OPINION OF ADVOCATE GENERAL

Sharpston

delivered on 10 February 2011 ( )

Case C‑272/09 P

KME Germany AG, formerly KM Europa Metal AG

KME France SAS, formerly Tréfimétaux SA

KME Italy SpA, formerly Europa Metalli SpA

(Appeal – Competition – Price-fixing and market-sharing cartel – Factors taken into account in fixing fines – Scope of jurisdiction of the General Court – Effective judicial review)

1. Three linked undertakings participated, together with other undertakings, in price-fixing and market-sharing agreements and concerted practices on the market for copper industrial tubes, contrary to Article 81 EC (now Article 101 TFEU), and were fined by the Commission.

2. In fixing the fines, the Commission took account of the criteria set out in its own applicable guidelines, together with various aggravating and mitigating circumstances.

3. The three undertakings in question then applied to the General Court ( ) for a significant reduction in the fines imposed on them, alleging five specific errors in the determination of the amounts.

4. Their application was dismissed in its entirety, ( ) and they now appeal to the Court of Justice on five grounds, of which the first four correspond to their first four pleas in law at first instance. The fifth ground of appeal, however, raises the broader issue of the extent and nature of the review which the General Court should carry out when exercising unlimited jurisdiction with regard to financial penalties.

Legal background

Human and fundamental rights

5. Article 6(1) of the European Convention on Human Rights (‘the ECHR’) provides, in particular:

‘In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. …’

6. Article 6(2) and (3) lays down specific additional guarantees for those ‘charged with a criminal offence’, including the presumption of innocence and the availability of various resources to ensure their defence.

7. Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), ( ) entitled ‘Right to an effective remedy and to a fair trial’, provides, in particular:

‘Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article.

Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. …’

8. The explanatory note to that article states, inter alia, that the second paragraph corresponds to Article 6(1) ECHR, subject to the proviso:

‘In Union law, the right to a fair hearing is not confined to disputes relating to civil law rights and obligations. That is one of the consequences of the fact that the Union is a community based on the rule of law as stated by the Court in Case 294/83, ‘Les Verts’ v European Parliament (judgment of 23 April 1986, [1986] ECR 1339). Nevertheless, in all respects other than their scope, the guarantees afforded by the ECHR apply in a similar way to the Union.’

9. Article 49 of the Charter is entitled ‘Principles of legality and proportionality of criminal offences and penalties’. With regard to penalties, Article 49(3) states: ‘The severity of penalties must not be disproportionate to the criminal offence’. According to the explanatory note, that ‘states the general principle of proportionality between penalties and criminal offences which is enshrined in the common constitutional traditions of the Member States and in the case-law of the Court of Justice …’.

10. Article 51 of the Charter defines its scope. Article 51(1) provides:

‘The provisions of this Charter are addressed to the institutions and bodies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law. They shall therefore respect the rights, observe the principles and promote the application thereof in accordance with their respective powers.’ ( )

Treaty provisions

11. Article 81(1) EC (now, after slight amendment, Article 101(1) TFEU), provides:

‘The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

…

(c) share markets or sources of supply;

…’

12. Article 229 EC (now, after slight amendment, Article 261 TFEU), provides:

‘Regulations adopted jointly by the European Parliament and the Council, and by the Council, pursuant to the provisions of this Treaty, may give the Court of Justice unlimited jurisdiction with regard to the penalties provided for in such regulations.’

13. More generally, Article 230 EC (now, after amendment, Article 263 TFEU) gives the Court of Justice jurisdiction to review the legality of acts of the institutions, including the Commission, ‘on grounds of lack of competence, infringement of an essential procedural requirement, infringement of this Treaty or of any rule of law relating to its application, or misuse of powers’.

14. In accordance with Article 225(1) EC (now, after amendment, Article 256(1) TFEU), the General Court has, in principle, jurisdiction to hear and determine such proceedings at first instance, subject to a right of appeal to the Court of Justice on points of law only.

Competition law enforcement

15. Article 15 of Council Regulation No 17, ( ) which was applicable at the material time, provided, in particular:

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

(a) they infringe Article [81(1) EC / 101(1) TFEU]; or

…

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

…

4. Decisions taken pursuant to paragraph … 2 shall not be of a criminal law nature.’ ( )

16. Article 17 of Regulation No 17 provided:

‘The Court of Justice shall have unlimited jurisdiction within the meaning of Article [229 EC / 261 TFEU] to review decisions whereby the Commission has fixed a fine or periodic penalty payment; it may cancel, reduce or increase the fine or periodic penalty payment imposed.’ ( )

17. Also applicable at the material time were the Commission’s 1998 Guidelines on the method of setting fines (‘the Guidelines’). ( ) The preamble to those guidelines stated, inter alia:

‘The principles outlined here should ensure the transparency and impartiality of the Commission’s decisions, in the eyes of the undertakings and of the Court of Justice alike, while upholding the discretion which the Commission is granted under the relevant legislation to set fines within the limit of 10% of overall turnover. This discretion must, however, follow a coherent and non-discriminatory policy which is consistent with the objectives pursued in penalising infringements of the competition rules.

The new method of determining the amount of a fine will adhere to the following rules, which start from a basic amount that will be increased to take account of aggravating circumstances or reduced to take account of attenuating [( )] circumstances.’

18. Section 1 of the Guidelines specified that the basic amount would be determined according to the gravity and duration of the infringement, the only criteria referred to in Article 15(2) of Regulation No 17.

19. As regards gravity, under Section 1 A, account was to be taken of the nature of the infringement, of ‘its actual impact on the market, where this can be measured’, and of the size of the relevant geographical market. There were to be three categories: minor infringements, serious infringements and very serious infringements, the last including horizontal restrictions such as price cartels and market-sharing quotas, attracting ‘likely fines’ of above EUR 20 million. It would also be possible ‘to apply differential treatment to undertakings according to the nature of the infringement committed’ and necessary ‘to take account of the effective economic capacity of offenders to cause significant damage to other operators, in particular consumers, and to set the fine at a level which ensures that it has a sufficiently deterrent effect’.

20. As regards duration, under Section 1 B, a distinction was to be drawn between: infringements of short duration (in general, less than one year), in which case there would be no increase in the amount of the fine determined for gravity; of medium duration (in general, one to five years), involving an increase of up to 50% in that amount; and of long duration (in general, more than five years), involving an increase of ‘up to 10% per year’. ( ) The amount determined for gravity, plus the amount determined for duration, would together form the basic amount of the fine imposed.

21. Section 2 stated that the basic amount would be increased where there were aggravating circumstances including, inter alia, repeated infringements of the same type by the same undertaking or undertakings.

22. Section 3 stated that the basic amount would be reduced where there were particular attenuating circumstances including, inter alia: non-implementation in practice of the offending agreements or practices (second indent); termination of the infringement as soon as the Commission intervened (in particular when it carried out checks) (third indent); and effective cooperation by the undertaking in the proceedings, outside the scope of the Commission’s 1996 ‘Leniency Notice’ (sixth indent). ( )

23. The Leniency Notice set out the conditions under which enterprises cooperating with the Commission during its investigation into a cartel might be exempted from fines, or might be granted reductions in the fine which would otherwise have been imposed upon them.

24. Point 4 of Section A of the Leniency Notice stated: ‘The Commission considers that it is in the Community interest in granting [sic] favourable treatment to enterprises which cooperate with it in the circumstances set out below. The interests of consumers and citizens in ensuring that such practices are detected and prohibited outweigh the interest in fining those enterprises which cooperate with the Commission, thereby enabling or helping it to detect and prohibit a cartel’. Sections B, C and D identify in detail the kind of conduct that will enable an enterprise which has participated in anti-competitive activities nevertheless to be treated with leniency. They read as follows:

‘B. NON-IMPOSITION OF A FINE OR A VERY SUBSTANTIAL REDUCTION IN ITS AMOUNT

An enterprise which:

(a) informs the Commission about a secret cartel before the Commission has undertaken an investigation, ordered by decision, of the enterprises involved, provided that it does not already have sufficient information to establish the existence of the alleged cartel;

(b) is the first to adduce decisive evidence of the cartel’s existence;

(c) puts an end to its involvement in the illegal activity no later than the time at which it discloses the cartel;

(d) provides the Commission with all the relevant information and all the documents and evidence available to it regarding the cartel and maintains continuous and complete cooperation throughout the investigation;

(e) has not compelled another enterprise to take part in the cartel and has not acted as an instigator or played a determining role in the illegal activity,

will benefit from a reduction of at least 75% of the fine or even from total exemption from the fine that would have been imposed if they [sic] had not cooperated.

C. SUBSTANTIAL REDUCTION IN A FINE

Enterprises which both satisfy the conditions set out in Section B, points (b) to (e), and disclose the secret cartel after the Commission has undertaken an investigation ordered by decision on the premises of the parties to the cartel which has failed to provide sufficient grounds for initiating the procedure leading to a decision, will benefit from a reduction of 50% to 75% of the fine.

D. SIGNIFICANT REDUCTION IN A FINE

1. Where an enterprise cooperates without having met all the conditions set out in Sections B or C, it will benefit from a reduction of 10% to 50% of the fine that would have been imposed if it had not cooperated.

2. Such cases may include the following:

– before a statement of objections is sent, an enterprise provides the Commission with information, documents or other evidence which materially contribute to establishing the existence of the infringement;

– after receiving a statement of objections, an enterprise informs the Commission that it does not substantially contest the facts on which the Commission bases its allegations.’

