Keywords

Summary



Keywords

1 ECSC - Agreements, decisions and concerted practices - Administrative proceedings - Principle of ex proprio motu investigation - Commission under an obligation to investigate - Limits

(ECSC Treaty, Art. 65)

2 ECSC - Agreements, decisions and concerted practices - Administrative proceedings - Observance of the rights of the defence - Whether the Commission is obliged to reopen the oral procedure following an internal investigation after the hearing - No such obligation

(ECSC Treaty, Arts 36, first para., and 65)

3 ECSC - Agreements, decisions and concerted practices - Administrative proceedings - Similarities between the statement of objections and the decision finding an infringement - Observance of the rights of the defence

(ECSC Treaty, Art. 15)

4 Acts of the institutions - Drafting procedure - Commission decision - Obligation on the Commissioners - Accordance between the decision adopted and the decision notified

5 Acts of the institutions - Rules of Procedure of the Commission - Authentication of acts adopted - Documents `annexed' to the minutes - Meaning

(1993 Rules of Procedure of the Commission, Art. 16, first para.)

6 ECSC - Agreements, decisions and concerted practices - Prohibited - Infringement - Proof thereof

(ECSC Treaty, Art. 65)

7 ECSC - Agreements, decisions and concerted practices - Agreements between undertakings - Concept - Common intentions as to future market conduct

(ECSC Treaty, Art. 65(1); EC Treaty, Art. 85(1))

8 ECSC - Agreements, decisions and concerted practices - Concerted practice - Concept - Coordination and cooperation incompatible with the obligation for each undertaking to determine its market conduct independently - System for the exchange of information

(ECSC Treaty, Arts 4(d) and 65(1); EC Treaty, Art. 85(1))

9 ECSC - Agreements, decisions and concerted practices - Prejudicial to competition - Anti-competitive object - Sufficient to establish the existence thereof

(ECSC Treaty, Art. 65(1); EC Treaty, Art. 85(1))

10 ECSC - Article 65 of the Treaty - Interpretation - Protection of residual competition

(ECSC Treaty, Art. 65)

11 ECSC - Prices - Price lists - Compulsory publication - Purpose - Compatible with the prohibition of agreements, decisions and concerted practices

(ECSC Treaty, Arts 60 and 65(1))

12 ECSC - Agreements, decisions and concerted practices - Prohibited - System for the exchange of information - Appreciable influence on the conduct of participant undertakings - Anti-competitive

(ECSC Treaty, Art. 65(1))

13 ECSC - Agreements, decisions and concerted practices - Price-fixing agreements - Encouragement from the Commission - Encouragements misconstrued - Consequences

(ECSC Treaty, Art. 65(1))

14 ECSC - Agreements, decisions and concerted practices - Prohibited - Justification put forward - Toleration or laxity on the part of the Commission - Not permissible

(ECSC Treaty, Art. 65(1) and (4))

15 Actions for annulment - Pleas in law - Misuse of powers - Meaning - Decision imposing fines for infringement of the competition rules - Vitiated by misuse of powers only in exceptional circumstances

(ECSC Treaty, Arts, 3, 4, 33 and 65(1) and (5))

16 Acts of the institutions - Statement of reasons - Obligation - Scope - Decision imposing fines for infringement of the competition rules - Desirable that the method of calculating the fine be disclosed

(ECSC Treaty, Arts 15 and 65(1))

17 ECSC - Agreements, decisions and concerted practices - Fines - Amount - Determination thereof - Criteria - Aggravating circumstances - Recidivism (where an undertaking has already been penalised for similar infringements) - Concept

(ECSC Treaty, Art. 65(5))

18 ECSC - Agreements, decisions and concerted practices - Fines - Amount - Determination thereof - Criteria - Financial difficulties of the undertaking concerned - May be taken into consideration - Whether obligatory - No such obligation

(ECSC Treaty, Art. 65(5))

