Joined Cases T-67/00, T-68/00, T-71/00 and T-78/00

JFE Engineering Corp. and Others

v

Commission of the European Communities

(Agreements, decisions and concerted practices – Market in seamless steel tubes and pipes – EFTA – Powers of the Commission – Infringement – Fines)

Judgment of the Court of First Instance (Second Chamber), 8 July 2004

Summary of the Judgment

1. Actions for annulment – Jurisdiction of the Community judicature – Replacement of an addressee of a decision of a Community institution by a new addressee – Not possible when the designated addressee still exists

(Arts 229 EC and 230, fourth para., EC)

2. Actions for annulment – Application brought by the natural or legal person to whom the contested measure is addressed – Transfer of the application to a third person – Not permissible

(Arts 229 EC and 230, fourth para., EC)

3. Competition – Community rules – Infringements – Imputation – Natural or legal person managing the undertaking at the time of the infringement – Acceptance of responsibility by another person who has taken over the running of the undertaking – Lawfulness – Scope

4. Community law – Principles – Fundamental rights – Presumption of innocence – Procedures in competition matters – Applicability

5. Competition – Administrative procedure – Commission decision finding an infringement – Means of proof – Reliance on a body of evidence – Degree of evidential value necessary as regards items of evidence viewed in isolation

(Art. 81(1) EC)

6. Competition – Administrative procedure – Commission decision finding an infringement consisting in the conclusion of an anti‑competitive agreement – Decision relying on documentary evidence – Evidential obligations on undertakings disputing the existence of the infringement

(Art. 85(1) EC)

7. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Prejudicial to competition – Criteria for assessment – Anti‑competitive object – Sufficient finding

(Art. 81(1)(c) EC)

8. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Burden of proving the infringement on the Commission – Limits

(Art. 81(1)(c) EC)

9. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Proof – Undertaking’s reply to the Commission’s request for information – Statement of an undertaking disputed by other undertakings – Statement made before a public prosecutor – Probative value – Assessment

(Council Regulation No 17, Art. 11)

10. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Evidence of the infringement – Production by the Commission of a document without revealing its source – Lawfulness

11. Competition – Agreements, decisions and concerted practices – Participation in meetings of undertakings having an anti-competitive object – Circumstance from which, where the undertaking concerned has not distanced itself from the decisions adopted, it may be concluded that it participated in the ensuing cartel

(Art. 81(1) EC)

12. Competition – Administrative procedure – Commission decision finding an infringement – Evidence which has to be gathered – Degree of precision required as regards the type of products covered by the infringement

(Art. 81(1) EC)

13. Procedure – Proof – Burden of proof – Transfer from the applicant to the defendant in a particular case – Inability of the Commission to state the date of expiry of an agreement with a non-member State concluded by the Commission

14. Competition – Agreements, decisions and concerted practices – Agreements and concerted practices constituting a single infringement – Undertakings to which an infringement in the form of participation in an overall cartel may be imputed – Criteria

(Art. 81(1) EC)

15. Competition – Agreements, decisions and concerted practices – Effect on trade between Member States – Criteria

(Art. 81(1) EC)

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

(Art. 253 EC)

17. Actions for annulment – Pleas in law – Breach of the rights of the defence – Subjective nature which precludes review by the Court of its own motion

(Art. 230 EC; Rules of Procedure of the Court of First Instance, Art. 48(2))

18. Competition – Administrative procedure – Commission decision finding an infringement – Decision not identical to the statement of objections – Infringement of the rights of the defence – Condition – Impossibility for the undertaking to defend itself against an objection finally upheld

(Council Regulation No 17, Art. 19(1))

19. Competition – Administrative procedure – Statement of objections – Necessary content

(Council Regulation No 17, Art. 19(1))

20. Competition – Administrative procedure – Respective competences of the Commission and the Surveillance Authority of the European Free Trade Association – One-stop-shop principle – Opening of a procedure on the basis of provisions both of the EC Treaty and of the Agreement on the European Economic Area – Lawfulness – Condition – Impossibility, at that stage, to determine which authority is competent to find and sanction the alleged infringement

(Art. 81 EC; EEA Agreement, Arts 56 and 109; Regulation No 17)

21. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine in return for the cooperation of the undertaking concerned – Respect for the principle of equal treatment

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

22. Competition – Fines – Amount – Determination – Criteria – Cooperation by the undertaking during the administrative procedure – Definition – Merely providing information requested without recognising the existence of the infringement – Not included

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

23. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement

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

24. Competition – Fines – Amount – Determination – Commission’s margin of discretion – Limits – Compliance with the Guidelines adopted by the Commission – Compliance with the general rules and principles of Community law

(Council Regulation No 17, Art. 15; Commission Communication 98/C 9/03)

25. Competition – Fines – Amount – Discretion of the Commission – Judicial review – Unlimited jurisdiction – Condition for the exercise thereof – Scope

(Art. 229 EC; Council Regulation No 17, Art. 17)

1. The transferee of the entire business of a natural or legal person who has ceased to exist is necessarily substituted by operation of law for that person as addressee of a measure of an institution and can therefore pursue an action for annulment which that natural or legal person had brought.

On the other hand, the Community judicature has no power in the context of an action for annulment under Article 230 EC, not even in the exercise of its unlimited jurisdiction under Article 229 EC with regard to penalties in order to amend the decision of a Community institution by replacing the addressee thereof by another natural or legal person when that addressee still exists. That power belongs a priori only to the institution that adopted the measure concerned. Thus, once the competent institution has adopted a decision and, therefore, established the identity of the person to whom the decision is to be addressed, it is not for the Court to substitute another person for the latter.

(see paras 46-47)

2. An application brought by a person in his capacity of addressee of a measure in order to give effect to his rights in the context of an action for annulment under Article 230 EC and/or of an application for amendment under Article 229 EC cannot be transferred to a third person who is not the addressee thereof. If such a transfer were to be allowed, there would be a discrepancy between the status by virtue of which the action was brought and the status by virtue of which it was purportedly pursued. Moreover, such a transfer would give rise to a discrepancy between the identity of the addressee of the measure and that of the person litigating as addressee.

(see para. 48)

3. The person who becomes responsible for the running of an undertaking may, at the stage of the administrative procedure before the Commission, assume, by making a declaration to that effect, responsibility for the matters alleged against the person actually responsible, even though it falls, in principle, to the natural or legal person managing the undertaking in question when the infringement was committed to answer for that infringement. However, such a declaration cannot have the effect of changing the identity of the addressee of a Commission decision once the decision has been adopted or that of the applicant in an action for the annulment of such a decision once the action has been brought.

(see para. 50)

4. The principle of the presumption of innocence resulting in particular from Article 6(2) of the European Convention on Human Rights is one of the fundamental rights which, according to the case-law of the Court of Justice and as reaffirmed in the preamble to the Single European Act, by Article 6(2) of the Treaty on European Union and by Article 47 of the Charter of Fundamental Rights of the European Union, are protected in the Community legal order. Given the nature of the infringements in question and the nature and degree of severity of the ensuing penalties, the principle of the presumption of innocence applies in particular to the procedures relating to infringements of the competition rules applicable to undertakings that may result in the imposition of fines or periodic penalty payments.

It follows that where there is doubt, the benefit of that doubt must be given to the undertakings accused of the infringement. The Court cannot therefore conclude that the Commission has established the existence of the infringement at issue to the requisite legal standard, as it is required to do, if it still entertains doubts on that point.

(see paras 173, 177-178)

5. In competition cases, the Commission must produce sufficiently precise and consistent evidence to support the firm conviction that the infringement which it found took place.

However, it is not necessary for every item of evidence produced by the Commission to satisfy those criteria in relation to every aspect of the infringement. It is sufficient if the body of evidence relied on by the institution, viewed as a whole, meets that requirement. Therefore, the fact that a document refers only to some of the facts referred to in other evidence is not sufficient to require the Commission to exclude that document from the body of inculpatory evidence.

(see paras 179-180, 238, 263)

6. Since, in order to prove the infringement that it sought to penalise, namely the conclusion of an agreement with an anti-competitive object prohibited by Article 81(1)(c) EC, the Commission relies on documentary evidence, the undertakings implicated can successfully dispute the existence of the infringement only by showing that the evidence relied on is insufficient to establish the existence of the illegal agreement. It is of no avail to those undertakings to attempt to prove that the conclusion of an agreement was against their commercial interests or that the conduct that they actually adopted on the market could be explained other than by the existence of an anti‑competitive agreement.

(see paras 181-187)

7. Since the task of the Commission is to penalise infringements of Article 81(1) EC and given that agreements which ‘share markets or sources of supply’ are expressly mentioned in Article 81(1)(c) EC as being prohibited by that provision, it is sufficient for it to establish that an agreement between undertakings capable of affecting trade between Member States had the object or effect of sharing the Community markets in one or more products between them for that agreement to constitute an infringement.

(see para. 202)

8. Whilst it is necessarily incumbent upon the Commission, where it seeks to penalise an infringement of Article 81(1)(c) EC, to establish that an illegal market-sharing agreement was concluded, it would be excessive also to require it to produce evidence of the specific mechanism by which that object was attained. Indeed, it would be too easy for an undertaking guilty of an infringement to escape any penalty if it was entitled to base its argument on the vagueness of the information produced regarding the operation of an illegal agreement in circumstances in which the existence and anti‑competitive purpose of the agreement had nevertheless been sufficiently established. Undertakings are able properly to defend themselves in such circumstances provided that they have an opportunity to comment on all the evidence relied on against them by the Commission.

(see paras 203, 317)

9. Answers given to requests for information sent by the Commission under Article 11 of Regulation No 17 on behalf of an undertaking as such carry more weight than that of an employee of the undertaking, whatever his individual experience or opinion.

However, an admission by one undertaking charged with having participated in a cartel, the accuracy of which is contested by several other undertakings which have also been charged, cannot be regarded as constituting adequate proof of an infringement committed by the latter unless it is supported by other evidence.

