Opinion of the Advocate-General



Opinion of the Advocate-General

Table of contents

I – Background, procedure and forms of order sought

II – Legal analysis

A – Preliminary remarks

B – The first plea on appeal: breach of the rights of the defence as regards the attribution to ADM of leadership status within the cartel

1. Appraisal by the Court of First Instance

2. Arguments of the parties

3. Assessment

C – The action against the contested decision: assessment as to whether the rights of the defence were infringed as regards the attribution to ADM of the status of cartel ringleader

D – The second plea on appeal: non-observance of procedural safeguards as a result of the use of the FBI Report as evidence of ADM’s leadership status within the cartel

1. Appraisal by the Court of First Instance

2. Arguments of the parties

3. Assessment

a) Interpretation of the judgment under appeal

b) The correctness of the criteria for analysis used in the judgment under appeal

i) The non-existence of a general prohibition on the use by the Commission of evidence produced in a proceeding other than that being conducted by the Commission itself

ii) The breach of specific procedural safeguards

E – The action against the contested decision: whether the Commission was entitled to use the FBI Report as evidence that ADM was one of the ringleaders of the cartel

F – The pleas on appeal (third, fourth and fifth) relating to Cerestar’s written statement

G – The action against the contested decision: whether the Commission adequately demonstrated that ADM had been one of the ringleaders of the cartel

H – The sixth plea on appeal, relating to the failure to accept as an attenuating circumstance the cessation of ADM’s participation in the cartel as soon as the US antitrust authorities first took action

1. Appraisal by the Court of First Instance

2. Arguments of the parties

3. Assessment

I – The ninth plea on appeal, regarding the actual impact of the cartel on the market

1. Appraisal by the Court of First Instance

2. Arguments of the parties

3. Assessment

J – The pleas on appeal (seventh and eighth) alleging breach of the principle of the protection of legitimate expectations as regards the assessment of ADM’s cooperation in the course of the administrative procedure

1. The plea on appeal relating to statements made by Commission staff during the administrative proceeding

2. The plea on appeal relating to the alleged breach of the conditions laid down in Section B of the Leniency Notice

K – The action against the contested decision: whether ADM should be regarded, under Section B(b) of the Leniency Notice, as the first undertaking to have provided the Commission with decisive evidence of the cartel’s existence

L – Redetermination of the amount of the fine imposed on ADM

M – Costs

III – Conclusion

I – Background, procedure and forms of order sought

1. By Article 1 of Decision 2002/742/EC of 5 December 2001 (‘the contested decision’), (2) the Commission found, on conclusion of a proceeding conducted under Regulation No 17 of the Council of 6 February 1962, (3) that Archer Daniels Midland Co. (‘ADM’) and other undertakings had infringed Article 81(1) EC and Article 53(1) of the Agreement on the European Economic Area (EEA) by participating in a continuing agreement and/or concerted practice in the citric acid sector.

2. In recital 158 of the contested decision, the Commission identified the following as factors material to its finding of an infringement in this case: the allocation of markets and market share quotas; the freezing/restricting/closing down of production capacity; the agreement of concerted price increases; the designation of a producer to ‘lead’ price increases in each national market; the circulation of lists of current and future target prices in order to coordinate price increases; the devising and applying of a reporting and monitoring system to ensure the implementation of restrictive agreements; the sharing-out or allocation of customers; participation in regular meetings and the maintenance of other contacts in order to agree on those restrictions and to implement and/or modify them as required.

3. By Article 3 of the contested decision, fines were imposed on the undertakings held responsible for the infringement. In calculating the fines, the Commission applied – albeit without expressly saying so – the method set out in its 1998 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 Guidelines’) (4) and, where appropriate, it also applied – and expressly referred to – its 1996 notice on the non-imposition or reduction of fines in cartel cases (‘the Leniency Notice’). (5)

4. The fine imposed on ADM was in the amount of EUR 39.69 million.

5. When determining the amount of the fines, the Commission, in its assessment of the gravity of the infringement, took account in particular of the fact that the cartel had had an actual impact on the citric acid market in the EEA. To the basic amount of the fine calculated for ADM, set at EUR 58.8 million on the basis of the gravity and duration of the infringement, the Commission applied a 35% increase on account of aggravating circumstances, on the ground that ADM, together with another undertaking, had enjoyed leadership status within the cartel. In addition, ADM was denied the benefit provided for in Section B of the Leniency Notice – ‘non-imposition of a fine or a very substantial reduction’ of the amount which would have been imposed in the absence of cooperation – which was granted instead to another undertaking, Cerestar Bioproducts BV (‘Cerestar’). The Commission took the view that the first to provide decisive evidence of the cartel’s existence, within the meaning of Section B(b) of the Leniency Notice, was not ADM, but Cerestar, and that ADM, as one of the ringleaders of the cartel, also failed to meet the conditions laid down in Section B(e) of that notice. However, under Section D of the notice, the Commission granted ADM a ‘significant reduction’ (50%) of its fine.

6. By application lodged at the Registry of the Court of First Instance of the European Communities on 28 February 2002, ADM claimed, first, that Article 1 of the contested decision should be annulled in so far as it found that ADM had infringed Article 81 EC and Article 53 of the EEA Agreement by participating in the limitation of production capacity in the relevant market and in the designation of a producer who was to ‘lead’ price increases in each national segment of that market and, secondly, that Article 3 of that decision should be annulled in so far as it related to ADM or, failing which, that it should be amended so as to cancel or reduce the fine imposed on ADM.

7. By judgment of 27 September 2006 (‘the judgment under appeal’), (6) the Court of First Instance upheld ADM’s claim for the partial annulment of Article 1 of the contested decision, but rejected its claims concerning the fine imposed on it in Article 3 of that decision, ordering the Commission to pay one tenth of the costs incurred by ADM and ADM to bear the remainder of its own costs and to pay those incurred by the Commission.

8. By application lodged at the Registry of the Court of Justice on 11 December 2006, ADM appealed against that judgment, claiming that the Court should set it aside in so far as it dismisses the action brought by ADM against the contested decision and also that the Court should annul Article 3 of that decision in so far as it relates to ADM or amend that article so as to cancel or reduce the fine imposed on ADM, or, in the alternative, refer the case back to the Court of First Instance for the latter to give judgment in accordance with the legal principles established by the Court of Justice and, in any event, order the Commission to pay the costs of both sets of proceedings.

9. The Commission contends that the Court of Justice should dismiss the appeal and order ADM to pay the costs.

10. The representatives of the parties presented oral argument at the hearing on 8 May 2008.

II – Legal analysis

A – Preliminary remarks

11. In support of its appeal, ADM puts forward nine pleas in law (‘pleas on appeal’), all relating to the determination of the amount of the fine imposed on it.

12. By the first five pleas on appeal, ADM criticises the assessments which prompted the Court of First Instance to reject its arguments against the 35% increase applied by the Commission to the basic amount of the fine on account of aggravating circumstances, namely the leadership role allegedly played by ADM in the citric acid cartel. The first of those pleas on appeal relates to the fact that the Court of First Instance did not make a finding that ADM’s rights of defence had been breached by virtue of the Commission’s failure, in the course of the administrative proceeding, to object to that aggravating circumstance or to the facts relating thereto. The next four pleas on appeal, on the other hand, are directed, on various grounds, against the assessments relied on by the Court of First Instance in rejecting ADM’s argument that the considerations set out in the contested decision as the basis for attributing leadership status to ADM were not capable of justifying that imputation.

13. The last four pleas on appeal concern the failure to accept the existence of an attenuating circumstance, the assessment of the actual impact of the cartel on the market and the assessment of the cooperation provided by ADM to the Commission in the course of the administrative procedure.

14. Let me say straight away that some of those pleas on appeal appear to me to be well founded, so that the judgment under appeal should in my opinion be set aside on certain points, and that I consider that the state of the proceedings is such that the Court of Justice may, under the first paragraph of Article 61 of its Statute, give final judgment in the matter, as requested by ADM. For ease of exposition, having regard to the number of pleas on appeal, my examination of those I consider to be well founded shall immediately be followed by an examination of the relevant pleas in law relied upon at first instance which were rejected in the parts of the judgment under appeal which, it is submitted, should be set aside.

B – The first plea on appeal: breach of the rights of the defence as regards the attribution to ADM of leadership status within the cartel

1. Appraisal by the Court of First Instance

15. Before the Court of First Instance, ADM claimed that the Commission had infringed its rights of defence because the accusation that it had been one of the ringleaders of the cartel had not been put to it during the administrative procedure and because the statement of objections did not indicate the elements (in particular those relating to the role played at cartel meetings by certain of ADM’s representatives) relied on to substantiate that accusation in the contested decision. ADM also complained that it did not have an opportunity during that procedure to give its views on the use as evidence, in support of that accusation, of the report by the United States Federal Bureau of Investigation (FBI) concerning statements made to FBI agents on 11 and 12 October 1996 by a former representative of ADM (‘the FBI Report’) and the written statement of 18 March 1999 sent to the Commission by Cerestar (7) (‘Cerestar’s written statement’).

