Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C‑213/02 P

Dansk Rørindustri and Others

v

Commission of the European Communities

(Appeal – Competition – District heating pipes (pre-insulated pipes) – Article 85(1) of the EC Treaty (now Article 81(1) EC) – Cartel – Boycott – Fines – Guidelines on the method of setting fines – Non-retroactivity – Legitimate expectations – Lawfulness – Leniency notice – Obligation to state reasons)

Opinion of Advocate General Tizzano delivered on 8 July 2004

Judgment of the Court (Grand Chamber), 28 June 2005

Summary of the Judgment

1. Procedure — Measures of inquiry — Examination of witnesses — Discretion of the Court of First Instance – Impact of the general principle of Community law of the right to a fair judicial process

(Rules of Procedure of the Court of First Instance, Art. 68(1))

2. Procedure — Application initiating the proceedings – Formal requirements – Summary account of the pleas in law put forward – Pleas in law not set out in the application – Reference to elements in an annex – Inadmissible

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

3. Competition – Community rules – Undertaking – Concept

(EC Treaty, Arts 85 and 86 (now Arts 81 EC and 82 EC))

4. Competition – Community rules – Infringement by an undertaking – Attribution to another undertaking in view of the economic and legal links between them – Conditions – Insufficiency of a single control of capital

(EC Treaty, Art. 85(1) (now Art. 81(1) EC))

5. Competition – Agreements, decisions and concerted practices – Participation of an undertaking in an anti-competitive initiative – Sufficiency, in order to engage the liability of the undertaking, of tacit approval without publicly distancing itself or reporting the matter to the competent authorities

(EC Treaty, Art. 85(1) (now Art. 81(1) EC))

6. Competition – Agreements, decisions and concerted practices – Adverse effect on competition – Criteria for assessment – Anti-competitive object – Sufficient finding

(EC Treaty, Art. 85(1) (now Art. 81(1) EC))

7. Appeals – Pleas in law – Plea submitted for the first time in the context of the appeal – Inadmissible

(EC Statute of the Court of Justice, Art. 51)

8. Competition – Community rules – Infringements – Fines – Determination – Criteria – Raising of the general level of fines – Whether permissible – Conditions

(EC Treaty, Arts 85(1) and 86 (now Arts 81(1) EC and 82 EC); Council Regulation No 17)

9. Community law – Principles — Protection of legitimate expectations – Limits – Elimination of infringements of the competition rules – Determination of the amount of fines – Method of calculating fines – Discretion of the institutions – Lack of effect of the Leniency Notice

(Commission Notice 96/C 207/04)

10. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringements – Attenuating circumstances – Obligation for the Commission to adhere to its previous practice in taking decisions – None

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

11. Community law – General principles of law – Non-retroactivity of penal provisions – Scope – Fines imposed for infringement of the competition rules – Included – Possible breach owing to the application to an infringement committed before their introduction of the Guidelines on the method of setting fines – Foreseeability of the changes introduced by the Guidelines – No breach

(European Convention on Human Rights, Art. 7; Council Regulation No 17, Art. 15; Commission Notice 98/C 9/03)

12. Acts of the institutions – Guidelines on the method of setting fines imposed for infringements of the competition rules – Act of general application – Effects

(Commission Notice 98/C 9/03)

13. Competition – Fines – Amount – Determination – Criteria – Overall turnover of the undertaking concerned – Turnover achieved with the goods forming the subject-matter of the infringement – Respective taking into consideration – Limits

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

14. Appeals – Jurisdiction of the Court of Justice – Challenge, for reasons of fairness, of the assessment made by the Court of First Instance of the amount of the fines imposed on undertakings – Excluded – Review limited to ascertaining the taking into consideration by the Court of First Instance of the essential factors to assess the gravity of the infringement and all the arguments raised against the fine imposed

(TC Treaty, Art. 85 (now Art. 81 EC); EC Statute of the Court of Justice, Art. 51; Council Regulation No 17, Art. 15)

15. Competition – Guidelines on the method of setting fines – Calculation method taking into account various elements of flexibility to the detriment of the turnover of the hitherto privileged undertaking — Conformity with Article 15(2) of Regulation No 17

(Council Regulation No 15, Art. 15(2); Commission Notice 98/C 9/03)

16. Competition – Fines – Amount – Determination – Maximum amount – Calculation – Distinction between the final amount and the intermediate amount of the fine – Consequences

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

17. Competition – Fines – Amount – Determination – Criteria – Financial situation of the undertaking concerned – Whether taken into consideration – Obligation – None

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

18. Competition – Fines – Amount – Determination – Criteria – Reduction in the amount of the fine in exchange for the cooperation of the undertaking involved – Conditions – Discretionary power of the Commission

(Council Regulation No 17, Art. 15(2); Commission Notice 96/C 207/04, Section D, points 1 and 2)

19. Competition – Administrative procedure – Respect for the rights of the defence – Statement of objections – Necessary content – Indication of the criteria for calculating the contemplated fine – Premature indication – Absence of obligation to indicate a possible change of policy concerning the level of the amount of fines