In addition, statements which run counter to the interests of the declarant must in principle be regarded as particularly reliable evidence. In particular, where a person who has been asked to comment on documents admits that he committed an infringement and thus admitted the existence of facts going beyond those whose existence could be directly inferred from the documents in question, that fact implies, a priori, in the absence of special circumstances indicating otherwise, that that person had resolved to tell the truth.

Finally, although, admittedly, a statement made before a public prosecutor does not have the same value as evidence given under oath in a court, it must be considered that the compulsion deriving from the investigative powers enjoyed by a public prosecutor, and the adverse consequences which might arise under criminal law for a person who perjured himself in an inquiry, are circumstances which render such a deposition more reliable than a mere statement.

(see paras 205, 211-212, 219, 296, 312)

10. The prevailing principle in Community law is that of unfettered evaluation of evidence and the only relevant criterion for assessing evidence produced lies in the reliability thereof. It is not possible to dismiss a document as unreliable on the ground that the Commission which produces it refuses to divulge its source, since it may be necessary for the Commission to protect the anonymity of its informers.

(see para. 273)

11. Where an undertaking participates in meetings between undertakings with an anti-competitive object and does not publicly distance itself from what occurred at them, thus giving the impression to the other participants that it subscribes to the results of the meeting and will act in conformity with them, it may be concluded that it is participating in the cartel in question.

(see para. 327)

12. If a decision sanctioning an agreement, taken as a whole, shows that the infringement found related to a particular kind of product and mentions the evidence on which that conclusion is based, the fact that the decision does not contain a precise and exhaustive list of all the types of product covered by the infringement is not sufficient in itself to justify annulment thereof. If that were not the case, an undertaking could escape any penalty despite the fact that the Commission had established with certainty that it had committed an infringement in circumstances in which the identity of the specific products, included in a range of similar products marketed by the undertaking in question, had not been established.

(see para. 336)

13. Although an applicant cannot generally transfer the burden of proof to the defendant by relying on circumstances which it is not in a position to establish, the concept of burden of proof cannot, where the Commission decided not to make a finding of an infringement of the competition rules for the period during which voluntary restraint agreements concluded between a non-member country and the Community, represented by the Commission, were in force, be applied to the Commission’s advantage as regards the date of expiry of those agreements. The Commission’s inexplicable inability to adduce evidence relating to a circumstance which is of direct concern to it deprives the Court of the possibility of adjudicating with all the facts before it as regards that expiry date and it would be contrary to the principle of the proper administration of justice to require that the consequences of that inability on the Commission’s part be borne by the undertakings to which the contested decision was addressed, which, unlike the Commission, are not in a position to provide the missing evidence.

(see paras 342-344)

14. An undertaking may be held responsible for an overall cartel even though it is shown to have participated directly only in one or some of its constituent elements if it is shown that it knew, or must have known, that the collusion in which it participated, especially by means of regular meetings organised over several years, was part of an overall plan intended to distort competition and that the overall plan included all the constituent elements of the cartel.

Similarly, the fact that different undertakings have played different roles in the pursuit of a common objective does not mean that there was no identity of anti-competitive object and, therefore, of infringement, provided that each undertaking has contributed, at its own level, to the pursuit of the common object.

(see para. 370)

15. For an agreement, decision or concerted practice to be capable of affecting trade between Member States, it must be possible to foresee with a sufficient degree of probability on the basis of objective factors of law or fact that it may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States. It follows that the Commission was not required to demonstrate the actual existence of such an effect on trade, a potential effect being sufficient. However, it is important that that actual or potential influence should not be insignificant.

(see para. 392)

16. The obligation to state the reasons on which a measure is based cannot embody an obligation for the institution from which it emanates to give reasons for the fact that it did not adopt other measures of a similar kind addressed to third parties.

(see para. 414)

17. A breach of the rights of the defence, which by its nature is subjective, does not fall within the scope of an infringement of essential procedural requirements and, therefore, must not be raised on a party’s own initiative. Consequently, such a plea must be rejected as inadmissible, under Article 48(2) of the Rules of Procedure, if it has been raised for the first time by a party in its reply.

(see para. 425)

18. The rights of the defence are not breached by an inconsistency between the statement of objections and the final decision unless a criticism contained in the latter had not been set out in the former sufficiently clearly to enable the addressees to defend themselves.

It follows that, in principle, the Commission cannot be criticised for making the scope of a final decision narrower than that of the preceding statement of objections, in so far as the Commission must hear the views of the addressees and, if appropriate, take account of the observations submitted by them in response to the objections made, specifically in order to observe their rights of defence.

(see paras 429-430)

19. The Commission’s obligation at the stage of the statement of objections is limited to setting out its objections and describing clearly the facts on which it relied and the classification attributed to them, so that its addressees can properly defend themselves. The Commission is not obliged to set out the conclusions which it draws from facts, documents and legal arguments.

(see para. 453)

20. The Agreement on the European Economic Area (EEA), in particular Articles 56 and 109 thereof, establishes a ‘one-stop-shop’ for the application of the competition rules, a system which is applicable as from the investigation stage, so that each of the two authorities is under an obligation to cease handling the matter and to transfer its file to the other authority if it determines that the other authority is the competent authority.

However, that ‘one-stop’ concept cannot apply from the start of the investigation if it is not possible at that stage to determine which authority is competent, otherwise, in the event of the Surveillance Authority of the European Free Trade Association (EFTA) being seised of the case but the Commission ultimately proving to be the competent authority, there would be a breach of the principle whereby the provisions of the EEA Agreement cannot deprive the Commission of its power to investigate anti-competitive conduct affecting trade between Member States of the Community.

For that reason, the Commission cannot be criticised for opening an investigation into a particular sector using simultaneously as legal basis Article 81 EC, Regulation No 17 and Article 53 EEA, and a decision of the EFTA Surveillance Authority giving authority for a request for assistance to be sent to the Commission, if, at the time when that investigation is opened, it cannot reasonably know with certainty what the correct legal basis is, since the answer to that question depends specifically on the investigations to be carried out.

(see paras 489-490, 492)

21. In so far as undertakings provide the Commission, at the same stage of the administrative procedure and in similar circumstances, with similar information concerning the conduct imputed to them, the extent of the cooperation provided by them must be regarded as comparable, with the consequence that those undertakings must be treated equally when the amount of the fine imposed on them is determined.

(see paras 501, 573)

22. In order to justify reduction of the fine for cooperation, an undertaking’s conduct must facilitate the Commission’s task of identifying and penalising infringements of the Community competition rules.

An undertaking which merely provides the factual information which the Commission has asked it to provide, the usefulness of which derives solely from the fact that it corroborates, to some extent, other statements which are already in the Commission’s possession, whilst at the same time rejecting any interpretation thereof which is capable of establishing the existence of an infringement on its part, and which has not informed the Commission at any time that it admitted the materiality of the facts during the administrative procedure whilst moreover continuing to contest them before the Court, does not significantly facilitate the Commission’s task.

(see paras 499, 503-505)

23. The amount of the fine imposed on an undertaking in respect of an infringement of competition law must be proportional to the infringement, seen as a whole, having regard, in particular, to the gravity thereof.

It is necessary in assessing that gravity to take account of numerous elements whose nature and importance varies according to the type of infringement concerned and the special circumstances surrounding it.

(see para. 532)

24. Whilst the Commission enjoys a discretion in fixing the amount of fines in competition cases, it cannot depart from the rules which it has set for itself and must take account in particular of the elements which are mandatory under its Guidelines. None the less, in so far as its Guidelines do not require it to take account systematically of any given circumstance, it can determine which factors should be taken into account for that purpose, which enables it to adapt its assessment to specific cases. Its assessment must, however, be carried out in compliance with Community law, which includes not only the provisions of the Treaty but also the general principles of law.

(see paras 537, 553, 572)

25. Where an undertaking which has brought an action against a decision of the Commission fining it for infringement of the Community competition rules has asked the Community judicature in its application to exercise its unlimited jurisdiction, including in connection with an application for reduction of the fine, the Court is empowered to amend the contested measure, even if it does not annul it, having regard to all the factual circumstances, in order to amend the amount of the fine imposed. The unlimited jurisdiction conferred on the Community judicature by Article 17 of Regulation No 17, in accordance with Article 229 CE, expressly includes the power to increase the fine imposed, if appropriate.

Commission representatives may, subject to any express instructions to the contrary from their superiors, lawfully plead that the Community judicature should exercise its unlimited jurisdiction to increase the amount of a fine set by the Members of the Commission. The mere fact that a Commission representative asks the Community judicature to exercise a power available to it and puts forward arguments which might justify such a course of action cannot mean that the representative is acting in the stead of the Members of the Commission.

(see paras 575, 577)

JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber)

8 July 2004 ( )

(Agreements, decisions and concerted practices – Market in seamless steel tubes and pipes – EFTA – Powers of the Commission – Infringement – Fines)

In Joined Cases T-67/00, T-68/00, T-71/00 and T-78/00,

JFE Engineering Corp., formerly NKK Corp., established in Tokyo (Japan), represented initially by M. Smith and C. Maguire, solicitors, and subsequently by A. Vandencasteele and V. Dehin, lawyers, and A.-L. Marmagioli, solicitor, with an address for service in Luxembourg,

applicant in Case T-67/00,

Nippon Steel Corp., established in Tokyo, represented by J.-F. Bellis and K. Van Hove, lawyers, with an address for service in Luxembourg,

applicant in Case T-68/00,

applicant in Case T-71/00,

Sumitomo Metal Industries Ltd, established in Tokyo, represented by C. Vajda QC, G. Sproul and F. Weitzman, solicitors, with an address for service in Luxembourg,

applicant in Case T-78/00,

v

Commission of the European Communities, represented by M. Erhart and A. Whelan, acting as Agents, and N. Khan, barrister, with an address for service in Luxembourg,

defendant,

supported by

EFTA Surveillance Authority, represented by D. Sif Tynes and P. Bjørgan, acting as Agents,

intervener in cases T-68/00, T-71/00 and T-78/00,

APPLICATION for the annulment of Commission Decision 2003/382/EC of 8 December 1999 relating to a proceeding under Article 81 of the EC Treaty (Case IV/E-1/35.860-B seamless steel tubes) (OJ 2003 L 140, p. 1) or, in the alternative, for reduction of the fines imposed on the applicants,

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Second Chamber),

composed of: N.J. Forwood, President, J. Pirrung and A.W.H. Meij, Judges,

Registrar: J. Plingers, Administrator,

having regard to the written procedure and further to the hearing on 19, 20 and 21 March 2003,

gives the following

Judgment

Facts and procedure

1 The present case concerns Commission Decision 2003/382/EC of 8 December 1999 relating to a proceeding under Article 81 of the EC Treaty (Case IV/E-1/35.860-B seamless steel tubes) (OJ 2003 L 140, p. 1; ‘the contested decision’).

