Keywords

Summary



Keywords

1. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

2. Competition – Fines – Amount – Determination

(Art. 81(1) EC; Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1A)

3. Competition – Community rules – Infringement committed by a subsidiary

(Art. 81(1) EC)

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

(Council Regulation No 17, Art. 19(1))

5. Acts of the institutions – Statement of reasons – Obligation – Scope

(Arts 81 EC and 253 EC)

6. Competition – Fines – Amount – Determination – Deterrent effect

(Council Regulation No 17, Art. 15(2))

7. Competition – Fines – Amount – Determination

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

8. Competition – Fines – Amount – Discretion of the Commission – Judicial review

(Art. 229 EC)

9. Procedure – Costs – Recoverable costs – Definition

(Rules of Procedure of the Court of First Instance, Art. 91(b))

Summary

1. Under Article 15(2) of Regulation No 17, the amount of the fine is set by reference to the gravity and duration of the infringement. Moreover, in accordance with 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, the Commission sets the starting amount by reference to the gravity of the infringement in the light of the nature of the infringement, its actual impact on the market and the size of the relevant geographic market.

That legal framework does not explicitly require the Commission to take account of the small size of the market for the products.

However, in assessing the gravity of an infringement, the Commission is required to take account of a large number of factors, the nature and importance of which vary according to the type of infringement at issue and the specific circumstances surrounding the infringement in question. Those factors tending to establish the gravity of an infringement may, where appropriate, include the size of the market for the relevant product.

Accordingly, although the size of the market may be a factor to be taken into account to establish the gravity of the infringement, its importance varies according to the specific circumstances surrounding the infringement in question.

(see paras 35-38)

2. Under 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, where there are infringements involving a number of undertakings, the Commission may weight the starting amounts to take account of the specific weight of each undertaking by dividing the members of the cartel into groups ‘particularly where there is considerable disparity between the sizes of the undertakings committing infringements of the same type’ (sixth paragraph of Section 1A of the Guidelines). The Guidelines further state that ‘the principle of equal punishment for the same conduct may, if the circumstances so warrant, lead to different fines being imposed on the undertakings concerned without this differentiation being governed by arithmetic calculation’ (seventh paragraph of Section 1A of the Guidelines).

In determining the gravity of the infringement, the Commission is not required to ensure, where fines are imposed on a number of undertakings involved in the same infringement, that the final amounts of the fines resulting from its calculations for the undertakings concerned reflect any distinction between them in terms of their overall turnover, but it may divide them into groups.

However, when the Commission divides the undertakings concerned into groups for the purpose of determining the amount of the fines, the determination of the thresholds for each of the groups thus identified must be coherent and objectively justified.

(see paras 56-58)

3. In competition law, the fact that a subsidiary has separate legal personality is not sufficient to exclude the possibility of its conduct being imputed to the parent company, especially where the subsidiary does not independently decide its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company.

The Commission may, in that context, reasonably assume that a wholly-owned subsidiary carries out, in all material respects, the instructions given to it by its parent company. That assumption implies that the Commission is not required to check whether the parent company has actually exercised that power. In such a situation, when, in the statement of objections, the Commission relies on that assumption and declares its intention to hold a parent company liable for an infringement committed by its wholly-owned subsidiary, it is for the parties concerned, when they consider that, despite the shareholdings at issue, the subsidiary determines its conduct independently on the market, to rebut that assumption by providing the Commission with sufficient evidence during the administrative procedure.

(see paras 82-83)

4. The statement of objections addressed by the Commission to an undertaking against which it is contemplating imposing a fine for infringement of the competition rules must contain the essential findings against that undertaking, such as the acts complained of, their classification and the evidence on which the Commission relies, in order to enable that undertaking to put forward its arguments effectively during the administrative procedure opened concerning it. Likewise, given its importance, the statement of objections must specify unequivocally the legal person on whom fines may be imposed and be addressed to that person.

(see para. 87)

5. Where a decision taken in application of Article 81 EC relates to several addressees and raises a problem with regard to liability for the infringement, it must include an adequate statement of reasons with respect to each of the addressees, in particular those of them who according to the decision must bear the liability for the infringement.

(see para. 93)

6. In order to assess the gravity of an infringement, the Commission must take account of a large number of factors, including the requirement that the fine must have a deterrent effect. The Commission is fully entitled to fix the amount of the fine by reference to the specific characteristics of the undertaking which is liable for the infringement, in order to achieve that deterrent effect.

In fixing the starting amount of the fine at a level higher for those undertakings holding a relatively larger market share than others on the relevant market, the Commission takes account of the undertaking’s specific responsibility, in the light of the requirement of maintaining free competition. It is an individual factor from which an assessment can be made of the gravity of the conduct of the undertakings concerned. That factor reflects the higher level of responsibility, in a cartel situation, for undertakings which hold a relatively larger share of the relevant market in terms of the damage caused to competition. In that context, the Commission may also reasonably take account of legal and economic knowledge and infrastructures in very large undertakings which enable them more easily to recognise that their conduct constitutes an infringement and be aware of the consequences stemming from it under competition law.

Moreover, where the Commission calculates the fine imposed on an undertaking it may take account, amongst other things, of its size and its economic strength. In addition, the overall turnover is relevant for the measurement of the financial capacity of members of a cartel.

It follows that the Commission is entitled to apply a multiplier for the purposes of determining the deterrent effect of the fine imposed, taking account of the size and economic strength of the undertaking concerned.

(see paras 114-117)

7. According to the method laid down in 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, the calculation of the amount of the fines is carried out by reference to the two criteria referred to in Article 15(2) of Regulation No 17, namely the gravity and the duration of the infringement, whilst respecting the maximum limit in relation to the turnover of each undertaking established by the same provision. Consequently, the Guidelines do not go beyond the legal framework for fines set out in that provision.

(see para. 119)

8. Where an examination of the pleas in law raised by an undertaking against the legality of a Commission decision imposing a fine on it due to infringement of the Community competition rules has shown there to be no such illegality, it is not necessary for the Court to make use of its unlimited jurisdiction to reduce the amount of that fine.

(see para. 130)

9. The expenses incurred by an undertaking in providing and maintaining a bank guarantee in order to avoid the enforcement of a Commission decision are not expenses incurred for the purpose of the proceedings within the meaning of Article 91(b) of the Rules of Procedure of the Court of First Instance. Similarly, an undertaking’s claim that the Commission should be ordered to reimburse the expenses incurred by it during the administrative procedure in competition proceedings must be dismissed. Although under Article 91 of those Rules of Procedure ‘the following shall be regarded as recoverable costs ... expenses necessarily incurred by the parties for the purpose of the proceedings’, that provision, in referring to ‘proceedings’, refers only to proceedings before the Court of First Instance and does not include any prior stage.

(see para. 133)