Judgment of the Court of First Instance (Third Chamber, extended composition) of 14 May 1998. - Mo Och Domsjö AB v Commission of the European Communities. - Competition - Article 85(1) of the EC Treaty - Liability for unlawful conduct - Relevant product market - Information exchange - Order to desist - Fine - Determination of the amount - Statement of reasons - Mitigating circumstances. - Case T-352/94.



European Court reports 1998 Page II-01989



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1 Acts of the institutions - Statement of reasons - Obligation - Scope

(EC Treaty, Art. 190)

2 Competition - Administrative procedure - Statement of objections - Matters to be stated - Non-disclosure of certain information to undertakings - Commission's final decision based in part on that information - Infringement of the rights of the defence - Validity of the final decision as a whole - Review by the Court of the substance of the decision - Information in question taken into consideration - Not permissible

(Council Regulation No 17, Art. 19(1); Commission Regulation No 99/63, Art. 4)

3 Competition - Administrative procedure - Commission decision finding an infringement - Infringement committed by a subsidiary of a group of undertakings - Decision addressed to the parent company - Parent company pleading error regarding the correct addressee of the decision - Whether admissible - Pecuniary position unaffected

(EC Treaty, Art. 173, fourth para.)

4 Competition - Agreements, decisions and concerted practices - Undertaking - Meaning - Economic unit - Attribution of the infringements

(EC Treaty, Art. 85(1))

5 Competition - Agreements, decisions and concerted practices - Where an undertaking agrees to set up and participate in meetings of a body whose anti-competitive object was known to and accepted by the undertakings which established it - Ground for concluding that an undertaking participated in the subsequent cartel

(EC Treaty, Art. 85(1))

6 Competition - Administrative procedure - Cessation of infringements - Obligations imposed on undertakings - Proportionality - Criteria

(Council Regulation No 17, Art. 3(1))

7 Acts of the institutions - Statement of reasons - Obligation - Scope - Decision imposing fines on several undertakings for an infringement of the competition rules

(EC Treaty, Art. 190; Council Regulation No 17, Art. 15)

8 Procedure - Application initiating proceedings - Procedural requirements - Summary of the pleas in law relied upon - Similar requirements for submissions in support of a plea in law

(Rules of Procedure of the Court of First Instance, Art. 44(1))

9 Competition - Fines - Amount - Determination thereof - Criteria - Gravity and duration of the infringements - Criteria to be applied - Possibility of increasing the fines in order to strengthen their deterrent effect

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

10 Competition - Fines - Amount - Determination thereof - Criteria - Conduct of the undertaking during the administrative procedure - Illegality of reductions given to undertakings which have not expressly acknowledged the Commission's factual allegations - Undertakings precluded from relying on the principle of equal treatment in order to obtain an unlawful reduction

(Council Regulation No 17, Art. 15)

11 Competition - Fines - Amount - Determination thereof - Criteria - Gravity of the infringements - Mitigating circumstances - Setting up of an effective programme for compliance with the Community competition rules

(Council Regulation No 17, Art. 15)

12 Competition - Fines - Amount - Determination thereof - Criteria - Past conduct of the undertaking

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

Summary

1 The purpose of the obligation to give reasons for an individual decision is to enable the Community judicature to review the legality of the decision and to provide the party concerned with an adequate indication as to whether the decision is well founded or whether it may be vitiated by some defect enabling its validity to be challenged; the scope of that obligation depends on the nature of the act in question and on the context in which it was adopted.

Although pursuant to Article 190 of the Treaty the Commission is bound to state the reasons on which its decisions are based, mentioning the facts, law and considerations which have led it to adopt them, it is not required to discuss all the issues of fact and law which have been raised during the administrative procedure.

2 The statement of objections must be couched in terms which, albeit succinct, are sufficiently clear to enable the parties concerned properly to identify the conduct complained of by the Commission. It is only on that basis that the statement of objections can fulfil its function under the Community regulations of giving undertakings all the information necessary to enable them properly to defend themselves, before the Commission adopts a final decision.

Where certain information has not been set out in the statement of objections or in the appendices thereto and the undertaking concerned has been unable therefore to make known its views properly on those matters of fact, the Commission is not entitled to base its decision on that information. However, that infringement of the undertaking's rights of defence is not in itself such as to affect the validity of the decision as a whole where the decision is not based solely on the information in question. The Court must disregard those matters when considering the validity of the decision.

3 An undertaking which is stated in the operative part of a Commission decision to have participated in an infringement of Article 85(1) of the Treaty has, on that basis, a legal interest in disputing that finding, irrespective of any question of fines, because that finding is at the very least likely to affect its reputation. It is therefore admissible for such an undertaking to submit that the decision should have been addressed to the associated company of which it subsequently obtained control, even if it acknowledges that it will answer for that company's liability if a fine is ultimately imposed on that company.

4 In prohibiting undertakings inter alia from entering into agreements or participating in concerted practices which may affect trade between Member States and have as their object or effect the prevention, restriction or distortion of competition within the common market, Article 85(1) of the Treaty is aimed at economic units which consist of a unitary organisation of personal, tangible and intangible elements, which pursues a specific economic aim on a long-term basis and can contribute to the commission of an infringement of the kind referred to in that provision.

The Commission is therefore entitled, where several companies in a group have participated in an infringement and the group constitutes one and the same undertaking, to address the decision finding an infringement to the group itself, as represented by the parent company.

5 The fact that an undertaking agreed to set up and participate in meetings of a body whose anti-competitive object - in particular the discussion of future price increases - was known to and accepted by the undertakings which originally established it constitutes a sufficient ground for considering that that undertaking is liable for collusion on prices.

6 Article 3(1) of Regulation No 17 may be applied so as to include an order directed at bringing an end to certain acts, practices or situations which have been found to be unlawful, and at prohibiting the adoption of similar conduct in the future. Moreover, since that provision is to be applied according to the nature of the infringement found, the Commission has the power to specify the extent of the obligations on the undertakings concerned in order to bring an infringement to an end. Such obligations on the part of undertakings may not, however, exceed what is appropriate and necessary to attain the objective sought, namely to restore compliance with the competition rules infringed.

A prohibition fails to satisfy the conditions required for application of Article 3(1) of Regulation No 17 if it seeks to prevent the exchange of purely statistical information which is not in, or capable of being put into, the form of individual information where it is not apparent from the decision that the Commission considered the exchange of statistical data to be in itself an infringement of Article 85(1) of the Treaty; furthermore, the mere fact that a system for the exchange of statistical information might be used for anti-competitive purposes does not make it contrary to Article 85(1) of the Treaty, since in such circumstances it is necessary to establish its actual anti-competitive effect.

7 The purpose of the obligation to give reasons for an individual decision is to enable the Community judicature to review the legality of the decision and to provide the party concerned with an adequate indication as to whether the decision is well founded or whether it may be vitiated by some defect enabling its validity to be challenged; the scope of that obligation depends on the nature of the act in question and on the context in which it was adopted.

As regards a decision imposing fines on several undertakings for infringement of the Community competition rules, the scope of the obligation to state reasons must be assessed in the light of the fact that the gravity of infringements falls to be determined by reference to numerous factors including, in particular, the specific circumstances and context of the case and the deterrent character of the fines; moreover, no binding or exhaustive list of criteria to be applied has been drawn up.

Furthermore, when fixing the amount of each fine, the Commission has a margin of discretion and cannot be considered obliged to apply a precise mathematical formula for that purpose.

Moreover, since the deterrent character of the Commission's action is inherent in the exercise of its power to impose fines, it is not obliged to refer specifically to that objective in a decision.

Lastly, the reasons for a decision must appear in the actual body of the decision and, save in exceptional circumstances, explanations given ex post facto cannot be taken into account.

When the Commission finds in a decision that there has been an infringement of the competition rules and imposes fines on the undertakings participating in it, it must, if it has systematically taken into account certain basic factors in order to fix the amount of fines, set out those factors in the body of the decision in order to enable the addressees of the decision to verify that the level of the fine is correct and to assess whether there has been any discrimination.

8 Under Article 44(1) of the Rules of Procedure the application must contain a summary of the pleas in law on which it is based. That summary must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action, if necessary without any other supporting information. The application must therefore specify the nature of the grounds on which it is based and, accordingly, a mere abstract statement of the grounds does not satisfy the requirements of the Rules of Procedure. Similar requirements are called for where a submission is made in support of a plea in law.

9 In determining the amount of the fine to be imposed for infringement of the Community competition rules, regard is to be had to both the gravity and the duration of the infringement. The gravity of infringements falls to be determined by reference to numerous factors including the specific circumstances and context of the case and the deterrent character of the fines; moreover, no binding or exhaustive list of the criteria which must be applied has been drawn up.

When assessing the general level of fines, the Commission is entitled to take account of the fact that clear infringements of the Community competition rules are still relatively frequent and that, accordingly, it may raise the level of fines in order to strengthen their deterrent effect. Consequently, the fact that in the past the Commission has applied fines of a certain level to certain types of infringement does not mean that it is estopped from raising that level, within the limits set out in Regulation No 17, if that is necessary in order to ensure the implementation of Community competition policy.

Furthermore, the Commission is entitled, when assessing the gravity of the infringement, to take into account the measures adopted by the undertakings concerned to conceal the existence of the collusion.

Lastly, when fixing the general level of fines, the Commission is entitled to take into account inter alia the lengthy duration and obviousness of an infringement of Article 85(1) of the Treaty which has been committed despite the warning which the Commission's previous decisions should have provided.

