Keywords

Summary



Keywords

1. Appeals – Grounds – Plea submitted for the first time in the context of the appeal – Inadmissibility

(Rules of Procedure of the General Court, Art. 113(2))

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

(Art. 101 TFEU; Council Regulation No 1/2003, Art. 23(2))

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

(Art. 101 TFEU; Council Regulation No 1/2003, Art. 23(2))

4. Competition – Administrative procedure – Statement of objections – Access to the file – Subject-matter – Observance of the rights of the defence – Scope

(Art. 81 EC)

5. Competition – Administrative procedure – Observance of the rights of the defence – Duty to act within a reasonable time

(Art. 81 EC; Council Regulation No 1/2003)

6. Acts of the institutions – Statement of reasons – Obligation – Scope

(Arts 81 EC and 253 EC)

7. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision imposing fines for infringement of the competition rules and relating to several addressees

(Arts 81 EC and 253 EC)

Summary

1. The subject-matter of the proceedings before the General Court may not be changed in the appeal. Accordingly, the appellate jurisdiction of the Court of Justice is confined to review of the findings of law on the pleas argued before the General Court. A party cannot therefore change the subject-matter of the proceedings by putting forward for the first time before the Court of Justice a plea in law which it could have raised before the General Court but did not, since that would amount to allowing it to bring before the Court of Justice, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the General Court. In consequence, such pleas must be held inadmissible in an appeal.

(see paras 35, 51, 78)

2. The concept of ‘undertaking’ covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed. In that connection, the term ‘undertaking’ must, in the context of the competition rules of the European Union, be understood as designating an economic unit even if in law that economic unit consists of several natural or legal persons; and if such an economic entity infringes the competition rules, it is for that entity, consistently with the principle of personal liability, to answer for that infringement. The conduct of a subsidiary may be imputed to the parent company in particular where that subsidiary, despite having a separate legal personality, does not decide independently upon its own conduct on the market, but carries out, in all material respects, instructions given to it by the parent company, regard being had in particular to the economic, organisational and legal links between those two legal entities.

In the specific case where a parent company has a 100% shareholding in a subsidiary which has infringed the competition rules of the European Union: (i) the parent company is able to exercise a decisive influence over the conduct of the subsidiary and (ii) there is a rebuttable presumption that the parent company does in fact exercise such a decisive influence. In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to presume that the parent actually exercises decisive influence over the subsidiary’s commercial policy. 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.

(see paras 53-54, 56-57, 80, 96)

3. The purpose of the presumption of the actual exercise of decisive influence by a parent company over the conduct of a subsidiary is, in particular, to strike a balance between, on the one hand, the importance of the objective of combatting conduct contrary to the competition rules, in particular to Article 101 TFEU, and of preventing a repetition of such conduct, and, on the other hand, the importance of the requirements flowing from certain general principles of EU law such as the principle of the presumption of innocence, the principle that penalties should be applied solely to the offender, the principle of legal certainty and the principle of the rights of the defence, including the principle of equality of arms. It is for that reason, among others, that the presumption is rebuttable. The presumption is based on the fact that, save in quite exceptional circumstances, a company holding all the capital of a subsidiary can, by dint of that shareholding alone, exercise decisive influence over that subsidiary’s conduct and, furthermore, that it is within the sphere of operations of those entities against whom the presumption operates that evidence of the lack of actual exercise of that power to influence is generally apt to be found.

In those circumstances, if, in order to rebut that presumption, it were sufficient for a party concerned to put forward mere unsubstantiated assertions, the presumption would be largely robbed of its usefulness. Moreover, a presumption, even where it is difficult to rebut, remains within acceptable limits so long as it is proportionate to the legitimate aim pursued, it is possible to adduce evidence to the contrary and the rights of the defence are safeguarded.

(see paras 59-62)

4. As regards a proceeding pursuant to Article 81 EC, the administrative procedure before the Commission is divided into two distinct and successive stages, each having its own internal logic, namely, a preliminary investigation stage and an inter partes stage. The preliminary investigation stage, covering the period up to notification of the statement of objections, is intended to enable the Commission to gather all the relevant evidence confirming that there has or has not been an infringement of the competition rules and to adopt an initial position on the course which the procedure is to follow. The inter partes stage, which covers the period from notification of the statement of objections to adoption of the final decision, must enable the Commission to reach a final decision on the alleged infringement.