16. The Court of First Instance first of all referred to the judgment of the Court of Justice in Musique diffusion française and Others v Commission , (8) according to which, provided that the Commission indicates expressly in the statement of objections that it will consider whether it is appropriate to impose fines on the parties concerned and provided that it sets out the principal elements of fact and of law that may give rise to a fine – such as the gravity and duration of the alleged infringement and the fact that it has been committed ‘intentionally or negligently’ – it fulfils its obligation to respect the undertakings’ right to be heard, thereby providing them with the necessary elements to defend themselves not only against a finding of infringement but also against the fact of being fined. (9)

17. The Court of First Instance then rejected ADM’s complaints, taking the view that, in the statement of objections, the Commission had set out the principal elements of fact and of law that could justify the fine which it planned to impose on ADM and stating that ‘[o]bservance of the rights of defence of the undertakings concerned does not require the Commission to state more precisely in the statement of objections the manner in which it will take account, where relevant, of each of those factors when setting the level of the fine’. Referring to Michelin v Commission , (10) the Court observed, in particular, that ‘the Commission was not required to state either that ADM could be considered to be a ringleader of the cartel or the size of the increase which it might apply to ADM’s fine for that reason’. As regards the use in evidence of the FBI Report and Cerestar’s written statement, the Court observed that ‘the Commission [had] annexed those documents to the statement of objections and … the parties [had] therefore [been] able to express a view on this point, including as regards their use as evidence’. (11)

2. Arguments of the parties

18. By the plea on appeal under consideration here, ADM alleges that the Court of First Instance infringed the principle of protection of the rights of the defence by concluding that the Commission is not required in the statement of objections to inform the addressee of the possibility that it may be considered to be a ringleader of the cartel and that the Commission is not obliged to indicate the facts on which such a finding might be based. Moreover, according to ADM, the second of those conclusions was not supported by an adequate statement of reasons.

19. In ADM’s view, the role of cartel leader is one of the principal elements of fact which characterises the gravity of the conduct of an undertaking that has committed an infringement and which must be mentioned in the statement of objections, (12) also because the increase applied by the Commission for such an aggravating circumstance usually accounts for between 30% and 50% of the amount of the fine.

20. Furthermore, in ADM’s view, the facts underlying the attribution of cartel leadership status must be mentioned in the statement of objections or at least be reasonably inferable from the documents annexed to it. (13) In the present case, however, there was no mention of those facts in the statement of objections nor any possibility of inferring them from the documents attached to it, the reasons for this being: (i) the Commission had expressly stated in the statement of objections that, in calculating the amount of the fine and, in particular, in assessing the role played by each undertaking, it would take account of the facts as described in that statement; (ii) identification of the leader of the cartel was difficult because of the complexity of the facts, as was recognised in the contested decision (recital 273) and in the judgment under appeal (paragraph 300); (iii) the Commission, by indicating to ADM in the course of the administrative procedure that it could benefit under Section B of the Leniency Notice, had given the impression that it did not regard ADM as one of the leaders of the cartel; (iv) an undertaking cannot, without being specifically advised to that effect, be required to examine and refute, on the basis of counter-evidence, every fact set out in the range of voluminous documents annexed to a statement of objections: if it did so, the undertaking could well lose the benefit of the application of Section B of the Leniency Notice, which presupposes inter alia constant and total cooperation on the part of the undertaking.

21. The Commission contends that ADM’s complaints are unfounded. They are based, it says, on a specious distinction between the fact of leadership of the cartel and the consequences of that leadership for the calculation of the fine. ADM has lost sight of the fact that a leadership role has an impact on the amount of the fine, not on the establishment of the infringement. There is no need, therefore, for the Commission to set out in greater detail in the statement of objections ‘facts which are in reality an anticipation of the level of the fine’. On the contrary, in the present case, it was sufficient, according to the Commission, to state – as it did – that in assessing the gravity of the infringement it would take account of the role played by each of the undertakings concerned.

22. The Commission observes that the FBI Report and Cerestar’s written statement were among the eight documents annexed to the statement of objections.

23. It adds that the role played by ADM in the cartel is mentioned in the main part of the statement of objections (referring, by way of example, to paragraphs 63, 71, 84, 85, 93, 94 and 104 of the statement of objections). Moreover, in its reply to that statement, ADM made express reference to both the FBI Report and Cerestar’s written statement, and made extensive comments on its role in the cartel, rejecting the view that it was a leader or an instigator and actually relying on the FBI Report in support of that contention. This proves that ADM was in a position to construct its own defence on the basis of the content of the statement of objections.

3. Assessment

24. Although there is no lack of isolated dicta that could be interpreted to the contrary, (14) it may be regarded as settled case-law that undertakings which are the subject of a proceeding for the suspected infringement of the EC Treaty competition rules have a right to be heard by the Commission not only as regards the existence of the alleged infringements but also as regards the imposition of a fine and the criteria for setting the fine.

25. As noted by the Court of First Instance in the judgment under appeal, the Court of Justice has held that, provided that the Commission indicates expressly in the statement of objections that it will consider whether it is appropriate to impose fines on the parties concerned and that it sets out the principal elements of fact and of law that may give rise to a fine, such as the gravity and the duration of the alleged infringement and the fact that it has been committed ‘intentionally or negligently’, it fulfils its obligation to respect the undertakings’ right to be heard, since in that way it provides them with the necessary elements to defend themselves not only against a finding of infringement but also against the fact of being fined. (15)

26. In particular, in Michelin v Commission ,(16) the Court appears to some extent to have departed from the suggestions made by Advocate General Verloren Van Themaat, who considered it ‘self-evident that the Commission cannot indicate in the administrative procedure itself what the fine or the criteria for its assessment will be since the degree of guilt or negligence can be determined only at the end of the administrative procedure.’ (17) As regards the criteria for setting the fine, the Court considered it necessary to observe in that judgment that ‘in the statement of objections … the Commission [had] expressly indicated that it intended to fine [the undertaking concerned] in an amount to be fixed by taking into account the duration and gravity of the infringement which it regarded as serious ’, thereby giving that undertaking ‘the opportunity to defend itself not only against the finding of an infringement but also against the imposition of a fine’. (18)

27. More recently, in Showa Denko v Commission , (19) the Court observed, in absolutely clear terms, that undertakings involved in a proceeding for the suspected infringement of Article 81 EC have a right to be heard ‘not only on the principle of the penalty but also on each of the matters which [the Commission proposes] to take into account in setting the fines’.

28. The case-law to which I refer in point 25 above is framed, however, in somewhat general terms and does not give any guidance as to what is to be understood by ‘principal elements of fact and of law’ which are relevant to the fine and must be apparent from the statement of objections: in particular, no guidance is given as to whether it is sufficient for the Commission to indicate in the statement of objections that, in deciding whether to impose a fine and, if so, in what amount, it will take into account the gravity, the duration and the subjective element of the alleged infringement, or, on the other hand, whether it is necessary for the Commission to give details of its assessments of each of those aspects.

29. It is certainly out of the question that the Commission need only make an abstract reference to the gravity, the duration and the subjective element of the alleged infringement. As the Court of First Instance has observed, ‘the obligation to give an indication of the gravity and intentional or negligent nature of the infringement would be rendered pointless if a simple paraphrase of Article 15(2) of Regulation No 17 were in itself sufficient to satisfy it’. (20) As regards the duration of the infringement, the Court of Justice has already made it clear that this must be specified in the statement of objections. (21)

30. On the other hand, it can be ruled out on the basis of the case-law that observance of the undertakings’ rights of defence implies that they must be given precise details in the statement of objections as to the manner in which the Commission intends using each of those ‘elements of fact and of law’ in determining the amount of the fine. Indeed, to give indications as to the size of the fine before the undertakings are given an opportunity to put forward their defence regarding the charges against them would be equivalent to improperly anticipating the Commission decision. (22)

31. Given that the statement of objections must indicate both the duration of the infringement and whether it was committed intentionally or through negligence, it remains necessary, in the grey area between those two extreme approaches, to establish whether it is sufficient for the Commission to list in the statement of objections the criteria for determining the gravity of the infringement on which it intends to rely or whether it is required to specify the assessments which it intends to carry out when applying those criteria. More precisely, in the present case, was it sufficient for the Commission to indicate in the statement of objections – as it did – that, in setting the amount of their respective fines, it was going to take account, inter alia, of the role played by each undertaking in the infringement (indication of the criterion), or should it already have pointed out in the statement of objections that the status of cartel leader might be attributed to ADM (assessment on application of that criterion)?

32. The case-law of the Court of Justice does not seem to me to give useful guidance on this question. The same may be said of the judgments of the Court of First Instance in HFB and Others v Commission and LR AF 1998 v Commission , relied on by ADM in support of the second approach. (23) Whilst it is true that in those judgments the Court of First Instance pointed out that, in the statement of objections sent to the applicant undertakings, the Commission referred inter alia to the active role (24) or to the leading role (25) played by them in the cartel in question – going on to state that, ‘[i]n doing so, the Commission [had] set out in the statement of objections the elements of fact and of law on which it would base the calculation of the fine to be imposed on the applicant, so that, in that regard, the applicant’s right to be heard was duly observed’ (26) – it does not necessarily follow that the Court considered that such a reference was necessary in order to observe that right.