(Council Regulation No 17)

20. Appeals – Pleas in law – Inadequate statement of reasons – Jurisdiction of the Court of Justice – Taking into consideration of the facts found by the Court of First Instance – Included

(EC Treaty, Art. 190 (now Art. 253 EC))

21. Acts of the institutions – Statement of reasons – Obligation – Scope – Decisions – Remedy of a failure to state reasons during the administrative procedure – Not permissible

(EC Treaty, Art. 190 (now Art. 253 EC))

1. Even where a request for the examination of witnesses, made in the application, states precisely about what facts and for what reasons the witness or witnesses should be examined, it falls to the Court of First Instance to assess the relevance of the application to the subject-matter of the dispute and the need to examine the witnesses named.

The existence of a discretion in that regard on the part of the Court of First Instance cannot be challenged on the basis of the general principle of Community law inspired by Article 6(1) of the European Convention on Human Rights, which provides that everyone is entitled to a fair hearing, and, more particularly, the principle laid down in paragraph 3(d) of that article, which provides that everyone charged with a criminal offence has the right to obtain the attendance and examination of witnesses on his behalf on the same conditions as witnesses against him, a principle that constitutes a particular aspect of the right to a fair hearing.

In practice, that latter provision does not confer on the accused an absolute right to obtain the attendance of witnesses before a court and it is in principle for the national court to determine whether it is necessary or appropriate to call a witness.

Article 6(3) of that Convention does not therefore require that every witness be called but is aimed at full equality of arms, ensuring that the procedure in issue, considered in its entirety, gave the accused an adequate and proper opportunity to challenge the suspicions concerning him.

(see paras 68-71)

2. It follows from Article 44(1)(c) of the Rules of Procedure of the Court of First Instance that the essential facts and law on which an application is based must be apparent from the text of the application itself, even if only stated briefly, and that a reference in the application to such elements in an annex to the application is therefore not sufficient.

Likewise, it is not for the Court of First Instance to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and ancillary purpose.

(see paras 94, 97, 100)

3. In the field of competition law, the concept of an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed. It does not require that the economic unit concerned have legal personality.

(see paras 112-113)

4. The anti-competitive conduct of an undertaking can be attributed to another undertaking where it has not decided independently upon its own conduct on the market but carried out, in all material respects, the instructions given to it by that other undertaking, having regard in particular to the economic and legal links between them.

In that regard, the fact that the share capital of two separate commercial companies is held by the same person or the same family is insufficient, in itself, to establish that those companies are a single economic unit with the result that, under Community competition law, the actions of one company can be attributed to the other and that one can be held liable to pay the fine for the other.

(see paras 117-118)

5. It is sufficient for the Commission to show that an undertaking participated in meetings at which anti-competitive agreements were concluded, without manifestly opposing them, to prove to the requisite standard that the undertaking participated in the cartel. Where participation in such meetings has been established, it is for that undertaking to put forward evidence to establish that its participation in those meetings was without any anti-competitive intention by demonstrating that it had indicated to its competitors that it was participating in those meetings in a spirit that was different from theirs.

In that regard, a party which tacitly approves of an unlawful initiative, without publicly distancing itself from its content or reporting it to the administrative authorities, effectively encourages the continuation of the infringement and compromises its discovery. That complicity constitutes a passive mode of participation in the infringement which is therefore capable of rendering the undertaking liable in the context of a single agreement.

Nor is the fact that an undertaking does not act on the outcome of a meeting having an anti-competitive object such as to relieve it of responsibility for the fact of its participation in a cartel, unless it has publicly distanced itself from what was agreed in the meeting.

(see paras 142-144)

6. For the purposes of applying Article 85(1) of the Treaty (now Article 81(1) EC), it is sufficient that the object of an agreement should be to restrict, prevent or distort competition irrespective of the actual effects of that agreement. Consequently, in the case of agreements reached at meetings of competing undertakings, that provision is infringed where those meetings have such an object and are thus intended to organise artificially the operation of the market. In such a case, the liability of a particular undertaking in respect of the infringement is properly established where it participated in those meetings with knowledge of their object, even if it did not proceed to implement any of the measures agreed at those meetings.

The fact of the participation in the cartel of dominant or particularly powerful undertakings in a position to take retaliatory measures against other, much less powerful, participants should the latter publicly distance themselves from what was decided at meetings having an anti-competitive object, the greater or lesser degree of regular participation by the undertaking concerned in the meetings and of completeness of its implementation of the measures agreed are relevant not to the establishment of its liability but rather to the extent of that liability and thus to the severity of the penalty.

(see paras 145, 150)

7. To allow a party to put forward for the first time before the Court of Justice a plea in law which it has not raised before the Court of First Instance would mean allowing that party to bring before the Court of Justice, whose jurisdiction in appeals is limited, a wider case than that heard by the Court of First Instance. In an appeal the jurisdiction of the Court of Justice is thus confined to examining the assessment by the Court of First Instance of the pleas argued before it.