Imposition and determination of the fines in the present case

25. On 16 December 2003, following various investigations, the Commission adopted a decision ( ) finding that six undertakings – Wieland Werke AG (‘Wieland’), Outokumpu Oyj, Outokumpu Copper Products OY (collectively, ‘Outokumpu’), KM Europa Metal AG (‘KME Germany’), Europa Metalli SpA (‘KME Italy’) and Tréfimétaux SA (‘KME France’) – had infringed the provisions of Article 81(1) EC and – from 1 January 1994 – Article 53(1) of the EEA Agreement by participating, between 3 May 1988 and 22 March 2001, in a complex of agreements and concerted practices consisting of price fixing and market sharing in the industrial tubes sector. KME Germany, KME France and KME Italy (which have since 1995 formed part of the KME Group; hereinafter, collectively, ‘KME’) were the applicants at first instance and are the appellants in the present proceedings.

26. Fines totalling EUR 39.81 million were imposed on KME. ( ) The process by which the Commission determined the amounts in question is summarised as follows in paragraphs 11 to 22 of the judgment under appeal:

‘11 Regarding, first, the determination of the starting amount of the fine, the Commission took the view that the infringement, which consisted essentially of price fixing and market sharing, was by its very nature a very serious infringement (recital 294 of the contested decision).

12 In determining the seriousness of the infringement, the Commission also took account of the fact that the cartel had affected the whole of the territory of the European Economic Area (EEA) (recital 316 of the contested decision). The Commission further examined the actual effects of the infringement, and found that the cartel had “overall had an impact on the market” (recital 314 of the contested decision).

13 In reaching that finding, it based its reasoning, inter alia, on the following evidence. First, it looked at the implementation of the cartel, with reference to the fact that the participants had communicated sales volumes and price levels (recital 300). Secondly, evidence on the file showed that prices fell at times when the collusive agreement was not strictly adhered to, and rose sharply in other periods (recital 310). Thirdly, the Commission referred to the collective market share of between 75 and 85% held by the cartel members (recital 310). Fourthly, the Commission found that the respective market shares of the cartel participants remained relatively stable during the whole duration of the infringement, even if the customers of the participants had sometimes changed (recital 312).

14 Finally, still in relation to the determination of the seriousness of the infringement, the Commission took into account the fact that the market in copper industrial tubes constituted an important industrial sector, with an estimated market value in the EEA of EUR 288 million (recital 318).

15 Having regard to all those circumstances, the Commission concluded that the infringement in question had to be regarded as very serious (recital 320).

16 Secondly, the Commission applied differential treatment to the undertakings concerned, in order to take account of the effective economic capacity of each of them to cause significant damage to competition. In that regard, the Commission pointed to the existence of a difference between the market shares for industrial tubes in the EEA held, on the one hand, by the KME Group, market leader in the EEA market with a [confidential]% share, and, on the other, by Outokumpu and Wieland, holding respectively a [confidential]% and 13.4% share. Having regard to that difference, the starting amount of the fine imposed on Outokumpu and Wieland was fixed at 33% of that for the KME Group, namely EUR 11.55 million for Outokumpu and for Wieland and EUR 35 million for the KME Group (recitals 327 and 328).

17 Since the KME Group had come into being in 1995, the Commission divided the starting amount of the fine imposed on the group, namely EUR 35 million, into two parts[: t]he first for the period from 1988 to 1995 (distinguishing KME Germany from KME France and KME Italy) and the second for the period from 1995 to 2001 (regarding the three entities as forming a group). That starting amount was therefore allocated as follows: EUR 8.75 million for KME Germany (1988 to 1995); EUR 8.75 million jointly and severally for KME Italy and KME France (1988 to 1995) and EUR 17.50 million for the KME Group, namely jointly and severally for KME Germany, KME France and KME Italy (1995 to 2001) (recital 329 of the contested decision).

18 Thirdly, in order to take account of the need to fix the fine at a sufficiently deterrent level, the Commission increased the starting amount of the fine on Outokumpu by 50%, thereby taking it to EUR 17.33 million, taking the view that the latter’s worldwide turnover, of over EUR 5 billion, indicated that it had a size and economic strength warranting that increase (recital 334).

19 Fourthly, the Commission classified the duration of the infringement, which lasted from 3 May 1988 until 22 March 2001, as ‘long’. The Commission therefore considered it appropriate to increase the starting amounts of fines on the undertakings concerned by 10% for each year of participation in the cartel. Thus the Commission increased by 55% the starting amount of the fine imposed on the KME Group for the period from 1995 to 2001, and by 70% the starting amount of the fines imposed on KME Germany of the one part and KME Italy and KME France of the other part for the period from 1988 to 1995. The basic amount of the fines was therefore fixed at EUR 56.88 million for the whole of the KME Group (recitals 338, 342 and 347). [( )]

20 Fifthly, in respect of aggravating circumstances, the basic amount of the fine imposed on Outokumpu was increased by 50% on the ground that it was guilty of repeat infringement, having been an addressee of Commission Decision 90/417/ECSC of 18 July 1990 relating to a proceeding under Article 65 [CS] concerning an agreement and concerted practices engaged in by European producers of cold-rolled stainless steel flat products (OJ 1990 L 220, p. 28) (recital 354).

21 Sixthly, in respect of attenuating circumstances, the Commission stated that, without the cooperation of Outokumpu, it would have been able to establish the existence of the infringing conduct for a period of only four years, and it therefore reduced the basic amount of its fine by EUR 22.22 million, in order that the basic amount correspond to the fine which would have been imposed for such a period (recital 386).

22 Seventhly and lastly, in accordance with Section D of the 1996 Leniency Notice, the Commission reduced the amount of the fines by 50% for Outokumpu, 20% for Wieland, and 30% for the KME Group (recitals 402, 408 and 423).’

Summary of the judgment under appeal

27. KME’s application at first instance was headed: ‘Application pursuant to Articles 225 and 230 EC’. In it, KME asked the General Court to:

– substantially reduce the fine;

– order the Commission to pay KME’s legal fees and expenses as well as the costs incurred in providing a bank guarantee in lieu of payment of the fine pending judgment by the General Court; and

– take any other measures that the General Court considered appropriate.

28. In support of those claims, KME put forward five pleas in law, all concerning the determination of the amount of the fine: (a) failure to take sufficient account of the actual impact of the cartel when calculating the starting amount of the fine, (b) inadequate assessment of the size of the relevant market, (c) erroneous increase in the fine by reason of the duration of the infringement, (d) failure to take account of attenuating circumstances and (e) misapplication of the Leniency Notice. The General Court dismissed all five pleas and, consequently, the action in its entirety.

29. As regards the first plea (failure to take sufficient account of the actual impact of the cartel), the General Court found that the Commission was entitled to differentiate between participants by reference to the market share of each; that cartels, in particular price-fixing and customer-sharing, were by their very nature so serious as to merit the severest fines, regardless of market impact; and that ‘in any event, and for the sake of completeness’, the Commission had demonstrated to a sufficient legal standard that the cartel did have an actual impact on the market concerned.

30. In the second plea, KME argued that the Commission had wrongly evaluated the size of the copper tube manufacturing market from turnover including the cost of the raw material (namely, copper), whereas that cost was determined, and sometimes borne directly, by the purchaser; a correct evaluation would have been based on the value added by the manufacturers. The General Court found that there was no valid reason to require that the turnover of a relevant market be calculated excluding certain production costs and that, despite its approximate nature, turnover was regarded by the legislature, the Commission and the Court of Justice as an adequate criterion for assessing the size and economic power of undertakings.

31. With regard to the third plea (erroneous increase in the fine – of 10% per year – by reason of the duration of the infringement), the General Court found that, without confusing the gravity and the duration of the infringement, the Commission had exercised its permissible discretion within the confines of the rules which it had imposed on itself in the Guidelines and that the increase of 125% for a duration of 12 years and 10 months was not disproportionate.

32. In the fourth plea, KME submitted that, contrary to its own Guidelines, the Commission failed to take account of certain alleged attenuating circumstances: (i) the fact that, while not systematically abstaining from implementing the agreements, KME did so in a limited manner; (ii) the fact that KME ended the infringement, immediately and voluntarily, after the checks carried out by the Commission; (iii) the economically difficult situation of the industrial tubes sector; and (iv) the fact that KME provided evidence which was decisive or completed evidence held by the Commission. The General Court found, respectively, that: (i) KME had not adopted any actual competitive conduct and that limited implementation was not a sufficient attenuating factor; (ii) a reduction of the fine by reason of the termination of – in particular – an intentional infringement as soon as the Commission intervenes is a matter for the Commission’s discretion depending on its appraisal of the circumstances; (iii) the Commission is not required to treat the poor financial health of a sector as a mitigating circumstance; and (iv) the Commission has a discretion as regards the application of attenuating circumstances, and did not exercise it incorrectly by considering that it was Outokumpu and not KME which had provided the important information.

33. In the fifth plea (insufficient reduction of the fine pursuant to the Leniency Notice), KME alleged that: (i) third parties in earlier cases had received more favourable treatment; (ii) the information supplied by KME should have led to a reduction of more than 30%; and (iii) the Commission had infringed the principle of equal treatment by granting Outokumpu a 50% reduction. The General Court found, respectively, that: (i) the fact that the Commission had in the past granted a certain rate of reduction for specific conduct did not require it to grant the same rate for similar conduct in a subsequent procedure; (ii) only an obvious error of assessment could be censured, since the Commission enjoyed a wide discretion in assessing the quality and usefulness of the cooperation provided by an undertaking, in particular by reference to the contributions made by other undertakings, and in this case there was no such obvious error; and (iii) that there was no discriminatory treatment because KME and Outokumpu were not in comparable situations.