33. Conversely, it must be recognised that in Corus UK v Commission , (27) which is also relied on by ADM, the Court of First Instance in fact took a more stringent approach regarding the Commission’s obligations regarding the content of the statement of objections, essentially taking the view that it was not sufficient simply to refer to a particular criterion for gravity without including a provisional assessment made in accordance with that criterion. After stating that the Commission ‘is required to give, in the statement of objections, a brief provisional assessment as to the duration of the alleged infringement, its gravity and the question whether, in the circumstances of the case, the infringement was committed intentionally or negligently’, the Court of First Instance held that in the case before it the statement of objections was ‘vitiated by a defect, in that the Commission did not indicate in the statement of objections its provisional classification of the gravity of the infringement committed’, having failed to clarify whether in its opinion it was a ‘serious’ or a ‘very serious’ infringement within the meaning of the Guidelines. (28) The Court of First Instance observed that that defect was nevertheless not a basis for annulment of the contested decision, since it had not been shown that, in the absence of that defect, ADM would have put forward, in its reply to the statement of objections, arguments appreciably different from the arguments, designed to play down the gravity of the infringement committed, which it actually had put forward in that reply. (29)

34. For my part, I wonder whether a somewhat different approach might be more correct. Rather than determining at the outset and in the abstract the scope of the Commission’s obligations regarding the content of the statement of objections, and then going on to establish whether the failure to discharge those obligations actually affected the rights of the defence, it might be more appropriate to deduce the scope of those obligations from the need for those rights to be observed.

35. If – as is often asserted in the case-law, and as was recalled in paragraph 435 of the judgment under appeal – ‘as regards determining the amount of fines, the rights of defence of the undertakings concerned are guaranteed before the Commission through the opportunity to make submissions on the duration, the gravity and the foreseeability of the anti-competitive nature of the infringement’, (30) the Commission’s obligations should be those – and only those – that are capable of ensuring that this is a genuine opportunity.

36. In that regard, it seems to me that once the Commission has indicated in the statement of objections – as it did in this case – that, in order to determine the fine to be imposed on an undertaking, it is going to take account, in assessing the gravity of the infringement, of the role played by that undertaking in the collusive agreements described in the statement of objections, the undertaking in question is well placed to submit observations on the conclusions to be drawn, regarding its role, from the facts mentioned by the Commission and to argue, for example, that those facts do not show that its role was active or indeed that of a leader.

37. I am therefore of the opinion that the Court of First Instance did not err in law in concluding that the Commission was not required to point out in the statement of objections that it might consider ADM to be one of the ringleaders of the cartel in question.

38. On the other hand, as regards the second part of the present plea on appeal, regarding the failure to indicate in the statement of objections facts subsequently relied on in the contested decision to support the attribution to ADM of the status of cartel leader, I consider that ADM’s arguments deserve to be upheld in part.

39. The facts to which ADM refers in this part of the plea on appeal are the circumstances set out in recitals 265 and 266 of the contested decision, which were taken from the FBI Report and from Cerestar’s written statement. According to the FBI Report, one of ADM’s representatives devised the mechanics of the ‘G-4/5’ arrangement, played a fairly active role in the meeting of 6 March 1991 in Basle, where the citric acid arrangement was formulated, was regarded as the ‘wise old man’ and was nicknamed ‘the preacher’ by a Jungbunzlauer representative (recital 265). According to Cerestar’s written statement, a different ADM representative played a leading role and chaired the ‘Sherpa’ meetings (in other words, those which operated at a technical level, as opposed to the so-called ‘Masters’’ meetings, held at a higher level), dealing with the preparation of matters and the putting forward of proposals for the price lists to be agreed (recital 266). The Commission regarded those circumstances as ‘enough additional elements to conclude that ADM was a leader of the cartel’, after finding that ‘the fact that a round of bilateral meetings took place between ADM and its competitors shortly before the first multilateral cartel meeting [was] not sufficient to show that ADM was the instigator of the cartel’ (recital 264). Those factual circumstances thus appear to have been decisive as regards the attribution to ADM of the status of cartel leader.

40. The plea alleging that the reasoning in the judgment under appeal was inadequate in relation to ADM’s arguments concerning the failure to indicate those circumstances in the statement of objections can be regarded as unfounded. Although the Court of First Instance did not illustrate very clearly the reasons for which that omission did not in its opinion add up to a breach of ADM’s rights of defence, it may be concluded that those reasons are implicit in paragraph 439 of the judgment under appeal. Admittedly, paragraph 439 refers mainly to a different argument – which it rejects – whereby ADM complained of not having had an opportunity to give its views in the administrative procedure on the use of the FBI Report and Cerestar’s written statement as evidence. However, the scope of that paragraph is wider, as is apparent from the phrase ‘including as regards their use as evidence’, in so far as the Court of First Instance appears to be expressing the view that the Commission’s annexing of those two documents to the statement of objections was sufficient to enable the parties to give their views not only on their use as evidence but also on the factual circumstances described in them.

41. On the other hand, I am of the opinion that the Court’s assessment to the effect that it was unnecessary for the statement of objections to set out the factual circumstances referred to in recitals 265 and 266 of the contested decision is wrong in law.

42. Observance of the rights of defence requires, as I see it, that the statement of objections should disclose to the addressee undertaking at least the facts and the associated evidential material on which the Commission intends to rely as a basis for its assessment in the final decision. (31)

43. According to the Court of Justice, ‘[r]espect for the rights of the defence requires that the undertaking concerned must have been afforded the opportunity, during the administrative procedure, to make known its views on the truth and relevance of the facts and circumstances alleged and on the documents used by the Commission to support its claim that there has been an infringement’. (32)

44. The obligation for the Commission to give advance notice of the facts and associated evidence which it intends using in the final decision – which has thus been confirmed with regard to the establishment of an infringement – must, in my opinion, also apply with regard to the imposition of a fine and to the determination of the amount. (33)

45. The present case is characterised in particular by the fact that the Commission’s conclusion regarding ADM’s leadership role is based, as is common ground, on factual circumstances (those referred to in recitals 265 and 266 of the contested decision) which are not mentioned in the statement of objections, but which are said to be proved by documents which are both annexed to the statement of objections – as emphasised by the Commission – and mentioned in that statement of objections, albeit merely as proof of the facts set out in that statement.

46. Does the fact that those circumstances were apparent from those documents – which the statement of objections indicated would be used as evidence – necessarily mean that ADM was able to take a position as to the reality and relevance of those circumstances?

47. ADM suggests that reference be made to the judgment of the Court of First Instance in Shell v Commission , (34) from which the following in particular emerges:

– documents which are appended to the statement of objections, but are not mentioned in it, may be used in the decision as against the addressee undertaking only if that undertaking could reasonably have deduced from the statement of objections the conclusions which the Commission intended to draw from them; (35)

– documents which are appended to the statement of objections and mentioned in it in support of a particular objection may be used in the decision to support a different objection against the same undertaking only if the latter could reasonably have deduced from the statement of objections and from the content of the documents the conclusions which the Commission intended to draw from them. (36)

48. Those criteria appear to be sound, in that they permit a balanced reconciliation of requirements relating to the undertakings’ defence and requirements relating to the efficient conduct of the Commission’s administrative procedures. Moreover, documents annexed to the statement of objections may be (and often are) very numerous or voluminous, for which reason, as ADM rightly maintains, it is inconceivable that the addressee should bear the burden of finding every element in those documents which might in the abstract be interpreted as evidence against it and of contesting the reality or meaning thereof.

49. A criterion similar to those laid down in Shell v Commission should, in my opinion, be applicable also in cases – such as this one – in which documents annexed to the statement of objections and mentioned therein are used in the final decision as evidence of facts other than those set out in the statement of objections. Such use should be permissible only where it is found that the undertaking concerned could deduce, on the basis of the statement of objections and in the light of the content of those documents, the findings of fact that the Commission intends to draw from the latter.

50. I therefore consider that the Court of First Instance erred in law when, having failed to apply such a test, it took the view that the simple fact that the FBI Report and Cerestar’s written statement were annexed to the statement of objections made it permissible for the Commission to rely as against ADM in the final decision on the factual circumstances referred to in recitals 265 and 266 of that decision.

51. That error of law cannot in my opinion be remedied by substituting other grounds, (37) an approach which is permissible only where grounds which are legally unsound can be replaced by grounds of pure law. (38) However, the application of that test, designed to determine whether ADM could deduce from the statement of objections and the content of the two documents in question that the Commission intended to base its imputations on the abovementioned factual circumstances, implies an assessment of the facts which the Court of Justice cannot undertake when examining an appeal. The judgment under appeal should therefore in my opinion be set aside as regards the aspect mentioned in point 50 above, without it being necessary for that purpose to take into account either ADM’s arguments as set out in point 20(i), (ii) and (iii) above, or the Commission’s arguments as set out in point 23 above, which are relevant, if at all, in the different context of applying that test.

C – The action against the contested decision: assessment as to whether the rights of the defence were infringed as regards the attribution to ADM of the status of cartel ringleader

52. For the purposes of examining, to the extent relevant here, the plea at first instance alleging breach of ADM’s rights of defence regarding the issue of cartel leadership, it is necessary – as I have indicated above – to check whether ADM could reasonably have deduced, from the statement of objections and having regard to the content of the documents annexed to that statement, that the Commission intended to use against it, as evidence of its leadership of the cartel, the facts which were later set out in recitals 265 and 266 of the contested decision.