(see para. 165)

8. The fact that the Commission, in the past, imposed fines of a certain level for certain types of infringement does not mean that it is estopped from raising that level within the limits indicated in Regulation No 17 if that is necessary to ensure the implementation of Community competition policy; on the contrary, the proper application of the Community competition rules requires that the Commission may at any time adjust the level of fines to the needs of that policy.

The supervisory task conferred on the Commission by Articles 85(1) and 86 of the EC Treaty (now Articles 81(1) EC and 82 EC) not only includes the duty to investigate and punish individual infringements but also encompasses the duty to pursue a general policy designed to apply, in competition matters, the principles laid down by the Treaty and to guide the conduct of undertakings in the light of those principles.

(see paras 169-170, 227)

9. Traders cannot have a legitimate expectation that an existing situation which is capable of being altered by the Commission in the exercise of its discretionary power will be maintained. That principle clearly applies in the field of competition policy, which is characterised by a wide discretion on the part of the Commission, in particular as regards the determination of the amount of fines.

Undertakings involved in an administrative procedure in which fines may be imposed cannot therefore acquire a legitimate expectation in the fact that the Commission will not exceed the level of fines previously imposed. It follows that a legitimate expectation cannot be based on a method of calculating fines either.

Furthermore, the legitimate expectation that traders are able to derive from the Leniency Notice is limited to an assurance that their fines will be reduced by a certain percentage, but does not extend to the method of calculating fines or, a fortiori, to a specific level of the fine capable of being calculated at the time when the trader decides to implement his intention to cooperate with the Commission.

(see paras 171-173, 187-188, 228)

10. As regards the determination of the amount of the fine to be imposed for infringement of the competition rules, the mere fact that the Commission, in its previous practice when taking decisions, granted a certain rate of reduction for specific conduct does not mean that it is required to grant the same proportionate reduction when assessing similar conduct in a subsequent administrative procedure.

(see para. 192)

11. The principle of non-retroactivity of criminal laws, enshrined in Article 7 of the European Convention on Human Rights as a fundamental right, constitutes a general principle of Community law which must be observed when fines are imposed for infringement of the competition rules and requires that the penalties imposed correspond with those fixed at the time when the infringement was committed.

The concept of ‘law’ (‘droit’) for the purposes of Article 7(1) corresponds to ‘law’ (‘loi’) used in other provisions of that Convention and encompasses both law of legislative origin and that deriving from case-law. Although that provision, which enshrines in particular the principle that offences and punishments are to be strictly defined by law (nullum crimen, nulla poena sine lege), cannot be interpreted as prohibiting the gradual clarification of the rules of criminal liability, it may preclude the retroactive application of a new interpretation of a rule establishing an offence. That is particularly true of a judicial interpretation which produces a result which was not reasonably foreseeable at the time when the offence was committed, especially in the light of the interpretation put on the provision in the case-law at the material time.

Like that case-law on new developments in case-law, a change in an enforcement policy, in this instance the Commission’s general competition policy in the matter of fines, especially where it comes about as a result of the adoption of rules of conduct such as the Guidelines adopted by the Commission on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, may have an impact from the aspect of the principle of non-retroactivity. Having particular regard to their legal effects and to their general application, such rules of conduct come, in principle, within the concept of ‘law’ for the purposes of Article 7(1) of the Convention.

In order to ensure that the principle of non-retroactivity was observed, it is necessary to ascertain whether the change in question was reasonably foreseeable at the time when the infringements concerned were committed. In that regard, the scope of the notion of foreseeability depends to a considerable degree on the content of the text in issue, the field it is designed to cover and the number and status of those to whom it is addressed. A law may still satisfy the requirement of foreseeability even if the person concerned has to take appropriate legal advice to assess, to a degree that is reasonable in the circumstances, the consequences which a given action may entail. This is particularly true in relation to persons carrying on a professional activity, who are used to having to proceed with a high degree of caution when pursuing their occupation. They can on this account be expected to take special care in assessing the risks that such an activity entails.

Having regard to the fact that the proper application of the Community competition rules requires that the Commission may at any time, within the limits indicated in Regulation No 17, adjust the level of fines to the needs of Community competition policy and, accordingly, that it may raise the level of the amount of fines by reference to that applied in the past, not only by raising the level of the amount of fines in imposing fines in individual decisions, but also by raising it by the application, in particular cases, of rules of conduct of general application, such as the Guidelines, it follows that those Guidelines and, in particular, the new method of calculating fines contained therein, on the assumption that it has the effect of increasing the level of the fines imposed, were reasonably foreseeable for undertakings at the time when the infringements were committed, before those Guidelines were adopted.

(see paras 202, 216-219, 222-224, 227-231)

12. In adopting rules of conduct designed to produce external effects, as is the case of the Guidelines, which are aimed at traders, and in announcing by publishing them that they will henceforth apply to the cases to which they relate, the institution in question imposes a limit on the exercise of its discretion and cannot depart from those rules under pain of being found, where appropriate, to be in breach of the general principles of law, such as equal treatment or the protection of legitimate expectations. It cannot therefore be precluded that, on certain conditions and depending on their content, such rules of conduct, which are of general application, may produce legal effects.