19 ECSC - Agreements, decisions and concerted practices - Fines - Amount - Determination thereof - Criteria - Whether the anti-competitive effects of an infringement are to be taken into account - Limits

(ECSC Treaty, Art. 65(5))

20 ECSC - Agreements, decisions and concerted practices - Fines - Amount - Determination thereof - Criteria - Possibility of raising the level of fines

(ECSC Treaty, Art. 65(5))

21 ECSC - Agreements, decisions and concerted practices - Fines - Amount - Determination thereof - Cases in which the fine is fixed by the Community judicature - Unlimited jurisdiction

(ECSC Treaty, Art. 36, second para.)

22 ECSC - Agreements, decisions and concerted practices - Fines - Interest payable in cases of postponed payment - Effect of actions pending - No effect

(ECSC Treaty, Art. 39)

Summary

1 Having regard to the principle of ex proprio motu investigation, when the Commission finds itself facing allegations of importance for the defence of undertakings concerned by a proceeding pursuant to Article 65 of the ECSC Treaty and when, in the case of allegations that a Commission department encouraged those undertakings to implement the practices of which they are accused, the Commission is therefore, with regard to the conduct of its own departments, in a privileged position, compared with those undertakings, to establish whether those allegations are true or false, it follows from the principles of sound administration and equality of arms that it is under an obligation to examine seriously that aspect of the case-file in order to determine whether or not those allegations are well founded and, if so, to what extent. However, it is for the Commission, not the undertakings, to decide how to conduct such an examination.

2 In proceedings pursuant to Article 65 of the ECSC Treaty, the guarantee of the rights of the defence afforded by the first paragraph of Article 36 of the Treaty does not require the Commission to reply to all the arguments of the party concerned, or to carry out further investigations or to hear witnesses put forward by the party concerned, where it considers that the preliminary investigation of the case has been sufficient.

Where a hearing has provided the undertakings concerned with an opportunity to set out their position in detail, the mere fact that they produced certain documents after the hearing and that the Commission then decided to open an internal investigation is not, in itself, such as to oblige the Commission to reopen the oral procedure after that investigation has been concluded.

In such cases, the rights of defence of the undertakings concerned are sufficiently respected where the Commission informs them of the results of the investigation, indicating that the documents which they have provided do not justify a second hearing; and their procedural rights are sufficiently guaranteed by their right to bring an action before the Court of First Instance.

3 The reproduction, in a decision finding that the competition rules have been infringed, of the text of certain passages in the statement of objections indicates in itself only that the Commission has maintained its point of view. In the absence of any other relevant evidence, such similarity between texts does not establish that the Commission failed, when assessing the case, to give proper consideration to the arguments which the party concerned set out in its defence.

4 The operative part and reasoning of a decision notified to the person or persons to whom that decision is addressed must correspond to those of the decision adopted by the college of Commissioners, exception being made for any corrections merely of spelling or grammar which may still be made to the text of an act after its formal adoption by that college.

The fact that a decision has been adopted in the form of two documents, the second of which contains a number of amendments, some handwritten, to the first, is irrelevant where it has not been possible to identify any substantive difference between the version of the decision adopted by the college and the version notified to addressees. Likewise, the fact that in some language versions the two documents have inconsistent page numbering or different character fonts is irrelevant where the intellectual component and the formal component of those documents, read in conjunction, corresponds to the version of the decision notified to addressees.

5 The purpose of the first paragraph of Article 16 of the Commission's 1993 Rules of Procedure, under which `[i]nstruments adopted by the Commission in the course of a meeting or by written procedure shall be annexed, in the authentic language or languages, to the [minutes] of the meeting at which they were adopted or at which note was taken of their adoption', is to ensure that the Commission has duly adopted the instrument in the form notified to the party to whom it is addressed.

