Keywords

Summary



Keywords

1. Competition – Agreements, decisions and concerted practices – Agreements and concerted practices constituting a single infringement – Meaning

(Art. 81(1) EC)

2. Competition – Fines – Amount – Determination – Criteria – Turnover

(Commission Notice 2006/C 210/02, Section 13)

3. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Principle of the individualisation of sanctions

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02)

4. Competition – Fines – Amount – Determination – Criteria – Duration of the infringement

(Commission Notice 2006/C 210/02)

5. Competition – Fines – Amount – Determination – Deterrent effect – Assessment

(Commission Notice 2006/C 210/02, Section 25)

6. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances – Assessment

(Commission Notice 2006/C 210/02, Section 29)

7. Competition – Fines – Amount – Determination – Mitigating circumstances – Anti‑competitive conduct authorised or encouraged by public authorities

(Commission Notice 2006/C 210/02, Section 29, last indent)

8. Competition – Fines – Amount – Determination – Reduction on account of an undertaking’s financial situation – Conditions

(Commission Notice 2006/C 210/02, Section 35)

Summary

1. It would be artificial to split up continuous conduct, characterised by a single purpose, by treating it as consisting of several separate infringements, when what was involved was a single infringement which progressively manifested itself in both agreements and concerted practices.

Accordingly, an undertaking that has taken part in an infringement through conduct of its own which fell within the scope of an agreement or concerted practice having an anti-competitive object for the purposes of Article 81(1) EC and which was intended to help bring about the infringement as a whole is also responsible, throughout the entire period of its participation in that infringement, for conduct of other undertakings in the context of the same infringement.

In order to establish that there has been a single and continuous infringement, the Commission must show that the undertaking intended to contribute by its own conduct to the common objectives pursued by all the participants and that it was aware of the conduct planned or put into effect by other undertakings in pursuit of the same objectives or that it could reasonably have foreseen it and that it was prepared to take the risk.

Restrictive practices can be regarded as constituent elements of a single anti‑competitive agreement only if it is established that they form part of an overall plan pursuing a common objective. In addition, only where the undertaking knew, or ought to have known, when it participated in those practices, that it was taking part in the single agreement, can its participation in them constitute the expression of its accession to that agreement.

Thus, three conditions must be met in order to establish participation in a single and continuous infringement, namely the existence of an overall plan pursuing a common objective, the intentional contribution of the undertaking to that plan, and its awareness (proved or presumed) of the offending conduct of the other participants.

As regards the existence of an overall plan pursuing a common objective, the concept of a common objective cannot be determined by a general reference to the distortion of competition in the market concerned by the infringement, since an impact on competition, as object or effect, constitutes a constituent element of any conduct covered by Article 81(1) EC. Such a definition of the concept of a common objective is likely to deprive the concept of a single and continuous infringement of a part of its meaning, since it would have the consequence that different types of conduct which relate to a particular economic sector and are prohibited by Article 81(1) EC would have to be systematically characterised as constituent elements of a single infringement. Thus, for the purposes of characterising various instances of misconduct as a single and continuous infringement, it is necessary to take into account any circumstance capable of establishing or casting doubt on a link of complementarity, such as the period of application, the content (including the methods used) and, correlatively, the objective of the various instances of misconduct.

(see paras 33-37, 40)

2. Section 13 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 states that: ‘In determining the basic amount of the fine to be imposed, the Commission will take the value of the undertaking’s sales of goods or services to which the infringement directly or indirectly relates …’. It does not follow from that provision that only the value of sales for transactions actually affected by the infringement may be taken into account for the purposes of determining the relevant value of sales. Thus, point 13 of those Guidelines refers to: ‘sales … to which the infringement directly or indirectly relates’ and not to ‘sales affected by the infringement’. The wording of Section 13 therefore relates to sales in the relevant market.

That interpretation is reinforced by the objective of the EU rules on competition. In order to determine the basic amount of the fines to be imposed in cartel cases, the Commission is not obliged to ascertain the individual sales which were affected by the cartel. An obligation of that kind has never been imposed by the Courts of the European Union and there is no indication that the Commission intended to assume such an obligation in the above Guidelines. In addition, it is inevitable, in cartel cases, which by their very nature are secret, that some of the documents showing each of the manifestations of anti-competitive practices will not be discovered.

Furthermore, the proportion of the turnover accounted for by the goods in respect of which the infringement was committed gives a proper indication of the scale of the infringement on the relevant market. In particular, the turnover in the products which were the subject of a restrictive practice constitutes an objective criterion giving a proper measure of the harm which that practice does to normal competition.

(see paras 61-66)

3. Where an infringement has been committed by several undertakings, the relative gravity of the participation of each of them must be examined. That conclusion follows logically from the principle that penalties must be specific to the offender and to the offence, so that an undertaking may be penalised only for acts imputed to it individually, a principle applying in any administrative procedure that may lead to the imposition of sanctions under Community competition law. The gravity of the infringement is to be assessed on an individual basis by taking into account numerous factors, such as the particular circumstances of the case, its context and the deterrent effect of fines. The fact that an undertaking has not taken part in all aspects of an anti-competitive scheme or that it played only a minor role in the aspects in which it had participated must be taken into consideration when the gravity of the infringement is assessed and, as appropriate, when the fine is determined.