In that regard, even though the Guidelines adopted by the Commission on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty do not constitute the legal basis of the decision imposing a fine on a trader, as that decision is based on Articles 3 and 15(2) of Regulation No 17, they determine, generally and abstractly, the method which the Commission has bound itself to use in assessing the fines imposed by the decision and, consequently, ensure legal certainty on the part of the undertakings.

(see paras 210-213)

13. The gravity of the infringements must be assessed in the light of numerous factors, such as the particular circumstances of the case, its context and the dissuasive effect of fines, although no binding or exhaustive list of the criteria to be applied has been drawn up.

The factors capable of affecting the assessment of the gravity of the infringements include the conduct of each of the undertakings, the role played by each of them in the establishment of the concerted practices, the profit which they were able to derive from those practices, their size, the value of the goods concerned and the threat that infringements of that type pose to the objectives of the Community.

It follows that, on the one hand, it is permissible, for the purpose of fixing the amount of the fine, to have regard both to the total turnover of the undertaking, which gives an indication, albeit approximate and imperfect, of the size of the undertaking and of its economic power, and to the proportion of that turnover accounted for by the goods in respect of which the infringement was committed, which gives an indication of the scale of the infringement. On the other hand, it follows that it is important not to confer on one or the other of those figures an importance disproportionate in relation to the other factors and, consequently, that the fixing of an appropriate fine cannot be the result of a simple calculation based on the total turnover. That is particularly the case where the goods concerned account for only a small part of that figure.

(see paras 241-243, 257, 292, 312)

14. In the context of an appeal the purpose of review by the Court of Justice is, first, to examine to what extent the Court of First Instance took into consideration, in a legally correct manner, all the essential factors to assess the gravity of particular conduct in the light of Article 85 of the Treaty (now Article 81 EC) and Article 15 of Regulation No 17 and, second, to consider whether the Court of First Instance responded to a sufficient legal standard to all the arguments raised by the appellant with a view to having the fine cancelled or reduced.

On the other hand, it is not for the Court of Justice, when ruling on questions of law in the context of an appeal, to substitute, on grounds of fairness, its own assessment for that of the Court of First Instance exercising its unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements of Community law.

(see paras 244-245, 303)

15. In setting out in the Guidelines the method which it proposed to apply when calculating fines imposed under Article 15(2) of Regulation No 17, the Commission remained within the legal framework laid down by that provision and did not exceed the discretion conferred on it by the legislature.

Although that method marks a departure from the Commission’s previous practice, which placed more emphasis on the turnover of the undertakings on which fines were imposed, it does not contravene the provisions of that article, as interpreted in the case-law, which do not in any way require that fines be calculated on amounts based on the turnover of the undertakings concerned. On the contrary, by envisaging that numerous factors will be taken into account in assessing the gravity of the infringement fine, including in particular the profits secured by the infringement or the need to ensure the deterrent effect of the fines, while not precluding the taking into account of turnover, and therefore by introducing flexibility, it allows the Commission to exercise its discretion in full conformity with those provisions.

(see paras 252, 254, 258, 260-261, 267)

16. The upper limit of the amount of the fine referred to in Article 15(2) of Regulation No 17 must be understood to mean that the amount of the fine ultimately imposed on an undertaking cannot exceed that limit. That provision therefore does not prohibit the Commission from referring, for the purposes of its calculation, to an intermediate amount in excess of that limit. Nor does it preclude intermediate calculations which take the gravity and the duration of the infringement from being carried out on an amount higher than that limit. Where it turns out, following the calculation, that the final amount of the fine must be reduced by the amount by which it exceeds the upper limit, the fact that certain factors such as the gravity and duration of the infringement are not actually reflected in the amount of the fine imposed is merely a consequence of the application of that upper limit to the final amount.

That upper limit seeks to prevent fines being imposed which it is foreseeable that the undertakings, owing to their size, as determined, albeit approximately and imperfectly, by their total turnover, will not be able to pay. That limit is therefore one which is uniformly applicable to all undertakings and arrived at according to the size of each of them and seeks to ensure that the fines are not excessive or disproportionate. That upper limit thus has a distinct and autonomous objective by comparison with the criteria of gravity and duration of the infringement. The only possible consequence of the upper limit is that the amount of the fine calculated on the basis of those criteria will be reduced to the maximum permitted level. Its application implies that the undertaking concerned will not pay the fine which in principle would be payable if it were assessed on the basis of those criteria.

(see paras 277-283, 323)

17. The Commission is not required, when determining the amount of the fine, to take into account the poor financial situation of an undertaking, since recognition of such an obligation would be tantamount to giving an unjustified competitive advantage to undertakings least well adapted to the market conditions.

(see para. 327)

18. The Commission has a discretion to find that information provided by an undertaking and capable, in principle, of coming within situations permitting a reduction in the fine under Section D, point 2, of the Leniency Notice does not necessarily have to induce it to grant the undertaking a reduction under that notice.