53. It seems to me that that question cannot be answered in the affirmative. As ADM correctly emphasised, the statement of objections indicated, in paragraph 161, that in assessing the gravity of the infringement the Commission would take account of ‘the facts as described and assessed above’ and, in paragraph 162, that, in determining the fine to be imposed on each undertaking, it would take account, inter alia, of the role played by each of them in the collusive arrangements ‘as described above’. The facts mentioned in recitals 265 and 266 of the contested decision are not described either in paragraphs 63, 71, 84, 85, 93, 94 and 104, to which the Commission refers in its defence, or in other paragraphs of the statement of objections. Also, although paragraph 50 of the statement of objections did in fact indicate that the Commission intended using as evidence, among other documents, the FBI Report and Cerestar’s written statement, reference was nevertheless made to proof of the ‘facts as set out in Section C’ of that statement. (39)

54. As regards the fact, emphasised by the Commission, that in its reply to the statement of objections ADM referred to both the FBI Report and Cerestar’s written statement and even relied on the FBI Report in order to contend that its role in the cartel was not that of a leader or instigator, that certainly cannot mean that ADM understood or should have understood that the circumstances which were later set out in recitals 265 and 266 of the contested decision were going to be used against it.

55. I do not see how it could reasonably be concluded that the content of the statement of objections, even considered in the light of the documents annexed to it, was such as to enable ADM to deduce that those circumstances were going to be used against it.

56. The plea at first instance alleging breach of ADM’s rights of defence should therefore in my opinion be upheld, in the sense set out above.

57. In assessing whether ADM played a leadership role in the citric acid cartel, account cannot therefore be taken of the factual circumstances mentioned in recitals 265 and 266 of the contested decision, which – as I have noted in point 39 above – were nevertheless decisive, by its own admission, in the Commission’s finding that ADM enjoyed leadership status. I would add that it is also unclear from the contested decision whether the elements relied on by the Commission in that connection include the series of bilateral meetings between ADM and its competitors which took place shortly before the first multilateral meeting of the cartel, reported in recital 263 of the contested decision. In recital 264, the Commission considered that those bilateral meetings strongly suggested that ADM had played the role of instigator , even though the fact of those meetings was not sufficient to prove it. The Commission added that nevertheless it was in possession of ‘enough additional elements to conclude that ADM was a leader of the cartel’. (40)

58. However, as suggested in Section 2 of the Guidelines, concerning aggravating circumstances, it is necessary to distinguish between the role of ‘leader’ in the infringement, which concerns the functioning of the cartel, and that of ‘instigator’ of the infringement, which relates to the time of establishment or enlargement of the cartel. (41) Indicia regarding an undertaking’s possible role as an instigator cannot therefore constitute evidence that it played the role of a leader. The bilateral meetings in question are not therefore relevant as a basis for identifying ADM as a leader of the cartel.

59. The Commission has not referred, either before the Court of First Instance or before this Court, to other circumstances relevant as such a basis, which the Community judicature could take into account by virtue of its unlimited jurisdiction in the matter of fines.

60. It follows that, since the conditions for considering that ADM’s role in the cartel was that of a ringleader are not satisfied, the 35% increase applied by the Commission to the basic amount of ADM’s fine on account of aggravating circumstances should be cancelled.

61. I shall now examine the next four pleas on appeal, which also relate to the issue of leadership of the cartel, and in so doing I shall disregard the conclusions arrived at in the foregoing points, in view of the importance of certain issues raised by those pleas and in case the Court should find, contrary to my suggestion, that the plea on appeal examined above is unfounded.

D – The second plea on appeal: non-observance of procedural safeguards as a result of the use of the FBI Report as evidence of ADM’s leadership status within the cartel

1. Appraisal by the Court of First Instance

62. Before the Court of First Instance, ADM accused the Commission of erring in law by basing its conclusion as to ADM’s leadership status on certain extracts from the FBI Report. According to ADM, that report should not have been used by the Commission as evidence of its leadership status within the cartel. In that connection, ADM put forward grounds of a procedural nature and arguments concerning the reliability of that document. Regarding the first aspect, it stated in particular that: (i) the report had been drawn up by the authorities of a non-member country for the purposes of an investigation in which the procedural safeguards provided for under Community law did not apply; (ii) the statements of a former representative of ADM as reported in that document had not been reread, approved or signed by that representative or by his lawyer; (iii) ADM had not had an opportunity before the Commission to assert, regarding the statements in that document, its Community law privilege against self-incrimination; (iv) the US antitrust authorities had expressly declared that the statements made by ADM’s former representative would not, without a court order, be divulged except in proceedings brought by the US authorities. As regards the second aspect, ADM contended that the FBI Report was not reliable, on account of its nature and internal contradictions, and because it conflicted with other evidential findings.

63. In the judgment under appeal, the Court of First Instance rejected the objections of a procedural nature, on the grounds set out in paragraphs 261 to 270 of that judgment, as well as those concerning the correctness of the Commission’s assessment of the content of that report.

64. By the present plea on appeal, criticism is levelled only against the reasoning set out in paragraphs 261 to 270 of the judgment under appeal.

65. First of all, the Court of First Instance held that ‘[i]t is common ground that there is no provision that prevents the Commission from relying on a document as evidence that could be used to find that there has been a breach of Articles 81 EC and 82 EC and to set a fine, where, as in this instance, in the case of the FBI Report, the document was established in the context of a procedure which was not conducted by the Commission itself’. (42)

66. After noting that the Community case-law, dating from Orkem v Commission , (43) has recognised the right of undertakings not to be compelled by the Commission, under Article 11 of Regulation No 17, to admit their participation in an infringement, the Court of First Instance noted that the factual situation in the case before it differed from the situation examined in that case-law, which had been characterised by the fact that the Commission had put questions to undertakings. (44)

67. None the less, the Court of First Instance decided that ‘where, as in the present case, the Commission, when freely assessing the evidence in its possession, relies on a statement made in a context different from that of the proceeding initiated before it, and where that statement potentially contains information that the undertaking concerned would have been entitled to refuse to provide to the Commission by reason of the Orkem v Commission case-law …, the Commission is required to guarantee to the undertaking concerned procedural rights equivalent to those conferred by that case-law’. (45)

68. According to the Court of First Instance, ‘[c]ompliance with those procedural safeguards entails, in a context such as this one, the need for the Commission to carry out an examination automatically if, prima facie, there is serious doubt as to whether the procedural rights of the parties concerned were complied with in the procedure during which they provided such statements. If there is no such serious doubt, the procedural rights of the parties concerned must be deemed to have been adequately safeguarded if, in the statement of objections, the Commission clearly indicates, if necessary by annexing the relevant documents to it, that it intends to rely on the statements in question. In this way, the Commission makes it possible for the parties concerned to comment not only on the content of those statements, but also on any irregularities or special circumstances concerning their composition or submission to the Commission’. (46)

69. Applying those criteria to the case before it, the Court of First Instance first observed that ‘the FBI Report was submitted to the Commission by a competitor of ADM, Bayer, which had also taken part in the cartel … and … ADM did not claim that that document had been obtained illegally by Bayer or by the Commission’. (47)

70. Secondly, it found that ‘the FBI Report is a document compiled by the competent US authority for the purpose of taking action against secret cartels, which was produced before the US courts during the trial relating to the same cartel’ and that ‘[i]t contained no outward sign which should have automatically prompted the Commission to doubt its evidential value’. (48)

71. Thirdly, the Court of First Instance noted that in the statement of objections the Commission had stated that it intended to rely on that report, which it had appended to the statement, thus enabling ADM ‘to comment not only on the content of that document, but also on any irregularities or special circumstances concerning its composition … or its submission to the Commission, irregularities or circumstances which, according to ADM, meant that the Commission could not rely on that document without infringing the procedural rights guaranteed by Community law’. (49)

72. The Court of First Instance also observed that ADM did not complain in its reply to the statement of objections about the fact that the Commission had taken account of that document but, on the contrary, ADM itself expressly relied on that document in support of its arguments. The Court added that ADM did not claim even to have brought the unreliability of the FBI document to the Commission’s attention at any other time during the administrative procedure or to have asked the Commission to question the former ADM representative about the veracity of comments which appear in that report. (50)

73. The Court therefore concluded that, ‘[i]n such a situation’, the Commission had not infringed the procedural rights guaranteed by Community law by relying, in the context of ‘its unfettered evaluation of the evidence in its possession’, on the FBI Report. (51)

2. Arguments of the parties

74. ADM submits – relying on Spanish Banks (52) and Otto (53) – that, in a proceeding for the suspected infringement of Article 81 EC, the Commission is not entitled to use as evidence information obtained and used, even lawfully, by public authorities in the context of other proceedings. The FBI Report was prepared in an entirely different legal context from that in which the Commission operates, where there are different procedural safeguards from those provided under Community law. ADM observes that neither the former representative of ADM nor his lawyer had an opportunity to reread, approve or sign that report. Moreover, it emphasises that the report should have remained confidential, as is apparent from its first page, and should have been used only in the context of proceedings in the United States, as is apparent from the written commitment to that effect given by the US antitrust authorities in a letter dated 13 June 1997, produced before the Court of First Instance. (54)

75. Specifically referring to the undertakings’ privilege against self-incrimination, as upheld in Orkem v Commission , (55) ADM claims that it is apparent from Otto (56) that the Commission acts in breach of that privilege where it uses as evidence information obtained in other proceedings under compulsion, which it could not have obtained directly, as a result of that right, through the exercise of its own powers of compulsion. (57)

76. According to ADM, the criteria laid down by the Court of First Instance in paragraph 265 of the judgment under appeal (see point 68 above) conflict with the abovementioned rules which ADM infers from the Community case-law. Moreover, observance of the procedural safeguards provided for undertakings under Community law, in particular the privilege against self-incrimination, is in any event binding on the Commission, even if no request to that effect is made by the undertaking concerned, and no contrary inference can be drawn from the fact that there are no serious doubts as to whether procedural rights were respected in the ‘external’ proceedings in which the information was obtained or from the fact that the document containing the information was annexed by the Commission to the statement of objections. Likewise unimportant are other circumstances to which the Court of First Instance, on the other hand, attached significance in its analysis, doing so – according to ADM – inconsistently with the abovementioned criteria upheld by it, such as the fact that the document might have been legally obtained and transferred to the Commission by a third undertaking, or that it might have been drawn up by the competent US authority, or that – a possibility which ADM in fact rules out – it might have evidential value and have been produced before the US courts in proceedings concerning the citric acid cartel.

