Keywords

Summary



Keywords

1. Competition – Agreements, decisions and concerted practices – Agreements subject ratione materiae and ratione temporis to the legal system of the ECSC Treaty – Expiry of the ECSC Treaty – Continuation of supervisory action by the Commission on the basis of Regulation No 1/2003

(Art. 65(1) CS; Council Regulation No 1/2003)

2. Acts of the institutions – Temporal application – Expiry of the ECSC Treaty – Commission decision adopted against an undertaking after the expiry of the ECSC Treaty and relating to acts prior to the expiry of that treaty – Principles of legal certainty and the protection of legitimate expectations – Scope – Liability of undertakings for their conduct in breach of the rules on competition in the context of the succession of the legal framework of the EC Treaty to that of the ECSC Treaty – Substantive rules – Procedural rules

(Art. 65(1) CS; Council Regulation No 1/2003, Arts 7(1) and 23(2))

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

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

4. Competition – Administrative procedure – Observance of the rights of the defence – Excessive length of the administrative procedure – Disappearance of evidence of relevance to the exercise of the rights of the defence – Burden of proof

(Council Regulation No 1/2003)

5. Competition – Administrative procedure – Limitation period with regard to proceedings – Suspension – Commission decision the subject of proceedings pending before the Court of Justice – Scope

(Council Regulation No 1/2003, Arts 23, 25(3) and (6) and 26(2); Decision No 715/78, Arts 2, 3 and 4(2))

Summary

1. In accordance with a principle common to the legal systems of the Member States, the origins of which may be traced back to Roman law, when legislation is amended, unless the legislature expresses a contrary intention, continuity of the legal system must be ensured. That principle applies to amendments to the primary law of the European Union.

There is no indication that the European Union legislature wished it to be possible for concerted practices prohibited under the ECSC Treaty to escape the application of all penalties after that treaty expired. The succession of the ECSC, EC and FEU Treaties ensures, in order to guarantee free competition, that any conduct corresponding to the factual elements set out in Article 65(1) CS, whether taking place before or after the expiry of the ECSC Treaty on 23 July 2002, could be and still can be penalised by the Commission.

In those circumstances, it would be contrary to the objectives and the coherence of the Treaties and irreconcilable with the continuity of the legal order of the European Union if the Commission did not have jurisdiction to ensure the uniform application of the rules deriving from the ECSC Treaty which continue to produce effects even after the expiry of that treaty. The General Court does not therefore err in law by interpreting Regulation No 1/2003 as enabling the Commission to find and penalise, after the expiry of the ECSC Treaty, agreements between undertakings arrived at in the sectors falling within the scope of the ECSC Treaty ratione materiae and ratione temporis .

(see paras 62-66)

2. The principle of legal certainty requires that European Union rules enable those concerned to know precisely the extent of the obligations which are imposed on them, and that those persons must be able to ascertain unequivocally what their rights and obligations are and take steps accordingly. In this respect, in so far as the Treaties define clearly the infringements and the nature and extent of the penalties which can be imposed on undertakings for infringements of the rules on competition, the principles of legal certainty and the protection of legitimate expectations do not aim to guarantee to undertakings that subsequent amendments to the legal bases and procedural rules will enable them to escape all penalties relating to their past infringements.

In the case of a Commission decision concerning a legal situation which was definitively established before the expiry of the ECSC Treaty, adopted against an undertaking after the expiry of that treaty, the General Court does not err in law by holding, first, that compliance with the principles governing the temporal application of the law and the requirements relating to the principles of legal certainty and the protection of legitimate expectations require the application of the substantive provisions of Article 65(1) and (5) CS to facts which occurred before the expiry of the ECSC Treaty and fall within the scope of that treaty ratione materiae and ratione temporis . In this respect, Article 65(1) and (5) CS provided a clear legal basis for imposing a penalty for infringement of the rules on competition, so that a diligent undertaking could not at any time be unaware of the consequences of its conduct or count on the fact that the succession of the legal framework of the EC Treaty to that of the ECSC Treaty would have the consequence of allowing it to escape all penalties for infringements of Article 65 CS committed in the past.

As regards, secondly, the procedural rules applicable, the General Court was right to hold that the Commission has power to conduct the procedure pursuant to Articles 7(1) and 23(2) of Regulation No 1/2003. The provision which forms the legal basis of an act and empowers the Union institution to adopt the act in question must be in force at the time when the act is adopted, and procedural rules are generally held to apply from the time of their entry into force.