Since the first paragraph of Article 16 of the 1993 Rules of Procedure does not define how instruments adopted in the course of a meeting are to be `annexed' to the minutes - in contrast to Article 16 of the Commission's Rules of Procedure, as subsequently amended, which provides that the instruments in question are to be attached to the minutes `in such a way that they cannot be separated' - it can be assumed that, when the minutes are received by the Court of First Instance, accompanied by the documents constituting the adopted act, in the same container (which Commission officials state to have received as such from the Commission's Secretariat-General), those documents are `annexed' to the minutes in the sense that they have been placed with those minutes, without being physically attached to them.

In those circumstances, and regard being had to the presumption of validity which Community measures enjoy, those documents must therefore be regarded as having been authenticated by the signatures of the President and the Secretary-General on the first page of the minutes.

6 Attendance by an undertaking at meetings involving anti-competitive activities suffices to establish its participation in those activities, in the absence of proof capable of establishing the contrary.

7 The common desire expressed by undertakings to conduct themselves on the market in a particular manner in regard to prices constitutes an agreement within the meaning of Article 65(1) of the ECSC Treaty. There is no reason to interpret the concept of `agreement' in Article 65(1) of the ECSC Treaty differently from the concept of `agreement' in Article 85(1) of the EC Treaty.

8 The concept of concerted practice must be construed having regard to the purpose of Article 65(1) and the legal framework of the ECSC Treaty. Admittedly, the steel market is an oligopolistic market, characterised by the system of Article 60 of the Treaty which ensures - through the compulsory publication of price lists and transportation charges - publicity for the prices charged by the various undertakings. However, the resulting immobility or parallelism of prices are not, in themselves, contrary to the Treaty if they result, not from an agreement - even tacit - between the parties concerned, but from the interplay of the strengths and strategies of independent and opposed economic units on the market. It follows that the idea that every undertaking must determine independently the market policy which it intends to pursue, without collusion with its competitors, is inherent in the ECSC Treaty and particularly in Articles 4(d) and 65(1) thereof.

The prohibition by Article 65(1) of the ECSC Treaty of `concerted practices' in principle has the same purpose as the parallel prohibition of `concerted practices' in Article 85(1) of the EC Treaty. More particularly, it seeks to ensure the effectiveness of the prohibition under Article 4(d) of the Treaty by bringing under that prohibition a form of coordination between undertakings which, without having reached the stage where an agreement properly so-called has been concluded, knowingly substitutes practical cooperation between the undertakings for the risks of normal competition under the Treaty.

Where an undertaking reveals to its competitors - during one of a series of regular meetings at which most of them are present - what its future market conduct will be in regard to prices, calling on them to adopt the same conduct, and thus acts with the express intention of influencing their future competitive activities, and where that undertaking can reasonably count on its competitors complying in large measure with that request or, at least, on their bearing it in mind when deciding on their own commercial policy, the undertakings in question are in those circumstances substituting practical cooperation between themselves for the risks of normal competition under the Treaty, and such conduct must be classified as a concerted practice within the meaning of Article 65(1) thereof.

Undertakings also engage in a concerted practice within the meaning of that provision where they actually take part in a scheme designed to eliminate uncertainty as to their future market conduct and necessarily implying that each of them takes into account the information obtained from its competitors. It is not necessary, therefore, to demonstrate that such exchanges of information led to a specific result or were put into effect on the market in question.

9 In so far as Article 65(1) of the ECSC Treaty refers to agreements `tending' to distort normal competition, that expression encompasses the formula `have as their object' found in Article 85(1) of the EC Treaty. Consequently, in order to establish an infringement of Article 65(1) of the Treaty, it is not necessary to demonstrate that there was an adverse effect on competition.

10 While it is true that the oligopolistic character of the markets covered by the ECSC Treaty may, to some extent, weaken the effects of competition, that consideration cannot justify an interpretation of Article 65 authorising undertakings to behave in such a way as to reduce competition even further, particularly through price-fixing. In view of the consequences which the oligopolistic structure of the market may have, it is all the more necessary to protect residual competition.