10 In determining the amount of the fine to impose for infringement of the Community competition rules, a reduction on grounds of cooperation during the administrative procedure is justified only if the conduct of the undertaking under investigation made it easier for the Commission to establish an infringement and, as the case may be, to put an end to it.

An undertaking which expressly states that it is not contesting the factual allegations on which the Commission bases its objections may be regarded as having facilitated the Commission's task of finding and bringing to an end infringements of the Community competition rules. In its decisions finding infringements of those rules, the Commission is entitled to take the view that such conduct constitutes an acknowledgement of the factual allegations and thus proves that those allegations are correct. Such conduct may therefore justify a reduction in the fine.

The situation is different where the essential allegations made by the Commission in its statement of objections are contested by an undertaking in its reply to that statement, or where the undertaking does not reply or merely states that it is not expressing any view on the Commission's factual allegations. By adopting such an attitude during the administrative procedure the undertaking does not facilitate the Commission's task.

Since reductions in fines can be considered lawful only in so far as the undertakings concerned have expressly stated that they do not contest the factual allegations, an undertaking which has not adopted that attitude cannot lay claim to a reduction on grounds of its cooperation during the administrative procedure because, even if the Commission has applied an unlawful criterion by reducing the fines imposed on undertakings which have not expressly stated that they were not contesting the factual allegations, it is necessary that respect for the principle of equal treatment be reconciled with the principle of legality, according to which a person may not rely, to his benefit, on an unlawful act committed in favour of a third party.

11 Although, in the context of determining the amount of the fine to impose for infringement of the Community competition rules, the implementation of a programme for compliance with those rules demonstrates the intention of the undertaking in question to prevent future infringements and thus better enables the Commission to accomplish its task of applying the principles laid down by the Treaty in competition matters and of influencing undertakings in that direction, the mere fact that in certain of its previous decisions the Commission has taken the implementation of a compliance programme into consideration as a mitigating factor does not mean that it is obliged to act in the same manner in a particular case.

12 In determining the amount of the fine to be imposed for infringement of the Community competition rules, the fact that the Commission has already found an undertaking guilty of infringing the competition rules in the past and has penalised it for that infringement may be treated as an aggravating factor as against that undertaking, but the absence of any previous infringement is a normal circumstance which the Commission does not have to take into account as a mitigating factor.

Parties

In Case T-352/94,

Mo och Domsjö AB, a company incorporated under Swedish law, established at Örnsköldsvik, Sweden, represented by Antony Woodgate, Martin Smith and Vincent Smith, Solicitors, London, with an address for service in Luxembourg at the Chambers of Arendt & Medernach, 8-10 Rue Mathias Hardt,

applicant,

v

Commission of the European Communities, represented by Richard Lyal, of its Legal Service, and Rosemary Caudwell, a national official seconded to the Commission, acting as Agents, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for annulment of Commission Decision 94/601/EC of 13 July 1994 relating to a proceeding under Article 85 of the EC Treaty (IV/C/33.833 - Cartonboard, OJ 1994 L 243, p. 1),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES

(Third Chamber, Extended Composition),

composed of: B. Vesterdorf, President, C.P. Briët, P. Lindh, A. Potocki and J.D. Cooke, Judges,

Registrar: J. Palacio González, Administrator,

having regard to the written procedure and further to the hearing which took place from 25 June to 8 July 1997,

gives the following

Judgment

Grounds

Facts

1 This case concerns Commission Decision 94/601/EC of 13 July 1994 relating to a proceeding under Article 85 of the EC Treaty (IV/C/33.833 - Cartonboard, OJ 1994 L 243, p. 1), as corrected prior to its publication by a Commission decision of 26 July 1994 (C(94) 2135 final) (hereinafter `the Decision'). The Decision imposed fines on 19 producers supplying cartonboard in the Community on the ground that they had infringed Article 85(1) of the Treaty.

2 The product with which the Decision is concerned is cartonboard. The Decision refers to three types of cartonboard, designated as `GC', `GD' and `SBS' grades.

3 GD grade cartonboard (hereinafter `GD cartonboard') is white-lined chipboard (recycled paper) which is normally used for the packaging of non-food products.

4 GC grade cartonboard (hereinafter `GC cartonboard') is cartonboard with a white top layer and is normally used for the packaging of food products. GC cartonboard is of higher quality than GD cartonboard. During the period covered by the Decision there was normally a price differential of approximately 30% between those two products. High quality GC cartonboard is also used, but to a lesser extent, for graphic purposes.

5 SBS is the abbreviation used to refer to cartonboard which is white throughout (hereinafter `SBS cartonboard'). The price of this cartonboard is approximately 20% higher than that of GC cartonboard. It is used for the packaging of foods, cosmetics, medicines and cigarettes, but is designated primarily for graphic uses.

6 By letter of 22 November 1990, the British Printing Industries Federation (`BPIF'), a trade organisation representing the majority of printed carton producers in the United Kingdom, lodged an informal complaint with the Commission. It claimed that the producers of cartonboard supplying the United Kingdom had introduced a series of simultaneous and uniform price increases and requested the Commission to investigate whether there had been an infringement of the Community competition rules. In order to ensure that its initiative received publicity, the BPIF issued a press release. The content of that press release was reported in the specialised trade press in December 1990.

7 On 12 December 1990, the Fédération Française du Cartonnage also lodged an informal complaint with the Commission, making allegations relating to the French cartonboard market which were similar to those made in the BPIF complaint.

8 On 23 and 24 April 1991, Commission officials acting pursuant to Article 14(3) of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87, hereinafter `Regulation No 17'), carried out simultaneous investigations without prior notice at the premises of a number of undertakings and trade associations operating in the cartonboard sector.

9 Following those investigations, the Commission sent requests for both information and documents to all the addressees of the Decision pursuant to Article 11 of Regulation No 17.

10 The evidence obtained from those investigations and requests for information and documents led the Commission to conclude that from mid-1986 until at least (in most cases) April 1991 the undertakings concerned had participated in an infringement of Article 85(1) of the Treaty.

11 The Commission therefore decided to initiate a proceeding under Article 85 of the Treaty. By letter of 21 December 1992 it served a statement of objections on each of the undertakings concerned. All the addressees submitted written replies. Nine undertakings requested an oral hearing. A hearing was held on 7, 8 and 9 June 1993.

12 At the end of that procedure the Commission adopted the Decision, which includes the following provisions:

`Article 1

Buchmann GmbH, Cascades SA, Enso-Gutzeit Oy, Europa Carton AG, Finnboard - the Finnish Board Mills Association, Fiskeby Board AB, Gruber & Weber GmbH & Co KG, Kartonfabriek "de Eendracht NV" (trading as BPB de Eendracht NV), NV Koninklijke KNP BT NV (formerly Koninklijke Nederlandse Papierfabrieken NV), Laakmann Karton GmbH & Co KG, Mo Och Domsjö AB (MoDo), Mayr-Melnhof Gesellschaft mbH, Papeteries de Lancey SA, Rena Kartonfabrik A/S, Sarrió SpA, SCA Holding Ltd (formerly Reed Paper & Board (UK) Ltd), Stora Kopparbergs Bergslags AB, Enso Española SA (formerly Tampella Española SA) and Moritz J. Weig GmbH & Co KG have infringed Article 85(1) of the EC Treaty by participating,

- in the case of Buchmann and Rena from about March 1988 until at least the end of 1990,

- in the case of Enso Española, from at least March 1988 until at least the end of April 1991,

- in the case of Gruber & Weber from at least 1988 until late 1990,

- in the other cases, from mid-1986 until at least April 1991,

in an agreement and concerted practice originating in mid-1986 whereby the suppliers of cartonboard in the Community

- met regularly in a series of secret and institutionalised meetings to discuss and agree a common industry plan to restrict competition,

- agreed regular price increases for each grade of the product in each national currency,

- planned and implemented simultaneous and uniform price increases throughout the Community,

- reached an understanding on maintaining the market shares of the major producers at constant levels, subject to modification from time to time,

- increasingly from early 1990, took concerted measures to control the supply of the product in the Community in order to ensure the implementation of the said concerted price rises,

- exchanged commercial information on deliveries, prices, plant standstills, order backlogs and machine utilisation rates in support of the above measures.

...

Article 3

The following fines are hereby imposed on the undertakings named herein in respect of the infringement found in Article 1:

...

(xii) Mo Och Domsjö AB, a fine of ECU 22 750 000;

...'

13 According to the Decision, the infringement took place within a body known as the `Product Group Paperboard' (hereinafter `the PG Paperboard'), which comprised several groups or committees.

14 In mid-1986 a group entitled the `Presidents Working Group' (hereinafter `the PWG') was established within that body. This group brought together senior representatives of the main suppliers of cartonboard in the Community (some eight suppliers).

15 The PWG's activities consisted, in particular, in discussion and collaboration regarding markets, market shares, prices and capacities. In particular, it took broad decisions on the timing and level of price increases to be introduced by producers.

16 The PWG reported to the `President Conference' (hereinafter `the PC'), in which almost all the managing directors of the undertakings in question participated (more or less regularly). The PC met twice each year during the period in question.

17 In late 1987 the Joint Marketing Committee (hereinafter `the JMC') was set up. Its main task, was on the one hand, to determine whether, and if so how, price increases could be put into effect and, on the other, to prescribe the methods of implementation for the price initiatives decided by the PWG, country-by-country and for the major customers, in order to achieve a system of equivalent prices in Europe.

18 Lastly, the Economic Committee discussed, inter alia, price movements in national markets and order backlogs, and reported its findings to the JMC or, until the end of 1987, to the Marketing Committee, the predecessor of the JMC. The Economic Committee was made up of marketing managers of most of the undertakings in question and met several times a year.

