Keywords

Summary



Keywords

1. Acts of the institutions — Choice of legal basis — Action on several legal bases — Inadequacy of certain legal bases relied on — Not relevant where there are no adverse consequences for the addressee of the act

2. Competition — Maritime transport — Regulation No 4056/86 — Horizontal price-fixing agreements between the members of a liner conference and independent companies — Prohibition — Inapplicability of the block exemption in favour of such agreements entered into by the members of a liner conference — (Art. 81(1)(a) EC; Council Regulations No 1017/68, Art. 2(a), and No 4056/86, Art. 3)

3. Competition — Administrative procedure — Observance of the rights of the defence — Statement of objections — Necessary content — (Council Regulations No 17, Art. 19(1), No 1017/68, Art. 26(1), and No 4056/86, Art. 23(1))

4. Competition — Administrative procedure — Observance of the rights of the defence — Whether the parties involved have a right to express an opinion regarding the way in which their own arguments have been taken into account — No such right

5. Competition — Agreements, decisions and concerted practices — Adverse effect on competition — Agreement between shipping companies prohibiting the grant of discount on published rates for charges and surcharges — Anti-competitive object and appreciable effect — Intention to restrict competition and effective application of the agreement — Irrelevant — (Art. 81(1)(a) EC; Council Regulation No 1017/68, Art. 2(a))

6. Actions for annulment — Actionable measures — Definition — Measures affecting a particular legal situation — Action directed solely against the statement of reasons for a measure — Whether admissible — (Art. 230 EC)

7. Competition — Administrative procedure — Decision finding that there has been an infringement — Obligation to define the relevant market — Scope — (Art. 81 EC)

8. Competition — Agreements, decisions and concerted practices — Agreements between undertakings — Effect on trade between Member States — Criteria — Insignificant effect on market — Agreement not prohibited — (Art. 81(1) EC)

9. Competition — Transport — Agreements, decisions and concerted practices — Prohibition — Exemption — Cumulative conditions for grant — Effect on the obligation to define the relevant markets — (Art. 81(3) EC; Council Regulation No 1017/68, Art. 5)

10. Competition — Fines — Amount — Determination — Criteria defined in the Commission Guidelines — Applicability to infringements of the competition rules in the transport sector — (ECSC Treaty, Art. 65(5); Council Regulations No 17, Art. 15(2), No 1017/68, Art. 22(2), and No 4056/86, Art. 19(2))

11. Competition — Fines — Amount — Commission ' s discretion — Judicial review — Unlimited jurisdiction — Effect — (Art. 229 EC; Council Regulations No 17, Art. 17, No 1017/68, Art. 24, and No 4056/86, Art. 21)

12. Competition — Fines — Amount — Determination — Calculation method set out in the Commission ' s Guidelines — Commission decision to apply that method in a particular case — Consequences — Obligation to state reasons in respect of all infringements — (ECSC Treaty, Art. 65(5); Council Regulation No 17, Art. 15(2))

13. Competition — Fines — Amount — Determination — Criteria — Duration of the infringements — Agreement penalised because of its anti-competitive object regardless of its effects — Consideration of the duration of the agreement without regard to its non-application — (Council Regulations No 17, Art. 15(2), No 1017/68, Art. 22(2), and No 4056/86, Art. 19(2))

14. Competition — Fines — Amount — Determination — Criteria — Gravity of the infringements — Mitigating circumstances — Non-application of the agreement — Consideration of that mitigating circumstance when assessing the gravity of the infringement — Whether permissible — (ECSC Treaty, Art. 65(5); Council Regulations No 17, Art. 15(2), No 1017/68, Art. 22(2), and No 4056/86, Art. 19(2))

15. Competition — Fines — Amount — Determination — Criteria — Cooperation by the undertaking during the administrative procedure — Definition — (Council Regulation No 17, Art. 11(4) and (5))

16. Competition — Administrative procedure — Commission ' s obligations — Requirement to act within a reasonable time — (Council Regulations No 17, No 1017/68 and No 4056/86)

17. Competition — Administrative procedure — Limitation period for fines — Exclusive application of Regulation No 2988/74 — Inapplicability of factors connected to the requirement to act within a reasonable period — (Council Regulation No 2988/74, Art. 2(1) and (3))

