Keywords

Summary



Keywords

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

(Arts 81 EC and 82 EC; Council Regulation No 1/2003, Art. 23(2))

2. Competition – European Union rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Presumption of decisive influence exercised by the parent company over its wholly‑owned subsidiaries

(Arts 81 EC and 82 EC; Council Regulation No 1/2003, Art. 23(2))

3. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision to apply competition rules – Decision relating to several addressees

(Arts 81 EC, 82 EC and 253 EC)

4. Competition – Fines – Amount – Determination – Deterrent effect – Size and global turnover of the sanctioned undertaking taken into account – Relevance – Application of a multiplier to the starting amount

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

5. Competition – Administrative procedure – Adoption of a Commission decision finding an infringement after other decisions that took repeat infringement into account – No breach of the principle non bis in idem

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

6. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned

(Council Regulation No 1/2003, Arts 18 and 23(2); Commission Notice 2002/C 45/03, Sections 21 and 23(b))

7. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned

(Council Regulation No 1/2003, Arts 18 and 23(2); Commission Notice 2002/C 45/03, Sections 21 and 23(b))

8. Competition – Fines – Amount – Determination – Criteria – Taking into account of cooperation of the incriminated undertaking with the Commission outside the framework laid down by the Leniency Notice – Conditions – Limits

(Council Regulation No 1/2003, Art. 23; Commission Notices 96/C 207/04, 98/C 9/03, Section 3, and 2002/C 45/03)

Summary

1. The conduct of a subsidiary may be imputed to its parent company in particular where, although having a separate legal personality, that subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links between those two legal entities. That is the case because, in such a situation, the parent company and its subsidiary form a single economic unit and therefore form a single undertaking within the meaning of Article 81 EC, which enables the Commission to address a decision imposing fines to the parent company, without having to establish the personal involvement of the latter in the infringement.

In the specific case where a parent company has a 100% shareholding in a subsidiary which has infringed the competition rules of the European Union, first, the parent company can exercise a decisive influence over the conduct of the subsidiary and, second, there is a rebuttable presumption that the parent company does in fact exercise a decisive influence over the conduct of its subsidiary. In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to presume that the parent company exercises a decisive influence over the commercial policy of the subsidiary. The Commission will then be able to regard the parent company as jointly and severally liable for the payment of the fine imposed on its subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to show that its subsidiary acts independently on the market.

The ownership structure of the capital of a subsidiary does provide sufficient grounds for such a presumption and the Commission is not required to adduce further evidence in relation to the parent company’s actual exercise of a decisive influence. That conclusion is not called into question by the fact that additional evidence of that kind was put forward in other cases.

Where control over all or almost all of the share capital of a subsidiary has been considered to be sufficient grounds for that presumption with regard to all the addressees of a decision imposing a fine for infringement of competition law, and in the absence of any argument refuting that presumption, the fact that the Commission put forward, with regard to certain addressees of that decision, additional evidence, either to reinforce the conclusion that had already been validly drawn from the fact of control over the whole of the subsidiary’s share capital or to answer the arguments developed by the undertakings concerned, does not mean that the principles applied by the Commission were not the same for all the addressees and that the principle of equal treatment was infringed.

(see paras 31-34, 46-47, 52-53, 59)

2. Where the Commission applies the presumption of the exercise of a decisive influence in order to impute to a parent company the unlawful conduct of its subsidiary, it is necessary for that parent company to adduce sufficient evidence to demonstrate that its subsidiary acts independently on the market.

In this connection, account must be taken of all the relevant factors relating to the economic, organisational and legal links which tie the subsidiary to the parent company, which may vary from case to case. It is not necessary to restrict that assessment to matters relating solely to the subsidiary’s commercial policy stricto sensu , such as the distribution or pricing strategy. In particular, the presumption in question cannot be rebutted merely by showing that it is the subsidiary that manages those specific aspects of its commercial policy, without receiving instructions.

The mere fact that the parent company is a non-operating holding company is insufficient to disprove that it exercised a decisive influence on its subsidiary, in particular by coordinating financial investments within the group. Indeed, in the context of a group of companies, a holding company is a company which seeks to regroup shareholdings in various companies and whose function is to ensure that they are run as one.

Furthermore, the division of tasks, which is a normal phenomenon within a group of companies, cannot rebut that presumption of a decisive influence.

As regards the fact that there was no information system between the parent company and its subsidiary, the fact that that latter never implemented for the benefit of its parent company a specific information policy on the market concerned is not sufficient to show that it was independent, given that the independence of a subsidiary is not to be assessed solely by reference to the operational management aspects of the undertaking.

(see paras 67-69, 74, 76, 78)

3. The statement of reasons required by Article 253 EC must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Court to exercise its power of review. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

Where a decision taken in application of Article 81 EC relates to several addressees and raises a problem with regard to liability for the infringement, it must include an adequate statement of reasons with respect to each of its addressees, in particular those of them who, according to the decision, must bear the liability for the infringement. Thus, in regard to a parent company held jointly and severally liable for the infringement, such a decision must contain a detailed statement of reasons for attributing the infringement to that company.