19 According to the Decision, the Commission also took the view that the activities of the PG Paperboard were supported by an information exchange organised by Fides, a secretarial company, whose registered office is in Zurich, Switzerland. The Decision states that most of the members of the PG Paperboard sent periodic reports on orders, production, sales and capacity utilisation to Fides. Under the Fides system, those reports were collated and the aggregated data were sent to the participants.

20 The Decision sets out the reasons why that decision was addressed to the applicant, Mo och Domsjö AB (hereinafter `MoDo') (point 151 et seq.). According to the Decision, Thames Board Ltd (hereinafter `TBM'), a manufacturer of GC grade cartonboard with a cartonboard mill in Workington, United Kingdom, took part from mid-1986 in meetings of the bodies of the PG Paperboard, including PWG meetings. With effect from 1 January 1988, the whole of TBM was acquired by AB Iggesunds Bruk (hereinafter `Iggesunds Bruk'), an associated company of MoDo, in which MoDo held 49.9% of the voting rights. TBM was then renamed Iggesund Paperboard (Workington) Ltd.

21 Until the acquisition of TBM, Iggesunds Bruk had produced mainly SBS cartonboard; it had also produced GC grade cartonboard to a lesser extent. MoDo acquired 100% control of Iggesunds Bruk at the beginning of 1989 and made it a division of the MoDo group, known as Iggesund Paperboard AB (hereinafter `Iggesund Paperboard'). Representatives of that division attended meetings of the PWG and of the JMC. Managers and employees from Workington also attended the JMC meetings.

Procedure

22 The applicant brought this action by application lodged at the Registry of the Court on 20 October 1994.

23 Sixteen of the eighteen other undertakings held to be responsible for the infringement have also brought actions to contest the Decision (Cases T-295/94, T-301/94, T-304/94, T-308/94, T-309/94, T-310/94, T-311/94, T-317/94, T-319/94, T-327/94, T-334/94, T-337/94, T-338/94, T-347/94, T-348/94 and T-354/94).

24 The applicant in Case T-301/94, Laakmann Karton GmbH, withdrew its action by letter lodged at the Registry of this Court on 10 June 1996 and the case was removed from the Register by order of 18 July 1996 (Case T-301/94 Laakmann Karton v Commission, not published in the ECR).

25 Four Finnish undertakings, members of the trade association Finnboard, and as such held jointly and severally liable for payment of the fine imposed on Finnboard, have also brought actions against the Decision (Joined Cases T-339/94, T-340/94, T-341/94 and T-342/94).

26 Lastly, an action was also brought by an association, CEPI-Cartonboard, which was not an addressee of the Decision. However, it withdrew its action by letter lodged at the Registry of the Court on 8 January 1977 and the case was removed from the Register of the Court by order of 6 March 1997 (Case T-312/94 CEPI-Cartonboard v Commission, not published in the ECR).

27 By letter of 5 February 1997 the Court requested the parties to take part in an informal meeting with a view, in particular, to their presenting observations on a possible joinder of Cases T-295/94, T-304/94, T-308/94, T-309/94, T-310/94, T-311/94, T-317/94, T-319/94, T-327/94, T-334/94, T-337/94, T-338/94, T-347/94, T-348/94, T-352/94 and T-354/94 for the purposes of the oral procedure. At that meeting, which took place on 29 April 1997, the parties agreed to such a joinder.

28 By order of 4 June 1997 the President of the Third Chamber, Extended Composition, of the Court, in view of the connection between the abovementioned cases, joined them for the purposes of the oral procedure in accordance with Article 50 of the Rules of Procedure and allowed an application for confidential treatment submitted by the applicant in Case T-334/94.

29 By order of 20 June 1997 he allowed an application for confidential treatment submitted by the applicant in Case T-337/94 which related to a document produced in response to a written question from the Court.

30 Upon hearing the report of the Judge-Rapporteur, the Court (Third Chamber, Extended Composition) decided to open the oral procedure and adopted measures of organisation of procedure in which it requested the parties to reply to certain written questions and to produce certain documents. The parties complied with those requests.

31 The parties in the cases referred to in paragraph 27 above presented oral argument and gave replies to the Court's questions at the hearing which took place from 25 June to 8 July 1997.

Forms of order sought

32 The applicant claims that the Court should:

- annul the Decision in so far as it concerns it;

- annul Article 2;

- annul the fine or reduce its amount;

- order the Commission to pay the costs.

33 The Commission contends that the Court should: - dismiss the application as unfounded;

- order the applicant to pay the costs.

The application for annulment of the Decision

34 The organisation of the pleas which are considered in this judgment differs from that in the report for the hearing. Some of the pleas on which the applicant relies in support of its claim for annulment of the Decision can lead only to a reduction in the fine and must therefore be considered in that context.

A - The pleas alleging infringements of essential procedural requirements

The plea that the statement of reasons is defective

Arguments of the parties

35 The applicant contends that the Decision is vitiated by a defect in the statement of the reasons on which it is based, because it does not reveal how the Commission assessed certain evidence and arguments submitted during the administrative procedure.

36 First, its arguments contesting the probative value of Stora's statements were probably misunderstood by the Commission (see point 108 of the Decision). Stora might have been influenced by the likely consequences of its statements. The Commission should not therefore have relied on those statements.

37 Moreover, while the Commission sometimes blindly followed Stora's statements, it nevertheless drew conclusions that are incompatible with or different from those statements.

38 In that context, the applicant refers to several points on which the Commission did not follow Stora's statements, in particular the assertion that a number of aspects of the alleged infringement had little impact on the market, the comments showing that customers enjoyed considerable power, the statement that the information exchanges did not include disclosure of the length of order backlogs and, lastly, the statement that the main purpose of the collection of data on orders in hand was to enable companies to monitor their own performance on the market.

39 Nor did the Commission take due account of certain observations in Stora's statements. The applicant refers to points 3, 11, 12 and 28 of Stora's second statement (appendix 39 to the statement of objections) and to paragraph 1.1 of Stora's third statement (appendix 43 to the statement of objections).

40 The Commission therefore adopted an unfair approach in regard to Stora's statements, since it followed them only in the absence of other evidence. By contrast, where evidence other than the statements existed, it accepted the evidence that was most unfavourable to the addressees of the Decision.

41 Second, the Commission did not correctly assess the reports by London Economics (hereinafter the `LE report'), produced on behalf of several addressees of the Decision, which aimed to explain the market phenomena noted by the Commission. The applicant had also supplied data to the Commission in order to show that production costs at its Workington plant had increased almost as much as the transaction prices, despite the strong demand during the period in question.

42 Third, the implication that the applicant deliberately concealed evidence in order to frustrate the investigation (point 116 of the Decision) is unfounded.

43 Lastly, it is apparent from the Decision that no consideration was given to the possibility that Unilever plc, the owner of TBM before its acquisition by Iggesunds Bruk, was responsible for part of the alleged infringement.

44 The Commission observes that it is not obliged to respond in detail to every matter raised in a reply to a statement of objections (see Joined Cases 209/78 to 215/78 and 218/78 Van Landewyck and Others v Commission [1980] ECR 3125, paragraph 66) and that, in accordance with its duties, it considered the evidence and arguments submitted by the applicant and replied in the Decision to the matters which were relevant to its conclusions.

45 As regards the applicant's arguments relating to the reliability of Stora's statements, the Commission maintains that it understood them and took them into account. It simply did not agree with the applicant. As indicated in points 112 and 113 of the Decision, the statements were corroborated by numerous documents. Moreover, it seems absurd to maintain that the Commission blindly followed Stora's statements and to complain that it did not follow those statements in every detail.

46 As regards the LE report, the Commission refers in the main to the arguments on which it relies to show that it correctly assessed the effects of the cartel on the market (see paragraph 289 et seq. below).

47 Contrary to the applicant's claim, the Commission never asserted that the applicant had concealed evidence during the administrative procedure.

48 Lastly, in its reply to a written question from the Court, the Commission stated that it had no evidence of the involvement of Unilever plc in the cartel.

Findings of the Court

49 It is settled law that the purpose of the obligation to give reasons for an individual decision is to enable the Community judicature to review the legality of the decision and to provide the party concerned with an adequate indication as to whether the decision is well founded or whether it may be vitiated by some defect enabling its validity to be challenged; the scope of that obligation depends on the nature of the act in question and on the context in which it was adopted (see, inter alia, Case T-49/95 Van Megen Sports v Commission [1996] ECR II-1799, paragraph 51). Although pursuant to Article 190 of the Treaty the Commission is bound to state the reasons on which its decisions are based, mentioning the facts, law and considerations which have led it to adopt them, it is not required to discuss all the issues of fact and law which have been raised during the administrative procedure (see, inter alia, Van Landewyck and Others v Commission, cited above, paragraph 66).

50 As regards Stora's statements, the Commission explained in points 112 and 113 of the Decision that the essential points of those statements are corroborated by other proof.

51 The fact that the Commission did not adopt all the assertions made in Stora's statements cannot render the statement of reasons for the Decision inadequate or defective. In essence, the applicant's arguments merely contest the correctness of the Commission's assessment of the reliability of Stora's statements. As such arguments fall within the scope of the Court's examination of the substance of the Decision, they are irrelevant in the present context.

52 The same holds for the applicant's assertion that the Commission did not correctly assess the LE report or the evidence produced by the applicant in order to show that its costs increased in line with the prices which it charged.