11 The purpose of the compulsory publication of prices under Article 60(2) of the ECSC Treaty is, first, as far as possible to prevent prohibited practices; second, to enable purchasers to learn exactly what prices will be charged and be able themselves to check whether any discrimination has taken place; and, third, to enable undertakings to have an accurate knowledge of the prices of their competitors so as to enable them to align their prices.

The fact that the provisions of Article 60 tend to restrict competition does not prevent application of the prohibition of agreements laid down in Article 65(1) of the Treaty. The prices which appear in the price lists must be fixed by each undertaking independently, without any agreement - even tacit - between them.

12 Article 65(1) of the ECSC Treaty is based on the principle that every trader must determine independently the policy which he intends to follow on the common market.

A system for the exchange of information concerning the participant undertakings' orders and deliveries on the main Community markets, broken down by undertaking and Member State - where such information is up-to-date, intended solely for producers party to the arrangement (to the exclusion of consumers and other competitors), and having regard to the homogenous nature of the products concerned and the degree of market concentration - appreciably influences the behaviour of the participant undertakings and substitutes practical cooperation between them for the normal risks of competition.

13 No provision in the ECSC Treaty authorises anti-competitive pricing agreements and neither the Council, the Commission nor the undertakings may ignore the provisions of Article 65(1) of the Treaty or exempt themselves from their obligation to comply with them.

It follows that, even on the assumption that price agreements concluded within the Eurofer/Scandinavia group were concluded under the arrangements limiting trade between the Community and certain Scandinavian countries (Sweden, Norway and Finland) and that the Commission and/or the authorities of those countries encouraged or tolerated them, at least indirectly, such agreements none the less infringed Article 65(1) of the Treaty in so far as they fixed prices on the Danish market.

14 The provisions of Article 65(4) of the ECSC Treaty, to the effect that agreements or decisions prohibited under Article 65(1) are `automatically void', have an objective content and are binding both on undertakings and the Commission, which cannot exempt those undertakings. In those circumstances, toleration or administrative laxity cannot alter the fact that a breach of Article 65(1) is an infringement of the Treaty.

This is particularly so when such toleration (if assumed to have been established) is practised by the Commission Directorate-General responsible for industrial affairs, not that responsible for competition matters. Should undertakings have the slightest doubt as to whether their conduct is lawful, they must contact the departments responsible for competition matters in order to clarify the situation.

15 A measure may amount to a misuse of powers only if it appears, on the basis of objective, relevant and consistent factors, to have been taken with the exclusive purpose, or at any rate the main purpose, of achieving an end other than that stated or of evading a procedure specifically prescribed by the ECSC Treaty for dealing with the circumstances of the case.

The prosecution and punishment of infringements in competition matters are a legitimate objective of Commission action, in accordance with the fundamental provisions of Articles 3 and 4 of the ECSC Treaty. If the commission of such infringements has actually been proved and it has been established that the fines have been calculated in an objective and proportionate way, the decision imposing such fines, in accordance with Article 65(5) of the Treaty, cannot be regarded as being vitiated by misuse of powers except in exceptional circumstances.

In that connection, neither the co-existence of parallel negotiations between the Commission and the industry concerning the restructuring of the European steel industry, nor the `coincidence' of the failure of those negotiations with the adoption of a decision finding that the main undertakings operating in that sector have infringed the competition rules constitutes per se evidence of misuse of powers.

16 The statement of reasons required under Article 15 of the ECSC Treaty must enable the person concerned to ascertain the matters relied upon to justify the measure adopted so that, if necessary, he can defend his rights and verify whether the decision is well founded; secondly, it must enable the Community judicature to review the legality of that measure. So far as a decision imposing fines on several undertakings for a breach of Community competition rules is concerned, the scope of the obligation to provide reasons must, in particular, be assessed in light of the fact that the gravity of the infringements must be determined by reference to a variety of factors such as the particular circumstances of the case, its context and the dissuasive effect of fines, there being no binding or exhaustive list of criteria which must be applied. Furthermore, the Commission enjoys a margin of discretion when fixing the amount of each fine and cannot be regarded as being obliged to apply a precise mathematical formula for that purpose.