2 The Commission addressed the contested decision to eight undertakings producing seamless steel tubes (‘the addressees of the contested decision’). These undertakings included four European companies (‘the European producers’ or ‘the Community producers’): Mannesmannröhren-Werke AG (‘Mannesmann’), Vallourec SA, Corus UK Ltd (formerly British Steel plc, then British Steel Ltd; hereinafter ‘Corus’) and Dalmine SpA. The other four addressees of the contested decision are Japanese companies (‘the Japanese producers’ or ‘the Japanese applicants’): NKK Corp., Nippon Steel Corp. (‘Nippon’), Kawasaki Steel Corp. and Sumitomo Metal Industries Ltd (‘Sumitomo’).

A – Administrative procedure

3 By decision of 17 November 1994, the Surveillance Authority of the European Free Trade Association (EFTA), acting pursuant to Article 8(3) of Protocol 23 to the Agreement on the European Economic Area, approved by Decision 94/1/ECSC, EC of the Council and the Commission of 13 December 1993 on the conclusion of the Agreement on the European Economic Area between the European Communities, their Member States and the Republic of Austria, the Republic of Finland, the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway, the Kingdom of Sweden and the Swiss Confederation (OJ 1994 L 1, p. 1; ‘the EEA Agreement’), authorised the member responsible for competition matters to invite the Commission to carry out an investigation, within the Community, into possible anti-competitive practices concerning carbon-steel tubes used for drilling and transport operations in the Norwegian oil industry.

4 By decision of 25 November 1994 (Case IV/35.304; ‘the decision of 25 November 1994’), unpublished, reproduced at page 3 of the Commission’s administrative file and adopted on the dual legal basis of Article 14(3) of Council Regulation No 17 of 6 February 1962: First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition 1959-1962, p. 87) and the decision of the EFTA Surveillance Authority of 17 November 1994, the Commission decided to initiate an investigation. This investigation was to examine the practices reported in the decision of the EFTA Surveillance Authority of 17 November 1994, in so far as they might constitute an infringement of not only Article 53 of the EEA Agreement but also Article 81 EC. The Commission sent a copy of its decision of 25 November 1994 to eight companies, including Mannesmann, Corus, Vallourec and a company within the Sumitomo group, Sumitomo Deutschland GmbH. Pursuant to that decision, Commission staff and representatives of the competition authorities of the Member States concerned carried out investigations at the premises of those undertakings on 1 and 2 December 1994.

5 By decision of 6 December 1995, the EFTA Surveillance Authority found that since trade between Member States of the Community was being significantly affected by the case before it, it fell within the competence of the Commission by virtue of Article 56(1)(c) of the EEA Agreement. It therefore decided to transmit the case to the Commission, pursuant to Article 10(3) of Protocol 23 to the EEA Agreement, whereupon the Commission gave the case a new number (IV/E-1/35.860).

6 Between September 1996 and December 1997, the Commission carried out further investigations under Article 14(2) of Regulation No 17 at the premises of Vallourec, Dalmine and Mannesmann. In particular, it carried out an investigation at Vallourec’s premises on 17 September 1996, when the head of Vallourec Oil & Gas, Mr Verluca, made the statement reproduced at page 6356 of the Commission’s file (hereinafter ‘Mr Verluca’s statement of 17 December 1996’), on which the Commission relies in the contested decision. Subsequently, the Commission sent requests for information pursuant to Article 11 of Regulation No 17 to all the addressees of the contested decision, and also to certain other undertakings.

7 As Dalmine and the Argentinean companies Siderca SAIC (‘Siderca’) and Techint Group refused to supply some of the information requested, a Commission decision of 6 October 1997 (C(1997) 3036 IV/35.860 Steel tubes, unpublished), adopted under Article 11(5) of Regulation No 17, was addressed to them. Siderca and Dalmine brought actions before the Court of First Instance for annulment of that decision. Dalmine’s action for partial annulment was declared manifestly inadmissible by order of the Court of First Instance of 24 June 1998 in Case T-596/97 Dalmine v Commission [1998] ECR II-2383, while Siderca’s action for annulment was withdrawn and then removed from the list by order of 7 June 1998 in Case T-8/98 Siderca v Commission, not published in the ECR.

8 Mannesmann also refused to supply some of the information requested by the Commission. Although a decision requiring that it do so was adopted by the Commission on 15 May 1998 (C(1998) 1204, IV/35.860, Steel tubes, unpublished) pursuant to Article 11(5) of Regulation No 17, Mannesmann persisted in its refusal. Mannesmann also brought an action before the Court of First Instance against that decision. By judgment of 20 February 2001 in Case T‑112/98 Mannesmannröhren-Werke v Commission [2001] ECR II-729, the Court of First Instance annulled the decision in part and dismissed the remainder of the application.

9 In January 1999, the Commission adopted two statements of objections concerning welded carbon steel tubes and seamless carbon steel tubes respectively. It thus divided the case into two: Case IV/E-1/35.860-A concerning welded steel tubes and Case IV/E-1/35.860-B concerning seamless steel tubes.

10 In the case relating to seamless carbon steel tubes the Commission sent its statement of objections to the eight addressees of the contested decision and also to Siderca and the Mexican company Tubos de Acero de México SA. Between 11 February and 22 April 1999 those undertakings were given access to the file which the Commission had compiled in the case. In addition, by letters of 11 May 1999, the Commission sent copies of the decisions of November 1994 relating to the investigations to the undertakings which were not addressees of those decisions and which, consequently, had not had sight of them.

11 After submitting their written observations, the addressees of the two statements of objections presented oral argument to the Commission on 9 June 1999 in the welded carbon steel tubes case and on 10 June 1999 in the seamless carbon steel tubes case. In July 1999, the Commission informed the addressees of the statement of objections in Case IV/E-1/35.860-A, concerning welded carbon steel tubes, that it had dropped the case relating to those products. However, it proceeded with Case IV/E-1/35.860-B.

12 It was in those circumstances that the Commission adopted the contested decision on 8 December 1999.

B – Relevant products

13 The relevant products in Case IV/E-1/35.860-B are seamless carbon steel tubes used by the oil and gas industry, consisting of two major categories.

14 The first category includes borehole pipes and tubes, commonly known as ‘Oil Country Tubular Goods’ or ‘OCTG’. These are sold either plain-ended (‘plain ends’) or threaded. Threading is designed to enable OCTG tubes to be joined together and may comply with American Petroleum Institute (API) standards (such tubes being referred to hereinafter as ‘standard thread OCTG’) or employ special techniques, which are usually patented. In the latter case, the threading, or ‘joints’, are known as ‘premium quality’ or ‘premium’ (tubes threaded according to this method being hereinafter referred to as ‘premium-thread OCTG tubes’).

15 The second category of products consists of oil and gas pipes (‘line pipe’) made of seamless carbon steel; these are divided into pipes made to standard specifications and those made to order for specific projects (‘project line pipes’).

C – Infringements found by the Commission in the contested decision

16 In the contested decision, the Commission considered, first, that the eight addressees of the decision had concluded an agreement with the object, inter alia, of respecting each other’s domestic markets (recitals 62 to 67 to the contested decision). Under that agreement, each undertaking gave a commitment not to sell standard-thread OCTG tubes or project line pipe in the domestic market of any other party to the agreement. The agreement was concluded at meetings between Community and Japanese producers known as the ‘the Europe-Japan Club’. The principle of respect for domestic markets was designated by the term ‘Fundamental Rules’ (‘Fundamentals’). The Commission also found that the members of the club had in fact complied with the Fundamentals and that the agreement had therefore had anti-competitive effects in the common market (recital 68 to the contested decision).

17 The Commission concluded that the agreement fell within the prohibition laid down in Article 81(1) EC (recital 109 to the contested decision). Consequently, the Commission found in Article 1 of the contested decision that there had been an infringement of Article 81(1) EC and imposed fines on the eight undertakings concerned.

18 As regards the duration of the infringement, the Commission took the view that, although the Europe-Japan Club first met in 1977 (recital 55 to the contested decision), 1990 should be taken as the starting date of the infringement for the purpose of setting the fines because, between 1977 and 1990, agreements on the voluntary restraint of exports (‘voluntary restraint agreements’) had been concluded between the European Community and Japan (recital 108 to the contested decision). The Commission considered that the infringement ceased in 1995 (recitals 96 and 97 to the contested decision).

19 For the purpose of setting the amount of the fines imposed on the eight addressees of the contested decision, the Commission characterised the infringement as very serious on the ground that the agreement was intended to ensure respect for domestic markets and thus jeopardised the proper functioning of the single market (recitals 161 and 162 to the contested decision). On the other hand, it noted that sales of seamless carbon steel tubes in the four Member States in question by the undertakings concerned amounted to only around EUR 73 million a year. Consequently, it set the amount of the fine intended to reflect the gravity of the infringement at EUR 10 million for each of the eight undertakings. As they were all large undertakings, the Commission considered that there was no need to differentiate between the amounts adopted (recitals 162, 163 and 165 to the contested decision).