Grounds of appeal

34. KME puts forward five grounds of appeal, which may be summarised as follows.

35. First, in holding that the Commission had demonstrated to a sufficient legal standard that the cartel had an impact on the relevant market, a factor to be taken into account in determining the basic amount of KME’s fine, the General Court infringed European Union (‘EU’) law and gave an illogical and inadequate statement of reasons for dismissing the first plea in law. Furthermore, by upholding the Commission’s conclusion that KME’s econometric evidence did not show that the infringement as a whole had no market impact, the General Court manifestly distorted the facts and evidence put before it.

36. Second, in approving the Commission’s determination of the size of the market affected by the cartel (industrial tubes) by including turnover on a separate upstream market (copper), even though the cartel members were not vertically integrated in that upstream market, the General Court infringed EU law and gave an inadequate statement of reasons for its rejection of KME’s second plea in law.

37. Third, the General Court infringed EU law and gave an obscure, illogical and inadequate statement of reasons in upholding the relevant part of the decision at issue and rejecting KME’s third plea in law, namely that the Commission had misapplied the Guidelines and infringed the principles of proportionality and equal treatment by imposing the maximum percentage increase to the basic amount of KME’s fine on account of duration.

38. Fourth, the General Court infringed EU law by rejecting the fourth limb of KME’s fourth plea in law and upholding the relevant part of the decision at issue, in which the Commission denied KME the benefit of a fine reduction on account of its cooperation outside the scope of the Leniency Notice, in violation both of the Guidelines and of the principles of fairness and equal treatment.

39. Fifth, the General Court violated EU law and the fundamental right to full and effective judicial review by failing to examine KME’s arguments thoroughly and closely and by showing a biased deference to the Commission’s discretion.

40. Of those grounds of appeal, it seems to me that the fifth and last must be examined first, since the view which the Court takes on the general question of the scope, degree and nature of the review which must be carried out by the General Court in cases of this kind will colour the approach to be taken to the first four grounds of appeal, each of which criticises a different specific application of that review.

Fifth ground of appeal: effective judicial review

Relevant passages of the judgment under appeal

41. KME cites the following passages of the judgment under appeal in support of its argument that the General Court ‘deferred to an excessive and unreasonable extent to the Commission’s discretion’:

‘92 ... the seriousness of the infringement is determined by reference to several factors, in respect of which the Commission has a discretion …’

‘103 … It is for the Commission to choose, in the context of its discretion …, the uplift which it intends to apply in respect of the duration of the infringement.’

‘115 The adoption of the Guidelines has not rendered irrelevant the previous case-law under which the Commission enjoys a discretion as to whether or not to take account of certain matters when setting the amount of the fines it intends imposing, by reference in particular to the circumstances of the case. Thus, in the absence of any binding indication in the Guidelines regarding the mitigating circumstances that may be taken into account, it must be concluded that the Commission has retained a degree of latitude in making an overall assessment of the extent to which a reduction of fines may be made in respect of mitigating circumstances.’

‘129 … the Commission has a discretion as regards the application of attenuating circumstances …’

42. Those passages may be read against the background of the ‘preliminary observation’ made by the General Court in paragraphs 32 to 37 of the judgment under appeal, although these passages are not specifically alluded to by KME:

‘32 … it should be noted, first, that, as is apparent from recitals 290 to 387 of the contested decision, the fines which the Commission imposed for the infringement were imposed by virtue of Article 15(2) of Regulation No 17, and, secondly, that, although the Commission does not expressly refer to the [Guidelines], it is undisputed that it determined the amount of the fines by applying the methodology defined in those guidelines.

33 Whilst the Guidelines may not be regarded as rules of law, they nevertheless form rules of practice from which the Commission may not depart in an individual case without giving reasons which are compatible with the principle of equal treatment (Case C‑397/03 P Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission [2006] ECR I‑4429, paragraph 91 and case-law cited).

34 It is therefore for the Court to verify, when reviewing the legality of the fines imposed by the contested decision, whether the Commission exercised its discretion in accordance with the method set out in the Guidelines and, should it be found to have departed from that method, to verify whether that departure is justified and supported by sufficient legal reasoning. In that regard, it should be noted that the Court of Justice has confirmed the validity, first, of the very principle of the Guidelines, and, secondly, the method which is there indicated (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, paragraphs 252 to 255, 266, 267, 312 and 313).

35 The self-limitation on the Commission’s discretion arising from the adoption of the Guidelines is not incompatible with the Commission’s maintaining a substantial margin of discretion. The Guidelines display flexibility in a number of ways, enabling the Commission to exercise its discretion in accordance with the provisions of Regulation No 17, as interpreted by the Court of Justice (Dansk Rørindustri, paragraph 267).

36 Therefore, in areas where the Commission has maintained a discretion, for example as regards the uplift for duration, review of the legality of those assessments is limited to determining the absence of manifest error of assessment (see, to that effect, Case T‑241/01 Scandinavian Airlines System v Commission [2005] ECR II‑2917, paragraphs 64 and 79).

37 Nor, in principle, does the discretion enjoyed by the Commission and the limits which it has imposed in that regard prejudge the exercise by the Community judicature of its unlimited jurisdiction (Joined Cases T‑67/00, T‑68/00, T‑71/00 and T‑78/00 JFE Engineering and Others v Commission [2004] ECR II‑2501, paragraph 538), which empowers it to annul, increase or reduce the fine imposed by the Commission (see, to that effect, Case C‑3/06 P Groupe Danone v Commission [2007] ECR I‑1331, paragraphs 60 to 62; Case T‑368/00 General Motors Nederland and Opel Nederland v Commission [2003] ECR II‑4491, paragraph 181).’

Summary of the submissions

KME’s appeal

43. KME complains of the General Court’s failure to carry out a thorough and close examination of its arguments at first instance, and of that Court’s ‘excessive deference’ to the Commission’s discretion, upholding a disproportionate fine. That failure, in KME’s view, violates the fundamental right to a full, effective and fair judicial review of the decision at issue by an impartial and independent tribunal.

44. EU competition law is shaped by the interplay between the Commission, as investigator, prosecutor and decision-maker, and the judicature, providing a measure of external control. However, the case-law has never clarified the exact meaning, scope or rationale of the margin of discretion accorded to the Commission, having regard to the institutional balance between the two.

45. The state of that interplay has been influenced by the evolution of the Commission’s role in enforcing competition policy since Regulation No 17 was adopted. In 1962 the EEC comprised six Member States and there was little experience or acceptance of European competition law. Notifications were a useful source of information enabling the Commission to exercise a priori control and shape its enforcement policy; its role was mainly to educate and to provide legal certainty by issuing formal exemption decisions, comfort letters or clearance decisions. Although the Commission already combined investigative, prosecutorial and decision-making powers, investigations and prosecutions were relatively rare, and fines typically low. In that context, it was reasonable, logical and fair for the Court of Justice to hold in Consten and Grundig ( ) that, since the exercise of the Commission’s powers necessarily implied complex evaluations of economic matters, judicial review of those evaluations had to take account of their nature by confining itself to an examination of the relevance of the facts and of the legal consequences which the Commission deduced therefrom. Moreover, the Commission’s self-restraint rendered less crucial the issue of defining clear boundaries to the exercise of its fining powers.

46. However, it is arbitrary, dangerous and unfair to apply the same ‘judicial deference’ to the Commission’s discretion in the context of the current EU competition law enforcement regime, characterised by increasingly large fines having inevitable economic and financial impact on companies, shareholders and employees, and leading to de facto ‘criminalisation’ of competition law. EU competition rules are directly applicable provisions which leave no room for policy-based discretion in their interpretation and application, so that there is scope for only a very limited degree of deference by the Courts when reviewing their application by the Commission in a specific case.

47. Under the current regime introduced by Regulation No 1/2003, Article 101 TFEU as a whole is now applied not only by the Commission, but also by national competition authorities and courts. It has never been suggested that a national court applying Article 101 TFEU in individual cases enjoys a broad margin of discretion, to which deference is owed by the higher court on appeal.

48. The Commission’s expertise in evaluating complex factual and/or economic matters cannot justify according it a broad margin of discretion in the application of EU competition law. Rather, a heightened scrutiny in complex cases is part of the mandate of the General Court, which was established in reaction to criticism that the intensity of judicial control then being exercised was no longer up to the standards required of a legal regime which had started to encroach significantly on individual rights by stringently enforcing the competition rules. Moreover, both the General Court and the Court of Justice have often satisfactorily engaged in particularly intense judicial scrutiny of complex cases. The intensity of the General Court’s review does not decrease with the complexity of the facts at issue, but depends on its assessment of what kind of scrutiny is required and appropriate in the circumstances of each case.

49. Moreover, the General Court has unlimited jurisdiction with respect to penalties imposed in competition cases. In exercising that jurisdiction, it should not accord the Commission any margin of discretion as regards the appropriate and proportionate character of a fine or the method used in its calculation – a fortiori given the de facto criminal nature of such fines and the ECHR requirement of effective judicial review of any administrative decision imposing a criminal penalty. Therefore, the General Court must examine how the Commission appraised the gravity and duration of unlawful conduct in each case and may substitute its own assessment by cancelling, reducing or increasing the fine. Full exercise of that unlimited jurisdiction entails control not only of the formal legality of the fine but also of its appropriateness, through an independent appraisal of the seriousness of the conduct to be sanctioned and of the overall fairness of the sanction in view of all the individual circumstances of each case.