77. In that context, ADM also maintains that, by stating in paragraph 229 of the judgment under appeal that the statements recorded in the FBI Report were made in the course of an ‘interview by the Grand Jury’ and, in paragraph 267 of that judgment, that the report ‘was produced before the US courts during the trial relating to the [citric acid] cartel’, the Court of First Instance made a finding of fact which is vitiated by material inaccuracies apparent from the documents in the file, and as such open to censure in an appeal. First, it is apparent from the FBI Report itself that the former representative of ADM was heard not by a grand jury but by lawyers of the Antitrust Division of the US Department of Justice and an FBI agent; secondly, there were no proceedings before any US courts on the citric acid cartel, all the undertakings involved in that cartel having concluded ‘plea agreements’.

78. ADM also accuses the Court of First Instance of ‘distorting the evidence’ in that it concluded that the Commission could not entertain serious prima facie doubts as to the observance of procedural rights. According to ADM, certain circumstances of the present case, deriving from the FBI Report, clearly militated in favour of the applicability of the case-law initiated by Orkem v Commission , and the Commission should have noted such applicability on its own initiative.

79. Finally, ADM criticises the part of the judgment under appeal in which it is stated that ADM’s failure, in its reply to the statement of objections, to contest the admissibility of the FBI Report as evidence is such as to ‘justify an infringement of fundamental rights’ and means that ADM has forfeited the right to raise that objection before the Community judicature.

80. The Commission maintains that the present plea on appeal is unfounded in every respect.

81. The Commission contends, first of all, that the Court of First Instance correctly found that the protection upheld by Orkem v Commission should, in the present case, be adjusted to the particular circumstances of the case, in view of the fact that the Commission had received the FBI Report from a third undertaking and had not requested it directly from ADM. In those circumstances, in the Commission’s view, it was incumbent on the Commission itself to verify whether its use of the document might adversely affect ADM’s procedural rights. The best way of doing so was – as was accepted by the Court of First Instance – to give ADM an opportunity to express its own views on the use of the document, which the Commission properly did by citing the document in the statement of objections and annexing it thereto.

82. At the hearing, the agent for the Commission observed that the right granted by Orkem v Commission can be waived, since the undertaking concerned can choose whether or not to exercise it, and that ADM did not raise objections against the use of the FBI Report in the course of the administrative procedure before the Commission, even though it was given the opportunity to do so. The Commission’s agent added that the rights of the defence were respected by the US authorities who took the statements from the former representative of ADM and that, in particular, in the United States, undertakings – in contrast to natural persons – have no right under the fifth amendment to the US Constitution to refuse to answer.

83. The Commission emphasises that, if ADM’s complaint regarding the manner in which the Court of First Instance adapted the protection offered by Orkem v Commission to the circumstances of the present case were upheld, the ‘incongruous’ result would be that the use of any document containing statements against an undertaking which had been disclosed by another undertaking would be automatically excluded.

84. The Commission also maintains that, contrary to ADM’s argument (see point 76 above), all the elements of assessment used by the Court of First Instance were relevant in that they were necessary so that the rule laid down in Orkem v Commission could be applied in a manner appropriate to the present case.

85. As regards the alleged distortion of evidence, the Commission finds it difficult to understand that complaint or to see in what way, even if it were tenable, it might demonstrate the illegality of the judgment under appeal. Next, the Commission regards as ‘absurd’ the complaint referred to in point 79 above, taking the view that there would have been a breach of ADM’s fundamental rights if ADM had not been notified of the Commission’s intention to use the FBI Report and given an opportunity to comment on the use of that document. As the Court of First Instance found, however, the Commission, through the statement of objections, duly advised ADM of that intention, thereby giving it an opportunity to contest the use of the FBI Report.

3. Assessment

a) Interpretation of the judgment under appeal

86. The reasoning of the Court of First Instance in paragraphs 261 to 270 of the judgment under appeal does not appear to be absolutely clear throughout.

87. The starting point of that reasoning is, however, clear and in essence reflects the following assertion: the Commission is not in principle precluded from using as evidence in one of its own proceedings for the suspected infringement of Articles 81 EC and 82 EC a document drawn up in the context of a proceeding other than that being conducted by the Commission itself. (58)

88. The second stage of the reasoning reflects, in essence, the following assertion: where the Commission uses as evidence a statement made in a proceeding other than the proceeding being conducted by the Commission itself, it is required to guarantee to the undertaking concerned ‘procedural rights equivalent’ to those available to the undertaking under Community law in a proceeding conducted by the Commission. (59) That assertion, although in itself clear, must nevertheless be clarified in the light of the observations made by the Court of First Instance when it goes on to describe the manner in which the Commission must fulfil that obligation.

89. In that regard, the Court of First Instance indicates that the Commission must, initially, ‘carry out an examination automatically if, prima facie, there is serious doubt as to whether the procedural rights of the parties concerned were complied with in the procedure during which they provided such statements’. (60)

90. That passage – which is in apparent contradiction with the premiss concerning the necessary observance of rights equivalent to those conferred by Community law (61) and with the subsequent references to observance of ‘procedural rights guaranteed by Community law’ (62) – appears to refer to compliance with the procedural rights that may be relied on in the ‘source’ procedure, that is to say, in the present case, the procedural rights laid down by US legislation regarding investigations carried out by the US antitrust authorities. That seems also to be the meaning vaguely conveyed by the Court of First Instance’s references to ‘any irregularities’ in relation to the composition of the FBI Report or its production to the Commission (63) (irregularities whose existence can only be assessed under US law) and also by the reference – in connection with what appears to be the application to the present case of that first criterion of prima facie verification of the absence of serious doubts as to the observance of procedural rights (see point 70 above) – to questions of US law, such as that of the competence of the authority which drew up the report in question.

91. Although the grounds of the judgment under appeal on this point are open to allegations of insufficiency or inconsistency, I nevertheless consider that those grounds can reasonably be interpreted, notwithstanding the infelicitous wording of some parts, to the effect that:

(a) the possibility of using statements made in a ‘foreign’ procedure as evidence in a proceeding conducted by the Commission presupposes, first, that the procedural safeguards provided for under that legal system in relation to the taking of such statements have been observed and , secondly, that the modus operandi used by those foreign authorities for taking the statements is compatible with procedural rights under Community law;

(b) before using such statements as evidence in its own proceeding, the Commission is under an obligation to verify whether there are serious doubts concerning (i) the observance, in the foreign procedure, of the procedural rights conferred on the party concerned by the foreign legal order and (ii) the compatibility with procedural rights under Community law of the modus operandi used in that procedure for taking the statements in question.

92. The Court of First Instance goes on to say that, in the absence of serious doubts as to observance of ‘procedural rights’, the Commission must indicate in the statement of objections its intention to use the statements made in the foreign procedure. (64)

93. In that regard, in view of the literal wording of paragraph 265 of the judgment under appeal, the Court of First Instance appears to consider that the discharge of that obligation is in itself sufficient to guarantee the upholding of those rights. Such a conclusion is, in my opinion, clearly incorrect. Indeed, it seems obvious that giving the undertaking concerned an opportunity to challenge, as being injurious to its procedural rights, the use of the document containing those statements cannot in itself exclude the possibility that such use may indeed impair those rights. It will also be necessary, where objections are actually made by the undertaking, for the Commission to consider them and to assess their merits on the basis of legally sound arguments.

94. What the Court of First Instance appears in reality to mean is that, in the absence of objections by the undertaking concerned as to the use as evidence in a proceeding conducted by the Commission of statements made in a foreign procedure, the Commission is authorised to conclude that such use is not injurious to the procedural rights to which the undertaking is entitled.

b) The correctness of the criteria for analysis used in the judgment under appeal

95. I shall now examine, in the light of the parties’ arguments, the conformity with Community law of the criteria used by the Court of First Instance in its reasoning, as set out in point 87 (non-existence of a general prohibition on the use by the Commission of evidence produced in a proceeding other than that being conducted by the Commission itself), point 91(a) (the precondition for such use, namely compliance with procedural rights), and points 91(b) and 94 above (steps that the Commission must take in order to be sure that those rights have been complied with).