20 The Commission considered that the infringement was of medium duration and increased by 10% for each year of its participation in the infringement the amount of the fine established on the basis of gravity in order to set the basic amount of the fine imposed on each of the undertakings (recital 166 to the contested decision). However, taking into account the fact that the steel pipe and tube industry had been in crisis for a long time and that the situation in the sector had deteriorated since 1991, the Commission reduced the basic amounts by 10%, on the ground of attenuating circumstances (recitals 168 and 169 to the contested decision). Last, the Commission reduced Vallourec’s fine by 40% and Dalmine’s by 20% in accordance with point D.2 of Commission Notice 96/C 207/04 on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4; ‘the Leniency Notice’), in order to take account of the fact that both undertakings had cooperated with the Commission during the administrative procedure (recitals 170 to 173 to the contested decision).

21 The amount of the fine imposed on each of the undertakings concerned following the calculations described in the two preceding paragraphs is stated in Article 4 of the contested decision (see paragraph 33 below).

22 Second, the Commission found in Article 2 of the contested decision that the contracts concluded between the Community producers in respect of sales of plain end tubes on the United Kingdom market constituted an infringement (recital 116 to the contested decision). However, it did not impose additional fines in respect of that infringement, on the ground that the contracts ultimately represented only a means of ensuring the application of the principle of respect for domestic markets decided upon within the framework of the Europe-Japan Club (recital 164 to the contested decision).

D – Essential facts established by the Commission in the contested decision

23 The Europe-Japan Club met from 1977, approximately twice per year, until 1994 (recital 60 to the contested decision). In particular, the Commission found that, according to Mr Verluca’s statement of 17 September 1996, such meetings took place, in particular, on 14 April 1992 in Florence, on 23 October 1992 in Tokyo, on 19 May 1993 in Paris, on 5 November 1993 in Tokyo and on 16 March 1994 in Cannes. In addition, the Commission claimed that the note prepared by Vallourec entitled ‘Some information on the occasion of the Europe-Japan Club’ of 4 November 1991, reproduced at p. 4350 of its file, and that of 24 July 1990, reproduced at p. 15586 of its file, entitled ‘Meeting of 24 July 1990 with British Steel’ (hereinafter ‘the note on the meeting of 24 July 1990’), state that meetings of the Europe-Japan Club also took place in 1989 and 1991.

24 The agreement reached within the Europe-Japan Club consisted of three parts: (a) the ‘Fundamentals’ on respect for domestic markets (described at paragraph 16 above), which constitute the infringement found in Article 1 of the contested decision; (b) setting prices for tenders and minimum prices for ‘special markets’; and (c) dividing up the rest of the world by means of ‘sharing keys’, Canada and the United States of America being excluded from the concerted action (recital 61 to the contested decision). The Commission bases its conclusion as to the existence of the ‘Fundamentals’ on a number of documents listed in recitals 62 to 67 to the contested decision and also on the table in recital 68, which in the Commission’s contention shows that the share of the domestic producer in the deliveries of OCTG tubes and line pipe by the addressees of the contested decision in Japan and on the domestic market of each of the four Community producers was very high. The Commission infers that on the whole the domestic markets were in fact respected by the parties to the agreement. As regards the other two parts of the agreement, the Commission describes the relevant evidence in recitals 70 to 77 to the contested decision.

25 When, in 1990, Corus envisaged closing down its plain-end pipe production activities, the Community producers were concerned as to whether the principle of respect for domestic markets in the context of the Fundamental Rules would continue to apply in the United Kingdom market. It was in those circumstances that Vallourec and Corus launched the idea of ‘fundamentals improved’, which sought to maintain the restrictions on access to the United Kingdom market by the Japanese producers notwithstanding Corus’s withdrawal. In July 1990, when the licence agreement for the VAM threading technique was renewed, Vallourec and Corus agreed that the supply to Corus of seamless plain-end tubes should be divided between Vallourec, Mannesmann and Dalmine (recital 78 to the contested decision).

26 In April 1991, Corus closed its factory in Clydesdale (United Kingdom), where approximately 90% of its plain-end tubes were produced. Corus then concluded agreements for the supply of plain ends, for an initial period of five years and automatically renewable thereafter subject to 12 months’ notice of termination, with Vallourec (24 July 1991), Dalmine (4 December 1991) and Mannesmann (9 August 1993) (hereinafter ‘the supply contracts’). Under those three contracts, which are reproduced at pp. 12867, 12910 and 12948 of the Commission’s file, each of the beneficiary undertakings is allocated a supply quota fixed at 40%, 30% and 30% respectively of Corus’s needs (recitals 79 to 82 to the contested decision), other than for small-diameter tubes.

27 In 1993 three factors led to a re-examination of the operating principles of the Europe-Japan Club. First, there was the restructuring of the European steel industry: in the United Kingdom, Corus was contemplating ceasing production of threaded seamless tubes; in Belgium, the company New Tubemeuse (‘NTM’), whose principal activity was exporting to the Middle East and the Far East, was wound up on 31 December 1993. Second, the Latin American producers were gaining access to the Community market, which threatened to disrupt the market shares agreed in the Europe-Japan Club. Third and last, the share of welded tubes in the world market in tubes and pipes for oil and gas extraction and transportation had increased significantly, although significant regional disparities remained (recitals 83 and 84 to the contested decision).

28 It was in those circumstances that the members of the Europe-Japan Club met in Tokyo on 5 November 1993, in an attempt to reach a new market-sharing agreement with the Latin American producers. The terms of the agreement reached at that meeting are reflected in a document which was handed to the Commission on 12 November 1997 by an informer not involved in the proceedings and is reproduced at page 7320 of the Commission’s file, and which contains, inter alia, a ‘sharing key’. According to the informer, the document had been obtained from a commercial agent of one of the participants in the meeting. As regards, in particular, the consequences of the restructuring of the European industry, the closure of NTM had allowed the Community producers to obtain concessions from the Japanese and Latin-American producers, which were the principal beneficiaries of NTM’s withdrawal from the export markets (recitals 85 to 89 to the contested decision).

29 Corus decided to put an end to its remaining production of seamless pipes and tubes. On 22 February 1994, Vallourec took control of Corus’s tube threading and production facilities and for that purpose formed Tubular Industries Scotland Limited (‘TISL’). On 31 March 1994, TISL took over the supply contracts for plain-end tubes which Corus had concluded with Dalmine and Mannesmann. On 24 April 1997, the contract thus concluded with Mannesmann was still in force. On 30 March 1999, Dalmine terminated its supply contract with TISL (recitals 90 to 92 to the contested decision).

30 The Commission took the view that, by means of those contracts, the Community producers had divided up amongst themselves the supply of the British market in plain-end tubes, which represents more than half of all Community OCTG consumption. The Commission therefore concluded that that amounted to a cartel prohibited by Article 81(1) EC (see paragraph 22 above).

E – Operative part of the contested decision

31 According to Article 1(1) of the contested decision, the eight undertakings to which the decision was addressed ‘… have infringed the provisions of Article 81(1) of the EC Treaty by participating … in an agreement providing, inter alia, for the observance of their respective domestic markets for seamless standard threaded OCTG pipes and tubes and project line pipe’.

32 Article 1(2) of the contested decision states that the infringement lasted from 1990 to 1995 in the case of Mannesmann, Vallourec, Dalmine, Sumitomo, Nippon, Kawasaki Steel Corp. and NKK Corp. In the case of Corus, the infringement is stated to have lasted from 1990 to February 1994.

33 The other relevant provisions of the operative part of the contested decision are worded as follows:

‘Article 2

1. [Mannesmann], Vallourec …, [Corus] and Dalmine … infringed Article 81(1) of the EC Treaty by concluding, in the context of the infringement mentioned in Article 1, contracts which resulted in a sharing of the supplies of plain and OCTG pipes and tubes to [Corus] (to Vallourec … from 1994).

2. In the case of [Corus], the infringement lasted from 24 July 1991 to February 1994. In the case of [Vallourec], the infringement lasted from 24 July 1991 to 30 March 1999. In the case of [Dalmine], the infringement lasted from 4 December 1991 to 30 March 1999. In the case of [Mannesmann], the infringement lasted from 9 August 1993 to 24 April 1997.

...

Article 4

The following fines are imposed on the firms mentioned in Article 1 on account of the infringement established therein:

(1) [Mannesmann] EUR 13 500 000

(2) Vallourec … EUR 8 100 000

(3) [Corus] EUR 12 600 000

(4) Dalmine … EUR 10 800 000

(5) Sumitomo … EUR 13 500 000

(6) Nippon … EUR 13 500 000

(7) Kawasaki Steel Corp. … EUR 13 500 000

(8) NKK Corp. … EUR 13 500 000

…’

F – Procedure before the Court of First Instance

34 By seven applications lodged at the Registry of the Court of First Instance between 28 February and 3 April 2000, Mannesmann, Corus, Dalmine, NKK Corp., Nippon, Kawasaki and Sumitomo brought the present actions against the contested decision.

35 By three orders of 23 April 2002, the EFTA Surveillance Authority was granted leave to intervene in support of the form of order sought by the Commission, in accordance with Article 116(6) of the Rules of Procedure of the Court of First Instance, in Cases T-68/00, T-71/00 and T 78/00.

36 By order of 18 June 2002 the Court decided, after hearing the parties, to join the seven cases for the purposes of the oral procedure and also to join the four cases brought by the Japanese applicants (T-67/00, T-68/00, T-71/00 and T-78/00) for the purposes of the judgment, in accordance with Article 50 of the Rules of Procedure. After the cases were joined, all the applicants in the seven cases were allowed to examine all the files relating to the present proceedings at the Court Registry. Measures of organisation of procedure were also adopted.