50. The scope of the Commission’s margin of discretion (if any) in cases such as the present must be narrowly defined and the degree of judicial deference (if any) to that discretionary assessment must be correspondingly limited. The technical nature of a case should not cause the Court to forsake its duty to ensure that the law is observed.

51. Another issue is whether the review provided for in the EU judicial system is broad and intense enough to ensure the degree of protection required by Article 6(1) ECHR. Debate on that issue has become more acute in light not only of the Commission’s combination of investigative, prosecutorial and decision-making powers, but also of the ongoing ‘criminalisation’ of EU competition law. The European Court of Human Rights has long accepted that administrative law enforcement, including the imposition of fines, is not incompatible with Article 6(1) ECHR. However, although such enforcement need not be fully ‘judicialised’ in order to meet the requirements of that article, there must be sufficiently strong procedural guarantees, and effective judicial control with full jurisdiction to review the administrative decision. The requirements a system of judicial review must meet to comply with Article 6(1) ECHR have yet to be fully clarified, but it is uncertain whether the existing system of EU competition law enforcement, including judicial review, meets those requirements.

52. The right to an effective remedy before a tribunal is also enshrined in Article 47 of the Charter. The case-law confirms that addressees of Commission decisions imposing fines in competition cases have a right to a fair legal process, and that a breach of their right to an impartial tribunal arises if there is no appeal to a court with full jurisdiction within the meaning of the ECHR.

Commission’s response

53. The Commission submits, first, that the ground of appeal is too general and imprecise to be assessed by the Court (thus not meeting the requirements of Article 112(1)(c) of the Rules of Procedure), and is therefore inadmissible; second, that the General Court’s judgment was based on its own positive findings, and the ground of appeal is thus unfounded.

54. With regard to lack of precision, KME puts forward a range of arguments in favour of an intense review of Commission decisions by the General Court, but accepts that a system of administrative law enforcement coupled with judicial control with full jurisdiction is compatible with Article 6(1) ECHR. It also accepts that the General Court and the Court of Justice are in principle capable of carrying out adequate review and have done so in practice. It thus does not contest the fundamental structure for judicial review of Commission decisions.

55. Accordingly, KME should have (a) specified the elements of the judgment in which the General Court failed properly to address its submissions, (b) specified the standard by which the quality of that Court’s review should be assessed, and (c) demonstrated how, by reference to that standard, the Court failed properly to address KME’s submissions. Instead, it has quoted four passages from the judgment referring to the Commission’s discretion, without explaining how they demonstrate the General Court’s failure adequately to review the Commission’s decision in the light of KME’s submissions.

56. Indeed, the standard by which the review of the General Court should be assessed in accordance with Article 6(1) ECHR is unclear, even accepting KME’s assertion that EU competition law fines are ‘criminal’ for that purpose. KME avoids any discussion of what that might imply for the appropriate standard of review.

57. The European Court of Human Rights has made it clear that the requirements of Article 6(1) ECHR differ even within the overall category of ‘criminal charges’. Since EU law explicitly characterises competition law fines as non-criminal, they would fall outside the ‘hard core’ of criminal law identified by the European Court of Human Rights, and the guarantees applicable to criminal proceedings would not necessarily apply with full stringency.

58. In any event, the General Court clearly has ‘full jurisdiction’ for the purposes of Article 6(1) ECHR (not to be confused with the EU concept of unlimited jurisdiction to review financial penalties). The European Court of Human Rights has condemned as inadequate a judicial remedy against administrative acts that is limited to review of errors of law and which thus does not allow the court to correct errors of fact. However, while the court may also need to review proportionality, a limited review on certain aspects is not in itself incompatible with the concept of ‘full jurisdiction’ under Article 6(1) ECHR.

59. As regards the second contention, that the General Court’s judgment was based on its own affirmative findings, the Commission submits that, notwithstanding the references made to the Commission’s discretion, the General Court carried out a thorough and effective review of the calculation of the fine and reached its own affirmative conclusions that KME’s second, third and fourth pleas were unfounded. ( ) On those points, the General Court considered and rejected KME’s arguments on their merits, agreeing affirmatively with the Commission, and not ‘deferring to its discretion’. Whatever the standard of review implied by Article 6(1) ECHR, the General Court met that standard.

Assessment

60. KME’s argument is essentially that, by accepting that various assessments in the Commission’s determination of the fines fell within the Commission’s discretion and by not seeking, therefore, to make its own assessment in those regards, the General Court failed to subject the decision at issue to the scrutiny required by the ECHR and the Charter.

61. It is therefore important to ascertain what scrutiny is required by those instruments, the most relevant guidance being found in the case-law of the European Court of Human Rights.

62. KME contends that competition law enforcement procedures such as the one in issue, involving a finding that an undertaking has engaged in prohibited conduct and the imposition of a fine in respect of that conduct, are clearly of a criminal law nature for the purposes of the ECHR. The Commission notes that decisions of the kind in issue are expressly stated not to be ‘of a criminal law nature’ but accepts that, according to the case-law of the European Court of Human Rights, that is not a conclusive criterion; if they were to be considered of a criminal law nature for the purposes of that case-law, they would in any event fall outside the ‘hard core’ of criminal law identified by that Court. The issue is of importance because the European Court of Human Rights has required more stringent procedural guarantees and higher standards of review for criminal than for civil proceedings and, within the sphere of criminal law, for ‘hard core’ than for other proceedings.

63. In deciding whether proceedings concerning misconduct are to be categorised as ‘criminal’ or not, the European Court of Human Rights has regard to the three ‘Engel criteria’, so named after the judgment in which they were first formulated. ( ) First, there is the formal classification in the legal system concerned, but that is regarded explicitly as ‘no more than a starting point’. In Engel, as in subsequent judgments, the European Court of Human Rights accorded significantly more importance – to the extent of disregarding the national law classification – to its second and third criteria, namely, the nature of the offence and the degree of severity of the penalty that the person concerned risks incurring. It has in that regard considered it relevant whether the penalty is imposed under a general rule addressed to all citizens rather than to a group possessing special status and whether it is intended essentially as a punishment to deter re-offending rather than as pecuniary compensation for damage. ( )

64. In the light of those criteria, I have little difficulty in concluding that the procedure whereby a fine is imposed for breach of the prohibition on price-fixing and market-sharing agreements in Article 81(1) EC falls under the ‘criminal head’ of Article 6 ECHR as progressively defined by the European Court of Human Rights. ( ) The prohibition and the possibility of imposing a fine are enshrined in primary and secondary legislation of general application; the offence involves engaging in conduct which is generally regarded as underhand, to the detriment of the public at large, a feature which it shares with criminal offences in general and which entails a clear stigma; ( ) a fine of up to ( ) 10% of annual turnover is undoubtedly severe, and may even put an undertaking out of business; and the intention is explicitly to punish and deter, ( ) with no element of compensation for damage.

65. It is true that, as the Commission has pointed out, in Neste, ( ) the European Court of Human Rights considered certain aspects of Russian competition law enforcement to fall outside the criminal sphere. However, the factors which it took into account there seem to me largely different from those of the situation with which we are concerned here. It stressed that the relevant anti-monopoly rules applied only to relations which influenced competition in commodity markets and were thus restricted in application; that they were aimed at protecting and restoring competition; and that the measures which could be imposed were not ‘sanctions as such’ but injunctions, together with confiscation of unlawful profit intended to provide pecuniary compensation for damage rather than punishment intended to deter re-offending.

66. Admittedly, in that decision the European Court of Human Rights also stressed that certain types of monopolistic behaviour may be authorised if proven to serve the common good (a possibility which is available under Article 85(3) EC, at least in theory, even for prohibited price-fixing and market-sharing agreements), whereas genuinely criminal behaviour is not usually subject to such utilitarian justification; and that freedom of market competition is a relative, situational value, encroachments on which are not inherently wrong in themselves. As regards the first of those considerations, however, I would point out – with all due respect to the European Court of Human Rights – that it is not difficult to find undeniably criminal conduct which can none the less be authorised in appropriate circumstances. The possession of firearms may be a criminal offence in general but authorised in certain situations for public protection; the sale of certain drugs may be a criminal offence in general but authorised for established medicinal purposes; and so on. And, as regards the second consideration, price-fixing and market-sharing have repercussions for the consumer, and thus for the general public, which go well beyond ‘encroachment on freedom of competition’ affecting the business community.