Furthermore, a reduction under the Leniency Notice can be justified only where the information provided and, more generally, the conduct of the undertaking concerned might be considered to demonstrate genuine cooperation on its part. It is clear from the very concept of cooperation, as described in the Leniency Notice, and in particular in the introduction and Section D, point 1, that it is only where the conduct of the undertaking concerned reveals such a spirit of cooperation that a reduction may be granted on the basis of that notice.

Accordingly, an undertaking which has provided incomplete and in part inaccurate information could not claim that its conduct had been of that type.

(see paras 393-397)

19. Provided that the Commission indicates expressly in the statement of objections that it will consider whether it is appropriate to impose fines on the undertakings concerned and that it sets out the principal elements of fact and of law that may give rise to a fine, such as the gravity and the duration of the alleged infringement and the fact that it has been committed ‘intentionally or negligently’, it fulfils its obligation to respect the undertakings’ right to be heard. In doing so, it provides them with the necessary elements to defend themselves not only against a finding of infringement but also against the fact of being fined.

However, to give indications of the level of the contemplated fines, when the undertakings have not been in a position to put forward their observations on the objections held against them, would be tantamount to anticipate inappropriately the Commission’s decision.

Nor, likewise, is the Commission required to indicate in the statement of objections the possibility that it might change its policy as regards the level of the amount of the fines, a possibility which depends on general competition policy considerations with no direct bearing on the particular circumstances of the cases in question.

(see paras 428, 434-435)

20. The question of the extent of the obligation to state reasons is a question of law reviewable by the Court on appeal, since a review of the legality of a decision carried out in that context must necessarily take into consideration the facts on which the Court of First Instance based itself in reaching its conclusion as to the adequacy or inadequacy of the statement of reasons.

(see para. 453)

21. The purpose of the obligation to state reasons is to enable the Court to review the legality of the decision and to provide the person concerned with sufficient information to make it possible to ascertain whether the decision is well founded or whether it is vitiated by a defect which may permit its legality to be contested.

The statement of reasons must therefore, in principle, be notified to the person concerned at the same time as the decision adversely affecting him and a failure to state the reasons cannot be remedied by the fact that the person concerned learns the reasons for the decision during the proceedings before the Court.

(see paras 462-463)

JUDGMENT OF THE COURT (Grand Chamber)

28 June 2005 ( )





Table of contents





I – Legal framework

The European Convention for the Protection of Human Rights and Fundamental Freedoms

Regulation No 17

The Guidelines

The Leniency Notice

II – Facts

III – The actions before the Court of First Instance and the judgments under appeal

IV – Forms of order sought by the parties to the appeal

V – The grounds for setting aside the judgments under appeal

VI – The appeals

A – The procedural pleas

1. The plea alleging breach of Article 68(1) of the Rules of Procedure of the Court of First Instance, in that the Court rejected the Henss/Isoplus group’s application for certain witnesses to be heard by way of a measure of investigation

2. The plea whereby ABB alleges a breach of Articles 44(1)(c) and 48(2) of the Rules of Procedure of the Court of First Instance owing to its refusal to consider a legal opinion annexed to the reply

B – The substantive pleas in law, relating to the imputability of the infringement

1. The plea in law alleging infringement of Article 85(1) of the Treaty owing to the fact that certain undertakings in the Henss/Isoplus group were taken into account and that the infringement was imputed to that group as an ‘undertaking’ within the meaning of that provision

2. The pleas in law alleging breach of Article 85(1) of the Treaty owing to the attribution to the Henss/Isoplus group and to Brugg of an infringement of the competition rules on account of their participation in a meeting having an anti-competitive object

C – Substantive pleas in law, relating to the determination of the amount of the fines

1. Pleas in law relating to breach of the principles of protection of legitimate expectations and non-retroactivity owing to the application of the Guidelines to the infringements in issue

(a) Pleas in law alleging breach of the principle of protection of legitimate expectations

(b) The pleas in law alleging breach of the principle of non-retroactivity

2. The pleas in law relating to the legality of the method of calculating the amount of the fines as laid down in the Guidelines or applied in the contested decision

(a) The pleas in law alleging breach of Article 15(2) of Regulation No 17 consisting in the determination in the contested decision of the amount of the fines according to the calculation method provided for in the Guidelines

(b) The pleas in law alleging breach of the principles of proportionality and equal treatment when determining, in the contested decision, the amount of the fines according to the calculation method provided for in the Guidelines

(c) The pleas in law whereby the Henss/Isoplus group alleges breach of the rights of the defence in the assessment of the aggravating circumstances

(d) The plea in law whereby LR A/S alleges failure to take attenuating circumstances into account

(e) The pleas whereby the Henss/Isoplus group and LR A/S allege failure to take into account, or to take sufficiently into account, their cooperation during the administrative procedure

D – Pleas in law relating to the right to be heard and the obligation to state reasons