96. The issue raised, concerning the evidential rules in proceedings for the suspected infringement of Articles 81 EC and 82 EC and the transfer of evidence from one proceeding to another, and even from one legal system to another, is of undoubted delicacy and therefore calls for an in-depth analysis.

i) The non-existence of a general prohibition on the use by the Commission of evidence produced in a proceeding other than that being conducted by the Commission itself

97. First of all, ADM questions the Commission’s entitlement to use as evidence, in a proceeding for the suspected infringement of Article 81 EC, information obtained in a proceeding other than the proceeding being conducted by the Commission itself, and in that regard it relies on Spanish Banks and Otto .

98. In Spanish Banks , (65) the Court of Justice inferred from Article 214 of the EC Treaty (now Article 287 EC, concerning professional secrecy) and from the provisions of Regulation No 17 that the Member States, in the context of their competence to apply national and Community competition rules, may not use as evidence either unpublished information contained in replies given to requests for information addressed to undertakings under Article 11 of Regulation No 17 or information contained in the requests and notifications provided for in Articles 2, 4 and 5 of that regulation. ADM’s reference to Spanish Banks is of little use, however, since that judgment concerns (and holds to be prohibited) the use of information obtained by the Commission in a proceeding conducted by it under Regulation No 17 as evidence in a proceeding conducted by national competition authorities , whereas that case did not involve the bringing-in of information as evidence in the proceeding being conducted by the Commission , the matter with which the present plea on appeal is concerned.

99. As regards Otto , (66) the prohibition on the Commission of using as evidence in one of its proceedings certain statements obtained in the context of a case before a national civil court was not seen in the judgment as a prohibition of a general nature attributable to the separation of procedures but was derived from the need to observe the undertaking’s privilege against self-incrimination, as recognised in Orkem v Commission , on the assumption that such statements were self-incriminating.

100. On the other hand, more significant guidance in support of the view contended for by ADM could be derived from Dow Benelux v Commission (67) and PVC II (68) (‘the PVC judgments’), from which it is apparent that information or documents obtained by the Commission in a proceeding under Regulation No 17 in the course of investigations carried out under Article 14 of that regulation may not be used directly as evidence for the purposes of a second proceeding conducted by the Commission itself under that very regulation.

101. It could be argued that, if those two judgments confirmed that the Commission may not use as evidence in a proceeding for the suspected infringement of the competition rules information which the Commission itself has obtained in another proceeding of the same kind, then a fortiori the Commission should be regarded as precluded from using as evidence in one of its proceedings information obtained by the public authorities of a non-member country in a proceeding conducted by those authorities for breach of the competition rules of that country.

102. To my mind, however, that a fortiori argument cannot be upheld.

103. In the PVC judgments, the Court of Justice held that information obtained during investigations under Article 14 of Regulation No 17 may not be used for purposes other than those specified in the order or decision under which the investigation was carried out and that this requirement is intended to protect both professional secrecy, as explicitly referred to in Article 20 of that regulation, and the undertakings’ rights of defence, which Article 14(3) of that regulation is intended to guarantee. According to the Court of Justice, ‘those rights would be seriously endangered if the Commission could rely on evidence against undertakings which was obtained during an investigation but was not related to the subject-matter or purpose thereof’.

104. The prohibition upheld by the PVC judgments thus appears to be designed for the protection of safeguards – those of professional secrecy and the rights of the defence – which, by virtue of rules of Community law, are an integral aspect of the collection of information by the Commission in the proceeding being conducted by it , binding the latter and its officials and agents regarding the use of such information. That being the rationale for that prohibition, (69) it cannot be inferred from it, automatically and a fortiori, that there is a general prohibition on the use as evidence by the Commission of information obtained in a foreign antitrust proceeding.

105. The non-existence of any general prohibition in Community law on using as evidence in a proceeding conducted by the Commission for the suspected infringement of Article 81 EC information obtained in a proceeding conducted by other authorities is confirmed by the Court of Justice in Dalmine v Commission. (70)

106. In that judgment, the Court of Justice held, as did the Court of First Instance in the same case, (71) that it was permissible to use as evidence in a proceeding conducted by the Commission under Regulation No 17 minutes of the questioning of former executives of a company involved in that proceeding – Dalmine – by the prosecuting authorities of a Member State in connection with a criminal investigation.

107. Before the Court of First Instance, Dalmine had accused the Commission of seriously infringing the rules of procedure by using statements made in criminal proceedings wholly unconnected with the investigation entrusted to the Commission and it referred in that regard to Spanish Banks . The Court of First Instance rejected Dalmine’s complaint, observing – on the basis that Spanish Banks concerned the use by national authorities of information obtained by the Commission under Article 11 of Regulation No 17 and that such a situation was expressly governed by Article 20 of Regulation No 17 – that whilst ‘the lawfulness of the transmission to a national authority by the Commission of [such information] … and the lawfulness of the prohibition on the direct use of that information as evidence by that national authority are matters for Community law’, ‘[o]n the other hand, the lawfulness of the transmission to the Commission by a national prosecutor or the authorities competent in competition matters of information obtained in application of national criminal law and its subsequent use by the Commission are in principle questions covered by the national law governing the conduct of investigations by those national authorities and also, in the case of court proceedings, by the jurisdiction of the national courts’. The Court of First Instance observed, however, that it did not appear that Dalmine had ever raised before a competent Italian court the question of the use at Community level of the abovementioned minutes and that it had not even provided evidence to show that such use was contrary to the applicable Italian legal provisions. In consequence, according to the Court of First Instance, Dalmine’s arguments could only affect the credibility of the witness statements contained in those minutes and not their admissibility as evidence in the proceeding. (72)

108. In the appeal proceedings, the Court of Justice, following the Opinion of Advocate General Geelhoed on that point, (73) upheld that analysis by the Court of First Instance, on the following basis:

’62 As regards, next, the admissibility of those minutes as evidence, it must be held, as the Court of First Instance held ..., that the lawfulness of the transmission to the Commission by a national prosecutor or the authorities competent in competition matters of information obtained in application of national criminal law is a question governed by national law. Furthermore, as the Court of First Instance observed ..., the Community judicature has no jurisdiction to rule on the lawfulness, as a matter of national law, of a measure adopted by a national authority ...

63 As regards the use of that information by the Commission, the Court of First Instance correctly observed ... that Dalmine’s arguments could affect only “the reliability and therefore the probative value of its managers’ statements and not the admissibility of that evidence in the … proceedings”. As stated ...., the principle which prevails in Community law is that of the unfettered [production (74) ] of evidence and the only relevant criterion for the purpose of assessing the evidence adduced relates to its credibility. Accordingly, as the transmission of the minutes in issue was not declared unlawful by an Italian court, those documents cannot be considered to have been inadmissible evidence which ought to have been removed from the file.’

109. That judgment clearly excludes the existence of any general prohibition preventing the Commission from using as evidence, in a proceeding conducted by it under Regulation No 17, statements made in a foreign proceeding. In consequence, ADM’s broad-based assertion, referred to in point 97 above, does not, in my opinion, deserve to be upheld.

ii) The breach of specific procedural safeguards

110. Apart from that broad-based assertion, by this plea on appeal ADM in any event claims, essentially, that the use of the FBI Report as evidence infringed specific procedural safeguards to which it was entitled, concerning both the proceeding before the US antitrust authorities and the proceeding before the Commission.

– Existence of conditions for use by the Commission of evidence obtained in a proceeding other than that being conducted by the Commission itself: observance of procedural rights

111. In order to examine those more specific arguments put forward by ADM, it is necessary first of all to verify whether the Commission’s use of evidence obtained in a proceeding other than that being conducted by the Commission itself is subject to restrictions. This verification is necessary in view of the reference made by the Court of Justice in Dalmine v Commission (see point 108 above) to the Community law principle of the ‘unfettered [production] of evidence’, a reference which calls, in my opinion, for certain important clarifications.

112. The Community law principle of the unfettered production of evidence cannot be construed as meaning that every item of evidence is always and in all circumstances usable and that all that counts is its credibility.