67. If the fining procedure in the present case thus falls within the criminal sphere for the purposes of the ECHR (and the Charter), I would none the less agree that, in the words of the judgment in Jussila, ( ) it ‘differ[s] from the hard core of criminal law; consequently, the criminal-head guarantees will not necessarily apply with their full stringency’. That implies, in particular, that it may be compatible with Article 6(1) ECHR for criminal penalties to be imposed, in the first instance, not by an ‘independent and impartial tribunal established by law’ but by an administrative or non-judicial body which does not itself comply with the requirements of that provision, provided that the decision of that body is subject to subsequent control by a judicial body that has full jurisdiction and does comply with those requirements. ( ) Put another way, it must be clear that the available forms of appeal make it possible to remedy any deficiencies in the proceedings at first instance. ( )

68. A good deal of criticism has been levelled at the Commission’s triple role of investigator, prosecutor and decision-maker in competition law enforcement procedures, and KME has cited some of that criticism in its appeal. ( ) However, while there may be cogent grounds for taking the view that the Commission is not, in that regard, an ‘independent and impartial tribunal established by law’, it seems to me that such considerations are, in reality, extraneous to the present appeal. KME’s argument is not in fact based on the inadequacy of the procedure before the Commission, but on what it considers to be the inadequacy of the General Court’s review of the outcome of that procedure. The fact that the Commission is an administrative body, and may not be able to separate entirely its three functions in the procedure, ( ) is a given in the context of this appeal. The issue is whether the General Court exercised ‘full jurisdiction’ within the meaning of the case-law of the European Court of Human Rights. ( )

69. That Court has described ‘full jurisdiction’ in that sense as including ‘the power to quash in all respects, on questions of fact and law, the decision of the body below’. A judicial body charged with review ‘must in particular have jurisdiction to examine all questions of fact and law relevant to the dispute before it.’ ( ) The same Court has also held that, in order to determine whether a second-tier tribunal has ‘full jurisdiction’, or provides ‘sufficiency of review’ to remedy a lack of independence at first instance, it is necessary to have regard to such factors as ‘the subject-matter of the decision appealed against, the manner in which that decision was arrived at and the content of the dispute, including the desired and actual grounds of appeal’. ( )

70. It seems to me that there can be little doubt that the ‘unlimited jurisdiction’ conferred upon the General Court by Article 229 EC and Article 17 of Regulation No 17 meets those requirements as regards appeals against the amount of the fine imposed, even if it is, as the Commission submits, a different concept from the ‘full jurisdiction’ criterion of the European Court of Human Rights, which must be taken to cover also appeals against, for example, the actual finding of an infringement (which the General Court can and does also consider – albeit in a restricted way – if that is the basis of the case before it). Here, however, we are concerned solely with an appeal against the amount of a fine, and I do not propose to extend my analysis any further. In that context, unlimited jurisdiction to cancel, reduce or increase the amount, with no restriction as to the type of grounds (of fact or law) on which it can be exercised, must necessarily, in my view, provide the guarantee required by Article 6 ECHR – at least in theory.

71. The question may none the less arise whether, in any particular case, the General Court has in fact adequately exercised that jurisdiction, and it is just such a question which KME raises here.

72. It is a legitimate question, but its consideration must, in my view, be subject to a number of caveats, both general and particular, and the way in which it has been raised must be scrutinised in the light of certain of the Commission’s criticisms.

73. First, I consider that what is of greatest importance is the way in which the General Court actually carried out its review, the way in which it described that review being less relevant. Thus, it cannot necessarily be concluded from references to the degree of discretion, choice or latitude available to the Commission that the General Court failed in its duty to assess, in response to KME’s arguments, the way in which the fine was set. Nor, conversely, can it be concluded from the use of the words ‘in the exercise of its unlimited jurisdiction’ that that Court did indeed adequately exercise its powers of assessment. Each instance must be examined on the basis of its actual content.

74. A point which follows from that is that, whatever the extent of its jurisdiction, proceedings before the General Court are adversarial in nature. Nothing in Article 6 ECHR or the case-law of the European Court of Human Rights requires the ‘independent and impartial tribunal’ to investigate, of its own motion, matters which are not raised before it. Of course, this Court’s own case-law requires certain matters of public policy (essentially concerned with procedural guarantees) to be raised in that way but, in other regards, the General Court’s exercise of its unlimited jurisdiction must be measured against the content of the arguments on which it was asked to adjudicate.

75. None the less, I note that the General Court did request the Commission to produce a number of documents in its administrative file, and that the Commission produced well over 500 pages in response. That at least suggests a thoroughness of review sufficient to satisfy the requirements of the ECHR and the Charter. However, it remains to be verified, from the judgment itself, whether that review was of the requisite kind. In other words, was it confined to verifying that the Commission had not exceeded the bounds of its discretion, or was there also consideration (when called for by KME) of the assessment made within those bounds?

76. I turn now to two specific criticisms made by the Commission of the arguments advanced by KME.

77. A formal point which the Commission raised only at the hearing is that KME’s application at first instance was explicitly stated to be pursuant to Article 230 EC, and not Article 229 EC. Consequently, the suggestion appeared to be, KME was not even asking the General Court to exercise its unlimited jurisdiction and was therefore not in a position to criticise its alleged failure to do so.

78. As such, that would not seem to me to be a serious suggestion. The reference to Article 230 EC is only in the heading to the application. The mere fact that KME sought a reduction in its fine is enough to make it clear that it was on the General Court’s unlimited jurisdiction with regard to penalties that it relied, rather than on a review of legality alone. Such a review, if favourable to the applicant, could have led only to annulment of the fine, leaving the Commission to impose a new fine in accordance with the grounds of the judgment. The application, however, insists throughout on a reduction of the fine, which the General Court could decide upon only on the basis of Article 229 EC and Article 17 of Regulation No 17.

79. On the other hand, it must be borne in mind that KME did not ask that Court specifically to reassess the fine a novo, but rather to adjust the amount in the light of alleged defects in the decision at issue.

80. The Commission’s second criticism appears more serious. It points out, essentially, that, however well KME may have put the general case for an assiduous exercise by the General Court of its unlimited jurisdiction in cases such as the present, it has failed to identify a specific standard of review which should have been observed, or the passages of the judgment under appeal in which that standard was not observed.

81. Here, I agree with the Commission. KME’s fifth ground of appeal is presented much more as a general critique of the whole EU competition law enforcement system and the role of the General Court within that system than as an identification of specific failures, in the judgment under appeal, on the part of that Court. It is, however, settled case-law that an appeal must indicate precisely the contested elements of the judgment under appeal and the legal arguments specifically advanced. ( )

82. Normally, a finding of such a defect in a ground of appeal would lead to its simply being dismissed as inadmissible. It seems to me, however, that such an approach might not be wholly appropriate in the present case. It is true that, as a self-standing submission, KME’s fifth ground of appeal does not provide the Court with sufficiently precise indications to decide whether and to what extent the General Court may have specifically failed to perform an adequate review. None the less, it is an argument which can provide a further yardstick by which to assess the remaining grounds of appeal – as the Commission has, in fact, treated it in its response, examining it in the context of the second, third and fourth grounds of appeal.

83. I propose, therefore, to disregard the fifth ground of appeal as a separate submission but to bear the arguments put forward in mind when examining the first four grounds of appeal. In doing so, I shall none the less limit myself – as I have indicated above – to the ways in which the General Court in fact examined the pleas in law raised before it, the language it used in describing that examination being only one indication in that regard.

First ground of appeal: actual impact on the market

Relevant passages of the judgment under appeal

84. In its assessment of KME’s first plea in law (failure to take proper account of the actual impact of the cartel on the market), the General Court first admitted as evidence three econometric studies submitted by KME, then made the following findings:

‘60 … the applicants challenge both the Commission’s assessment of the seriousness of the infringement (see paragraphs 12 and 13 above) and the differentiated treatment which it carried out on the basis of the market shares of the undertakings concerned (see paragraph 16 above).

61 Concerning, first, the differentiated treatment of the undertakings in question, the reasoning provided by the Commission in the contested decision on that subject refers in particular to a concern to take account of the “specific weight and therefore the real impact of the offending conduct of each undertaking on competition” (recital 322 of the contested decision). It should, however, be emphasised that, even without proof of actual impact of the infringement on the market, the Commission is entitled to carry out differentiated treatment, by reference to the shares held in the market concerned, such as that set out in recitals 326 to 329 of the contested decision.

62 The case-law shows that the market share of each of the undertakings concerned in the market which formed the subject-matter of a restrictive practice constitutes an objective factor which gives a fair measure of the responsibility of each of them as regards the potential harmfulness of that practice for the normal operation of competition (see, to that effect, Joined Cases T‑236/01, T‑239/01, T‑244/01 to T‑246/01, T‑251/01 and T‑252/01 Tokai Carbon and Others v Commission [2004] ECR II‑1181, paragraph 197).

63 Similarly, concerning the assessment of the seriousness of the infringement, it should also be noted that, even if the Commission had not proved that the cartel had had an actual effect on the market, that would have been irrelevant to the classification of the infringement as “very serious” and thus to the amount of the fine.

64 In that regard, it should be noted that the Community system of penalties for infringement of the competition rules, as established by Regulation No 17 and interpreted by the case-law, shows that, by reason of their very nature, cartels merit the severest fines. Their possible concrete impact on the market, particularly the question to what extent the restriction of competition resulted in a market price higher than would have obtained without the cartel, is not a decisive factor for determining the level of fines (see, to that effect, Joined Cases 100/80 to 103/80 Musique diffusion française and Others v Commission [1983] ECR 1825, paragraphs 120 and 129; Case C‑219/95 P Ferriere Nord v Commission [1997] ECR I‑4411, paragraph 33; Case C‑286/98 P Stora Kopparbergs Bergslags v Commission [2000] ECR I‑9925, paragraphs 68 to 77; Case C‑407/04 P Dalmine v Commission [2007] ECR I‑829, paragraphs 129 and 130; Tokai Carbon, cited in paragraph 62 above, at paragraph 225; Opinion of Advocate General Mischo in Case C‑283/98 P Mo och Domsjö v Commission [2000] ECR I‑9855, I‑9858, points 95 to 101).