53 As regards the applicant's assertion that the Decision wrongly implied that it had deliberately concealed evidence in order to frustrate the investigation, it suffices to find that there is no such implication in the Decision. As the Commission has rightly stated, the point in the Decision to which the applicant refers concerns only the measures taken by the participants in the cartel designed to conceal its existence. The Commission's assessment of that aspect is explained in detail in the Decision (see, in particular, point 73 thereof).

54 Finally, the applicant did not submit any evidence during the administrative procedure before the Commission to show that Unilever plc was involved in the cartel as former parent company of TBM. In those circumstances, the fact that the Commission did not examine in the Decision whether that decision might be addressed to Unilever plc in order to make it answerable for part of the infringement committed by TBM cannot constitute a defect in reasoning.

55 In the light of the foregoing, this plea must be rejected.

The plea grounded upon infringement of the rights of the defence

Arguments of the parties

56 The applicant contends that the grounds of the Decision refer to evidence which was not set out in the statement of objections and thus infringes its rights of defence.

57 That is the case in regard to many of the assertions concerning the alleged `price before tonnage' policy, the fact that the Commission considers the Fides information exchange in itself to infringe Article 85 of the Treaty and the fact that the Commission considers the 1987 price increase in the United Kingdom to have been the result of collusion.

58 Furthermore, although in the statement of objections the Commission accepted that supply and demand were in balance for at least three or four years prior to 1991, the Decision contains less favourable findings, in particular in that it states several times that downtime was taken in 1990 (see, for example, point 134).

59 Lastly, information relating to the October 1988 price increases by Iggesunds Bruk in the Netherlands and by Feldmühle (of the Stora group) in Belgium and data relating to an October 1989 price increase by Enso-Gutzeit in Italy were included in the tables annexed to the Decision, but had not been included in those annexed to the statement of objections.

60 The Commission maintains that the statement of objections contained all the evidence relating to the `price before tonnage' policy. Likewise, the statement of objections showed that the 1987 price increase in the United Kingdom was the result of collusion (pages 68 and 69 and the annex concerning the fixing of prices referred to therein).

61 It observes that the initial statement of objections concerned only the Fides system, which was linked to the operation of the cartel as a whole. It was not therefore necessary to make any findings in regard to the unlawfulness of the system in itself. However, the addendum to the statement of objections explained that the system implemented after July 1991 continued to infringe Article 85 of the Treaty.

62 Lastly, there is no inconsistency between the information relating to supply and demand in the statement of objections and that in the Decision.

Findings of the Court

63 It is settled law that the statement of objections must be couched in terms that, albeit succinct, are sufficiently clear to enable the parties concerned properly to identify the conduct complained of by the Commission. It is only on that basis that the statement of objections can fulfil its function under the Community regulations of giving undertakings all the information necessary to enable them properly to defend themselves, before the Commission adopts a final decision (see, inter alia, Joined Cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85 Ahlström Osakeyhtiö and Others v Commission [1993] ECR I-1307, paragraph 42).

64 In this case, the Court must reject the applicant's argument that a large part of assertions relating to the alleged `price before tonnage' policy was not set out in the statement of objections. The applicant does not specify in what respect the assertions in the Decision differ from those in the statement of objections. Moreover, the Decision does not contain objections relating to the price before tonnage policy that were not brought to the attention of the applicant in the statement of objections.

65 Nor can the Court uphold the applicant's argument to the effect that in the statement of objections there was no allegation that the Fides information exchange system was in itself an infringement of Article 85(1) of the Treaty. It suffices to hold that, according to the Decision, that information exchange system infringed the Community competition rules only in that it supported the cartel found (Article 1, last indent, of the Decision, read in the light of point 134, third paragraph, of the Decision), even though the Commission considered that `in fact, in many cases individual data were shown or could be worked out without much difficulty' (ibidem).

66 As regards the concerted price increase in the United Kingdom in January 1987, this allegation was made sufficiently clearly against certain undertakings, including the applicant, in the statement of objections.

67 That allegation is set out in particular on page 54 of the statement of objections:

`A handwritten note (appendix 44) in the desk diary of Mr Opladen of Feldmühle covering three pages from 15-17 January 1987 relates to an exchange of information on pricing, order backlog and downtime between Feldmühle and several other producers in the context of the price increase which was being introduced in the United Kingdom market in December 1986-January 1987 (c.f. Appendix 61, found at [Mayr-Melnhof]'s UK sales agent "Recent Fides meeting included the representative of Weig, stating they thought 9% too high for the UK and were settling at 7%" ... etc).'

68 Furthermore, the Commission states (page 69 of the statement of objections):

`Details of the concerted price initiatives in West Europe from 1987 to 1991 are set out in the Pricing Annex which is attached to these objections.

Details are also shown on the price initiative in the United Kingdom market in early 1987.'

69 In technical appendix A, to which the statement of objections expressly refers, the Commission sets out its detailed objections relating to the January 1987 price increase in the United Kingdom. It is stated unambigiously in particular (on page 4) that it `is clear ... that this increase had been discussed and planned at the "President" level'.

70 It follows that the applicant could not have been unaware that the Commission was alleging that it had participated in a concerted price initiative in the United Kingdom in January 1987.

71 Furthermore, the applicant wrongly claims that the statement of objections does not show that downtime was taken in 1990.

72 In fact the statement of objections (page 85) states:

`Subsequently when in 1990 they were faced with a combination of increased capacity and reduced demand they were able to coordinate the taking of downtime by each producer and thereby avoid excess production and falling prices.'

73 Lastly, as regards the information on the price increases announced and implemented by some producers, the Commission does not contest the applicant's assertion that this information was not set out in the statement of objections or in the appendices thereto. The applicant was therefore unable to make known its views properly on those matters of fact. The Commission was not entitled to base its decision on information which had not been brought to the attention of the undertakings during the administrative procedure. In consequence, those matters of fact must be disregarded when considering the validity of the Decision.

74 However, that infringement of the applicant's right of defence is not in itself such as to affect the validity of the Decision as a whole, since it was not based solely on the information in question (see, to the same effect, Joined Cases 100/80, 101/80, 102/80 and 103/80 Musique Diffusion Française and Others v Commission [1983] ECR 1825, paragraph 30).

75 This plea must therefore be rejected.

B - The pleas grounded on the infringement of substantive rules

The plea that the applicant was not the correct addressee of the Decision

Admissibility of the plea

76 The Commission questions the applicant's legal interest in submitting that the Decision should have been addressed to Iggesund Paperboard, when the applicant acknowledges that it will answer for that company's liability if a fine is ultimately imposed on it.

77 It suffices to observe in that regard that the applicant is one of the undertakings stated in Article 1 of the Decision to have participated in an infringement of Article 85(1) of the Treaty. On that basis, the applicant has a legal interest in disputing that finding, irrespective of any question of fines, because that finding is at the very least likely to affect its reputation.

78 The plea must therefore be declared admissible.

Substance

- Arguments of the parties

79 According to the applicant, the Decision was addressed to the parent company of a group of companies where more than one company had participated in the infringement or where there was specific evidence implicating the parent company in the infringement (point 143 of the Decision). However, neither of those criteria is satisfied in its own case. In reality, only one undertaking in the MoDo group, Iggesund Paperboard, is accused of having participated in the infringement and the applicant itself did not participate in it.

80 In the present case, the Commission has not even applied the general criteria set out in the Decision. According to points 152 and 153 of the Decision, the Commission took the view, first, that there might be difficulties in collecting the fine if Iggesund Paperboard were the addressee of the Decision and, second, that Iggesund Paperboard was not really independent of the applicant. In applying those specific criteria in the applicant's case alone, the Commission infringed the principles of fairness, equal treatment, non-discrimination and protection of legitimate expectations.

81 Moreover, the specific criteria referred to in point 153 of the Decision do not justify the Commission's approach. First of all, it is incorrect to state that Iggesund Paperboard was not able to pay the fine. The Commission was also wrong to take the view that Iggesund Paperboard did not enjoy real independence in relation to the applicant. The mere fact that Iggesund Paperboard had no assets or employees did not preclude its being characterised as an undertaking for the purposes of Community law. The Commission itself conceded that Iggesund Paperboard, as an autonomous economic entity, fulfilled all the criteria in order to be considered as an undertaking. Iggesund Paperboard cannot therefore be regarded as a `shell' company.

82 Where an undertaking has under its control all the assets necessary to manage its activities, it is not necessary that it should own those assets. That is confirmed by Commission Decision 91/50/EEC of 16 January 1991 relating to a proceeding under Article 85 of the EEC Treaty (IV/32.732 - IJsselcentrale (IJC) and Others, OJ 1991 L 28, p. 32). Nor does the fact that the parent company supplies some ancillary services, such as legal and accounting services, and charges the group companies for them preclude Iggesund Paperboard from being characterised as an undertaking.

83 Lastly, it has not been proved that the applicant was aware of the alleged unlawful acts and had de facto control over the activities of Iggesund Paperboard. Nor does the fact that the applicant could issue directions to Iggesund Paperboard or the fact that it had chosen the directors of that undertaking suffice to render the applicant liable for the conduct of the undertaking or to conclude that Iggesund Paperboard and the applicant are a single economic entity.

84 The Commission contends that an undertaking, within the meaning of competition law, may be defined as an economic unit consisting of a unitary organisation of personal, tangible and intangible elements which pursues a specific economic aim on a long-term basis (Case T-11/89 Shell v Commission [1992] ECR II-757, paragraph 311).