18. Competition — Fines — Imposition — Condition that the undertaking derive a benefit from the infringement — No such condition — (ECSC Treaty, Art. 65(5); Council Regulation No 17, Art. 15(2))

19. Competition — Fines — Amount — Determination — Criteria — Financial situation of the undertaking concerned — May be taken into consideration — Whether obligatory — No such obligation — (Council Regulations No 17, Art. 15(2), No 1017/68, Art. 22(2), and No 4056/86, Art. 19(2))

20. Competition — Fines — Amount — Determination — Criteria — Gravity of the infringements — Mitigating circumstances — Whether Commission obliged to abide by its previous decision-making practice — No such obligation — (Council Regulation No 17, Art. 15)

21. Competition — Fines — Amount — Determination — Division of an overall amount between different groups of undertakings formed on the basis of the size of the activity of the undertakings committing the infringement in the sector concerned — Whether permissible — Conditions — (Council Regulations No 17, Art. 15(2), No 1017/68, Art. 22(2), and No 4056/86, Art. 19(2))

22. Competition — Fines — Amount — Determination — Criteria — Gravity of the infringement — Assessment on the basis of the total turnover of the undertaking — Whether permissible — Consideration of the individual role of each undertaking — (Council Regulations No 17, Art. 15(2), No 1017/68, Art. 22(2), and No 4056/86, Art. 19(2))

23. Competition — Fines — Amount — Determination — Criteria — Gravity of the infringement — Assessment in the light of the economic situation at the time when the infringement was committed — (Art. 81(1) EC; Council Regulations No 17, Art. 15(2), No 1017/68, Art. 22(2), and No 4056/86, Art. 19(2))

24. Competition — Administrative procedure — Limitation periods in proceedings — Interruption — Request for information — Condition — Need for the existence of a connection between the information requested and the infringement under investigation — (Council Regulations No 17, Art. 11(1), No 1017/68, Art. 19, No 2988/74, Arts. 1(1)(b) and 2(1)(a) and (3), and No 4056/86, Art. 16)

Summary

1. Where the Commission has based a decision finding there to be an infringement of the competition rules and imposing fines on its authors on several legal bases, if the undertakings concerned do not challenge one of the bases relied on, the error which may potentially constitute the action against one or other of those bases can only justify the annulment of that decision if the alleged error has had adverse consequences for those undertakings.

see para. 85

2. An agreement prohibiting discounts on the charges and surcharges agreed between the members of a liner conference and independent lines must be regarded as a horizontal price-fixing agreement. Horizontal price-fixing agreements, apart from being expressly prohibited by Article 81(1)(a) EC and Article 2(a) of Regulation No 1017/68 applying rules of competition to transport by rail, road and inland waterway, are clear infringements of Community competition law. The same is true in the case of Regulation No 4056/86 laying down detailed rules for the application of Articles [81 and 82 EC] to maritime transport, since such a price-fixing agreement was concluded between the members of a liner conference and independent lines, it restricts effective competition from non-conference shipping lines whereas, according to the eighth recital in the preamble to Regulation No 4056/86, the existence of effective competition from non-conference scheduled services is one of the main justifications for the block exemption provided for in Article 3 of that regulation.

see paras 100, 210

3. The statement of objections, which the Commission must issue when applying the competition rules, must be couched in terms which, even if succinct, are sufficiently clear to enable the parties concerned properly to identify the conduct complained of by the Commission. It is only on that basis that the statement of objections can fulfil its function under the Community regulations of giving undertakings and associations of undertakings all the information necessary to enable them properly to defend themselves, before the Commission adopts a final decision. That obligation is satisfied if the decision does not allege that the persons concerned have committed infringements other than those referred to in the complaints and only takes into consideration facts on which the persons concerned have had the opportunity of making known their views.

see para. 109

4. The taking into account of an argument put forward by an undertaking during the administrative procedure leading to the adoption of a decision concerning it with regard to competition, when the undertaking has not been given an opportunity to express an opinion in that respect before the adoption of the final decision, cannot as such constitute an infringement of defence rights.

see para. 113

5. An agreement between the members of a liner conference and independent lines concerning the transport of containerised cargo between northern Europe and the Far East which prohibits the undertakings concerned from granting their customers discounts on the published rates of charges and surcharges has as its object the restriction of competition by indirectly fixing prices within the meaning of Article 81(1)(a) EC or Article 2(a) of Regulation No 1017/68 applying rules of competition to transport by rail, road and inland waterway since, by means of that agreement, those undertakings mutually deprived themselves of the freedom to grant their customers discounts on the published tariffs.