37 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Second Chamber) decided to open the oral procedure. The parties, including the EFTA Surveillance Authority as intervener in Cases T-68/00, T-71/00 and T‑78/00, presented oral argument and answered the questions put to them by the Court at the hearing on 19, 20 and 21 March 2003.

Forms of order sought

38 In Case T-67/00, NKK claims that the Court should:

– annul the contested decision in so far as it relates to it;

– cancel the fine imposed on it;

– in the alternative, in the event that the contested decision is upheld in whole or in part, reduce the fine imposed on it;

– order the Commission to pay its costs incurred in these proceedings;

– grant such other order as may be necessary to give effect to the judgment of the Court.

39 In Case T-68/00, Nippon claims that the Court should:

– annul the contested decision in so far as it concerns Nippon;

– annul or, at least, reduce the amount of the fine imposed on it;

– order the Commission to pay the costs.

40 In Case T-71/00, Kawasaki Steel Corp. claims that the Court should:

– annul the contested decision,

– in the alternative, reduce the fine imposed on it;

– order the Commission to pay the costs.

41 In Case T-78/00, Sumitomo claims that the Court should:

– annul Articles 1 to 5 of the contested decision in so far as they concern Sumitomo;

– in the alternative, annul Article 4 of the contested decision in so far as it imposes a fine of EUR 13.5 million on Sumitomo and fix a fine which is substantially lower;

– order the Commission to pay the costs.

42 The Commission contends in each of the four cases that the Court should:

– dismiss the action;

– order the applicant to pay the costs.

The impact of the concentration between Kawasaki and NKK

43 By separate letters of 9 May 2003, NKK and Kawasaki informed the Court of First Instance, in connection with a concentration affecting the two groups to which they belonged, that they had changed name and were now called JFE Steel Corp. In the light of the documents annexed to their letters to evidence that change of name, the Registry of the Court asked those two applicants and the Commission to clarify the situation resulting from that concentration. Replies were received from each of the applicants in letters dated 11 September 2003 and from the Commission dated 22 September 2003.

44 It appears from those documents and replies that Kawasaki Steel Corp. changed its name and became JFE Steel Corp. On the other hand, it must be noted that NKK Corp. changed its name and became JFE Engineering Corp. However, in their respective letters of 11 September 2003, those two applicants stated that the rights and obligations of the steel undertaking NKK Corp. undertaking had been transferred to JFE Steel Corp.

45 It must be observed, first, that the Community Courts can indeed take note of the change of name of a party to proceedings.

46 Moreover, it is recognised in the case-law that an action for annulment brought by the addressee of a measure can be pursued by the transferee of all the latter’s business, particularly in the case of the death of a natural person or in the case of a legal person ceasing to exist when all its rights and obligations are vested in a new person (see to that effect Case 92/82 Gutmann v Commission [1983] ECR 3127, paragraph 2, and Case 294/83 Les Verts v Parliament [1986] ECR 1339, paragraphs 13 to 18). It must be observed that in such a situation the transferee of the entire business is necessarily substituted by operation of law for its predecessor as addressee of the contested measure.

47 On the other hand, the Community judicature has no power either in the context of an action for annulment under Article 230 EC, or even in the exercise of its unlimited jurisdiction under Article 229 EC with regard to penalties, to amend the decision of a Community institution by replacing the addressee thereof by another natural or legal person when that addressee still exists. That power belongs a priori only to the institution that adopted the measure concerned. Thus, once the competent institution has adopted a decision and, therefore, established the identity of the person to whom the decision is to be addressed, it is not for the Court to substitute another person for the latter.

48 It must then be considered that an application brought by a person in his capacity of addressee of a measure in order to give effect to his rights in the context of an action for annulment under Article 230 EC and/or of an application for amendment under Article 229 EC cannot be transferred to a third person who is not the addressee thereof. If such a transfer were to be allowed, there would be a discrepancy between the status by virtue of which the action was brought and the status by virtue of which it was purportedly pursued. Moreover, such a transfer would give rise to a discrepancy between the identity of the addressee of the measure and that of the person litigating as addressee.

49 It must be observed in that connection that a decision such as the contested decision, although drafted and published in the form of a single decision, must be seen as a set of individual decisions finding that each of the addressees is guilty of the infringement or infringements of which they are accused and imposing on them, where appropriate, a fine. That rule derives from a combined reading of the judgment of the Court of First Instance in Case T-227/95 AssiDomän Kraft Products and Others v Commission [1997] ECR II-1185, paragraph 56, and of the judgment of the Court of Justice, on appeal, in Case C-310/97 P Commission v AssiDomän Kraft Products and Others [1999] ECR I-5363, paragraph 49. Thus, in this case, NKK Corp. was and remains the sole addressee of the decision that was addressed to it, Kawasaki Steel Corp. being the addressee of a legally separate decision contained in the same measure.

50 Finally, it is true that the person who becomes responsible for the running of an undertaking may, at the stage of the administrative procedure before the Commission, assume, by making a declaration to that effect, responsibility for the matters alleged against the person actually responsible, even though it falls, in principle, to the legal or natural person managing the undertaking in question when the infringement was committed to answer for that infringement (see to that effect, even though an appeal is pending, the judgment of the Court of First Instance in Joined Cases T-45/98 and T-47/98 Krupp Thyssen Stainless and Acciai speciali Terni v Commission [2001] ECR II‑3757, paragraphs 57 and 62). However, it is apparent from the considerations set out in paragraphs 46 to 49 above that such a declaration cannot have the effect of changing the identity of the addressee of a Commission decision once the decision has been adopted or that of the applicant in an action for the annulment of such a decision once the action has been brought.

51 In those circumstances, it is appropriate to take note of the change of name of Kawasaki Steel Corp. to JFE Steel Corp. and of the fact that NKK Corp. is now called JFE Engineering Corp. However, it is not appropriate to replace JFE Engineering Corp. by JFE Steel Corp in Case T-67/00, whatever the effects may be under Japanese law of the merger agreement entered into by those two companies. Accordingly, JFE Steel Corp. (hereinafter ‘JFE‑Kawasaki’) remains the applicant in Case T-71/00 and JFE Engineering Corp. (hereinafter ‘JFE‑NKK’) remains the applicant in Case T-67/00.

Law

A – The claims for annulment of the contested decision, in particular Article 1 thereof

52 The Japanese applicants put forward 13 separate pleas in annulment, some of which are common to all of them or to several of them.

1. The first plea: the Commission did not establish to the requisite legal standard the existence of the infringement found in Article 1 of the contested decision

53 The present plea is put forward by the four Japanese applicants.

a) Arguments of the parties

54 The Japanese applicants make a number of preliminary observations concerning the taking of evidence of the alleged infringement of Article 81(1) EC. As regards the substance, this plea falls into three limbs.

55 First, the Japanese applicants argue that the absence of Japanese exports to the European onshore markets may be explained by objective commercial considerations and that the existence of the alleged cartel is inconsistent with the substantial deliveries of the relevant products by them in the market relating to the part of the continental shelf in the North Sea exploited by the United Kingdom (hereinafter ‘the United Kingdom offshore market’ or ‘the British offshore market’), so that the infringement of which the Japanese applicants are accused could not have had any anti-competitive effects in any event. Secondly, the evidence gathered by the Commission fails to establish either the existence of the alleged cartel or, supposing there were such a cartel, the involvement of each of the Japanese applicants in it. Thirdly, the Commission’s analysis of the objectives of the contracts for the supply of plain-end pipes concluded by the European producers, which constitute the infringement complained of in Article 2 of the contested decision, is incoherent. That analysis also confirms that the Commission’s argument regarding the participation of the Japanese applicants in the infringement established in Article 1 of the contested decision is unfounded.

Preliminary observations

56 Sumitomo and JFE-NKK argue that the burden of proof regarding all the elements making up an infringement lies on the Commission (Opinion of Advocate General Sir Gordon Slynn in Joined Cases 100/80 to 103/80 Musique diffusion française v Commission [1983] ECR 1825, 1914; Case C-185/95 P Baustahlgewebe v Commission [1998] ECR I-8417, paragraph 58, and Case C-49/92 P Commission v Anic Partecipazioni [1999] ECR I-4125, paragraph 86). Thus, where there is doubt, the benefit of that doubt must be given to the undertakings accused of the infringement (Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 113/73 and 114/73 Suiker Unie and Others v Commission [1975] ECR 1663, paragraphs 203, 304, 359 and 363, Case 27/76 United Brands v Commission [1978] ECR 207, paragraph 265, Opinion of Judge Vesterdorf, acting as Advocate General, in Case T-1/89 Rhône-Poulenc v Commission [1991] ECR II-867, II‑869, at page II-954). Thus, the Commission is obliged to prove the facts which it alleges beyond all reasonable doubt (Opinion of Advocate General Darmon in 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 (‘Woodpulp II’) [1993] ECR I-1307, at I‑445, point 195). Conversely, where an applicant is able to show that there is uncertainty as to the merits of the Commission’s finding of an infringement, that will suffice to obtain the annulment of the decision containing the finding (Opinion of Advocate General Sir Gordon Slynn in Musique diffusion française v Commission, at page 1931).

57 Moreover, in order to prove an infringement, the Commission must, according to the Japanese applicants, produce sufficiently precise and consistent evidence to support the firm conviction that the alleged infringement took place (Joined Cases 29/83 and 30/83 CRAM and Rheinzink v Commission [1984] ECR 1679, paragraph 20, Woodpulp II, cited in paragraph 56 above, paragraph 127, Joined Cases T-68/89, T-77/89 and T-78/89 SIV and Othe rs v Commission [1992] ECR II-1403, in particular, paragraphs 193 to 195, 198 to 202, 205 to 210, 220 to 232, 249, 250 and 322 to 328, Case T-62/98 Volkswagen v Commission [2000] ECR II-2707, paragraph 43 and 72). The evidence furnished must show, amongst other things, that the alleged infringements constitute an appreciable restriction of competition within the meaning of Article 81(1) EC. That requirement is not satisfied, in particular, where a plausible explanation can be given for the alleged infringement which rules out an infringement of the Community rules on competition (CRAM and Rheinzink v Commission, paragraph 16 et seq., Joined Cases T‑185/96, T-189/96 and T-190/96 Riviera Auto Service and Others v Commission [1999] ECR II-93, paragraph 47, and Volkswagen v Commission).