It is desirable for undertakings - in order to be able to define their position in full knowledge of the facts - to be able to determine in detail, in accordance with any system which the Commission might consider appropriate, the method of calculation of the fine imposed upon them without being obliged, in order to do so, to bring court proceedings contesting the decision.

This applies a fortiori where the Commission has used detailed arithmetical formulas to calculate the fines. It is desirable in such cases that the undertakings concerned - and, if need be, the Court of First Instance - be in a position to check that the method employed and the steps followed by the Commission are free of error and compatible with the provisions and principles applicable in regard to fines, and in particular with the principle of non-discrimination.

However, such figures, provided in the course of proceedings by the Commission at the request of the Court of First Instance, do not constitute an additional a posteriori statement of reasons for a decision imposing fines, but rather the translation into figures of the criteria set out in that decision where these are themselves capable of being quantified.

17 Recidivism, as understood in a number of national legal systems, implies that a person has committed fresh infringements after having been penalised for similar infringements.

The fact that the undertaking concerned has already been penalised - by means of an earlier decision - for similar infringements cannot be taken into account as an aggravating circumstance, justifying an increase in the fine, in so far as it relates to infringements committed before that decision was adopted.

18 In determining the amount of the fines to impose on steel undertakings for infringement of the competition rules, the Commission is in principle entitled to take account of the undertakings' financial difficulties while maintaining fines at a level which appears appropriate. However, recognition of an obligation requiring the Commission to take account of an undertaking's loss-making financial situation would be tantamount to conferring an unjustified competitive advantage on the undertakings least well adapted to the conditions of the market.

19 In so far as it is unnecessary, in order to find that there has been an infringement of Article 65(1) of the ECSC Treaty, to establish that the conduct in question actually had an anti-competitive effect, the effect which an agreement or concerted practice may have had on normal competition is not a conclusive criterion in assessing the proper amount of the fine. Factors relating to the intentional aspect, and thus to the object of a course of conduct, may be more significant than those relating to its effects, particularly where they relate to infringements which are intrinsically serious, such as price-fixing and market-sharing.

However, the assessment of the effects of an infringement may be relevant, in regard to fines, where the Commission bases its decision expressly on an effect and is unable to prove it or to provide good reasons why it should be taken into account.

In cases where the Commission has encouraged the undertakings to exchange their views on the economic situation of the market and future tendencies, particularly in regard to prices, the effects of the infringements cannot be determined simply by comparing the situation resulting from the anti-competitive agreements with that which would have existed had there been no contact whatever between the undertakings; rather, the situation resulting from the anti-competitive agreements should be compared with that which had been envisaged and accepted by the Commission.

20 The fact that the Commission has penalised certain types of infringement in the past by imposing fines at a particular level cannot prevent it from raising that level within the limits indicated in Article 65(5) of the ECSC Treaty if that is necessary to ensure the effectiveness of Community competition policy.

21 By its nature, the fixing of a fine by the Court of First Instance, in the exercise of its unlimited jurisdiction, is not an arithmetically precise operation. Moreover, the Court is not bound by the Commission's calculations, but must carry out its own assessment, taking all the circumstances of the case into account.

22 Under Article 39 of the ECSC Treaty, actions brought before the Court of First Instance do not have suspensory effect. It follows that the Commission cannot be required to treat in the same way an undertaking which, whether or not it has brought an action, pays the fine on its normal due date - where appropriate by making use of the arrangements to pay by instalments at the preferential interest rate which, as here, may have been offered to it by the Commission - and an undertaking which wishes to postpone that payment until a definitive judgment has been delivered. Exceptional circumstances apart, application of default interest at the normal rate must be regarded as justified in this latter case.