113. In evidential matters, it is important not to confuse different principles. In support of the statement, which it had also made in Dalmine v Commission , (75) that the principle pre vailing in Community law is that of the unfettered production of evidence and that the only relevant criterion for the purposes of assessing the evidence adduced relates to its credibility, the Court of First Instance referred to the Opinion of Judge Vesterdorf, acting as Advocate General, in Rhône-Poulenc v Commission , (76) and to the judgment in Met-Trans and Sagpol . (77) Judge Vesterdorf’s observations, to which the Court of First Instance referred, seem to me rather to relate to a separate principle, namely, that of the unfettered evaluation of the evidence , in other words, the freedom of the courts to reach their own conclusions regarding the substantive content of the evidence, in terms of the significance to be attributed to it. (78) In Met-Trans and Sagpol , the Court of Justice was asked, inter alia, to specify what kinds of evidence were sufficient to demonstrate a given circumstance envisaged by a particular provision of Community law and, in particular, whether in that regard documentary evidence meeting certain requirements was mandatory. (79) Replying that it was apparent from the wording of that provision that the evidence of that particular circumstance is not limited to certain types of evidence and that, ‘given that there is no legislation at Community level governing the concept of proof, any type of evidence admissible under the procedural law of the Member States in similar proceedings is in principle admissible’, the Court clearly upheld a principle of freedom as to the form of evidence adduced , which is to be interpreted as the right to rely, in order to prove a particular fact, on any form of evidence (such as oral testimony, documentary evidence, confessions, and so on), that principle being subject to the exceptions expressly laid down by the Community rules. (80)

114. Whilst it is true, therefore, that in Community law – saving specific provision to the contrary – a particular fact may be proved by any form of evidence (freedom as to the form of evidence adduced) and determination of the probative value of an item of evidence is a matter for the Community judicature, not for legislation (unfettered evaluation of evidence), it cannot on the other hand, in my view, be maintained that every item of evidence produced is usable and has to be evaluated as to its merits by the Commission or the Community judicature. That would be inconceivable, for example, in the case of a statement found to have been obtained by the competent authorities through the use of violence. Quite apart from that academic example, it need merely be noted that, according to Community case-law, the Commission cannot use the following as evidence in a proceeding under Regulation No 17:

– statements or documents acquired by the Commission in an earlier proceeding under the same regulation (see point 100 above);

– documents in respect of which the undertaking under investigation has not had an opportunity to exercise its right to be heard during the course of that investigation; (81)

– communications between lawyers and clients of a legally protected confidential nature; (82)

– statements made by executives of an undertaking in reply to questions put to them in the course of a preliminary examination of witnesses prior to the initiation of national civil proceedings, where the reply entails admission of an infringement of the competition rules; (83)

– minutes of questioning from national criminal proceedings, where transmission thereof to the Commission has been declared unlawful by the competent national court (see points 107 and 108 above).

115. To those examples of evidence which the Commission is not permitted to use, the judgment under appeal in the present case adds another: that of statements made in a proceeding other than the proceeding being conducted by the Commission itself, where the interested party was not given benefit of the procedural rights to which he was entitled in that context or those he would have enjoyed under Community law if those statements had been taken directly by the Commission.

116. As regards the limits on the use as evidence in the proceeding conducted by the Commission of statements made in another proceeding, the judgment under appeal and the judgments in the Dalmine v Commission cases (84) appear, however, to diverge. The Dalmine v Commission judgments suggest that the problem of the impermissibility of such use can arise only in cases where the transmission to the Commission or the use by the Commission of the minutes containing those statements is unlawful under the legislation of the State of the authority which took the statements (and where that illegality is ascertained by the competent national court). (85) The judgment under appeal, in wider terms, attaches importance to the failure to observe the procedural safeguards which apply in the foreign proceeding – which may, in my opinion, be considered to include the limits placed by the foreign legal system, in the interests of the maker of the statements, on the transmission of the statements to other authorities and on their use by those authorities – and to the incompatibility with the procedural safeguards conferred by Community law of the modus operandi used in that proceeding for taking those statements.

117. The fact that the Dalmine v Commission judgments did not recognise, as a ground for the unusability of evidence, the non-observance of the latter safeguards may perhaps be attributed to the fact that Dalmine did not contest the legality of using the minutes of the questioning concerned as evidence in the proceeding conducted by the Commission, on grounds of breach of specific procedural rights (such as the privilege against self-incrimination upheld by Community law), but, more radically, on grounds of an alleged general incompatibility with the rights of the defence of the use as evidence in that proceeding of information deriving from another proceeding.

118. Moreover, it does not do to gloss over the fact that the particularly reductive approach, adopted by the Community judicature in the Dalmine v Commission case, to the limits on the Commission’s use of evidence obtained in proceedings conducted by other authorities may also have to be seen as relating only to cases involving authorities of Member States of the European Community and as being ultimately based on the implicit presumption that the level of protection of the rights of the defence at Community level and at the level of the Member States is essentially equivalent. (86) However, such a presumption obviously has no place when proceedings conducted in non-member countries are involved.

119. In any event, I fully endorse the view, expressed in the judgment under appeal and not disputed by the parties to the present proceedings, that, for the purposes of the use as evidence in a proceeding conducted by the Commission of information obtained in a proceeding conducted by authorities of a non-member country, there must be observance both of the procedural safeguards laid down for the latter proceeding and of those established for the proceeding conducted by the Commission. That approach – which reflects the cumulative application of the laws of the State where the evidence originates and those of the State where the evidence is received – is necessary, in my opinion, in view of the fact that we are operating in the area of public law, and in particular in the matter of penalties, and that observance of the rights of the defence in any proceedings in which penalties may be imposed, in particular fines or default penalties, constitutes a fundamental principle of Community law which must be complied with even in the case of proceedings of an administrative nature. (87)

120. It is therefore necessary, for the observance of procedural rights in a case such as this, for the evidence from the foreign proceedings to have been obtained in accordance with the formalities laid down by the relevant foreign laws; for its transmission to the Commission and its use by the Commission to be allowed under those laws; and for such use to be compatible with the specific safeguards that the undertaking concerned would have enjoyed, under Community law, if the evidence had been taken directly in the proceeding conducted by the Commission.

– The criteria laid down by the Court of First Instance regarding the modus operandi that the Commission must use in order to be sure of observing procedural rights, and the application of those criteria to the present case

121. In its appeal, ADM criticises the criteria laid down by the Court of First Instance, in paragraph 265 of the judgment under appeal, regarding the manner in which the Commission is required to uphold the abovementioned rights. Observance of those rights is required in every case and, accordingly, the Commission could not – contrary to what was stated by the Court of First Instance – confine itself to ascertaining that in that regard there were no serious doubts, or objections on the part of the undertaking concerned. ADM points out that, according to the case-law, the Court of First Instance itself is required of its own motion to raise the issue of the observance of procedural safeguards.

122. In essence, the Court of First Instance took the view that there can be no infringement of an undertaking’s procedural rights where the Commission uses as evidence statements taken in foreign proceedings where that undertaking, previously apprised of the Commission’s intention to use those statements, has not raised objections in that regard and the Commission itself has no reason to entertain serious prima facie doubts as to the compatibility of such use with the observance of those rights.

123. I consider that ADM has grounds for complaining that that interpretation is unlawful. Procedural rights are to be observed by the Commission in all circumstances, including therefore in cases where the undertaking concerned fails to invoke them in the course of the administrative procedure. Community law contains no rule to the effect that, if an undertaking does not raise issues of law in the course of the administrative procedure before the Commission, its right to raise those issues will lapse. There is no rule that the application to the Community Court must in all respects match the reply to the statement of objections. Nor is the undertaking under any obligation to respond to the statement of objections. The Commission is required to adopt a final decision in conformity with law, regardless of whether the undertaking concerned has actually exercised its rights of defence in the administrative procedure or the extent to which it has done so.

124. I would also observe that the Commission is required, in the interests of the observance of the rights of the defence, to inform the addressee of the statement of objections in all cases of its intention to use statements originating from a foreign proceeding as evidence for the purposes of its final decision, that is to say, regardless of whether or not it entertains serious doubts as to the compatibility of such use with observance of procedural rights.

125. Even if it is conceded that, as the Commission observes, procedural rights may be waived, the mere fact of not submitting observations to the Commission regarding the use in evidence of information from a foreign proceeding, as announced in the statement of objections, cannot be construed as a waiver of the right to invoke procedural rights, but is to be seen simply as a failure by the undertaking to exercise its right to be heard by the Commission regarding the legality of such use.

126. On this point, it seems to me that the judgment under appeal is vitiated by an error of law.

127. Moreover, even if we regard the criteria set out by the Court of First Instance in paragraph 265 of the judgment under appeal as being in conformity with law, that judgment would appear to me in any event to be vitiated by an error of law in that the manner in which the Court of First Instance applied those criteria to the present case does not appear correct.

128. First, I would observe that the Court of First Instance was not entitled, without further analysis, to criticise ADM – and declare that its rights in that respect had lapsed – for not opposing, in its reply to the statement of objections, the use of the FBI Report in evidence by the Commission. In the proceedings at first instance, ADM objected to the use of that report as evidence of the factual circumstances indicated in recital 265 of the contested decision. Because, however, those facts did not appear in the statement of objections, which set out only circumstances not substantively contested by ADM, the Court of First Instance should, before making that criticism of ADM, have verified whether the latter could reasonably have deduced, from the statement of objections and in the light of the content of the FBI Report, which was mentioned in that statement and annexed to it, that the Commission intended using those circumstances against it, too (see points 46 to 50 above), and whether ADM therefore had an interest in complaining, in its response to the statement of objections, about the use of the FBI Report as evidence. ADM’s silence regarding possible grounds precluding use of the document as evidence cannot be interpreted as acquiescence except with regard to the use specified in the statement of objections.

129. Secondly, in my opinion, there were grounds in the present case for seriously doubting, prima facie, whether use of the FBI Report in evidence was compatible with ADM’s procedural rights.