However, the assessment of individual circumstances is undertaken not in the context of the assessment of the gravity of the infringement, that is, when the basic amount of the fine is set, but in the context of the adjustment to the basic amount to reflect mitigating or aggravating circumstances.

The Commission is at liberty to take into account certain aspects of ‘gravity’ within the meaning of Article 23 of Regulation No 1/2003 in the context of mitigating and aggravating circumstances and not in the context of ‘gravity’ within the meaning of its Guidelines on the method of setting fines.

Those Guidelines have brought about a fundamental change in the methodology for calculating fines. First, the three-fold categorisation of infringements (‘minor’, ‘serious’ and ‘very serious’) has been abolished. The current system, comprising a scale from 0% to 30%, enables finer distinctions to be made according to the gravity of the infringements. Second, flat-rate amounts have been abolished. Now, the basic amount is calculated on the basis of each individual undertaking’s value of sales to which the infringement directly or indirectly relates. That new methodology therefore makes it easier to take into account the extent of the individual participation of each undertaking in the infringement when the gravity of that infringement is assessed. It also makes it possible to take into account any reduction in the gravity of a single infringement over time.

Although the relative gravity of the participation in the infringement and the particular circumstances of the case must be taken into account, it remains open to the Commission, pursuant to the above Guidelines, to take such factors into account when assessing the gravity of the infringement or adjusting the basic amount according to the mitigating and/or aggravating circumstances. Where the Commission follows the latter approach, the assessment of mitigating and aggravating circumstances must, however, enable sufficient account to be taken of the relative gravity of the participation in a single infringement, and any variation in that gravity over time.

(see paras 84-87, 89-90, 92)

4. As regards multiplying the amount determined on the basis of the value of sales by the number of years of participation in the infringement, Article 23(3) of Regulation No 1/2003 simply states that ‘[i]n fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement’, without, however, specifying the specific manner in which the duration should be taken into account. Multiplication by the number of years of participation in the infringement, provided for in the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003, is equivalent to increasing the amount by 100% per year. That approach represents a fundamental change in methodology as to how the duration of a cartel is taken into consideration. Article 23(3) of Regulation No 1/2003 does not, however, preclude such a development.

Although the Commission has sometimes taken into account changes in an infringement over time, when increasing the amount of the fine for duration, none of the provisions of the above Guidelines obliges it to apply to such a case a multiplier that does not exceed two, or to reduce the percentage of the value of sales taken into account for gravity.

(see paras 107-110)

5. Section 25 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 provides: ‘[I]rrespective of the duration of the undertaking’s participation in the infringement, the Commission will include in the basic amount a sum of between 15% and 25% of the value of sales …, in order to deter undertakings from even entering into horizontal price-fixing, market‑sharing and output-limitation agreements.’

Where the Commission applies the same additional amount to all the addressees of its decision on the ground that they all participated in the single and continuous infringement which included price fixing and/or market sharing, the principle of equal treatment is not infringed.

The wording of Section 25 of the above Guidelines (‘inclura’, ‘will include’ and ‘fügt hinzu’) shows, moreover, that, as regards flagrant infringements, the imposition of an additional amount is automatic and does not depend on the existence of other factors.

(see paras 116-117)

6. Under the third indent of Section 29 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003, in order to benefit from a reduction in the fine on account of mitigating circumstances, the undertaking concerned must ‘[provide] evidence that its involvement in the infringement is substantially limited’ and ‘thus [demonstrate] that, during the period in which it was party to the offending agreement, it actually avoided applying it by adopting competitive conduct in the market’.

However, the use of the expression ‘such as’ shows that the list of circumstances set out in Section 29 of the above Guidelines is not exhaustive. In addition, the specific circumstances of the case, in particular whether the undertaking participated in all the aspects of the infringement, must be taken into account, if not in assessing the gravity of the infringement, at least in the course of adjusting the basic amount for mitigating or aggravating circumstances. That obligation was one of the reasons why the Court of Justice stated that the concept of a single and continuous infringement is not contrary to the principle that responsibility for infringements of competition law is personal in nature. The criteria laid down in the third indent of Section 29 are not capable on their own of ensuring this.

(see paras 126-127)

7. Section 29, last indent, of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 provides that ‘[t]he basic amount may be reduced … where the anti‑competitive conduct of the undertaking has been authorised or encouraged by public authorities or by legislation’. In that connection, mere knowledge of anti-competitive conduct does not imply that that conduct was implicitly ‘authorised or encouraged’ by the institution in question within the meaning of Section 29, last indent, of those Guidelines. Alleged inaction cannot be treated in the same way as a positive act such as an authorisation or encouragement.

(see paras 131, 134)

8. A reduction of a fine pursuant to Section 35 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 is subject to three cumulative conditions, namely, (i) the submission of a request during the administrative procedure, (ii) the existence of a specific social and economic context and (iii) the inability to pay of the undertaking, the latter having to provide objective evidence showing that the imposition of the fine would irretrievably jeopardise its economic viability and cause its assets to lose all their value.

The submission of a request to obtain a reduction of a fine is not merely a procedural requirement, but one which if not satisfied would preclude any valid assessment of the economic position from being carried out, since the Commission would not then possess relevant information, such as data internal to the undertaking concerned, in order to be able to assess the economic viability of that undertaking.

(see paras 171, 176)