85 Several companies in the same group, acting under the same management and control, may be considered to be part of the same undertaking. In that regard the Commission has a discretion in determining the level of such a structure to which it is most appropriate to address a decision. Consequently, even if it had been possible for the Commission to address the Decision to Iggesund Paperboard, that would not have meant that it was obliged to do so. Two of the applicant's subsidiary companies, Iggesund Paperboard (Workington) Ltd. and Iggesunds Bruk, were indeed involved in the cartel.

86 Lastly, the Commission rightly relied on the reasons set out in points 152 and 153 of the Decision, because Iggesund Paperboard has no assets or employees. It is therefore merely a `shell company' with capital of only SKR 50 000.

- Findings of the Court

87 In prohibiting undertakings inter alia from entering into agreements or participating in concerted practices which may affect trade between Member States and have as their object or effect the prevention, restriction or distortion of competition within the common market, Article 85(1) of the Treaty is aimed at economic units which consist of a unitary organisation of personal, tangible and intangible elements, which pursues a specific economic aim on a long-term basis and can contribute to the commission of an infringement of the kind referred to in that provision (Shell v Commission, cited above, paragraph 311).

88 In the present case the applicant and the various companies belonging to its paperboard division, a division which was formally managed by Iggesund Paperboard, must be regarded as consisting of a unitary organisation of personal, tangible and intangible elements which pursues, on a long-term basis, the aim inter alia of producing and selling cartonboard with a view to maximising profits, even, in some cases, to the detriment of the individual profits of its various components. In that organisation, each company plays a specific role (see, to the same effect, Shell v Commission, cited above, paragraph 312).

89 According to the Decision (see, in particular, the first paragraph of point 153), Iggesund Paperboard is a `commission company' that is wholly owned by the applicant, its capital amounting to SKR 50 000.

90 The second paragraph of point 153 adds:

`Iggesund Paperboard AB neither owns the production facilities for cartonboard nor employs its labour force. The cartonboard assets formerly owned by Iggesunds Bruk AB remain owned by that company which is now a dormant company entirely owned by MoDo. All personnel in Sweden are employed by MoDo itself.'

91 The applicant has not disputed any of those statements.

92 Moreover, it is apparent from the applicant's replies to the Court's written questions that at the date when the infringement ended Iggesund Paperboard (Workington) Ltd, formerly TBM, still owned the cartonboard mill at Workington, United Kingdom; that it posted the turnover of that mill in its accounts; and that it still employed the staff at that mill. It is also clear that no turnover was posted in the annual accounts of Iggesund Paperboard and that, in particular, the turnover of the Iggesunds Bruk carton mill was posted in the applicant's annual accounts.

93 Lastly, according to the applicant's annual accounts for 1991, the business of the MoDo group was conducted through six `commission companies', including Iggesund Paperboard, but the applicant supplied certain services, such as legal, data processing and accountancy services, for all the group companies.

94 In consequence, the Commission rightly states at the end of the second paragraph of point 153 of the Decision that `it is therefore appropriate for the purposes of the present proceedings to address the decision to the MoDo group itself [represented by its parent company] rather than to a subsidiary which has no real independence, owns no assets and employs no staff', and it is unnecessary to consider whether the other reasons relied on in points 152 and 153 of the Decision may justify the Commission's choice to address the Decision to the applicant.

95 Contrary to the applicant's assertion that only Iggesund Paperboard participated in the infringement, Iggesund Paperboard (Workington) Ltd was also in the list of the members of the PG Paperboard, and employees of that company took part in JMC meetings. In addressing the Decision to the applicant, the Commission therefore acted in conformity with the criterion set out in point 143 of the Decision, according to which that decision was to be addressed to the parent company of the group where more than one company in that group had participated in the infringement.

96 In the light of the foregoing considerations, the plea must be rejected.

The plea that the Commission has not proved the existence of collusion on volume control and limitation of production

97 This plea is in three parts. The first two parts will be considered together while the third part will be considered separately.

The first two parts of the plea: no proof of the existence of collusion aimed at freezing market shares and controlling supply

- Arguments of the parties

98 In the first part of the plea the applicant disputes the Commission's allegations regarding the existence of volume control measures. Those allegations are, in effect, based on Stora's statements. Those statements are not, however, corroborated by any evidence.

99 The applicant contends that demand continued to increase until May 1991 and that production capacity in the industry was fully utilised from 1987 until 1990. On that basis, it disputes the assertion in the Decision that producers were increasingly forced to take downtime during 1990.

100 Furthermore, the note of 3 October 1988 (appendix 102 to the statement of objections) proves that there was no system of volume control at that date.

101 Lastly, the applicant disputes that the documents relating to meetings of the Paper Agents' Association (`PAA') can support the Commission's contention. It considers that they should not be taken into consideration.

102 In the second part of the plea it contests the Commission's allegations of the existence of collusion on the freezing of market shares. Several items of evidence show that Stora's statements, on which the Commission relied, are not reliable.

103 First, the description of the measures aimed at freezing market shares is incoherent. The Commission failed to take into account the fact that the producers could not agree on a freezing of market shares without contact with customers and without turning away orders. The Decision does not indicate the products to which the market shares related. It does not specify whether the forecast percentage growth rate for the following year was determined individually or centrally. However, those matters ought necessarily to have been at the heart of any understanding on freezing market shares. Lastly, the information provided by Stora is not coherent either. Stora stated (appendix 39 to the statement of objections) that discussions on that topic related to national groupings, whereas in its letter of 23 December 1992 (appendix 43 to the statement of objections) it is alleged that the agreement related to market shares by producer group.

104 Second, its national market shares changed significantly and its share of the continental European market increased considerably. Moreover, the Commission itself accepts that several of the larger producers were able to increase their market shares slightly.

105 Third, the Commission did not duly take into account the low price elasticity of cartonboard.

106 Fourth, an agreement to freeze market shares would necessarily have had to be accompanied by agreements on the taking of downtime and on the creation of new production capacity. However, several producers increased their production capacity during the period in question.

107 The Commission states that the Decision explains that the producers understood that in the long term it was not possible to control prices without at the same time controlling volumes in order to ensure a balance between supply and demand. On that basis, the producers considered it necessary to strengthen the cartel on prices with an agreement on volume control. Consequently, the fact that it was not necessary to put that system into practice during a particular period is irrelevant. Furthermore, there is evidence that measures to control supply had been taken by Iggesund when necessary (points 94 and 95 of the Decision). The Commission also observes that it found that the producers agreed to freeze market shares at existing levels but that this was not an absolute freeze (points 52 to 56 of the Decision).

108 As regards the reasons for which the volume control scheme was considered necessary, the Commission states that a substantial increase in volumes would have entailed a fall in prices. The applicant's argument based on low price elasticity does not therefore answer the Commission's argument.

109 The Commission states that the conclusions drawn in the Decision are based on sound evidence. It refers in that regard to Stora's statements and to the documents described in points 53 to 55 and 58 to 59 of the Decision.

110 It maintains that it never alleged that market shares remained constant (points 59 and 60 of the Decision).

- Findings of the Court

111 According to Article 1 of the Decision, the undertakings referred to in that article infringed Article 85(1) of the Treaty by participating, during the relevant period, in an agreement and concerted practice whereby the suppliers of cartonboard in the Community `reached an understanding on maintaining the market shares of the major producers at constant levels, subject to modification from time to time' and `increasingly from early 1990, took concerted measures to control the supply of the product in the Community in order to ensure the implementation of the said concerted price rises'.

112 According to the Commission, those two types of collusion, dealt with in the Decision under the heading `volume control', were initiated during the reference period by the participants in the PWG meetings. It is apparent from the third paragraph of point 37 of the Decision that the true purpose of the PWG, as described by Stora, `included "discussions and concertation on markets, market shares, prices, price increases and capacity"'.

113 As to the PWG's role in relation to the collusion on market shares, the Decision (point 37, fifth paragraph) states as follows: `In connection with the moves to increase prices, the PWG held detailed discussions on the market shares in western Europe of the national groupings and of individual producer groups. As a result, certain "understandings" were reached between the participants as to their respective market shares, the object being to ensure that the concerted price initiatives were not jeopardised by excess of supply over demand. The large producer groups in effect agreed to maintain their market shares at the levels disclosed for each year by the annual production and sales figures and available in definitive form through Fides in March of the following year. Market share developments were analysed in each meeting of the PWG on the basis of the monthly Fides returns and if significant fluctuations emerged, explanations would be sought from the undertaking presumed responsible.'

114 According to point 52 of the Decision: `The agreement reached in the PWG during 1987 included the "freezing" of the west European market shares of the major producers at existing levels, with no attempts to be made to win new customers or extend existing business through aggressive pricing'.

115 The first paragraph of point 56 states: `The basic understanding between the major producers on maintaining their respective market shares continued throughout the period covered by this Decision'. According to point 57: `"Market share development" was analysed at each meeting of the PWG on the basis of provisional statistics'. Finally, the last paragraph of point 56 states: `The undertakings which took part in these discussions on market shares were those represented in the PWG, namely Cascades, Finnboard, KNP (until 1988), [Mayr-Melnhof], MoDo, Sarrió, the two Stora group producers CBC and Feldmühle, and (from 1988) Weig'.

116 The Court therefore considers that the Commission correctly established the existence of collusion on market shares between the participants in the meetings of the PWG.

117 The Commission's analysis is in essence based on Stora's statements (appendices 39 and 43 to the statement of objections) and is confirmed by appendix 73 to the statement of objections.

118 In appendix 39 to the statement of objections, Stora states: `The PWG met from 1986 to assist in the introduction of discipline in the market. ... Among other (legitimate) activities, its purpose included discussion and concertation on markets, market shares, prices, price increases, demand and capacity. Its role included assessing and explaining to the President Conference the precise state of supply and demand on the market and the measures to be taken to attempt to bring order to the market.'