The fact that that agreement does not prohibit the undertakings concerned from altering the tariff for the additionals or the freight rate does not mean that the restriction of competition in question is not appreciable where the parties to the agreement provide almost 90 % of the total trade on the routes in question and the member companies of the conference operate a uniform or common freight rate. It is common ground that the charges and surcharges in question may represent a significant part of the total cost of transport.

The fact that the object of the agreement to restrict competition and that the restriction was appreciable means that the Commission does not have to prove intention on the part of the parties to restrict competition or the anti-competitive effects of the agreement.

see paras 175, 177-179, 183

6. Regardless of the grounds on which an act adversely affecting a person ' s legal interests is based, only its operative part is capable of producing legal effects and, as a consequence, of adversely affecting such interests. The assessments in the recitals to the decision at issue are not in themselves capable of forming the subject of an application for annulment unless, as grounds of an act adversely affecting a person ' s interests, they constitute the essential basis for its operative part.

see para. 186

7. For the purposes of applying Article 81 EC, the reason for defining the relevant market, if at all, is to determine whether an agreement is liable to affect trade between Member States and has as its object or effect the prevention, restriction or distortion of competition within the common market. Consequently, there is an obligation on the Commission to define the relevant market in a decision applying Article 81 EC only where it is impossible, without such a definition, to determine whether the agreement, decision by an association of undertakings or concerted practice at issue is liable to affect trade between Member States and has as its object or effect the prevention, restriction or distortion of competition within the common market.

see para. 206

8. An agreement escapes the prohibition laid down in Article 81(1) EC if it restricts competition or affects trade between Member States only insignificantly.

see para. 207

9. The sole reason for defining the relevant market is to determine whether an agreement is liable to affect trade between Member States and has as its object or effect the prevention, restriction or distortion of competition within the common market.

By contrast, the precise definition of all the relevant markets is not necessarily indispensable in determining whether an agreement satisfies the four conditions for the grant of individual exemption laid down by Article 81(3) EC and Article 5 of Regulation No 1017/68 applying rules of competition to transport by rail, road and inland waterway. Whilst it is true that, in determining whether the fourth condition laid down by Article 81(3)(b) EC and Article 5(b) of that regulation is met, the Commission must examine whether the agreement in question is liable to eliminate competition in respect of either a substantial part of the products in question or the transport market concerned, depending on the applicable provisions, the four conditions for granting exemption are cumulative and therefore non-fulfilment of only one of those conditions suffices to make it necessary to refuse exemption.

Consequently, since the Commission established that the first three conditions for the grant of individual exemption are not satisfied and that it is not necessary to rule on the fourth condition, the Commission was under no obligation to define in advance all the relevant markets in order to determine whether the agreement in question qualifies for individual exemption. In order to determine whether the first three conditions are satisfied it is necessary to have regard to the benefits redounding from the agreement, not specifically on the relevant market, but for any market on which the agreement in question might have beneficial effects. Thus, both Article 81(3) EC and Article 5 of Regulation No 1017/68 envisage the possibility of exemption for, amongst others, agreements which contribute to promoting technical or economic progress, without requiring a specific link with the relevant market.

see paras 225-227

10. Although the Information from the Commission on the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty formally apply only to fines imposed under those two articles, in view of the fact that the relevant provisions appear in identical terms in Regulations No 4056/86 laying down detailed rules for the application of [Articles 81 and 82 EC] to maritime transport and No 1017/68 applying rules of competition to transport by rail, road and inland waterway, the Commission may rely on the Guidelines by analogy when calculating fines imposed under Regulations No 4056/86 and No 1017/68.