58 Furthermore, the evidence put forward must satisfy the criteria of precision and consistency, mentioned earlier, in relation to all the elements of the infringement, in particular, the identity of the parties and their involvement in the infringement (Woodpulp II, cited in paragraph 56 above, paragraph 69; Commission v Anic Partecipazioni, cited in paragraph 56 above, paragraph 87; and Case T-295/94 Buchmann v Commission [1998] ECR II-813, paragraph 121), the products or services involved (Suiker Unie and Others v Commission, cited in paragraph 56 above, paragraphs 301 to 304, and SIV and Others v Commission, cited in paragraph 57 above, paragraphs 175 to 194 and 324), the restrictions agreed by the parties (Case T-337/94 Enso-Gutzeit v Commission [1998] ECR II-1571, paragraphs 102 to 150) and the duration of the infringement (Case T-43/92 Dunlop Slazenger v Commission [1994] ECR II-441, paragraph 79, and Volkswagen v Commission, cited in paragraph 57 above, paragraph 188). As regards, more specifically, the duration of the infringement, the Commission must provide either direct evidence or evidence that is sufficiently proximate in time, in other words contemporaneous evidence.

59 JFE-NKK argues, in particular, that, according to the judgment in Case T‑348/94 ENSO Española v Commission [1998] ECR II-1875 (paragraphs 160 to 171), the Commission must rely on actual proof and not just assertions of the content and object of the meetings which the parties to the alleged agreement supposedly attended.

60 The Commission submits first of all that the fact that the Japanese applicants put forward arguments which place the facts established by the Commission in a different light cannot enable them to have the contested decision annulled. The arguments advanced by JFE-NKK on this point, based substantially on the judgment in CRAM and Rheinzink v Commission, cited in paragraph 57 above, and paragraphs 126 and 127 of the judgment in Woodpulp II, cited in paragraph 56 above, only apply where the Commission’s decision is based on no more than a supposition that the facts established cannot be explained otherwise than by concertation between undertakings. That is not the case here.

61 As regards the argument that the Commission must prove the existence of the infringement beyond any reasonable doubt, the Commission states that there are no grounds for such a submission. It should be noted, in particular, that, in Woodpulp II, Advocate General Darmon’s interpretation to that effect of the concept of sufficiently precise and coherent evidence was not adopted by the Court. Similarly, in Joined Cases T-305/94 to T-307/94, T‑313/94 to T‑316/94, T‑318/94, T‑325/94, T-328/94, T-329/94 and T-335/94 Limburgse Vinyl Maatschaapij and Others v Commission (‘PVC II’) [1999] ECR II-931, the Court’s approach was to make a general assessment of whether the evidence was sufficient to establish the infringement in question. In relation, more specifically, to the duration of the infringement, the requirement of precision and coherence does not apply to establishment of the existence of the infringement but merely serves to determine the extent to which the fine should be commensurate with the duration of the infringement. In any event, the precise date on which the infringement began is irrelevant in the present case, provided that it was some time before 1990 because, in fixing the fines, the Commission took account of the infringement only from that date onwards.

First part: incompatibility of the existence of the alleged agreement with the situation existing in the British offshore market and the other European markets

62 The Japanese applicants submit in essence that the existence of barriers to trade provides a credible alternative explanation for the absence of Japanese sales on the European markets as far as the products referred to in Article 1 of the contested decision are concerned. Since the Commission’s reasoning is based on the supposition that such absence can not be accounted for otherwise than by concertation between the parties to the offending agreement, Article 1 of the contested decision must be annulled, in line with the approach taken in the judgments in CRAM and Rheinzink v Commission, cited in paragraph 57 above, paragraph 16, Woodpulp II, cited in paragraph 56 above, paragraphs 126 and 127, and PVC II, cited in paragraph 61 above, paragraph 725.

63 The applicants argue that there is a fundamental contradiction between the allegation that the Japanese applicants were parties to an agreement in which they undertook to refrain from supplying the European markets and their actual activity in that market. In fact, contrary to the Commission’s claim, an examination of the patterns of trade between Japan and Europe demonstrates that the Japanese producers vigorously competed with the European producers in the offshore markets, in particular those of the United Kingdom and Norway, which, together, were the only markets of significance for the Japanese producers, for objective commercial reasons. Moreover, demand in the United Kingdom offshore market was primarily for premium thread OCTG rather than the standard thread OCTG mentioned in the contested decision. At the very least, the Commission erred in its assessment and classification of the facts by finding, in Article 1 of the contested decision, that there had been an infringement in both the offshore and onshore European markets.

64 In that connection, Nippon raises the question whether it is conceivable that the Japanese producers were parties to an agreement with the European producers not to sell their products in the European markets, given the circumstances described in the previous paragraph. JFE-Kawasaki and Sumitomo point out that, according to the table reproduced in recital 68 to the contested decision, no domestic producer has a 100% share of its national market in OCTG and transport pipes. In the United Kingdom market, in particular, imports of those products fluctuated between 16% and 22%. In response to the Commission’s argument that that fact may be explained by the particular status of the United Kingdom market, which is regarded as being ‘semi-protected’ (enjoying limited protection) by the ‘Fundamentals’, JFE-NKK replies that the French market, which did not have the same status, was less protected in 1991 and similarly protected in 1994, as is apparent from the table. Since the Japanese producers failed to sell any of the products referred to in the contested decision in certain European markets in some years of the period of the infringement established by the Commission, JFE-NKK considers that that fact may be explained by fluctuations in sales of those products, consumption being heavily dependent on activity in the oil and gas sectors.

65 Sumitomo expressly acknowledges that its arguments regarding the effects of the agreement are relevant to the present plea only if the Court of First Instance takes the view that the Commission failed to prove the existence of an infringement on the basis of the documents and statements relied on in the contested decision. Sumitomo observes in that connection that the Commission relied principally on the purpose of the agreement and only to a limited extent on its effects.

66 As regards the Commission’s argument, based on paragraph 1088 of the judgment in Joined Cases T-25/95, T-26/95, T-30/95 to T-32/95, T-34/95 to T-39/95, T‑42/95 to T-46/95, T-48/95, T-50/95 to T-65/95, T-68/95 to T‑71/95, T-87/95, T‑88/95, T-103/95 and T-104/94 Cimenteries CBR and Others v Commission (‘Cement’) [2000] ECR II-491, that an infringement is particularly serious if it consists in an agreement to eliminate competition in a market in which there is already little competition, JFE‑Kawasaki points out that the circumstances of the present case are very different from those of that judgment. In the present case, there was strong competition within Europe, at least structurally, given the presence of four major Community producers and thus any potential Japanese competition would have been negligible. In the Cement case there was, by contrast, a series of closed geographical monopolies.

67 JFE-Kawasaki argues that, according to recitals 61 to 77 to the contested decision itself, the ‘Fundamentals’ did not apply to the United Kingdom offshore market or to the other Community offshore markets. In particular, it is clear from recital 62 to the contested decision that the ‘Fundamental Rules’ governed the situation in the domestic markets, the United Kingdom offshore market benefiting from the special status of being ‘semi-protected’ or enjoying ‘limited protection’. The statement in recital 102 to the contested decision that the parties to the agreement were obliged to refrain from supplying the pipes in question in the domestic markets is inconsistent with the hybrid status attributed to the United Kingdom offshore market by recital 62.

68 Deliveries of seamless carbon-steel tubes from Japan to the UK offshore market are characterised by continuity and high volume. In that connection Nippon relies on the table reproduced in recital 68 to the contested decision, which shows that the Japanese applicants delivered significant quantities of seamless steel tubes to the United Kingdom market. The fact that the figures are for all steel tubes, not only those contemplated by the contested decision, does not affect their relevance and is simply the result of the fact that the producers supplied various types of tubes – standard thread OCTG, line pipe and premium thread OCTG – to the United Kingdom continental shelf. Nippon also relies on export figures produced by Japanese customs authorities for the years 1988 to 1996 and on statistics for 1977 to 1987 issued by the Japanese Iron & Steel Exporters Association, which confirm that there was competition. Sumitomo also contends that its sales of tubes to the European Community market, and in particular to the United Kingdom continental shelf, were significant and it puts forward evidence in support of that submission. In particular, it disputes the figure of 230 000 tonnes put forward by the Commission for average annual sales of line pipe by the members of the Europe-Japan Club in the European Community markets in question. Total sales achieved by all members of that club amounted to 71 000 tonnes of line pipe per annum. JFE-NKK, for its part, refers to detailed figures which it supplied in response to a request for information from the Commission and which show that it certainly did not refrain from selling tubes on the European markets during the period determined as the duration of the infringement. JFE-Kawasaki argues that, although its sales in all the European markets remained minimal, it had made significant efforts to achieve sales, particularly with regard to the United Kingdom offshore market.

69 Moreover, the vigorous competition of the Japanese producers, in the UK market in particular, is expressly demonstrated by documentary evidence obtained by the Commission during its investigation into the European producers. In particular, the document reproduced at page 4902 of the Commission’s file, headed ‘Paper for Presidents’ records ‘the current [Japanese] aggression on OCTG’ and the five notes prepared by Vallourec (the note of 23 March 1990, reproduced at page 15622 of the Commission’s file, headed ‘Réflexions concernant le renouvellement du contrat VAM’, the note of 2 May 1990, reproduced at page 15610 of the file, headed ‘Réflexions stratégiques concernant les relations de VLR’, the note of 1 June 1990, reproduced at page 15591 of the file, headed ‘Renouvellement du contrat VAM BSC’, the note on the meeting of 24 July 1990 and, lastly, the note of a meeting with Corus, set out at page 15596 of the file, undated, headed ‘Entretien BSC’) all confirm that Vallourec regarded sales by the Japanese producers in the UK offshore market as being of serious concern. Similarly, a fax from Mannesmann dated 16 August 1993, reproduced at page 2493 of the Commission’s file, records that Japanese price competition was making it pointless for Mannesmann to submit tenders in certain cases.