As regards the preliminary investigation stage, the starting point of that stage is the date on which the Commission, in exercise of the powers conferred on it by the legislature of the European Union, takes measures that suggest that an infringement has been committed and that have a significant impact on the situation of the undertakings suspected. It is not until the beginning of the administrative inter partes stage that the entity concerned is informed, via the statement of objections, of all the essential elements on which the Commission is relying at that stage of the procedure. Consequently, it is only after the statement of objections has been issued that the undertaking concerned can rely in full on its rights of defence.

(see paras 113-115)

5. The context being that of a proceeding pursuant to Article 81 EC, it is important to ensure that the rights of the defence are not irremediably impaired during the preliminary investigation stage of the administrative procedure since the measures of inquiry adopted may be decisive in assembling evidence of the unlawful nature of conduct engaged in by undertakings, for which they may be liable.

Accordingly, the appraisal of the source of any interference with the effective exercise of the rights of the defence must not be confined to the inter partes stage of the administrative procedure, but must extend to the entire procedure and be carried out by reference to its total duration.

That does not mean, however, that, before the first measure is taken against a given entity, the Commission is under a duty, as a matter of routine, to warn that entity even of the mere possibility of measures of investigation or of proceedings based on EU competition law, especially if, by such a warning, the effectiveness of the Commission’s investigation might be unduly compromised.

In addition, the principle of personal liability does not prevent the Commission from considering first of all the possibility of penalising the company which infringed the competition rules before considering the possibility that the infringement might be imputed to the parent company.

Thus, provided that the entity to which a statement of objections is addressed is put in a position to submit its views effectively during the administrative inter partes procedure as to the reality and the relevance of the facts and circumstances alleged by the Commission, the Commission is not required as a matter of principle to address a measure of investigation to that entity before issuing the statement of objections.

(see paras 117-122)

6. The purpose of the obligation to state the reasons on which an individual decision is based is, in addition to permitting review by the Courts, to provide the person concerned with sufficient information to know whether the decision may be vitiated by an error enabling its validity to be challenged. Accordingly, the statement of reasons must, in principle, be notified to the person concerned at the same time as the decision adversely affecting him. The absence of reasoning cannot be legitimised by the fact that the person concerned becomes aware of the reasons for the decision during the procedure before the Courts of the European Union.

The requirement to state reasons must be assessed by reference to the circumstances of the case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. the statement of the reasons for a measure must be logical and contain no internal inconsistency that would prevent a proper understanding of the reasons underlying the measure. On the other hand, the statement of the reasons for a measure must be logical and contain no internal inconsistency that would prevent a proper understanding of the reasons underlying the measure.

(see paras 148-151)

7. Where a decision taken in application of the competition law rules of the European Union relates to several addressees and raises a problem with regard to the imputability of the infringement, it must include an adequate statement of reasons with respect to each of its addressees, in particular those of them who, according to the decision, must bear the liability for the infringement. Accordingly, in respect of a parent company held jointly and severally liable for the infringement committed by its subsidiary, such a decision must in principle contain a detailed statement of reasons for imputing the infringement to that company. As regards, more specifically, a Commission decision which relies exclusively, with respect to certain addressees, on the presumption that they actually exercised decisive influence, the Commission is in any event required – if it is not to render that presumption in reality irrebuttable – to explain adequately to those addressees the reasons why the elements of fact and of law put forward did not suffice to rebut that presumption. The Commission’s duty to state reasons for its findings on that point flows primarily from the fact that that presumption is open to rebuttal, for the purposes of which it is necessary for those concerned to produce evidence relating to the economic, organisational and legal links between the companies concerned. That said, the Commission is nevertheless not required in such a context to adopt a position on factors which are manifestly irrelevant, unimportant or clearly ancillary.

Furthermore, although a decision of the Commission which fits into a well-established line of decisions may be reasoned in a summary manner (for example by a reference to those decisions), the Commission must, if a decision goes appreciably further than the previous decisions, provide a fuller account of its reasoning.

In those circumstances, it is for the General Court to pay particular attention to the question whether a decision imposing a fine for infringement of the competition rules on an undertaking composed of a parent company and its subsidiary, attributing to the former the conduct of the latter, contains a detailed statement of the reasons why the Commission finds that the evidence submitted by the parent company was not sufficient to rebut the attributabilty presumption applied in that decision. In any given case, therefore, the General Court errs in law in not finding fault with an inadequate statement of reasons that has vitiated a Commission decision which consists merely of a repetitive and by no means detailed series of bald assertions and denials. In such a case, a set of assertions and denials of that nature is incapable, in the absence of further information, of enabling those concerned to ascertain the reasons for the measure or the competent Court to exercise its power of review.

(see paras 152-155, 167-170)