see para. 242

11. The Commission has a margin of discretion when fixing the amount of each fine for infringements of the competition rules and cannot be considered bound to apply a precise mathematical formula for that purpose. Under Article 17 of Regulation No 17, Article 24 of Regulation No 1017/68 applying rules of competition to transport by rail, road and inland waterway and Article 21 of Regulation No 4056/86 laying down detailed rules for the application of Articles [81 and 82 EC] to maritime transport, the Court has unlimited jurisdiction within the meaning of Article 229 EC to review decisions whereby the Commission has fixed a fine and may consequently cancel, reduce or increase the fine imposed.

see para. 252

12. Where, in setting the fine to be imposed on undertakings for infringing the competition rules, the Commission decides to adopt the method laid down by the Guidelines for calculating fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, it is required in the light of the undertaking entered into when those Guidelines were published to adopt that method, and where it departs from them in any particular regard it must set out expressly the reasons justifying such a departure.

see para. 271

13. Since the Commission has not proved the effects of an agreement and it was under no obligation to do so, and since the agreement had as its object the restriction of competition, whether or not it was implemented is irrelevant as regards the duration of the infringement. In order to calculate the duration of an infringement the object of which is to restrict competition it is necessary merely to calculate the period during which the agreement existed, that is, the time between the date on which it was entered into and the date on which it was terminated.

see para. 280

14. It is irrelevant that the non-implementation of an agreement restricting competition in calculating the amount of the fines to be imposed was not specifically considered in the part of the decision concerning the assessment of the mitigating circumstances but at the stage of considering the gravity of the infringement since, in any event, the consideration of that factor resulted in the reduction of the basic amount of the fines, in accordance with the second indent of the first paragraph of section 3 of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty.

see para. 293

15. In the course of the administrative procedure before the Commission in application of the competition rules, cooperation in an investigation which does not go beyond that which undertakings are required to provide under Article 11(4) and (5) of Regulation No 17 does not justify a reduction in the fine as laid down by the Commission Notice on the non-imposition or reduction of fines in cartel cases.

Furthermore, where an undertaking contests the allegations of fact on which the Commission bases its complaints, it does not facilitate the Commission ' s task of finding infringements of the Community competition rules and bringing them to an end.

see paras 303-304

16. The Commission must act within a reasonable time when it adopts decisions following administrative proceedings relating to competition policy and that that is a general principle of Community law related to the principle of sound administration. Thus, the Commission may not defer defining its position indefinitely and that in the interests of legal certainty and of ensuring adequate judicial protection it is required to adopt a decision or to send a formal letter, if such a letter has been requested, within a reasonable time.

Whether the time taken for a procedure is reasonable must be assessed in relation to the individual circumstances of each case, and in particular its context, the conduct of the parties during the procedure, what is at stake for the various undertakings concerned and its complexity.

see paras 317-318

17. Whilst unreasonable length of the procedure, particularly where it infringes the rights of defence of the parties concerned, justifies the annulment of a decision establishing an infringement of the competition rules, the same does not apply where what is disputed is the amount of the fines imposed by that decision, since the Commission ' s power to impose fines is governed by Regulation No 2988/74 concerning limitation periods in proceedings and the enforcement of sanctions under the rules of the European Economic Community relating to transport and competition. That regulation established a complete system of rules covering in detail the periods within which the Commission is entitled, without undermining the fundamental requirement of legal certainty, to impose fines on undertakings which are the subject of procedures under the Community competition rules. Article 2(3) of that regulation provides that the limitation period expires in any event after 10 years where it is interrupted pursuant to Article 2(1) of that regulation, so that the Commission cannot put off a decision on fines indefinitely without incurring the risk of the limitation period expiring. In the light of those rules, there is no room for consideration of the Commission ' s duty to exercise its power to impose fines within a reasonable period.

see paras 321, 324

18. Whilst the amount of the fine imposed for an infringement of the competition rules must be in proportion to the duration of the infringement and to the other factors capable of affecting the assessment of the gravity of the infringement, including the profit which the undertaking concerned was able to derive from those practices, the fact that an undertaking did not benefit from an infringement cannot preclude the imposition of a fine, since otherwise it would cease to have a deterrent effect.

It follows that the Commission is not required, in order to fix fines, to establish that the infringement brought about an unlawful advantage for the undertakings concerned, or to take into consideration any lack of benefit from the infringement and nor is it required to do so according to its Information on the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty.

see paras 340-343

19. In competition matters, the Commission may, according to the circumstances, take the view that it is appropriate not to impose a fine or to reduce its amount on account of the financial difficulties faced by the undertaking concerned.