70 Moreover, it is evident from a letter dated 6 June 1994 from the Liaison Committee of the European Community Steel Tube Industry to the Commission, reproduced at page 5243 of the Commission’s file (hereinafter ‘the Liaison Committee’s letter of 6 June 1994’) and from the minutes of the Liaison Committee’s meeting of 24 August 1994, reproduced at page 5103 of the file, that the European producers regarded the Japanese firms as aggressive competitors and that their substantial market presence posed a threat to their position in the offshore markets of the Member States of the Community. The minutes of the Liaison Committee’s meeting of 24 August 1994 also show that the Japanese producers achieved a 25% share of the Community and Faeroe offshore markets in OCTG (all types of steel) and a 34% share of the Community and Norwegian offshore market in carbon-steel OCTG. In support of its claim that Japanese imports were significant in volume, Sumitomo also refers to a fax from the European Steel Tube Association (formerly Liaison Committee of the Community Steel Tube Industry) dated 5 October 1994 (reproduced at page 4725 of the Commission’s file) and an undated draft letter addressed to Mr Large of the Commission (page 4725 of the file). Similarly, statements by the European producers – and especially Dalmine’s replies of 29 May 1997 to the questions put to it by the Commission pursuant to Article 11 of Regulation No 17 (reproduced at page 15162 of the Commission’s file, hereinafter ‘Dalmine’s replies of 29 May 1997’) and Corus’s replies of 13 August 1997 (page 11916 of the file, hereinafter ‘Corus’s replies’) confirm that view. In particular, Corus’s replies say that the Japanese producers were targeting the United Kingdom offshore market. Nippon emphasises that, according to a document headed ‘(g) Japanese’, reproduced at page 4909 of the Commission file and prepared by one of the European firms, ‘Nippon Steel in particular [were] becoming ever more aggressive in the [United Kingdom continental shelf]’.

71 According to the Japanese producers, the fact that they sold significant quantities of steel tubes, and in particular premium thread OCTG and project line pipe, in the United Kingdom offshore market, without, however, selling significant quantities of those products in the onshore markets of the Member States of the Community, was – contrary to the Commission’s view – perfectly logical and consistent with the absence of the alleged agreement. In particular, the products in question, where they are intended for offshore use, are of high quality and are very expensive. Moreover, it is easier for foreign producers, generally speaking, to compete with local producers as regards special products, such as premium thread OCTG, rather than standard products, such as standard thread OCTG.

72 Furthermore, the North Sea continental shelf and, in particular, the United Kingdom offshore market, represent the lion’s share of the European market in steel tubes, as is evidenced by the ‘(g) Japanese’ document. The onshore markets for those products are thus relatively limited and not seen as very profitable. In addition, the competitive conditions in the British offshore market are very different from those in the Community onshore markets. Japanese sales in these latter markets, in fact, have suffered as a result of the cumulative effect of a number of trade barriers most of which do not exist in the British offshore market. The Commission has not taken those differences into account and has failed to distinguish, in the contested decision, between offshore and onshore markets. Nippon, however, argues that the onshore markets were practically closed to the Japanese producers because of those barriers, at least when considered as a whole. That fact is confirmed, according to Sumitomo, in so far as concerns standard thread OCTG, by a letter from a company which purchases that type of product in which it stated that the Japanese producers had made offers to sell, but that the prices were uncompetitive and the delivery times were longer than those offered by the European producers. According to Sumitomo, the mention of Japanese suppliers on the internet site of the company just mentioned – on which the Commission relies – relates to premium thread OCTG, not to standard thread OCTG.

73 As regards barriers to imports of Japanese tubes into the European Community, the Japanese applicants take the view, first, that the traditional trade policy of the European Community, which sought to protect European markets by means, in particular, of voluntary restrictions agreed between the Commission and the Japanese Government, represents such an obstacle. The aim of the policy was essentially to preserve existing trade patterns. In this case, the Japanese applicants state that, when those voluntary restraint agreements were in force, they were not exporting seamless tubes to the Community onshore market, or were doing so only on a very small scale, and that, consequently, the policy dissuaded them from exporting their products to those markets.

74 In practice, the first voluntary restraint agreement relating to steel tubes was entered into in March 1978. The last agreement renewing voluntary restraint arrangements, dated December 1989, remained in force until the end of 1990. The Commission itself asserted, in recital 134 to the contested decision, that those arrangements had dissuaded Japanese producers from exporting their steel tubes to Europe until 1990. That being so, during the period of voluntary restraint, the Japanese applicants simply could not have had, to a sufficient extent, common intentions of the kind referred to in Case T-141/94 Thyssen Stahl v Commission [1999] ECR II-347, at paragraph 262, or in Cement, cited in paragraph 66 above, at paragraph 917. JFE-NKK adds that it was the Commission itself that encouraged the Japanese producers to adopt the trade policy of which it now complains, despite its failure to prove exactly when the voluntary restraint agreement came to an end. Broadly speaking, the Japanese applicants rely on the extension of the voluntary restraint agreements in seeking a reduction in the amount of the fines (see paragraphs 136 et seq. and 511 to 513 below).

75 Second, the Japanese steel tube producers were dissuaded from exporting to the Community carbon-steel seamless tube onshore markets because they faced significant customs duties under the Common Customs Tariff. From 1977 to 1994 customs duties imposed on imports of seamless steel tubes into the onshore Community markets were never less than 9%. The Commission’s statement, in recital 138 to the contested decision, to the effect that it took that factor into account in no way explains why the Commission did not consider this to be a hindrance to Japanese sales. Sumitomo maintains in that connection that the Latin American producers were subject to lower levels of import duty under the General System of Preferences. Likewise, over the period of the infringement determined by the Commission, several free-trade agreements with Central and Eastern European countries removed customs duties on steel products imported from those countries. This made imports from those countries more viable than imports from Japan.

76 Third, transport costs, and, in the case of tubes intended for onshore applications, the costs of loading, unloading at the port of arrival in the Community, and delivery by sea or road to the final destination added to the competitive disadvantage of the Japanese steel tube producers, by comparison with the Community producers, particularly in the Community’s onshore markets. Also, because the quantities of tubes ordered in the European onshore markets are small, transport costs per tonne delivered are correspondingly higher. Moreover, transport costs are particularly high, as a percentage of invoice value, in the case of the standard thread OCTG referred to in the contested decision, because of that product’s relatively low cost. In that regard, the Japanese applicants put forward various sets of figures which they say are based on real prices obtained for supplies of seamless tubes to Europe. The Commission’s assertion that consignments may be bulked together to reduce transport costs does not undermine their argument since it must be recognised that the level of costs would remain dissuasive none the less. The fact that transport costs are high for the Japanese producers is also confirmed by the Liaison Committee’s letter of 6 June 1994, even though the purpose of that letter was to draw the Commission’s attention to the threat posed by Japanese tube imports. It is further confirmed, albeit indirectly, by the Commission’s decision-making practice, in particular Decision 93/247/EEC of 12 November 1992 declaring a concentration to be compatible with the common market (Case No IV/M.222 – Mannesmann/ Hoesch), recital 102 (OJ 1993 L 114, p. 34). Similarly, it is clear from the Commission’s decision of 26 February 1998 declaring a concentration to be compatible with the common market (Case No IV/M.1014 – British Steel/Europipe (OJ 1998 C 181, p. 3) that distance constitutes a significant disadvantage for producers outside the Community wishing to sell small quantities of relatively low specification products.

77 On this point, JFE-Kawasaki adds that the Japanese producers were at a disadvantage in relation not only to European producers, but also to other producers in non-member countries. For example, the costs of shipment from Japan to either Italy or the United Kingdom are between 40 and 50% higher than from Argentina. As regards the Commission’s argument that annex 5 to the contested decision shows that the Italian market was protected against Japanese imports but not against imports from other non-member countries, Sumitomo points out that the annex refers to all OCTG and all line pipe and is thus of no value in assessing the specific case of the products covered by Article 1 of the contested decision.

78 JFE-Kawasaki and JFE-NKK dispute the argument put forward by the Commission in recital 137 to the contested decision to the effect that, given the structural overcapacity in the steel tubes sector, any sale at a price above the variable cost is worth making and that such sales help to cover fixed costs. First, transport costs are higher for steel tubes – which are particularly bulky – than for other steel products. Second, the Commission’s assessment fails to take account of the fact that the Japanese producers have a finite steel production capacity and that they therefore seek to maximise profits by selling as many products as possible on which they can obtain the highest profit margin. The fact that the variable costs may be covered by sales of a particular product does not therefore imply that it is in the commercial interests of producers to make such sales.

79 As regards the Commission’s view that production capacities for steel products are specific to the various products and that it is therefore not possible to concentrate capacity on products with the highest profit margin, Kawasaki replies that the first stage of the production process is the same for all steel products. That is the stage in which its production capacities are limited. Sumitomo also states that overcapacity affected the European producers just as much as the Japanese. The consequences were thus the same for both sides and the other disadvantages would still have remained even if the Japanese producers had wished to sell at prices just below variable costs.