65 Moreover, it follows from the Guidelines that agreements or concerted practices involving in particular, as in the present case, price-fixing and customer-sharing may be classified as “very serious” on the basis of their nature alone, without it being necessary for such conduct to have a particular impact or cover a particular geographic area. That conclusion is supported by the fact that, whilst 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 impact or that there be effects in a particular geographic area (Case T‑38/02 Groupe Danone v Commission [2005] ECR II‑4407, paragraph 150).

66 In any event, and for the sake of completeness, the Court considers that the Commission has demonstrated to a sufficient legal standard that the cartel did have an actual impact on the market concerned.

67 In that context, it should be emphasised that the applicants’ premiss, to the effect that, if the Commission relied on concrete impact of the cartel in determining the amount of the fine, it was under a duty scientifically to demonstrate the existence of a tangible economic effect on the market and a link of cause and effect between the impact and the infringement, has been rejected by the case-law.

68 The Court of First Instance has held on numerous occasions that actual impact of a cartel on the market must be regarded as sufficiently demonstrated if the Commission is able to provide specific and credible evidence indicating with reasonable probability that the cartel had an impact on the market (see, in particular, Scandinavian Airlines System, cited in paragraph 36 above, at paragraph 122; Case T‑59/02 Archer Daniels Midland v Commission [2006] ECR II‑3627, paragraphs 159 to 161; Case T‑43/02 Jungbunzlauer v Commission [2006] ECR II‑3435, paragraphs 153 to 155; Case T‑329/01 Archer Daniels Midland v Commission [2006] ECR II‑3255, paragraphs 176 to 178; Case T‑322/01 Roquette Frères v Commission [2006] ECR II‑3137, paragraphs 73 to 75).

69 It should be noted in that regard that the applicants have not challenged the accuracy of the facts, set out in paragraph 13 above, on which the Commission relied in concluding that the cartel had an actual impact on the market, namely the fact that prices fell during periods when the collusive agreement was not strictly complied with and rose strongly in other periods, the implementation of a system for exchanging information concerning sales volumes and price levels, the major share of the market held by the cartel participants as a whole, and the fact that the respective market shares of the cartel participants remained relatively stable throughout the duration of the infringement. The applicants have merely argued that those facts were not capable of demonstrating that the infringement in question had an actual effect on the market.

70 On that point, however, the case-law shows that it is legitimate for the Commission to deduce, on the basis of the indicators referred to in the previous paragraph, that the infringement had an actual effect on the market (see, to that effect, Jungbunzlauer, paragraph 159; Roquette Frères, paragraph 78; T‑59/02 Archer Daniels Midland, paragraph 165; T‑329/01 Archer Daniels Midland, paragraph 181; and Joined Cases T‑259/02 to T‑264/02 and T‑271/02 Raiffeisen Zentralbank Österreich and Others v Commission [2006] ECR II‑5169, paragraphs 285 to 287).

71 As for the applicants’ argument that the file contains examples of non-compliance with the collusive agreements, the fact that cartel members did not always comply with the agreements is not sufficient to exclude their having had a market impact (see, to that effect, Groupe Danone, cited in paragraph 65 above, at paragraph 148).

72 Nor can this Court accept the arguments which the applicants make based on their own conduct. The actual conduct which an undertaking claims to have adopted is irrelevant for the purposes of evaluating a cartel’s effect on the market; account must be taken only of effects resulting from the infringement taken as a whole (Case T‑224/00 Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission [2003] ECR II‑2597, paragraph 167). Nor can the Commission be blamed for finding, in recital 303 of the contested decision, that the initial report was not sufficient to refute the Commission’s conclusions concerning the actual effects of the cartel on the market. The econometric analysis contained therein deals only with detailed figures relating to the applicants.

73 Therefore, having regard to the above considerations as a whole, this plea must be dismissed as unfounded.

74 The Court further considers, in the context of its unlimited jurisdiction and in the light of the above considerations, that there is no cause to call into question the assessment of the starting amount of the fine determined by reference to seriousness, as carried out by the Commission.’

Summary of the submissions

KME’s appeal

85. KME contests the General Court’s conclusion that the Commission had demonstrated to the required legal standard that the cartel had an impact on the market and could take such impact into account in determining the starting amount of the fine. The Guidelines required the Commission to take account of three elements, including the ‘actual impact on the market, where this can be measured’. Consequently, it could take account of such actual impact only if, and in so far as, it could establish and quantify that impact. It should not have been allowed to have recourse – behind the shield of ‘reasonable probability’ established in Roquette Frères ( ) – to assumptions enabling it to take market impact into account even where it could not establish the existence or extent of such impact in accordance with the Guidelines. Allowing recourse to such assumptions negates any possibility of differentiating between infringements on the basis of market impact. The case-law referred to at paragraphs 68 and 70 of the judgment under appeal is plainly wrong.

86. Moreover, if one cartel participant provides econometric evidence that the cartel as a whole did not have any impact on market prices, and the other participants make similar claims, the Commission should not be entitled to disregard that evidence to find that the infringement had such an impact – and to take that factor into account when setting the starting amount of a fine under the Guidelines – on the sole basis of indirect evidence such as that discussed at paragraph 69 of the judgment under appeal. In such a scenario the Commission should put forward direct evidence that the cartel did have a market impact.

87. The econometric evidence submitted by KME was based on comprehensive data drawn from all of its available invoice and customer information for over a decade, showing that (i) the cartel had no statistically significant impact on prices charged by KME and (ii) that analysis held good for the cartel as a whole. The lack of impact was confirmed by evidence in the case-file of non-compliance by the various participants. Finally, the lack of any harm for end users was confirmed by the fact that the tubes in question represented only around 2% of the retail price of the final products in which they were incorporated.

88. As a matter of law, the Commission should have produced direct counter-evidence, based on objective economic factors pertaining to the relevant market and economic context, substantiating the existence and extent of the assumed market impact; it was not entitled to find that the cartel had a market impact on the sole basis of the indirect evidence relied upon in the decision at issue.

89. The judgment under appeal is also vitiated by an illogical and inadequate statement of reasons. The General Court, assessing the merits of KME’s claim that the econometric evidence it provided demonstrated the absence of any market impact, (i) referred only to the initial report, according to which the cartel had no impact on KME’s prices, thus (ii) failed to take account of the two subsequent reports, concluding that the cartel as a whole had no market impact; and (iii) ultimately rejected KME’s claim on the ground that the econometric evidence did not show that the cartel as a whole had no market impact. In other words, the General Court, while admitting evidence showing a lack of market impact, rejected KME’s claim on the ground that it did not provide any such evidence – thus manifestly distorting the facts and evidence put before it.

90. Thus, by failing to recognise the errors in law committed by the Commission, the General Court violated EU law. KME therefore submits that the Court of Justice should redetermine the starting amount of the fine by excluding the market impact factor from the calculation.

Commission’s response

91. The Commission contends, first, that the ground of appeal, being directed against inessential complementary reasoning, is inoperative.

92. The finding that the Commission had demonstrated to a sufficient legal standard that the cartel had an actual impact on the market was explicitly made purely for the sake of completeness. It is settled case-law that a judgment cannot be set aside on the basis of a challenge directed solely against such findings. The General Court held that each of the two elements of the decision at issue for which KME claimed the actual impact on the market was relevant were justified whether such impact could be established or not. It held, with respect to the differentiated treatment of the participating undertakings, that, even without proof of actual impact on the market, the Commission was entitled to differentiate by reference to market shares; and, with respect to the seriousness of the infringement, that, even if the Commission had not proved an actual effect on the market, that would have been irrelevant to the classification of the infringement as ‘very serious’ and thus to the amount of the fine. KME does not even mention either of those key findings of principle, which thus fall outside the scope of the appeal. Its criticisms of the additional finding, made for the sake of completeness, cannot result in the judgment under appeal being set aside.

93. Secondly, the Commission submits that the ground of appeal is inadmissible as contesting factual assessments.

94. KME merely argues that the General Court (i) wrongly found that the Commission was entitled to deduce an actual market impact from the evidence listed at paragraph 69 of its judgment; (ii) should have given greater weight at paragraph 71 to evidence which KME views as suggesting a lack of impact and non-compliance by cartel members; (iii) should have given greater weight at paragraph 72 to the econometric studies which KME views as suggesting no statistically significant impact; and (iv) should have required ‘direct evidence’ of the existence and extent of any impact.

95. However, the Court of Justice has no jurisdiction to establish the facts or, in principle, to examine the evidence accepted by the General Court. It is for the latter alone to assess the value of the evidence, provided that it has been properly obtained and the relevant rules and principles have been observed. Unless the clear sense of the evidence has been distorted, that appraisal is not subject to review by the Court of Justice.

96. The evidence of actual impact relied on in the decision at issue, and the conclusions drawn from it, were debated in detail before the General Court, which summarised the evidence at paragraph 69 of its judgment, concluding at paragraph 70 that the Commission was entitled to deduce that the cartel had had an actual impact, and going on at paragraphs 71 and 72 to reject KME’s arguments that other elements undermined that finding.

97. In addition, besides the fact that KME’s arguments were based only on its own conduct, the econometric studies it produced were fundamentally undermined by a number of issues that were fully debated before the General Court. The General Court did not need to rule on those issues because it rejected KME’s arguments in any event, but the Commission summarises them as follows.

98. The studies sought to draw conclusions about the impact of the cartel by comparing admittedly cartelised prices with prices in ‘competitive’ periods and/or countries. However, that included many areas for which there was direct evidence of cartel conduct. One price agreement involved specific increases for named countries and 8% for ‘any other not mentioned’, suggesting that all KME’s sales were cartelised and there were no ‘competitive countries’ available for comparison.