130. In that regard, I am first of all in agreement with ADM that the elements taken into account by the Court of First Instance in paragraphs 266 and 267 of the judgment under appeal (see points 69 and 70 above) are, where not entirely irrelevant to the problem of observance of procedural safeguards, not such as to rule out serious doubts as to the compatibility of the Commission’s use of that report with the procedural safeguards specifically invoked by ADM before the Court of First Instance and now before the Court of Justice. The issues, it should be remembered, are the privilege against self-i ncrimination; the obligation of the authority which obtains information to submit to the declarant for approval the written record, prepared by that authority, of the statements made; and protection of the confidential nature of the statements made by ADM’s former representative to the US antitrust authorities in the context of the cooperation provided to those authorities by ADM itself.

131. I shall dwell, in particular, on the last aspect, which deserves particular attention because it touches on the delicate theme of bilateral relations between the European Community and the United States in the matter of cooperation between competition authorities.

132. In asserting that the FBI Report was intended to be used only in proceedings in the United States, ADM pointed out, first, that the first page of that report indicates that the disclosure of it to third parties is prohibited and, secondly, that the US antitrust authorities had expressly agreed with the lawyer of ADM’s former representative that the information provided by the latter would not be disclosed except for use in proceedings conducted by the United States. Those facts are readily apparent from the documents produced before the Court of First Instance.

133. It is true that the Commission probably did not have in its possession the letter containing that commitment from the US authorities (88) and that the FBI Report was not forwarded to it by those authorities but by another undertaking involved in the proceeding conducted by the Commission.

134. However, the Commission could not in my view have been unaware of the possibility that the use of the FBI Report in its proceeding might conflict with safeguards under US law regarding the confidential treatment of the information supplied by ADM’s former representative. That is so not only because, as emphasised by ADM, there was a notice on the first page of that document, forbidding disclosure to third parties, but above all because of the state of the relations between the European Communities and the United States in the sphere of cooperation between their respective competition authorities.

135. At the time of adoption of the contested decision, those relations were, as they are now, governed by a bilateral agreement concluded in 1991, (89) supplemented by a second bilateral agreement concluded in 1998. (90) Those agreements provide for consultation, cooperation and coordination between the Commission, on the one hand, and, on the other, the Antitrust Division of the US Department of Justice and the Federal Trade Commission in their endeavours to ensure the application of competition law. No provision of those agreements provides expressly for the exchange of information between those authorities for the purposes of proving infringements of competition law. The 1991 agreement provides, in particular, with regard to the exchange of information between those authorities, that the contracting party possessing the information is not required to provide it to the other party if disclosure of that information is prohibited under the domestic law of the former and that each contracting party is required to maintain, to the fullest extent possible, the confidentiality of any information provided to it by the other party under the agreement and to oppose to the fullest extent possible any application for disclosure of such information by a third party that is not authorised by the contracting party that supplied the information (Article VIII). It is also made clear that the provisions of the agreement must be interpreted so as to be consistent with the existing laws of the contracting parties – or of their member States – and as not requiring any changes in the laws thereof (Article IX). Moreover, in the exchange of interpretative letters regarding that agreement, it was declared on behalf of the European Community, in relation to Articles VIII and IX of the agreement, that information covered by professional secrecy, as referred to in Article 20 of Regulation No 17, would not be disclosed by the Commission to the US antitrust authorities without the express consent of the ‘source’ concerned. The 1998 agreement also contains, in Article IV(2)(c)(iii) and Article V thereof, references to the need to obtain prior consent from the source concerned for the transmission of information of a confidential character to the competition authorities of the other contracting party.

136. In essence, on the basis of those agreements, the Commission and the US antitrust authorities are not allowed to share information which may not be disclosed under the laws of the authority possessing the information (91) and are, in particular, ‘bound by their internal rules regarding the protection of the confidentiality of information gathered by them during their respective investigations’. (92)

137. The exchange of information between those authorities therefore takes place ‘within the limits of the existing provisions on confidentiality’ (93) and only if the interested party waives the right to confidentiality will the authorities in question be entitled to exchange confidential information. (94) The impossibility for the competition authorities, under their present cooperation agreements, to exchange confidential information without the consent of the source involved is also perceived as a significant limit on the effectiveness of cooperation in combating cartels, so much so that in some institutional circles it is suggested that a ‘second generation’ agreement, designed to allow the exchange of confidential information as well, should be concluded. (95)

138. The limitation placed on the exchange of information between authorities because of the need to observe the confidentiality of information assumes particular importance in cases, such as this one, where information is provided voluntarily in the framework of an undertaking’s cooperation designed to obtain leniency regarding penalties. It is clear that, if information of that kind could be transmitted to competition authorities of other countries by the authority that received it in connection with an application for leniency, the result – particularly in the absence of any coordination of the leniency programmes set up by the authorities concerned – would be an extremely powerful disincentive for undertakings to cooperate under such programmes. (96)

139. As stated by the Competition Committee of the Organisation for Economic Cooperation and Development (OECD), ‘information exchanges should not inadvertently undermine hard core cartel investigations, including the effectiveness of amnesty programmes’; ‘to that end, most member countries [of the OECD] have adopted policies pursuant to which they do not exchange information obtained from an amnesty applicant without the applicant’s prior permission’. (97)

140. In the light of the state of the bilateral relations between the European Community and the United States regarding the present issues and the problems inherent in the disclosure of information provided by undertakings seeking leniency arrangements – of which the Commission could not have been unaware – I consider that, having received the FBI Report from one of the other undertakings involved in the proceeding being conducted by it, the Commission should have taken appropriate precautions in deciding how that document should be used in that proceeding, in order to avert the risk of infringing any safeguards granted by US law regarding disclosure of the content of that document.

141. In particular, I do not think that the Commission was entitled to use the FBI Report in evidence without first asking the undertaking which had supplied it to clarify the manner in which it had obtained possession of it and without first asking the US antitrust authorities, in fulfilment of its obligations of cooperation with them under the existing bilateral agreements, whether, under US law, that report was a document regarded as confidential, as might be presumed until proved otherwise not only from its first page but also from the context, known to the Commission, in which it was drawn up (and as seems to be apparent from the letter of 13 June 1997 from the Antitrust Division of the US Department of Justice).

142. The fact that it was a third party which forwarded the FBI Report, and not those authorities, certainly cannot justify the Commission’s failure to take those precautions. That fact could not entitle the Commission to consider that the document had lost all confidentiality. On the basis of an interpretation in good faith of Article VIII of the 1991 bilateral agreement, the Commission should in my opinion have avoided the risk that, by using that report in evidence, it might exacerbate the consequences of a possible infringement of the confidentiality thereof committed in the United States.

143. Moreover, the fact that the FBI Report was not transmitted to the Commission by the US antitrust authorities materially distinguishes the present case from that examined in the Dalmine v Commission judgments, (98) in which the Commission received the interview minutes directly from the national authorities which had recorded them. In the case of Dalmine v Commission , the Commission was authorised, according to the Court of Justice, to use those minutes as evidence, in the absence of any ruling by the national court declaring their transmission to the Commission to be illegal. (99) In the present case, on the other hand, since the FBI Report was not forwarded directly by the US antitrust authorities, no importance could be attached to the absence of any such ruling by a US court. The Commission was under a duty to consult the US antitrust authorities regarding the legality under US law of its use of the document specifically in order to obtain on that matter at least an initial pronouncement from the competent national authorities, albeit one that was not of a judicial nature.

144. For the reasons set out in point 121 et seq. above, I therefore consider that, in the event of the first plea on appeal being rejected as unfounded, the judgment under appeal should be set aside in so far as it rejected the claims, alleging breach of procedural safeguards, made by ADM in respect of the Commission’s use of the FBI Report in evidence in order to show that ADM enjoyed ringleader status in the cartel.

E – The action against the contested decision: whether the Commission was entitled to use the FBI Report as evidence that ADM was one of the ringleaders of the cartel

145. I have already observed in point 141 above that the Commission could not legitimately use the FBI Report in evidence without first obtaining from the undertaking supplying it and from the US antitrust authorities the clarifications needed to ascertain the legal status of that document as regards confidentiality. The plea in law at first instance alleging breach of procedural safeguards, in so far as it was based on the incompatibility of the Commission’s use of that report with the confidentiality guaranteed for it by those authorities, should therefore, in my opinion, be upheld.

F – The pleas on appeal (third, fourth and fifth) relating to Cerestar’s written statement

146. By three separate pleas on appeal, ADM criticises the reasoning which prompted the Court of First Instance to conclude that, contrary to ADM’s claim at first instance, the Commission did not commit manifest errors in its appraisal of Cerestar’s written statement as regards the role of ADM’s former representative in the cartel.

147. In that connection, it should first of all be borne in mind that the Court of Justice has no jurisdiction to find the facts or, as a rule, to examine the evidence which the Court of First Instance accepted in support of those facts. Indeed, provided that such evidence has been properly obtained and that the general principles of law and rules of procedure relating to the burden of proof and the taking of evidence have been observed, it is for the Court of First Instance alone to assess the value which should be attached to the evidence produced before it. That appraisal does not therefore constitute – save where the clear sense of that evidence has been distorted – a point of law which, as such, is open to review by the Court of Justice. (100)

148. By the first of those pleas on appeal, however, that is precisely the complaint put forward by ADM, in that it alleges distortion of one item of evidence, namely the FBI Report. In its submission, in contrast to what the Court of First Instance concluded in