80 Fourth, the Japanese producers are at a disadvantage by comparison with their European competitors as regards delivery times. It takes between four and six weeks to ship steel tubes manufactured in Japan to Europe. Whilst the Commission argues, in recital 137 to the contested decision, that the undertakings in question do not think delivery times present an obstacle to Japanese exports of premium thread OCTG, which is used, inter alia, on the United Kingdom continental shelf in pre-defined projects, that observation does not apply to standard thread OCTG. It would, in fact, be expensive for a buyer of premium thread OCTG to change the type of premium joint once he had opted for one or other type offered by a given producer. The impact of delivery times is thus less significant in such a case. In the market for standard thread OCTG, on the other hand, the ability to achieve short delivery times presents a significant advantage. As regards project line pipe, the treatment those pipes require means that the supplier must work to a very tight schedule, so that delivery times become even more significant. Lastly, because OCTG and project line pipe are sold directly to users, it would be impossible to overcome this obstacle by making indirect sales through the intermediary of stockholders.

81 Fifth, the domestic market in each of the four Member States of the Community where the largest onshore sales could be made, that is to say France, Germany, Italy and the United Kingdom, was dominated by one national producer. That situation was not necessarily the result of a market-sharing agreement because certain objective factors, economic and otherwise, tend to favour national production. The position of national producers was strengthened, in particular, by the purchasing policy of their main customers in that market, that is to say the national gas transportation and distribution companies, which are often public undertakings. The Commission acknowledged the existence of such a situation in its Decision 93/247.

82 By way of example, Corus (formerly British Steel) enjoyed privileged relations at the relevant time with the companies British Gas and BP (formerly British Petroleum), as is evidenced, in BP’s case, by a document headed ‘Minutes of technical liaison meeting by BP engineering / British Steel’, reproduced at page 681 of the Commission’s file. Similarly, statements made by employees of Dalmine, reproduced at page 8820 b 4 of the Commission’s file (hereinafter ‘the Dalmine employees’ statements’), attest to the fact that they offered bribes to employees of Agip, which was Italy’s largest oil and gas company, to ensure that Agip’s orders for seamless steel tubes would not be awarded to other manufacturers and that Agip would generally seek to give preference to Italian manufacturers. In similar fashion, a document headed ‘Meeting with Distrigaz’, reproduced at page 2298 of the Commission’s file, evidences Distrigaz’s desire not to purchase from non-Community producers. More generally, the 11th and 12th recitals in the preamble to Council Directive 90/531/EEC of 17 September 1990 on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1990 L 297, p. 1) confirms that the public markets relating to the extraction, transportation and distribution of oil and gas were closed before the directive came into force. In addition, Article 29 of the directive, which governs the future position of producers in non-member countries, does not grant such producers equal access to the European public markets, contrary to what appears to be implied in the contested decision. According to JFE-NKK, the Japanese producers did not benefit in full from the rules laid down by Directive 90/531 because the international agreement relating to public contracts (annexed to Council Decision 81/271/EEC of 10 December 1979 concerning the conclusion of the Multilateral Agreements resulting from the 1973 to 1979 trade negotiations (OJ 1980 L 71, p. 1)) does not apply to the exploration, extraction or transportation of oil and gas.

83 Sixth, the European firms lodged antidumping complaints with the Commission with the aim of keeping non-Community producers out of the Community market. Between 1977 and 1998 seven actions were brought against non-Community producers of seamless steel tubes, only one of which was concluded without an undertaking being given or a duty imposed. Whilst none of those anti-dumping actions related to imports from Japan, there was nothing strange about that as regards the United Kingdom offshore market because the Community anti-dumping rules in force at the material time did not apply to the part of the continental shelf belonging to the Member States. On the other hand, the possibility of antidumping proceedings being brought against them had a significant dissuasive effect on Japanese exporters as regards the onshore markets, contrary to the Commission’s contention in recital 137 to the contested decision. The very fact of anti‑dumping proceedings being commenced against them would in itself represent a substantial burden for Japanese producers because of the investigative measures which would be adopted by the Commission. The truth of that argument is confirmed by the fact that the Paper for Presidents indicates that European firms were considering threatening the Japanese with anti-dumping complaints. The European producers were also exerting pressure on the Commission to extend the Community customs territory to the offshore markets of the Member States, as is evidenced in particular by the Liaison Committee’s letter of 6 June 1994.

84 Seventh, the cost of constant compliance with various national standards in the Member States of the Community and widely differing licensing requirements constituted another significant trade barrier. Essentially, the ‘API’ standard is only a basic specification and it is thus also necessary to comply with national standards and even to meet additional standards imposed by certain individual customers. According to Nippon, in Germany, for example, a certificate was required for the production process as well as for the product testing equipment and employees’ qualifications. To obtain those certificates it was necessary, every two or three years, to submit voluminous documents in German and pay a fee of up to DEM 45 000. In Decision 93/247, the Commission acknowledged that those national standards constituted a significant barrier to intra-Community trade in steel tubes. That finding is particularly pertinent to imports from Japan. The objective assessment made in Decision 93/247 cannot be dismissed in the present case for the reason voiced by the Commission that it was unaware of the present infringement when it adopted that decision. As regards the individual requirements of particular oil companies, JFE‑Kawasaki points out that Total, the French company, and Agip, the Italian company, require an ‘off-line’ inspection of all steel tubes delivered to them. Compliance with that obligation occasions costs of over USD 100 per thousand tonnes

85 Eighth, JFE-NKK, Nippon and JFE-Kawasaki argue, in their respective replies, that Corus benefited from a policy of the United Kingdom Government to promote sales by British suppliers to the United Kingdom continental shelf. The United Kingdom Government implemented that policy by setting up an Offshore Supplies Office (‘the OSO’). The OSO managed, by exerting pressure on operators active on the continental shelf, to increase the market share of British suppliers from between 25 and 30% in 1972 (according to a report published by the Department of Trade and Industry in 1997, a copy of which is included in annex 4 to the reply in Case T-67/00, hereinafter ‘the DTI report’) to 75% in 1984 and 87% in 1987 (according to the Bulletin of the European Communities, Supplement No 6‑1998, paragraph 115). It was hardly necessary for Corus, therefore, to enter into an agreement with the Japanese producers to obtain protection in the offshore market given that it was already benefiting from the OSO’s intervention. The very concept of ‘Fundamental Rules’, and especially of ‘Fundamentals Improved’ is tied up with the privileged status of Corus in the United Kingdom offshore market, as a result of that policy of national preference, a situation which also benefited other European producers to the extent that they supplied plain-end pipes to Corus after the closure of its Clydesdale plant. In any event, the contested decision is vitiated by a manifest error on this point because the Commission failed to take account of the role played by the OSO in the United Kingdom offshore market. That system of British national preference prevailed until July 1993 when it was replaced by the system of Community preference laid down by Directive 90/531. JFE-NKK maintains that it was unaware of those facts and obtained the documents annexed to its reply, which evidence the facts, only after it had lodged its application in Case T-67/00.

86 Those three applicants also submit that, in confirmation of their allegations on this point, some of the evidence on which the Commission relies mentions the policy implemented by the OSO. They point out, first, that the note headed ‘Renouvellement du contrat VAM BSC’ contains the statement: ‘il ne faut pas ouvrir la porte aux [Japonais] en les favorisant d’un british content’ and that, according to the author of the note on the meeting of 24 July 1990, ‘[i]t cannot be excluded that in [19]93, OSO will grant the 3% preference to the European producers which it is currently granting to the UK producers’. The references in that note to the reinforcement of the European Community and the possible extension of the 3% preference to the European producers relate to the entry into force of Directive 90/531, which provides for a Community preference provided that the prices of the Community producers are not more than 3% higher than those of non-member countries.

87 The fact that virtually none of the European producers delivered seamless steel tubes to Japan, as demonstrated by the table set out in recital 68 to the contested decision, is also attributable to reasons of commercial policy. There would thus have been no commercial justification for entering into an agreement for sharing that market.

88 Moreover, the Liaison Committee’s letter of 6 June 1994 makes it clear that the Japanese public markets in the steel tube sector were completely closed to European producers, that the Japanese tube market was dominated by huge consortia closely linked to the tube producers, that transportation and sales costs to Japan were very high for European producers and that the oil and gas exploration and production industry, and thus the OCTG sector, were in any event very limited. It also appears from a fax dated 16 November 1994 and sent to the Commission by the European Steel Tube Association, that non-Japanese steel tube producers wishing to sell in Japan were required to complete a very detailed questionnaire in order to comply with Japanese standards.

89 The Commission submits, first, that it based the contested decision essentially on the restrictive purpose of the agreement. It was therefore under no obligation also to prove actual effects in the Community markets in order to establish the existence of the infringement found in Article 1. Even if the trade barriers listed by the Japanese applicants could explain why they had not sold the products referred to in the contested decision in the Community markets, the fact nevertheless remains that the Commission furnished proof of an agreement the purpose of which was to restrict competition. In any event, to the extent to which the facts relied on by the applicants are relevant, their effect would be to increase the gravity of the infringement, rather than lessen it, as the applicants seem to suggest. In that connection the Commission refers to Cement, cited in paragraph 66 above, in which it was held that an economic analysis which tends to demonstrate the existence of objective trade barriers cannot override the inescapable reality of documentary evidence. Moreover, according to dicta of the Court of First Instance, if the economic analysis proposed by the applicants proves to be accurate, that would actually increase the gravity of the infringement because, by concluding the agreement in question, the undertakings attempted to eliminate what little real competition remained on the market (paragraphs 1087 and 1088 of Cement).

90 In response to JFE-Kawasaki’s argument that the contested decision did not treat the United Kingdom offshore market as being covered by the market‑sharing agreement, the Commission replies that recital 62 to the contested decision very clearly indicates that that market was in fact covered by the agreement, in so far as it was ‘semi-protected’.

91 Secondly, the Commission takes the view that it has in any case demonstrated to the requisite legal standard that the agreement referred to in Article 1 of the contested decision had real effects on the Community markets. In particular, the table set out in recital 68 to the contested decision confirms that the agreement was in fact applied, to a great extent, in the European markets. The fact that the Japanese producers competed to some extent on the United Kingdom offshore market cannot negate the infringement established in the contested decision in so far as that market was only semi-protected.

92 As regards the argument that some of the documents used by the Commission, and especially the Paper for Presidents and the note of the meeting with Corus