99. In any event, examination of the statistical calculations indicated that the claimed results were also consistent with the cartel having increased prices. KME’s model could not exclude an average increase of 10.5% per year and showed that KME Germany’s prices increased by an average of 29.9% per year throughout the cartel. In other respects, the studies produced unusual results which KME could not explain.

100. Thus the General Court properly examined the evidence relied on in the decision at issue to establish an actual impact, and all of KME’s arguments challenging that conclusion. On the basis of specific, credible and adequate evidence, going substantially beyond the fact that price agreements were implemented, the General Court concluded that an actual impact had been established.

101. Thirdly, the Commission submits that the General Court’s findings were adequately reasoned.

102. KME’s argument – that the General Court’s reasoning was illogical and inadequate in finding that KME’s econometric evidence did not show that the infringement as a whole had no market impact, referring to the initial report which related only to KME’s prices but not mentioning the two additional reports which concerned the cartel as a whole – is based on a misreading of paragraph 72 of the judgment.

103. Before the General Court, KME argued that the studies carried out on its own prices proved that the cartel had no actual market impact. However, both the initial study (considered by the Commission in the decision at issue) and the two additional studies (presented before the General Court) related to KME’s sales alone. At paragraph 72 of its judgment, the General Court rejected KME’s argument in its sovereign appraisal of the facts and evidence, insisting that the conduct of a single undertaking was not relevant to assessing the impact of the cartel as a whole. There is no inconsistency in that logic.

104. The importance of examining the effect of the cartel as a whole is clear in the present case. At first instance, the Commission stressed that the cartel included customer allocation and a system under which, before customer visits, participants had to contact the market leader in each country to ask what quantity could be sold at what price. Data on KME’s prices thus cannot justify conclusions about those of other cartel members – for example, where KME did not try to sell to customers because of the allocation arrangement. KME suggested that it cheated on the arrangements, but for its econometric studies to be informative in that respect, it would have had to prove cheating in relation to every customer allocated to another participant. KME did not even attempt to do so before either the Commission or the General Court.

105. The final sentence of paragraph 72 of the judgment under appeal refers only to the initial report because KME argued that the decision at issue was wrong to reject the relevance of that report. The additional reports did not exist at the time of the decision at issue, and could not have been taken into account. The General Court clearly examined all three econometric studies to reach its findings on KME’s arguments based on analysis of its prices. Those arguments were rejected for a reason common to all three studies – that they related to KME’s prices alone.

Assessment

106. The first issue is whether the General Court’s acceptance both of the Commission’s assessment of the infringement as ‘very serious’ and of its consequent fixing of the starting amount of the fine can be justified by the nature of the infringement (a price-fixing and market-sharing cartel) alone, regardless of proof of actual market impact.

107. In the decision at issue, the Commission fixed the starting amount on the basis of its findings (a) that the infringement was ‘very serious’ because of (i) its nature, (ii) its impact on the market and (iii) the geographical size of that market and (b) that KME’s market share was approximately three times greater than that of Outokumpu or of Wieland. It determined an overall starting amount of EUR 58.1 million – EUR 35 million for KME and EUR 11.55 million for each of the others.

108. KME argued at first instance that, both in assessing the seriousness of the infringement and in allocating the starting amount of the fine among the cartel participants, the Commission had failed to take actual market impact into account; it had reasoned simply that the existence of a market impact was established but could not be quantified and that the starting amount could validly be allocated on the basis of market share. KME contended, essentially, that the Commission was legally required to take actual market impact into account when it could be measured, that in this case it could be measured and that the econometric study submitted by KME showed that it was statistically insignificant; the overall starting amount should therefore have been set towards the lower end of the appropriate scale (beginning at EUR 20 million for ‘very serious’ infringements).

109. The General Court took the view, at paragraph 63 of its judgment, that, ‘even if the Commission had not proved that the cartel had had an actual effect on the market, that would have been irrelevant to the classification of the infringement as “very serious” and thus to the amount of the fine’, with additional reasoning to similar effect in paragraphs 64 and 65.

110. Before this Court, KME’s arguments are directed principally at the subsequent findings in paragraphs 66 to 72 of the judgment under appeal, in which the General Court found, ‘[i]n any event, and for the sake of completeness,’ that the Commission had sufficiently demonstrated the cartel’s actual impact on the market.

111. The Commission submits, therefore, that the ground of appeal is inoperative because KME has not challenged the key finding in paragraph 63; even if its arguments concerning actual market impact were upheld, the finding on the ‘very serious’ nature of the cartel would stand and the judgment could not be set aside in so far as it dismissed the first plea in law.

112. I can find no fault with that reasoning, but I do not think that the premiss, that KME has not challenged the key finding in paragraph 63, can necessarily be accepted.

113. It is certainly true that KME has not challenged the finding that the Commission was entitled to consider the infringement to be ‘very serious’ on the basis of its nature alone. Indeed, it points out (albeit in a footnote) that it had not taken issue with that point at first instance; it had argued rather that, in the light of the limited actual market impact of the cartel, the starting amount of the fine should have been set, overall, at the lower end of the scale for ‘very serious’ infringements – namely, according to the Guidelines, EUR 20 million – rather than at EUR 58.1 million. Viewed in that context, it seems to me, KME’s first ground of appeal must be seen as necessarily (though not, admittedly, as explicitly as would have been desirable) calling into question the General Court’s finding that, because the actual market impact was irrelevant for classifying the infringement as ‘very serious’, it was also irrelevant for determining the starting amount of the fine.

114. I agree, however, that if the findings in paragraphs 63 to 65 of the judgment under appeal are upheld, a challenge to the further findings in paragraphs 66 to 72, even if successful, would be to no avail. It is clear from the introductory words to paragraph 66 ( ) that what followed was over and above what the General Court considered to be sufficient reasoning. Moreover, it is a matter of logic that if, ‘by reason of their very nature, cartels merit the severest fines’, regardless of their actual effect on market prices, and if the Commission relied on the existence rather than the precise degree of that effect when fixing the starting amount of the fine, then that amount cannot be called in question by seeking to prove that the effect was limited.

115. The Commission also argues that this ground of appeal is inadmissible because it challenges only assessments of fact by the General Court.

116. Here again, I am not entirely convinced. Several aspects of KME’s argument do appear to be concerned with assessments of fact – in particular those set out in paragraphs 18 to 20 and 22 of the appeal, and points 87 and 89 above – but others are legal arguments directed at alleged inadequacies in the judgment under appeal (although, again, they could have been more adequately formulated). Essentially, KME argues that, faced with disagreement over the conclusions to be drawn from the available evidence, the General Court should not simply have allowed the Commission to rely on presumptions derived from ‘evidence indicating with reasonable probability that the cartel had an impact on the market’ but should have required it at least to satisfactorily rebut KME’s counter-evidence. That argument must be seen, as I have explained at point 113 above, in the context of a challenge to the General Court’s finding, not that the actual market impact was irrelevant for classifying the infringement as ‘very serious’, but that it was also irrelevant for determining the starting amount of the fine.

117. I would not, therefore, dismiss the first ground of appeal as inoperative, or as inadmissible in that it challenges only findings of fact.

118. On the other hand, in so far as it does raise issues of law, I do not propose that it should be upheld. The General Court’s statement at paragraph 64 of its judgment, that the possible concrete impact of a cartel on the market is not a decisive factor for determining the level of fines, is amply supported by the case-law which it cites. ( ) Such impact is merely one of numerous factors – not confined to the three enumerated in the Guidelines – which must be taken into account. To the extent that the Commission did, in the decision at issue, establish that there was some impact (a point which is not denied by KME), it could use that finding as one of the factors on which to base the calculation of the starting amount of the fine. And in so far as, in doing so, the Commission did not presume the degree of impact to be at any specific level – on the contrary, it proceeded on the explicit basis that the impact could not be quantified precisely ( ) – it cannot be criticised for not having accurately identified that level, nor can the General Court be criticised for having accepted the Commission’s approach.

119. I should like to add that, if undertakings choose to submit econometric studies to support their arguments, the Commission is of course required to have due regard to that evidence in its overall assessment. If, however, it does not accept the evidence in its entirety, it is not required to produce an econometric counter-study to prove the opposite.

120. It remains to be considered, as I indicated at point 83 above, whether the General Court’s scrutiny of the plea in law may have failed to meet the standard required by the ECHR and the Charter.

121. In that regard, I note that KME does not appear to allege any such failure. None of the passages cited in the context of its fifth ground of appeal is taken from the relevant part of the General Court’s judgment. Nor, indeed, does that part of the judgment use the type of wording to which KME particularly objects, namely a reference to the Commission’s discretion.

122. It seems to me, moreover, that the General Court dealt with the first plea in law in accordance with the manner in which it was raised by KME.

123. KME’s argument was based essentially on the contention that the Commission was bound, by the terms of its own Guidelines, either to measure the cartel’s actual impact on the market and rely on that measurement or to refrain from relying on market impact at all. The General Court dealt with that argument, and also – although it considered it superfluous to do so – examined both the evidence available to the Commission and the subsequent econometric reports submitted by KME, concluding that the Commission’s reference to and use of market impact when fixing the starting amount of the fine could not be criticised. Thus, even if other matters could have been raised – concerning, for example, the possible need to explain why the overall starting amount was EUR 58.1 million, rather than EUR 20 million or EUR 100 million – they were not, and the General Court addressed the matters which were raised in a manner which in no way suggests that it was not exercising its full jurisdiction as required by the ECHR.