Where the Commission relies upon the presumption that a parent company exercises a decisive influence over the conduct of its subsidiary, and the companies concerned put forward arguments during the administrative procedure to rebut that presumption, the decision must contain a sufficient statement of the reasons to justify the Commission’s opinion that those arguments were not such as to rebut the presumption. However, the Commission is not thereby obliged to adopt a position on all the arguments relied on by the parties concerned. Consequently, it cannot be criticised for not replying specifically to each argument relied on by an undertaking. Indeed, an all-encompassing answer may, depending on the circumstances of the case, be sufficient for the undertaking to be able properly to defend its rights and for the Court to exercise its power of review.

(see paras 89-91, 96)

4. The Commission has a margin of discretion when setting the amount of fines in order that it may channel the conduct of undertakings towards compliance with the competition rules. In order to determine the amount of the fine, the Commission must ensure that it has the necessary deterrent effect and may, in this respect, take into consideration, inter alia, the size and economic power of the undertaking in question.

The need to ensure that the fine has a sufficient deterrent effect requires that the amount of the fine be adjusted so that the fine is not rendered negligible, or on the other hand excessive, notably by reference to the financial capacity of the undertaking in question, in accordance with the requirements resulting from, first, the need to ensure that the fine is effective and, second, respect for the principle of proportionality.

In particular, where the undertaking concerned would find it easier to find the funds necessary to pay its fine, that may justify the application of a multiplier, in order to ensure that the fine is sufficiently deterrent. In this connection, the Commission is not required to establish any link between use of the undertaking’s resources and the commission of the infringement, but may legally take into account the overall size of the undertaking. Since the increase applied by the Commission may legally be based upon the size of the undertaking in question and the question of which resources are used in the commission of the infringement is irrelevant, the increase in question cannot constitute a breach of the principle of equal treatment merely because no distinction was made in its application between the infringing undertakings by reference to that criterion. Moreover, an increase cannot be regarded as disproportionate in light of the purpose of deterrence where it is fully justified, in view of the size of the undertaking in question, evidenced by the particularly high worldwide turnover of that undertaking.

(see paras 113-115, 117-120)

5. The application of the principle non bis in idem is subject to the threefold condition of identity of the facts, unity of the offender and unity of the legal interest protected. Under that principle, therefore, the same person cannot be sanctioned more than once for a single unlawful course of conduct designed to protect the same legal asset. In so far as, in taking previous infringements into consideration in a decision, the Commission does not seek to punish those infringements again but only to penalise the undertaking concerned for its participation in the cartel referred to in that decision, by taking account of its conduct constituting repeated infringement, the fact that the Commission had already taken the same infringements into consideration in earlier decisions does not amount to a breach of the principle non bis in idem .

(see paras 127-128)

6. According to points 21 and 23 of the Notice on Immunity from fines and reduction of fines in cartel cases, in order to qualify for a reduction of the fine, an undertaking must provide the Commission with evidence which represents significant added value with respect to the evidence which was already in its possession.

Moreover, for the purposes of applying the bands of reduction of the fine provided for in point 23(b) of that leniency notice, the Commission must establish the time at which the undertaking satisfied that requirement.

That interpretation is supported by the general scheme of the system laid down by the notice in question, which provides for three separate bands of reduction for the ‘first’, ‘second’ and ‘subsequent’ undertakings meeting the requirement in question, which therefore implies that the Commission is required to determine the precise time at which the conditions for a reduction of the fine are met by the undertaking concerned, by comparing the evidence provided with that already in its possession when the application is made. The Commission is right to rely, first, upon this chronological criterion and, secondly, on the degree of added value of the undertakings’ contributions, when it examines, in accordance with the condition laid down in point 21 of that notice, whether the evidence submitted offers significant added value with respect to the evidence already in its possession when the particular application is made.

That approach of taking account of both the timing and the value of the submission of evidence and rewarding the undertaking which first satisfies the conditions for obtaining a reduction, is consistent with the objectives pursued by that notice in that it encourages undertakings wishing to cooperate to do so as early as possible in the inquiry by providing, as soon as they apply for leniency, all the evidence available to them. In particular, by creating an incentive to meet the threshold of significant added value with their first application for leniency, it prevents undertakings making an application for leniency from measuring their efforts to cooperate, piecemeal, throughout the procedure. In addition, since the Leniency Notice is based on an approach which requires the precise chronological order of applications for leniency to be established, in accordance with the objectives of transparency and legal certainty, no distinction may be made in its application according to whether the lapse of time between applications is long or short.

(see paras 146-148, 153-155)

7. Although in appraising the cooperation provided by members of a cartel, the Commission may not disregard the principle of equal treatment, it enjoys a broad discretion in assessing the quality and usefulness of the cooperation provided by any given undertaking. Thus, only a manifest error of assessment by the Commission is open to censure.

(see para. 168)

8. In relation to infringements which fall within the scope of the Notice on Immunity from fines and reduction of fines in cartel cases, as a rule, an interested party cannot validly complain that the Commission failed to take into account the extent of its cooperation as an attenuating circumstance outside the legal framework of the Leniency Notice. Thus, where the Commission has taken an undertaking’s cooperation into account, by reducing the fine pursuant to the Leniency Notice, that undertaking cannot validly complain that the Commission did not apply a further reduction to the fine imposed on it, outside the scope of that notice.

(see paras 178-179)