1. Pleas in law alleging breach of the right to be heard

2. The pleas in law alleging breach of the obligation to state reasons in respect of the calculation of the fines

VII – Costs

(Appeal – Competition – District heating pipes (pre-insulated pipes) – Article 85(1) of the EC Treaty (now Article 81(1) EC) – Cartel – Boycott – Fines – Guidelines on the method of setting fines – Non-retroactivity – Legitimate expectations – Lawfulness – Leniency notice – Obligation to state reasons)

In Joined Cases C-189/02 P, C-202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P,

APPEALS under Article 49 of the EC Statute of the Court of Justice, lodged on 17 May 2002 in the first case, 29 May 2002 in the second, 3 June 2002 in the next four cases and 5 June 2002 in the last case,

Dansk Rørindustri A/S, established in Fredericia (Denmark), represented by K. Dyekjær-Hansen and K. Høegh, advokaterne (C-189/02 P),

Isoplus Fernwärmetechnik Vertriebsgesellschaft mbH, established in Rosenheim (Germany),

Isoplus Fernwärmetechnik Gesellschaft mbH, established in Hohenberg (Austria),

Isoplus Fernwärmetechnik GmbH, established in Sondershausen (Germany),

represented by P. Krömer, Rechtsanwalt, with an address for service in Luxembourg (C‑202/02 P),

KE KELIT Kunststoffwerk GmbH, established in Linz (Austria), represented by W. Löbl, Rechtsanwalt, with an address for service in Luxembourg (C‑205/02 P),

LR af 1998 A/S, formerly Løgstør Rør A/S, established in Løgstør (Denmark), represented by D. Waelbroeck, avocat, and H. Peytz, advokat (C-206/02 P),

Brugg Rohrsysteme GmbH, established in Wunstorf (Germany), represented by T. Jestaedt, H.-C. Salger and M. Sura, Rechtsanwälte, with an address for service in Luxembourg (C-207/02 P),

LR af 1998 (Deutschland) GmbH, formerly Lögstör Rör (Deutschland) GmbH, established in Fulda (Germany), represented by H.-J. Hellmann, Rechtsanwalt, with an address for service in Luxembourg (C‑208/02 P),

ABB Asea Brown Boveri Ltd, established in Zurich (Switzerland), represented by A. Weitbrecht, Rechtsanwalt, J. Ruiz Calzado, abogado, and M. Bay, avvocato, with an address for service in Luxembourg (C-213/02 P),

appellants,

the other parties to the proceedings being:

Commission of the European Communities, represented by W. Mölls, P. Oliver and H. Støvlbæk, acting as Agents, assisted by A. Böhlke, Rechtsanwalt (C‑189/02 P, C-202/02 P, C-205/02 P and C‑208/02 P), and R. Thompson QC (C‑206/02 P and C-213/02 P), with an address for service in Luxembourg,

defendant at first instance,

HFB Holding für Fernwärmetechnik Beteiligungsgesellschaft mbH & Co. KG,

HFB Holding für Fernwärmetechnik Beteiligungsgesellschaft mbH Verwaltungsgesellschaft,

represented by P. Krömer, Rechtsanwalt, with an address for service in Luxembourg (C-202/02 P),

applicants at first instance,

THE COURT (Grand Chamber),

composed of V. Skouris, President, P. Jann, C.W.A. Timmermans (Rapporteur) and R. Silva de Lapuerta, Presidents of Chamber, C. Gulmann, R. Schintgen, N. Colneric, S. von Bahr and J.N. Cunha Rodrigues, Judges,

Advocate General: A. Tizzano,

Registrar: H. von Holstein, Deputy Registrar, and M.-F. Contet, Principal Administrator,

having regard to the written procedure and further to the hearing on 16 March 2004,

after hearing the Opinion of the Advocate General delivered at the sitting on 8 July 2004,

gives the following

Judgment

1 The present appeals were brought by Dansk Rørindustri A/S (‘Dansk Rørindustri’) (C-189/02 P), Isoplus Fernwärmetechnik Vertriebsgesellschaft mbH, Isoplus Fernwärmetechnik Gesellschaft mbH and Isoplus Fernwärmetechnik GmbH (together ‘the Henss/Isoplus group’) (C-202/02 P), KE KELIT Kunststoffwerk GmbH (‘KE KELIT’) (C‑205/02 P), LR af 1998 A/S, formerly Løgstør Rør A/S (‘LR A/S’) (C-206/02 P), Brugg Rohrsysteme GmbH (‘Brugg’) (C-207/02 P), LR af 1998 (Deutschland) GmbH, formerly Lögstör Rör (Deutschland) GmbH (‘LR GmbH’) (C-208/02 P) and ABB Asea Brown Boveri Ltd (‘ABB’) (C-213/02 P).