(see paras 67-70, 73-75)

3. The concept of an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed. The Court has stated that, in the context of European Union competition law, the term ‘undertaking’ must be understood as designating an economic unit even if in law that economic unit consists of several natural or legal persons, and that when such an economic entity infringes the competition rules, it is for that entity, according to the principle of personal responsibility, to answer for that infringement.

The conduct of a subsidiary may be attributed to the parent company in particular where, although having a separate legal personality, that subsidiary does not determine independently its own conduct on the market, but essentially carries out the instructions given to it by the parent company, having regard especially to the economic, organisational and legal links between those two legal entities. In the particular case of a parent company having a 100% shareholding in a subsidiary which has infringed the rules on competition, the parent company is able to exercise decisive influence over the conduct of its subsidiary, and there is a rebuttable presumption that the parent company does in fact exercise decisive influence over the conduct of the subsidiary.

In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to avail itself of the presumption that the parent exercises decisive influence over the commercial policy of the subsidiary. The Commission will then be able to regard the parent company as jointly and severally liable for payment of the fine imposed on its subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to show that its subsidiary acts independently on the market. Other circumstances, such as the fact that it is not disputed that the parent company exercises influence over the commercial policy of its subsidiary and the fact that both companies are jointly represented during the administrative procedure, may be taken into account by the European Union judicature, but are not conditions for the application of that presumption.

(see paras 95-99)

4. It is for an undertaking which submits that the excessive length of the administrative procedure has had an impact on the exercise of its rights of defence to demonstrate to the requisite legal standard that, because of that excessive length, it experienced difficulties in defending itself against the Commission’s allegations.

A diligent company which is the addressee of a Commission decision contested by it and was a party to earlier proceedings before the European Union judicature should preserve the documents necessary for its defence. Failing that, it should indicate in detail, if not the specific items of evidence that have disappeared, at least the incidents, events or circumstances which prevented it, during the period in question, from complying with its obligation of diligence and brought about the alleged disappearance of the evidence alluded to. Only by examining such specific indications can the European Union judicature assess whether the undertaking has shown to the requisite legal standard that it experienced the alleged difficulties in defending itself against the Commission’s claims as a result of the excessive length of the administrative procedure, or whether those difficulties in fact derive from a failure to comply with its obligation of diligence.

(see paras 118, 120-122)

5. It is the very fact that an action is pending before the General Court or the Court of Justice that justifies the suspension of the limitation period. If an addressee of a Commission decision imposing a fine for an infringement of the competition rules decides to bring an action for annulment, the matter to be tried by the European Union judicature relates only to those aspects of the decision which concern that addressee. Unchallenged aspects concerning other addressees, on the other hand, do not form part of the matter to be tried by the Union judicature.

In accordance with Article 4(2) of Decision No 715/78 concerning limitation periods in proceedings and the enforcement of sanctions under the Treaty establishing the European Coal and Steel Community and Article 26(2) of Regulation No 1/2003, the limitation period for enforcement runs from the date on which the decision becomes final. The Court has explained that that limitation period therefore runs from expiry of the period for bringing an action against the decision on the infringement and the fine, if no action has been brought. It follows, first, that, with respect to undertakings which have not brought actions against a final decision of the Commission imposing a fine on them under Article 65 CS or Article 23 of Regulation No 1/2003, that decision becomes final and, secondly, that that finality starts time running against them for the enforcement of the decision, as laid down by Article 4 of Decision No 715/78 and Article 26 of Regulation No 1/2003. Consequently, with respect to those undertakings, an action brought by another undertaking against the same final decision cannot have any suspensive effect.

Moreover, both the wording of Article 3 of Decision No 715/78 and Article 25(6) of Regulation No 1/2003 and the objectives pursued by those articles cover actions brought against those acts referred to in Article 2 of Decision No 715/78 and Article 25(3) of Regulation No 1/2003 against which actions lie, as well as actions brought against the Commission’s final decision. Consequently, since Article 3 of Decision No 715/78 and Article 25(6) of Regulation No 1/2003 do not draw any distinctions as regards decisions to which suspensive effect is attached, erga omnes effect need not be attached to actions brought against the acts referred to in Article 2 of Decision No 715/78 and Article 25(3) of Regulation No 1/2003 against which actions lie.

(see paras 141-147)