119 As regards more specifically the collusion on market shares, Stora indicates that `the shares taken by national groups of EC, EFTA and other countries supplied by members of the PG Paperboard were considered in the PWG' and that the PWG `discussed the possibility of holding market shares at the previous year's level' (appendix 39 to the statement of objections, point 19). It also states (same document, point 6) that `[d]iscussions about producers' European market shares also took place during this period, the first reference period being 1987 levels'.

120 In a reply to a request by the Commission of 23 December 1991, sent on 14 February 1992 (appendix 43 to the statement of objections), Stora also states: `The understandings on market share levels reached by the PWG members related to Europe as a whole. The understandings were based on the previous total year figures, usually definitively available by the following March' (point 1.1).

121 That assertion is confirmed in the same document as follows: `... the discussions led to understandings usually in March of each year between members of the PWG to maintain their market shares at the previous year's level' (point 1.4). Stora reveals that `no measures were taken to ensure respect for the understandings' and that the participants in the meetings of the PWG `were aware that if they took exceptional positions in certain markets supplied by others, those others could retaliate in other markets' (ibidem).

122 Lastly, it states that the applicant (`Iggesund') took part in the discussions concerning market shares (point 1.2, p. 3).

123 Stora's assertions concerning collusion on market shares are supported by appendix 73 to the statement of objections. That document, found at FS-Karton (of the Mayr-Melnhof group), is a confidential note dated 28 December 1988 sent by the marketing director of the Mayr-Melnhof Group in Germany (Mr Katzner) to the General Manager of Mayr-Melnhof in Austria (Mr Gröller) concerning the market situation.

124 According to that document, cited in points 53 to 55 of the Decision, the closer cooperation within the `Presidents' grouping' (`Präsidentenkreis') decided on in 1987 had produced `winners' and `losers'. The author of the note considers Mayr-Melnhof to be amongst the losers for various reasons, including the following:

`(2) An agreement could only be reached by our being "punished" - we were asked to make "sacrifices".

(3) Market shares had to be "frozen" at 1987 levels, existing contacts maintained and no new activities or grades obtained via pricing (the result will be apparent in January 1989 - if all are honest).'

125 Those sentences must be read in the more general context of the note.

126 In that regard, the author of the note refers by way of introduction to the closer cooperation within the `Presidents' grouping'. That expression was interpreted by Mayr-Melnhof as a general reference to both the PWG and the PC, that is to say, without reference to a specific event or meeting (appendix 75 to the statement of objections, point 2.a). It is unnecessary to consider that interpretation in the present context.

127 The author goes on to indicate that this cooperation had led to `price discipline' which had produced `winners' and `losers'.

128 It is necessary, therefore, to understand the phrase relating to the market shares which were to be frozen at 1987 levels against the background of that discipline decided upon by the `Presidents' grouping'.

129 Moreover, the reference to 1987 as reference year is consistent with Stora's second statement (appendix 39 to the statement of objections; see paragraph 119 above).

130 As to the role played by the PWG in the collusion on the control of supply, which was a feature of the consideration of machine downtime, the Decision states that the PWG played a decisive role in implementing downtime when, from 1990, production capacity increased and demand fell: `From the beginning of 1990 ... the industry leaders ... considered it necessary to concert on the need for taking downtime in the forum of the PWG. The major producers recognised that they could not increase demand by lowering prices and that maintaining full production would simply bring prices down. In theory, the amount of downtime required to bring supply and demand back into balance could be calculated from the capacity reports' (point 70 of the Decision).

131 It is also observed: `However, the PWG did not formally allocate the "downtime" to be taken by each producer. According to Stora, there were practical difficulties in reaching a coordinated plan on downtime to cover all the producers. Stora says that for these reasons only "a loose system of encouragement existed"' (point 71 of the Decision).

132 The Court finds that the Commission adequately established the existence of collusion on downtime between the participants in the meetings of the PWG.

133 The documents it produces support its analysis.

134 In its second statement (appendix 39 to the statement of objections, point 24), Stora gives the following explanation: `With adoption by the PWG of the policy of price before tonnage and the gradual implementation of an equivalent price system from 1988, members of the PWG recognised that downtime would have to be taken to maintain those prices in the face of a reduced growth in demand. Without taking downtime the producers would have been unable to maintain agreed price levels in the face of an increasing excess of capacity.'

135 In point 25 of its statement, Stora adds: `In 1988 and 1989 the industry was able to run at near full capacity. Downtime in addition to normal closure for repairs and holidays became necessary from 1990. ... Ultimately downtime had to be taken when the order flow ceased in order to maintain the price before tonnage policy. The amount of downtime required to be taken by producers (to maintain the balance between production and consumption) could be calculated from the capacity reports. No formal allocation of downtime was made by the PWG, although a loose system of encouragement existed ...'

136 As to appendix 73 to the statement of objections, the reasons adduced by the author of the note in order to explain why he considered Mayr-Melnhof to be a `loser' at the time when the note was written are significant evidence of the existence of collusion on downtime between the participants in the meetings of the PWG.

137 The author states:

`(4) It is at this point that there begins to be a difference in opinion between the parties involved as to what is desired.

...

(c) All sales representatives and European agents were released from their quantity budgets and a pricing policy followed which admitted of practically no exceptions (our employees often did not understand our changed attitude to the market - in the past they were just required to go for tonnage and now the sole objective is price discipline with the danger of having to stop machines).'

138 Mayr-Melnhof states (appendix 75 to the statement of objections) that the passage reproduced above refers to its own internal situation. However, when considered in the light of the more general background to the note, that passage reflects the implementation, at the level of sales personnel, of a rigorous policy adopted within the `Presidents' grouping'. The document must therefore be construed as meaning that the participants in the 1987 agreement, that is to say, the participants in the meetings of the PWG at least, undoubtedly weighed up the consequences the agreed policy would have if it were to be applied rigorously.

139 On the basis of the foregoing, and without the need to consider appendix 102 to the statement of objections, the Commission has proved to the requisite legal standard that there was collusion on market shares between the participants in the meetings of the PWG and that there was collusion on downtime between those same undertakings. Since TBM/Iggesund Paperboard (Workington) Ltd/Iggesund Paperboard participated in the meetings of the PWG (see point 370 et seq. below) and the applicant is expressly referred to in Stora's statements, the Commission was entitled to hold the applicant liable for participation in those two types of collusion.

140 The applicant's criticism of Stora's statements, by which it disputes the probative value of those documents, does not weaken that finding.

141 It is not disputed that those statements are made by one of the undertakings regarded as having participated in the alleged infringement and that they contain a detailed description of the nature of the discussions held in the bodies of the PG Paperboard, of the objective pursued by the undertakings which met within it, and of the participation of those undertakings in the meetings of its various bodies. Since this central evidence is corroborated by other documents, it constitutes a sound basis for the Commission's assertions.

142 Nor can the Court accept the applicant's argument that the undertakings' actual conduct shows that the Commission's allegations are unfounded.

143 First, the existence of collusion between the members of the PWG on the two aspects of the `price before tonnage policy' should not be confused with their implementation. The probative value of the proof adduced by the Commission is such that information as to the applicant's actual conduct on the market cannot affect the Commission's conclusions concerning the fact of the existence of collusion on the two aspects of the policy at issue.

144 Second, the Commission's conclusions are not contradicted by the information supplied by the applicant. It must be emphasised that the Commission expressly accepts that the collusion on market shares involved `no formal machinery of penalties or compensation to reinforce the understanding on market shares' and that the market shares of some large producers did creep up from year to year (see, in particular, points 59 and 60 of the Decision). Moreover, the Commission acknowledges that since the industry had operated at full capacity until the beginning of 1990, practically no downtime was required until that date (point 70 of the Decision).

145 Third, two documents in the file confirm that the applicant implemented the price before tonnage policy agreed in the PWG.

146 Thus, according to the minutes of the PAA meeting on 23 January 1990, drawn up by a representative of Kopparfors (of the Stora group): `... Iggesund said that Thames had been having some production downtime which was their policy as opposed to lowering prices' (appendix 130 to the statement of objections).

147 To the same effect, the minutes of the PAA meeting of 4 April 1990, drawn up by a representative of Mayr-Melnhof Pegg, states as follows:

`Thames Board (Iggesund). 3 weeks lead time. UK demand lower than same period 1989. Downtime preferred to decreasing prices. April price increase full (sic) implemented' (appendix 131 to the statement of objections).

148 In the light of the foregoing, the first and second parts of the plea must be rejected.

The third part of the plea: error in assessing the significance of the Fides statistics

- Arguments of the parties

149 The applicant contends that the Commission did not correctly assess the significance of the Fides statistics. It exaggerated their importance and unlawful nature. Moreover, those statistics were not sufficiently detailed to allow a quota system to be monitored.

150 Although it is true that the statistics gathered by Fides were broken down country-by-country except in the case of the weekly order inflow reports, they did not enable the deliveries of each producer to be identified.

151 Furthermore, the applicant states that the Commission acknowledges that during the year the producers normally used provisional statistics (point 63 of the Decision). In fact, those statistics provided only general information on trends in demand. In those circumstances, the participants in the PWG meetings could hardly have relied on those statistics for rational analysis of market shares and capacity utilisation.

152 Moreover, contrary to the Commission's assertion, the state of the order backlog of each producer is not secret. The statistics supplied by Fides on the state of order backlogs therefore simply served to provide producers with a Europe-wide picture.