2 By their appeals, those undertakings requested the Court to set aside the judgments of the Court of First Instance of the European Communities of 20 March 2002 concerning them, namely the judgments in Case T-21/99 Dansk Rørindustri v Commission [2002] ECR II-1681, Case T-9/99 HFB and Others v Commission [2002] ECR II-1487, Case T-17/99 KE KELIT v Commission [2002] ECR II-1647, Case T-23/99 LR AF 1998 v Commission [2002] ECR II-1705, Case T‑15/99 Brugg Rohrsysteme v Commission [2002] ECR II-1613, Case T-16/99 Lögstör Rör v Commission [2002] ECR II-1633 and Case T-31/99 ABB Asea Brown Boveri v Commission [2002] ECR II-1881 (hereinafter, for example, ‘the judgment in Dansk Rørindustri v Commission’, where the reference is to one of those judgments, or ‘the judgments under appeal’, where the reference is to all of the judgments).

3 By the judgments under appeal, the Court of First Instance, inter alia, reduced the fine imposed on ABB by Commission Decision 1999/60/EC of 21 October 1998 relating to a proceeding under Article 85 of the EC Treaty (IV/35.691/E-4 – Pre-insulated pipes) (OJ 1999 L 24, p. 1) (‘the contested decision’) and essentially dismissed the actions for annulment of that decision.

I – Legal framework

The European Convention for the Protection of Human Rights and Fundamental Freedoms

4 Article 7 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), entitled ‘No punishment without law’, provides in paragraph 1:

‘No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.’

Regulation No 17

5 Article 15 of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87) provides:

‘1. The Commission may by decision impose on undertakings or associations of undertakings fines of from 100 to 5 000 units of account where, intentionally or negligently:

…

(b) they supply incorrect information in response to a request made pursuant to Article 11(3) or (5) or to Article 12, or do not supply information within the time-limit fixed by a decision taken under Article 11(5);

…

2. The Commission may by decision impose on undertakings or associations of undertakings fines of from 1 000 to 1 000 000 units of account, or a sum in excess thereof but not exceeding 10% of the turnover in the preceding business year of each of the undertakings participating in the infringement where, either intentionally or negligently:

(a) they infringe Article 85(1) or Article 86 of the Treaty; …

…

In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’

The Guidelines

6 The Commission notice entitled ‘Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65 of the ECSC Treaty’, published in the Official Journal of the European Communities of 14 January 1998 (OJ 1998 C 9, p. 3; ‘the Guidelines’), states in the preamble:

‘The principles outlined here should ensure the transparency and impartiality of the Commission’s decisions, in the eyes of the undertakings and of the Court of Justice alike, while upholding the discretion which the Commission is granted under the relevant legislation to set fines within the limit of 10% of overall turnover. This discretion must, however, follow a coherent and non-discriminatory policy which is consistent with the objectives pursued in penalising infringements of the competition rules.

The new method of determining the amount of a fine will adhere to the following rules, which start from a basic amount that will be increased to take account of aggravating circumstances or reduced to take account of attenuating circumstances.’

The Leniency Notice

7 In its Notice on the non-imposition or reduction of fines in cartel cases, published in the Official Journal of the European Communities on 18 July 1996 (OJ 1996 C 207, p. 4; ‘the Leniency Notice’), a draft of which had been published on 19 December 1995 (OJ 1995 C 341, p. 13; ‘the draft Leniency Notice’), the Commission defined the conditions under which an undertaking which cooperates with the Commission during its investigation may be exempted from a fine or be granted a reduction in the amount of the fine which would otherwise have been imposed on it, as indicated in Section A, paragraph 3, of that notice.

8 Section A, paragraph 5, of the Leniency Notice provides:

‘Cooperation by an [undertaking] is only one of several factors which the Commission takes into account when fixing the amount of a fine. …’.

9 Section E, paragraph 3, of the Leniency Notice, on procedure, provides, in particular:

‘The Commission is aware that this notice will create legitimate expectations on which [undertakings] may rely when disclosing the existence of a cartel to the Commission.’

II – Facts

10 The facts giving rise to the actions before the Court of First Instance, as set out in the judgments under appeal, may for the purposes of the present judgment be summarised as follows.

11 The appellants are companies operating in the district heating sector. They produce, or market, pre-insulated pipes for that sector.

12 Following a complaint lodged on 18 January 1995 by the Swedish undertaking Powerpipe AB (‘Powerpipe’), the Commission and representatives of the Competition Authorities of the Member States concerned carried out, on 28 June 1995, certain investigations, on the basis of Article 14 of Regulation No 17, at the premises of 10 undertakings or associations in the district heating sector, including the applicants, or certain establishments belonging to them.

13 The Commission sent requests for information, pursuant to Article 11 of Regulation No 17, to most of the undertakings involved in the facts in issue.

14 On 20 March 1997, the Commission sent a statement of objections to certain of the applicants and to the other undertakings concerned, in accordance with Article 2(1) of Commission Regulation No 99/63/EEC of 25 July 1963 on the hearings provided for in Article 19(1) and (2) of Council Regulation No 17 (OJ, English Special Edition 1963-1969, p. 47).

15 A hearing of the undertakings concerned took place on 24 and 25 November 1997.

16 On 21 October 1998, the Commission adopted the contested decision, in which it found that various undertakings, and in particular certain of the appellants, had participated in a series of agreements and concerted practices within the meaning of Article 85(1) of the EC Treaty (now Article 81(1) EC) (‘the cartel’).

