit, at the stage of the statement of objections, evidence other than proof of the shareholding of the parent company in its subsidiaries, the argument relating to the breach of the rights of the defence cannot be accepted (see, to that effect, Akzo Nobel and Others v Commission, paragraph 88 above, paragraph 64).

124 The complaint alleging breach of the rights of the defence must therefore be rejected on the substance, without there being any need to adjudicate on the question of its admissibility raised by the Commission.

125 In conclusion, in the light of all the foregoing, the first part of the first plea must be rejected in its entirety.

Second part of the first plea, alleging infringement of Article 23(2) of Regulation No 1/2003

Arguments of the parties

126 Transcatab maintains that, because it held Alliance One liable for the infringements in question, the Commission imposed a fine on Transcatab which exceeds the maximum limit provided for in Article 23(2) of Regulation No 1/2003 of 10% of its turnover for the business year preceding the adoption of the contested decision. In fact, the fine imposed on it comes to around 43% of its turnover.

127 For the remainder, Transcatab refers to the arguments developed by Alliance One in its action (Case T‑25/06), a copy of which it has annexed.

128 The Commission contends that Transcatab’s arguments should be rejected.

Findings of the Court

129 It should be observed, in the first place, that this part is closely linked to the first part of the present plea, in so far as the rejection of the first part necessarily has an impact on the merits of the present part. Consequently, regard being had to the considerations that led to the rejection of the first part of the present plea, it must be concluded that the Commission did not err in taking SCC’s consolidated turnover as a reference for the calculation of the maximum amount of 10% of turnover provided for in Article 23(2) of Regulation No 1/2003 (see, to that effect, Akzo Nobel and Others v Commission, paragraph 103 above, paragraph 114).

130 That maximum amount must be calculated on the basis of the total turnover of all the companies constituting the economic entity acting as an undertaking for the purposes of Article 81 EC, since only the total turnover of the component companies can constitute an indication of the size and economic power of the undertaking in question (see, to that effect, Case T‑9/99 HFB and Others v Commission [2002] ECR II‑1487, paragraphs 528 and 529, and Akzo Nobel and Others v Commission, paragraph 103 above, paragraph 114).

131 As regards, in the second place, Transcatab’s general reference to the arguments developed in the action brought by its parent company, Alliance One, it should be observed that such a reference, which refers to the annexed document only generally and does not enable the Court to identify precisely the arguments that it might regard as supplementing the pleas developed in the written submissions, must be considered inadmissible.

132 It should be borne in mind that, under Article 21 of the Statute of the Court of Justice and Article 44(1)(c) of the Rules of Procedure of the General Court, each application is required to state the subject-matter of the proceedings and a summary of the pleas in law on which the application is based. According to consistent case-law, it is necessary, for an action to be admissible, that the basic matters of law and of fact relied on be indicated, at least in summary form, coherently and intelligibly in the application itself. Whilst the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed thereto, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential arguments in law which, in accordance with the abovementioned provisions, must appear in the application. Moreover, it is not for the Court to seek and to identify, in the annexes, the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function (see Case T‑209/01 Honeywell v Commission [2005] ECR II‑5527, paragraphs 56 and 57, and Case T‑201/04 Microsoft v Commission [2007] ECR II‑3601, paragraph 94 and the case-law cited).

133 Consequently, the second part of the first plea must also be rejected as unfounded in part and as inadmissible in part.

134 It follows from the foregoing considerations that the first plea must be rejected in its entirety.

2. Second plea, concerning the setting of the starting amount of the fine

First part of the second plea, concerning the gravity of the infringement

135 In the first part of the second plea, Transcatab raises a number of complaints relating to the classification of the infringement as ‘very serious’ in the contested decision.

136