153 As regards statistics on capacities and capacity utilisation, those statistics were imprecise and merely for the purpose of observing dynamic trends in the industry and of comparing changes in the utilisation rates of each undertaking with changes in aggregate rates.

154 Lastly, the statistics concerned were not necessary in order to find that there was a balance between supply and demand, as that state of affairs was obvious for the whole industry.

155 According to the Commission, the applicant's arguments principally aim to show that the Fides information exchange system was not inherently contrary to Article 85(1) of the Treaty. As that system was used simply to reinforce and facilitate the implementation of an unlawful cartel, the discussion is purely academic.

- Findings of the Court

156 The third part of the plea must be understood to be a claim that the Commission's assessment of the significance of the Fides statistics was incorrect, those statistics being neither necessary nor useful for the purposes of the alleged cartel.

157 According to Article 1 of the Decision, the undertakings referred to in that article infringed Article 85(1) of the Treaty by participating in an agreement and concerted practice whereby the undertakings, inter alia, `exchanged commercial information on deliveries, prices, plant standstills, order backlogs and machine utilisation rates in support of the above measures', that is to say, collusion on prices, market shares and downtime.

158 In view of its operative part and the third paragraph of point 134, the Decision must be interpreted as meaning that the Commission considered the Fides information exchange system to be contrary to Article 85(1) of the Treaty because it supported the cartel.

159 The third paragraph of point 134 of the Decision explains that the Fides information exchange system `was an essential aid to:

- monitoring market share development,

- monitoring conditions of supply and demand so as to maintain full capacity utilisation,

- deciding whether concerted price increases could be introduced,

- determining the necessary downtime'.

160 Moreover, it is apparent from the Decision that the Fides statistics were analysed and discussed in the PWG. The first paragraph of point 57, which also refers to point 63 of the Decision, states: `"Market share development" was analysed at each meeting of the PWG on the basis of provisional statistics'. In addition, the first paragraph of point 69 states: `A comparison could be made of the weekly order backlog and the available capacity, in the light of which the PWG reached an assessment of the overall state of demand in the cartonboard industry'.

161 The Court finds that those allegations by the Commission are proved.

162 First, the applicant does not dispute the fact that the Fides statistics were discussed in the PWG.

163 Second, the Commission rightly considered that the Fides statistics were used in that body, first, for the purpose of `monitoring market share development' (point 134, third paragraph, first indent) and, second, of `monitoring conditions of supply and demand so as to maintain full capacity utilisation' and `determining the necessary downtime' (point 134, third paragraph, second and fourth indents).

164 As regards the use of the Fides statistics in order to `monitor market share development', Stora acknowledged that `if it appeared from analysis of the statistics that the level of sales by national groupings was moving too much, members of the PWG ... would encourage each other and take it upon themselves to limit fluctuations in national markets' (appendix 39 to the statement of objections, point 19).

165 Likewise, according to appendix 43 to the statement of objections (point 1.1):

`Fluctuations in supply to national markets were examined and discussed at each PWG (ie every two to three months) on the basis of the Fides quick statistics ... These were produced on a monthly basis with a total per calendar year and not on a running year total basis. Fluctuations that appeared in the statistics would not necessarily accurately reflect the final end year position and could not be relied on with any great certainty. It did not make sense for the major producers represented in the PWG to discuss market shares on a national basis in detail since producers were not able to determine the end destination of their deliveries.

...

The understandings on market share levels reached by the PWG members related to Europe as a whole. The understandings were based on the previous total year figures, usually definitively available by the following March.'

166 As regards the use of the Fides statistics for the purpose of `monitoring conditions of supply and demand so as to maintain full capacity utilisation', reference should be made to Stora's statement (appendix 39 to the statement of objections, point 5):

`Linked with the pricing initiative from 1987, was the need to maintain a near balance between production and consumption (price before tonnage policy). In 1988 and 1989, producers were operating at full or near full capacity. In 1990, as a result of a combination of increased capacity and a reduced growth in demand, downtime began to be taken by producers in order to maintain the balance between production and consumption. ... The producers could work out from the annual capacity reports the amount of downtime necessary and encouraged each other to take downtime sufficient to maintain the balance between production and demand ... [N]ot all manufacturers took downtime in this way with the result that some, usually the larger, producers suffered proportionately greater tonnage losses in an effort to maintain price levels' (to the same effect, ibidem, point 25).

167 Stora's statements are indirectly confirmed by appendices 73 and 75 to the statement of objections. It is apparent from appendix 73 (see point 123 et seq. above) that the marketing director for the Mayr-Melnhof/FS-Karton group in Germany (Mr Katzner) suggested to the general manager of Mayr-Melnhof in Austria that the Fides information exchange system then in operation should be amended (page 5, subparagraph 5, under the heading `Kontrolle'). According to appendix 75 (page 11), Mayr-Melnhof's reply to a request for information: `The Fides rules were subsequently amended, broadly along the lines of the proposals' set out in appendix 73 (see also point 63, second paragraph, of the Decision). In view of the general tenor of appendix 73, Mr Katzner's request for an amendment to the Fides information exchange system must be understood in the sense that this system did not allow adequate control of changes in market shares and/or examination of downtime and that accordingly it should be improved in order to ensure better control.$

168 In the light of that evidence, and having regard to the fact that the Commission rightly considered that the applicant participated in collusion on downtime and on market shares in the PWG, the third part of the plea must be rejected.

169 The whole of the plea must therefore be rejected.

The plea that the duration of the cartel was incorrectly assessed

Arguments of the parties

170 The applicant submits that even on the basis of the allegations made in the Decision there was no infringement prior to 1988. If Stora's statements are left out of account, there is no evidence to show that the creation of the PWG in itself constituted an infringement. Moreover, the evidence does not show that the PWG was created before 10 November 1986.

171 Moreover, neither the statement of objections nor the Decision show that the January 1987 price initiative in the United Kingdom was an infringement.

172 The Commission maintains that the infringement began in mid-1986 and that this date must be adopted for the purpose of calculating the fines. That is the approximate time when the PG Paperboard was reorganised and when discussions on prices and quantities began. In that regard, it was entitled to rely on Stora's statements.

Findings of the Court

173 According to the second paragraph of point 161 of the Decision, the majority of the undertakings to which the Decision was addressed participated in the infringement from June 1986 onward, that being the date `when the PWG was set up and the collusion between the producers intensified and started to be more effective'.

174 As regards the date on which the PWG was set up, Stora has stated (appendix 39 to the statement of objections, point 8): `The PWG met from 1986 ...'.

175 On that basis, and in the absence of evidence showing the precise date on which that body was set up, the Commission was entitled to take the view that the PWG was set up around mid-1986 and that it met regularly from that date onward. The Court points out in that context that the applicant participated in the PWG meetings right from the creation of that body (see point 370 et seq. below). In those circumstances, the applicant cannot, without evidence to support its claim that the PWG was set up at a later date, validly dispute the Commission's assessment of the date on which the PWG was set up.

176 The Commission correctly concluded that the applicant, being an undertaking which participated in the PWG meetings right from the creation of that body in about mid-1986, must be held liable for collusion on prices with effect from that date.

177 The PWG was set up by certain undertakings, including the applicant, for an essentially anti-competitive purpose. As Stora stated (appendix 39 to the statement of objections, point 8), it `met from 1986 to assist in the introduction of discipline to the market' and its purpose included `discussion and concertation on markets, market shares, prices, price increases and capacity' (appendix 35 to the statement of objections, point 5(iii)).

178 The role played by the undertakings meeting in that body in regard to collusion on market shares and on downtime has been described in the previous plea (see paragraphs 113 to 139 above). The undertakings which met in that body also discussed price initiatives. According to Stora (appendix 39 to the statement of objections, point 10), `[f]rom 1987 the PWG reached an agreement and took broad decisions on both the timing ... and level of price increases to be introduced by cartonboard producers'.

179 Consequently, the fact that they had agreed to set up and participate in meetings of a body whose anti-competitive object, in particular the discussion of future price increases, was known to and accepted by the undertakings which originally established it, constitutes a sufficient ground for considering that the applicant is liable for collusion on prices with effect from mid-1986.

180 This plea must therefore be rejected.

The plea that the Commission committed an error of assessment in considering that SBS cartonboard was the subject of the infringement and formed part of the same market as GC and GD cartonboard and that there are defects in reasoning and procedural defects in that regard

181 This plea is in three parts. Each part will be considered separately.

First part: infringement of the rights of the defence

182 The applicant submits that it was unable to exercise its rights of defence during the administrative procedure, because the statement of objections did not refer to the existence of an infringement relating to SBS cartonboard. That product was mentioned only once, in brackets, in relation to one price increase.

183 The Court finds that there is no basis for that submission.

184 It is apparent from the statement of objections (pages 3 and 4) that three main grades of cartonboard manufactured in western Europe, including SBS cartonboard, are covered by the definition of `cartonboard' and are the subject of the proceeding.

185 Moreover, all the evidence on which the Commission relies in the Decision in order to demonstrate that SBS cartonboard was the subject of the infringement is referred to in the statement of objections or in the individual particulars annexed thereto which were addressed to the applicant (see, in particular, appendices 111, 113 and 117 to the statement of objections).

GROUNDS CONTINUED UNDER DOC.NUM: 694A0352.1

186 Lastly, each of the pricing annexes to the statement of objections contain, in regard to each alleged concerted price initiative, information on the price increases of SBS cartonboard.

