Case T-161/05

Hoechst GmbH

v

Commission of the European Communities

‛Competition — Agreements, decisions and concerted practices — Market for monochloroacetic acid — Decision finding an infringement of Article 81 EC — Market sharing and price-fixing — Attributability of the infringement — Fines — Proportionality — Cooperation — Aggravating circumstances — Repeated infringement — Access to the file — Report of the Hearing Officer — Order to bring the infringement to an end’

Judgment of the Court of First Instance (Seventh Chamber), 30 September 2009 II ‐ 3563

Summary of the Judgment

It falls, in principle, to the legal or natural person managing the undertaking in question when the infringement of the Community competition rules was committed to answer for that infringement, even if, when the decision finding the infringement was adopted, another person had assumed responsibility for operating the undertaking. None the less, for the effective enforcement of competition law it may become necessary, by way of exception, to attribute a cartel offence not to the initial operator but to the new operator of the undertaking which participated in the cartel if the new operator may in fact be regarded as the successor to the original operator, that is if he continues to operate the undertaking which participated in the cartel. If there was no possibility of imposing a penalty on an entity other than the one which committed the infringement, undertakings could escape penalties by simply changing their identity through restructurings, sales or other legal or organisational changes. The economic continuity test only applies in cases where the legal person responsible for running the undertaking has ceased to exist in law after the infringement has been committed or in cases of internal restructuring of an undertaking where the initial operator has not necessarily ceased to have a legal existence but no longer carries out an economic activity on the relevant market, and in view of the structural links between the initial operator and the new operator of the undertaking. The principle of personal liability cannot be called into question by the principle of economic continuity in cases where an undertaking involved in a cartel has transferred a part of its business to an independent third party and there is no structural link between the initial operator and the new operator. The power to impute to the new operator an infringement committed by the former operator is a power granted to the Commission, under certain circumstances, and not an obligation; this is particularly so in cases where the initial operator committing the infringement continues to exist in law and economically. (see paras 50-52, 61, 64)

In the specific case of a parent company holding 100% of the capital of a subsidiary which has committed an infringement, there is a rebuttable presumption that the parent company exercises decisive influence over the conduct of its subsidiary and that they therefore constitute a single undertaking within the meaning of Article 81 EC. It is thus for a parent company which disputes before the Community judicature a Commission decision fining it for the conduct of its subsidiary to rebut that presumption by adducing evidence to establish that its subsidiary was independent. (see para. 59)

Where the business of an undertaking which has been the subject of an unlawful agreement has been transferred to another undertaking, an application lodged by the transferee undertaking under the Notice on the non-imposition or reduction of fines in cartel cases can benefit only that undertaking, and not the transferor undertaking, even if that application refers to the period when the transferor undertaking was active on the product market in respect of which the infringement was committed. It is apparent in particular from Section B of the Leniency Notice that it is the undertakings that fulfil the conditions referred to in that section which will benefit from a reduction of the fine or even from total exemption. (see paras 75, 76)

In order to receive a reduction in the fine on the ground of not contesting the facts, in accordance with the second indent of Section D 2 of the Notice on the non-imposition or reduction of fines in cartel cases, an undertaking must expressly inform the Commission, after perusing the statement of objections, that it has no intention of substantially contesting the facts. In this respect, an objection to the Commission’s legal assessment of certain facts cannot be treated in the same way as a challenge to the very existence of those facts. Although it is not sufficient for an undertaking to state in general terms that it does not contest the facts alleged if, in the circumstances of the case, that statement is not of any help to the Commission at all, a declaration of non-contestation of the facts set out in the statement of objections, worded expressly and unequivocally in the reply to the statement of objections which enables the Commission to refer, in its final decision, to all the facts as set out in the statement of objections, without having to take further steps to demonstrate their existence, cannot but facilitate the Commission’s task. Moreover, whilst it is true that the Commission has a wide discretion in assessing the quality and usefulness of the cooperation provided by an undertaking, it is nevertheless not entitled to depart from self-imposed rules of practice without giving reasons. In particular, the Commission’s appraisal of non-contestation of the facts by an undertaking must be included in the decision. (see paras 91, 95, 97-99)

The method used to determine the amount of fines imposed for infringement of Community competition rules, the essential feature of which is that fines are determined on a tariff basis, albeit one that is relative and flexible, does not require – but does not preclude – that the size of the affected market be taken into account for the purposes of determining the general starting amount and still less does it require the Commission to set that amount according to a fixed percentage of the total turnover on the market. (see para. 109)