Second ground of appeal: size of the market

Relevant passages of the judgment under appeal

124. In the decision at issue, the Commission had calculated the size of the relevant market by including the cost of the copper used in manufacturing the tubes. KME argued at first instance that such a calculation ignored the reality of the market. In fact, the purchasers of the tubes themselves determine the price of the copper to be used and that price, accounting for about two thirds of the final price of the tubes, is merely passed on to them. The real economic weight of the market was confined to the processing margin, about one third of the value of EUR 288 million used in the decision at issue.

125. At paragraphs 86 to 89 of its judgment, the General Court noted that the Commission was entitled, but not required, to refer to the size of the market when determining the gravity of the infringement for the purpose of fixing the starting amount of the fine; that in this case it had done so, albeit as only one of the factors taken into account; and that it was therefore necessary to consider whether the Commission was wrong to take account of the copper price in that regard. The General Court’s conclusion is in paragraphs 91 to 94:

‘91 … there is no valid reason to require that the turnover of a relevant market be calculated excluding certain production costs. As the Commission has rightly pointed out, there are in all industries costs inherent in the final product which the manufacturer cannot control but which nevertheless constitute an essential element of its business as a whole and which, therefore, cannot be excluded from its turnover when fixing the starting amount of the fine (see, to that effect, Joined Cases T‑25/95, T‑26/95, T‑30/95 to T‑32/95, T‑34/95 to T‑39/95, T‑42/95 to T‑46/95, T‑48/95, T‑50/95 to T‑65/95, T‑68/95 to T‑71/95, T‑87/95, T‑88/95, T‑103/95 and T‑104/95 Cimenteries CBR and Others v Commission [2000] ECR II‑491, paragraphs 5030 and 5031). The fact that the price of copper constitutes an important part of the final price of industrial tubes or that the risk of fluctuations of copper prices is far higher than for other raw materials does not invalidate that conclusion.

92 … regarding the applicants’ various claims seeking to argue that, instead of using the criterion of the turnover of the relevant market, it would be more appropriate, having regard to the deterrent purpose of fines and the principle of equal treatment, to fix their amount by reference to the profitability of the sector affected or the added value relating thereto, the Court finds that they are irrelevant. First, the seriousness of the infringement is determined by reference to several factors, in respect of which the Commission has a discretion (Joined Cases T‑101/05 and T‑111/05 BASF v Commission [2007] ECR II‑4949, paragraph 65), no binding or exhaustive list of criteria having to be taken into account in that regard having been drawn up (Dalmine, cited in paragraph 64 above, at paragraph 129), it is not for the Community Court but for the Commission to choose, within the framework of its discretion and in accordance with the limits which follow from the equal treatment principle and Regulation No 17, the factors and the detailed figures which it will take into account in order to implement a policy which ensures compliance with the prohibitions laid down by Article 81 EC.

93 It is undeniable that, as a factor for assessing the seriousness of the infringement, the turnover of an undertaking [or] of a market is necessarily vague and imperfect. It does not make a distinction either between sectors with a high added value and those with a low added value, or between undertakings which are profitable and those which are less so. However, despite its approximate nature, turnover is currently considered, by the Community legislature, the Commission and the Court, as an adequate criterion, in the context of competition law, for assessing the size and economic power of the undertakings concerned (see, in particular, Musique diffusion française, cited in paragraph 64 above, at paragraph 121; Article 15(2) of Regulation No 17; recital 10 and Articles 14 and 15 of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ 2004 L 24, p. 1)).

94 Having regard to all of the above, the Court finds that the Commission was right to take the copper price into account for the purposes of determining the size of the market concerned.’

Summary of the submissions

KME’s appeal

126. KME considers that its account of the characteristics of the relevant market, not having been contested in the judgment under appeal, must be regarded as established facts for the purposes of the appeal. It submits however that the General Court erred in law and gave an inadequate statement of reasons by not acknowledging that the Commission is entitled to interpret ‘turnover’ as net turnover when calculating market value.

127. First, the case-law and the Commission’s practice show that, in calculating the starting amount of a fine, the Commission must take account of the specific features of the market or undertaking concerned. The Courts have held that it may depart from its general practice of basing its calculation on turnover during the last full year of the infringement, if that year is not representative of the undertaking’s true size and economic power and of the scale of the infringement. With respect to the calculation of the maximum fine, the Court of Justice has held that, in each specific case, and having regard both to the context and to the objectives of the scheme of fines, the Commission must assess the intended impact on the undertaking in question, taking account in particular of a turnover which reflects the undertaking’s real economic situation during the infringement. In recent practice, the Commission has often relied on the possibility in the Guidelines of departing from the rule of using sales during the last full business year of participation in the infringement where such departure is warranted by the specific facts of the case or other external factors. And the General Court has held that the Commission may base its assessment of effective economic capacity to cause significant damage on data relating to turnover and market share, unless particular circumstances, such as the characteristics of the market, appreciably diminish the significance of such data and require other factors to be taken into account.

128. Secondly, the fact that the copper price depends solely on the customer’s decision to buy on a certain day makes the copper tube industry unique and unsuitable for comparison with other industries, just as copper cannot be compared with other inputs – such as energy, water and equipment – whose prices are contractually determined between the manufacturer and the relevant provider. Yet the General Court wrongly concluded that there was no valid reason to exclude copper price from the size of the market affected by a cartel for fine calculation purposes. In doing so, it also infringed the principles of non-discrimination – under which different situations must be treated differently – and proportionality. In the latter regard, KME’s fine represented approximately 2% of its total worldwide turnover in 2002, 40% of its EEA turnover in the industrial tube market on the basis of the full price including copper, 80% of its conversion turnover in that market, 42% of its consolidated gross operating profit in 2003 and 16% of its consolidated net worth in June 2003.

129. Thirdly, if the Commission had fined KME for a cartel in the same market, ceasing in 2007, and had calculated the market value on the basis of full turnover for that year, the starting amount of the fine would have been much higher simply because of the enormous increase in copper prices between 2003 and 2007.

130. Fourthly, the General Court wrongly relied upon its Cimenteries CBR judgment: ( ) in that case, the relevant input costs, such as costs for transport and the supply of bags, were under the cartel members’ control, whereas here the copper price was not under the tube manufacturers’ control. It further wrongly relied on the case-law according the Commission discretion in choosing the factors it uses to establish the gravity of an infringement including, as a general rule, turnover, since full-price turnover is not a meaningful indicator of the gravity of an infringement in the industrial tube market. The Commission’s discretion in choosing those factors cannot extend to relying on elements that, in the light of the special features of the economic context, have no bearing on the gravity of the infringement. In its judgment the General Court failed to scrutinise whether the criteria used by the Commission were pertinent and adequate.

Commission’s response

131. The Commission submits that KME’s assertions about how copper prices are determined and the way in which industrial tubes are sold are not established facts for the purpose of the appeal. The General Court did not need to rule on those details. Its findings do not support KME’s characterisation of the cartel members as purchasing agents of the metal and the Commission specifically argued at first instance that, for the reasons ultimately adopted in the judgment under appeal, KME’s assertions that it often acted as agent for its customers were irrelevant. As the Commission explained, wherever the customer actually bought the copper and asked KME to convert it, the metal price would not be included in KME’s turnover. In any event, the General Court’s findings on the size of the industrial tubes market are incompatible with the suggestion that industrial tube manufacturers simultaneously made sales on a competitive copper market and a cartelised conversion market; there is only one market – for industrial tubes.

132. The General Court rejected KME’s claim that the industrial tubes market is unique by reason of a lack of control over input prices, without needing to make findings on KME’s detailed allegations. It held at paragraph 91 of its judgment that there was no valid reason to require market turnover to exclude certain production costs, and found as a fact that all industries have costs inherent in the final product which the manufacturer cannot control but which are nevertheless an essential element of its business as a whole. Those costs cannot be excluded from turnover when fixing the starting amount of a fine. The fact that the price of copper forms an important part of the final price of industrial tubes or that the risk of fluctuation in copper prices is higher than for other raw materials does not invalidate that conclusion.

133. This ground of appeal merely asks the Court of Justice to make a different appraisal of whether the industrial tubes industry is unique. KME repeats its allegations at first instance about the contractual rights of customers in relation to the copper price, the size of the copper price relative to the overall price of the tube, and the volatility of copper prices. Not only is such an argument inadmissible, but nothing in fact distinguishes industrial tube manufacturers from other manufacturers buying raw materials, utilities or equipment. No non-dominant undertaking can control the price of input products. Any contracts are the result of the manufacturers’ own choice – with here the benefit of passing the risk of copper price fluctuations on to the customer.

134. At paragraph 93, the General Court recognised that, as a factor for assessing the seriousness of the infringement, the turnover of an undertaking on a market is necessarily vague and imperfect. It accepted that turnover does not distinguish between sectors with high or low added value or between undertakings which are more or less profitable. Its appraisal was none the less that turnover is an adequate criterion, in the context of competition law, for assessing the size and economic power of the undertakings concerned. KME’s arguments, by contrast, merely invite the Court of Justice to disagree with the General Court’s appraisal in this respect. That appraisal was balanced, after much debate in the written pleadings and at the hearing, and preferred the objectivity of turnover to the potential for endless controversy, subjectivity and unpredictability that would be implied by KME’s proposal for the