187 The statement of objections therefore clearly showed that SBS cartonboard was the subject of the procedure.

188 The first part of the plea must therefore be rejected.

Second part: Commission's error of assessment in that it considered that SBS cartonboard was the subject of the infringement, and an inadequate statement of reasons in that regard

- Arguments of the parties

189 The applicant contends that the Decision and the evidence referred to in it do not prove that SBS cartonboard was the subject of the infringement. It also submits that the Decision does not contain adequate explanations to support the Commission's allegations.

190 First of all, Stora's statements do not mention SBS cartonboard.

191 Moreover, none of the allegations relating to the volume control measures concern SBS cartonboard. The allegation that an agreement was made in the PWG to observe 1987 market shares relates to a period in which no producer of SBS cartonboard was represented in that body.

192 The handwritten notes obtained at Rena concerning a JMC meeting on 6 September 1989 (appendix 117 to the statement of objections) are not relevant, because Iggesund Paperboard did not take part in that meeting and the note refers to a price increase which took place more than one month before the meeting.

193 Nor do the tables relating to price increases annexed to the Decision demonstrate the existence of collusion in regard to SBS cartonboard. Comparisons between the price increases announced by the applicant and those announced by Enso-Gutzeit, the other producer of SBS cartonboard to which the Decision was addressed, and between those price increase announcements and increases for GC and GD cartonboard confirm that there was no collusion in regard to SBS cartonboard.

194 The Decision's statement of reasons relating to SBS cartonboard is also defective because, contrary to what is indicated in point 4 thereof, the term `GC grades' does not cover SBS cartonboard.

195 Furthermore, the statement in the Decision that the price initiatives `involved increases in all national markets ..., with SBS usually (but not always) going up in line with GC grades' (point 20, second paragraph) is the only passage in the Decision, apart from the summary of the infringement and some unclear statements in points 86 and 97 of the Decision, in which it is stated that the price initiatives concerned SBS cartonboard.

196 Contrary to the assertion made in point 4 of the Decision, SBS cartonboard is not covered by the terms `GC' or `FBB'. Part of Iggesund Paperboard's production of SBS cartonboard is not even covered by the definition of the product concerned by the activities of the PG Paperboard, that is to say, according to point 28 of the Decision, cartonboard `of 200 g/m2 and more'.

197 Furthermore, the information given in the Decision concerning producers, purchasers and production volumes of SBS cartonboard is incorrect. There are European producers of SBS cartonboard other than Enso-Gutzeit and the applicant, and Enso-Gutzeit's production of SBS cartonboard was over-estimated.

198 The Commission submits that there is ample proof that the collusion related to SBS cartonboard, in particular in regard to some of the price increase initiatives. SBS cartonboard is produced by a small number of manufacturers and in much smaller quantities than the other cartonboard grades. That may explain the fact that it figured less in discussions at meetings of the PG Paperboard and that there is less documentary evidence concerning it.

199 SBS cartonboard was covered by a large part of the Fides information exchange system (appendix 5 to the statement of objections) and by the market studies made by the director general of Finnboard (the `Kosk' studies, appendices 56 and 95 to the statement of objections). The Commission also refers to appendices 111, 113 and 117 to the statement of objections, which set out all the price increases for SBS cartonboard (or GZ board, an alternative designation of SBS cartonboard).

200 As regards the tables relating to the various price increase initiatives annexed to the Decision, some addressees of the Decision did not provide complete price documentation (see point 118 of the Decision). In particular the undertakings' replies, and especially those of the applicant's subsidiaries, to requests for information were incomplete as regards the price increases.

201 In any event, the documentation on price increase announcements shows that for each of the initiatives the producers had agreed to increase prices on all the national markets.

- Findings of the Court

202 It is apparent from the Decision that the Commission's claim that there was price collusion concerning SBS cartonboard is founded in particular on appendix 111 to the statement of objections (point 80 of the Decision), a price list in Swedish obtained at Rena, which contains information relating to price increases in nine Community countries for GC cartonboard (GC 1 and GC 2 grades) and SBS cartonboard (referred to as `GZ', see point 4 of the Decision) implemented in September/October 1989. It is common ground that, in so far as information is available relating to that price increase, the particulars in the price list as to the level and date of price increases for SBS cartonboard are in conformity with the price increases actually implemented by the applicant.

203 At the hearing the applicant submitted that because the price list is undated, it does not have the probative value which the Commission attributes to it.

204 That submission must be understood in the sense that, in the applicant's view, it has not been proved that the information in the list relates to future price increase announcements.

205 However, the probative value of appendix 111 must be assessed in the light of the other documentary proof of collusion on prices. As the Commission explains in the Decision (points 79, 80 and 83), it obtained two other price lists drawn up in the same format and also in Swedish, namely a price list obtained at Finnboard (UK) Ltd (hereinafter `the Finnboard list'), and also appendix 110 to the statement of objections (obtained at Rena), which relate to the price increases implemented in April 1989 and April 1990 respectively.

206 In view of the striking similarities in the form of those three price lists, the Court finds that they have a common origin. Moreover, appendix 110 is dated 3 December 1989, a date prior to the price announcements to which it refers. As a result, the Commission was justified in inferring that the two other undated price lists had to be regarded as having been drawn up prior to the dates of the actual price increase announcements to which those lists refer. Lastly, the Court observes that Rena and Finnboard produce only GC cartonboard, whereas the three price lists refer to several other types of cartonboard.

207 On that basis, the Commission rightly considered that those three price lists, when taken in conjunction with the other evidence, constituted weighty evidence of price collusion in the bodies of the PG Paperboard, given that the applicant did not dispute such collusion except with regard to SBS cartonboard. Moreover, as the applicant is the only producer of SBS cartonboard which participated in the meetings of the PWG and of the JMC, the principal bodies of the cartel, the Court finds that the information on price increases of SBS cartonboard in appendix 111 to the statement of objections demonstrates its participation in collusion on prices in regard to both GC cartonboard and SBS cartonboard.

208 That finding is corroborated by appendix 113 to the statement of objections, a note dated 11 January 1990 obtained at FS-Karton, which, according to the Commission, relates to a JMC meeting (point 84 of the Decision). That document contains information on the dates of the price increase announcements for the GC and GD cartonboard of various producers (Kopparfors (of the Stora group), Mayr-Melnhof, Finnboard and Cascades). As regards the applicant, the note states as follows: `Thames: 10 Tg Igges. 15/20 Tg' (`Tg' for `Tage' indicates the number of days of order backlog) and `Th/Ig KW5 GC/GZ +13,-' (`KW5' for `Kalenderwoche 5' indicates that the price increase will have to be announced in the course of the fifth calendar week of the year).

209 Consistently with what is stated in that note, the applicant announced a price increase for its GC and SBS cartonboard of DM 13 per 100 kg on 31 January 1990 (documents F-12-5 and F-12-6).

210 The Commission therefore correctly considered that that document was proof of price collusion in regard to GC, GD and SBS cartonboard.

211 That conclusion is not undermined by the argument which the applicant made at the hearing, namely that it has not been proved that appendix 113 to the statement of objections related to a JMC meeting. The Court points out, first, that all the producers referred to in that document participated in the meetings of the PWG and of the JMC and, second, that there is no dispute that collusion on prices took place at meetings of those two bodies. In consequence, even if the Commission had not proved that appendix 113 to the statement of objections related to a JMC meeting, that document proves collusion on prices either in that body or in the PWG.

212 In the light of the foregoing, the Court considers that it has been proved that the applicant participated in price collusion in regard to SBS cartonboard and it is not necessary to consider the other evidence upon which the Commission relies.

213 It follows that the Commission has proved that the applicant, being an undertaking which attended meetings of the PWG from the date when that body was set up, participated in collusion on cartonboard prices from mid-1986 and in collusion on market shares and on downtime from the end of 1987.

214 Admittedly, as regards the latter two types of collusion, the Court has not examined which grades of cartonboard were involved. However, as the purpose of the two types of collusion was to ensure the success of the price initiatives and the applicant does not dispute that this was their purpose, it must be held that it participated in those two aspects of collusion also in regard to its production of SBS cartonboard, which was the subject of the collusion on prices.

215 Finally, in as much as the applicant submits that the reasoning of the Decision is inadequate and/or contains errors concerning SBS cartonboard, the Court finds that the Decision clearly states that the infringement found related to SBS cartonboard and clearly sets out the evidence on which that conclusion is based (see, in particular, points 3, 4, 80, 81, 85 and 97, and the tables on the price initiatives annexed to the Decision). Furthermore, it is clear from the first and second paragraphs of point 28 of the Decision that, although the activity of the PG Paperboard was officially defined as relating to cartonboard `of 200 g/m2 and more', this was not an absolute threshold.

216 On the basis of the foregoing considerations, the second part of the plea must also be rejected.

Third part: Commission's error of assessment in that it considered that SBS cartonboard was part of the same market as GC and GD cartonboard

- Arguments of the parties

217 The applicant argues that SBS cartonboard is not part of the same product market as GC and GD cartonboard.

218 In the present case, it is necessary to define the relevant product market, because of the inferences made by the Commission in regard to the gravity of the infringement and its success on the market. Without a definition of the market, it is not possible to reach the conclusion in point 168 of the Decision that the cartel was largely successful in achieving its objectives. A definition of the market is all the more necessary as SBS cartonboard differs considerably from GC and GD cartonboard.

219 Moreover, according to points 168 and 169 of the Decision, when calculating the fines the Commission took into account the fact that the producers accounted for `virtually the whole of the market' and the importance of the undertakings in `the industry'. No such assertions can be made, because the Commission denies that a definition of the market is relevant.

220 Nor were the characteristics of SBS cartonboard correctly assessed in points 3 and 4 of the Decision. SBS cartonboard is used principally for graphical purposes and not, as indicated in points 3 and