In determining the gravity of the infringement, the Commission is not required to ensure, where fines are imposed on a number of undertakings involved in the same infringement of the Community competition rules, that the final amounts of the fines reflect any distinction between the undertakings concerned in terms of their overall turnover. It may divide them into groups. The method of dividing the members of a cartel into categories in order to apply differential treatment when setting the starting amounts of the fines, the principle of which has been approved by case-law even though it ignores differences in size between undertakings in the same category, results in a flat-rate starting amount for all the undertakings in the same category. None the less, such a division into categories must comply with the principle of equal treatment, and the amount of the fine must at least be proportionate in relation to the factors taken into account in the assessment of the gravity of the infringement. The Commission must choose a coherent and objectively justified method, in particular in the light of the difference between the market shares of each of the undertakings belonging to those various categories. (see paras 123, 124, 128)

The method used for calculating fines imposed for infringement of the Community competition rules, which is set out in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, does not lay down an arithmetical calculation method preventing the fines imposed on each undertaking concerned from being adjusted individually to take account of the relative gravity of its participation in the infringement. The Guidelines display flexibility in a number of ways, enabling the Commission to exercise its discretion in accordance with Article 15 of Regulation No 17 and Article 23 of Regulation No 1/2003. (see para. 129)

The finding and the appraisal of the specific characteristics of a repeated infringement come within the discretion of the Commission, which cannot be bound by any limitation period when making such a finding. Repeated infringement is an important factor which the Commission must appraise, since the purpose of taking repeated infringement into account is to induce undertakings which have demonstrated a tendency towards infringing the competition rules to change their conduct. The Commission may therefore, in each individual case, take into consideration the indicia which confirm such a tendency. In addition, it is sufficient that an undertaking has been found previously to be a perpetrator of an infringement of the same type, even if the decision is still subject to review by the courts. The assessment of the specific characteristics of a repeated infringement depends on an appraisal of the circumstances of the case by the Commission in the course of its discretion. Furthermore, Commission decisions are presumed to be valid until such time as they are annulled or withdrawn. Moreover, the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty refer to an infringement of the same type by the same undertaking, and the concept of repeated infringement, as understood in a number of national legal orders, implies that a person has committed new infringements after being punished for similar infringements. The Commission is therefore entitled to find that there has been a repeated infringement where the same undertaking has been censured for the same type of infringement, despite the fact that the infringements at issue concern subsidiaries or different markets. Notwithstanding the finding of an infringement of Community competition law, the undertaking, within the meaning of Article 81 EC, continued to infringe that provision. (see paras 141-143, 146, 147)

In proceedings for infringement of the Community competition rules, it is not until the beginning of the inter partes administrative stage that the undertaking concerned is informed, by means of the notification of the statement of objections, of all the essential evidence on which the Commission relies at that stage of the procedure and that that undertaking has a right of access to the file in order to ensure that its rights of defence are effectively exercised. Consequently, the other parties’ replies to the statement of objections are not, in principle, included in the documents of the investigation file that the parties may consult. However, if the Commission wishes to rely on a passage in a reply to a statement of objections or on a document annexed to such a reply in order to prove the existence of an infringement in a proceeding under Article 81(1) EC, the other parties involved in that proceeding must be placed in a position in which they can express their views on such evidence. In such circumstances the passage in question from a reply to the statement of objections or the document annexed thereto constitutes evidence against the various parties alleged to have participated in the infringement. The Commission is not required to communicate to an undertaking the reply to the statement of objections of its former subsidiary, and the fact that the undertaking no longer has at its disposal the relevant commercial documents since the sale of its business and that its former subsidiary refuses to communicate them to it does not undermine that conclusion. By virtue of a general duty of care attaching to any undertaking, an undertaking which transfers its business is required to ensure the proper maintenance of records in its books and files of information enabling details of its activities to be retrieved, in order, in particular, to make the necessary evidence available in the event of legal or administrative proceedings. (see paras 163, 164, 170, 171)

Under Article 15 of Decision 2001/462 on the terms of reference of hearing officers in certain competition proceedings, the hearing officer is to draw up a final report in writing on the respect of the right to be heard, namely, in particular, on disclosure of documents and on access to the file, on time-limits for replying to the statement of objections and on the proper conduct of the oral hearing. The hearing officer considers in that report whether the draft decision deals only with objections in respect of which the parties have been afforded the opportunity of making known their views, and the objectivity of any enquiry. Article 16 of that decision provides that the hearing officer’s final report is to be attached to the draft decision submitted to the Commission, in order to ensure that, when it reaches a decision on an individual case, the Commission is fully apprised of all relevant information as regards the course of the procedure and respect of the right to be heard. It is apparent from those provisions that the hearing officer is not responsible for collecting all the objections of a procedural nature put forward by the parties concerned during the administrative procedure. He is required to communicate to the College of Members of the Commission only the objections relevant to the assessment of the lawfulness of the conduct of the administrative procedure. (see paras 177-179)