But it is in no way required when determining the fine to take account of an undertaking ' s financial losses since recognition of such an obligation would have the effect of conferring an unfair competitive advantage on the undertakings least well adapted to the conditions of the market.

see paras 351-352

20. In competition cases, the fact that the Commission has found in previous decisions that certain factors constituted mitigating circumstances for the purpose of determining the amount of the fine does not mean that it is obliged to do so in subsequent decisions as well.

see para. 353

21. In fixing the amount of the fines to be imposed on the various undertakings which committed the same infringement of the competition rules, the Commission is entitled first to determine the overall amount of the fine to be imposed and then spread that total among the undertakings concerned by dividing them into groups according to the extent of their activities in the sector concerned provided that the thresholds used to demarcate the different groups are coherent, and objectively justified, comply with the principle of non-discrimination and are supported by a sufficient statement of reasons.

It is true that the effect of that method is to ignore the differences in size between undertakings in the same group but it achieves the objective of penalising the large undertakings more severely.

see paras 384-385, 416, 437

22. In fixing the amount of the fines to be imposed on the various undertakings which committed the same infringement, the method of determining the gravity of the infringement and adjusting the basic amount calculated according to the nature of the infringement on the basis of the size of the undertakings in question, is in accordance with the legal framework of the sanctions as defined by Article 15(2) of Regulation No 17 and the equivalent provisions of Regulations No 1017/68 applying rules of competition to transport by rail, road and inland waterway and No 4056/86 laying down detailed rules for the application of Articles [81 and 82 EC] to maritime transport.

When determining the size of an undertaking, the Commission may refer to its total turnover, which constitutes an indication of its economic power and of its ability to inflict damage on other undertakings, and not to its turnover on the market in question.

In determining the gravity of the infringement, the Commission must also take account of the role played by each undertaking, for example whether it was a leader or follower.

see paras 398-403

23. In competition cases, the assessment of the gravity of an infringement must take account of the economic reality as it was at the date on which the infringement was committed. Consequently, in order to assess the size and economic power of each undertaking as well as the scale of the infringement committed by each undertaking, the Commission must refer to the turnover of each undertaking during the period in which the infringement was committed.

see para. 460

24. Article 1(1)(b) of Regulation No 2988/74 concerning limitation periods in proceedings and the enforcement of sanctions under the rules of the European Economic Community relating to transport and competition lays down the principle of a five-year limitation period in respect of which the interruption of the limitation period laid down by Article 2 of that regulation constitutes an exception which must be interpreted narrowly.

Furthermore, it is apparent from the first subparagraph of Article 2(1)(a) of that regulation that, in order to interrupt the limitation period, the written requests for information by the Commission, which are expressly mentioned in that provision as examples of actions interrupting the limitation period, must be " for the purpose of the preliminary investigation or proceedings in respect of an infringement" .

Pursuant to Article 11 of Regulation No 17 and, as regards the rail, road, inland waterway and maritime transport sectors, Article 19 of Regulation No 1017/68 and Article 16 of Regulation No 4056/86, requests for information must, according to the first paragraph of those provisions, be " necessary" . A request for information is " necessary" within the meaning of Article 11(1) of Regulation No 17 and, respectively, of Articles 19 and 16 of the regulations referred to above, which are worded identically, if it may legitimately be regarded as having a connection with the putative infringement.

It follows that in order validly to interrupt the five-year limitation period laid down by Article 1(1)(b) of Regulation No 2988/74, a request for information must be necessary for the preliminary investigation or proceedings.

Although a request for information may interrupt the limitation period for fines where its purpose is to enable the Commission to comply with its obligations in fixing the fine, it cannot, for instance, make requests for information the sole purpose of which is to prolong the limitation period artificially so as to preserve the power to impose a fine. Requests for information solely for that purpose cannot be necessary for infringement proceedings. Furthermore, if the Commission were able to interrupt the limitation period by sending requests for information not necessary for the proceedings it would be able systematically to prolong the limitation period up to the 10-year maximum laid down by Article 2(3) of Regulation No 2988/74, thereby subverting the five-year limitation period laid down by Article 1(1) of that regulation and converting it into a 10-year one.

see paras 484-488