17 According to the decision, an agreement was concluded in late 1990 between the four Danish producers of district heating pipes on the principle of general cooperation on their national market. That agreement involved ABB IC Møller A/S, the Danish subsidiary of ABB, Dansk Rørindustri, also known as Starpipe, LR A/S and Tarco Energi A/S (‘Tarco’, the four companies being referred to collectively as ‘the Danish producers’).

18 One of the first measures was found to have consisted in coordinating in a price increase both on the Danish market and on export markets. In order to protect the Danish market, quotas were set, then implemented and monitored by a contact group composed of the senior sales staff of the undertakings concerned.

19 According to the contested decision, two German producers, the Henss/Isoplus group and Pan-Isovit GmbH (which subsequently became Lögstör Rör (Deutschland) GmbH and then LR GmbH), joined from autumn 1991 in the regular meetings with the Danish producers. In the context of those meetings, negotiations on dividing the German market took place. Those negotiations led, in August 1993, to agreements fixing sales quotas for each participating undertaking.

20 According to the decision, an agreement was reached between all those producers in 1994 to fix quotas for the whole of the European market. That Community-wide cartel was structured on two levels. The directors’ club, consisting of the chairmen or managing directors of the undertakings participating in the cartel, allocated quotas to each undertaking both on the market as a whole and on each of the national markets, in particular the Danish, German, Italian, Netherlands, Austrian, Finnish and Swedish markets. For certain national markets, a contact group was set up, composed of local sales managers, who were given the task of administering the agreements by assigning projects and coordinating the bids.

21 As regards the German market, the contested decision states that following a meeting on 18 August 1994 of the six main European producers, namely ABB, Dansk Rørindustri, the Henss/Isoplus group, LR A/S, LR GmbH and Tarco, and also Brugg, a first meeting of the contact group for Germany was held on 7 October 1994. The meetings of that group continued long after the Commission’s investigations, at the end of June 1995, although from that time they were held outside the European Union, in Zurich (Switzerland). The meetings in Zurich continued until 25 March 1996, or some days after certain of the undertakings received the requests for information sent by the Commission.

22 As an element of the cartel, the decision refers, in particular, to the adoption and implementation of concerted measures designed to eliminate the only large undertaking not forming part of the cartel, Powerpipe. The Commission explains that certain participants in the cartel recruited ‘key employees’ from that company and gave it to understand that it must withdraw from the German market.

23 When Powerpipe was awarded a large German project in March 1995, a meeting was held in Düsseldorf (Germany), attended by the seven undertakings which had met on 18 August 1994. It was decided at that meeting to establish a collective boycott of Powerpipe’s customers and suppliers. That boycott was then implemented.

24 In the contested decision, the Commission sets out the reasons why not only the express market-sharing arrangement concluded between the Danish producers at the end of 1990 but also the arrangements concluded after October 1991 may together be regarded as forming an agreement prohibited by Article 85(1) of the Treaty.

25 Furthermore, the Commission states that the cartel in Denmark and the Community-wide cartel are merely the expression of a single cartel which began in Denmark but which from the outset had the long-term objective of extending the participants’ control to the entire common market. According to the Commission, the continuous agreement between producers had a significant effect on trade between Member States.

26 In the judgments under appeal, the Court of First Instance observed that it was not disputed that in the contested decision the amount of the fines was calculated according to the method laid down in the Guidelines, as indicated in particular at paragraphs 222 and 275 of the judgment in LR AF 1998 v Commission.

27 It is common ground, moreover, that the contested decision makes no reference to the Guidelines, that the undertakings were not informed during the administrative procedure that the method set out in those Guidelines would be applied to them and that that method was not mentioned in the statement of objections or referred to at the hearings of the undertakings.

28 It should further be noted that, with the exception of the Henss/Isoplus group, all the undertakings concerned by the contested decision had their fines reduced by the Commission pursuant to the Leniency Notice. That reduction, in the form of a percentage applied to the amount of the fine which would be payable in principle, was granted in return for their cooperation during the administrative procedure. That cooperation consisted in having agreed not to dispute the essential elements of the infringements or in having contributed, to varying degrees, to establishing the proof of the infringements.

29 The contested decision contains the following provisions:

‘Article 1

ABB …, Brugg …, Dansk Rørindustri …, Henss/Isoplus Group, [KE KELIT], Oy KWH Tech AB, Løgstør Rør A/S, Pan-Isovit GmbH, Sigma Tecnologie di rivestimento S.r.l. and Tarco … have infringed Article 85(1) of the Treaty by participating, in the manner and to the extent set out in the reasoning, in a complex of agreements and concerted practices in the pre-insulate pipes sector which originated in about November/December 1990 among the four Danish producers, was subsequently extended to other national markets and brought in Pan-Isovit and Henss/Isoplus, and by late 1994 consisted of a comprehensive cartel covering the whole of the common market.

The duration of the infringements was as follows:

– in the case of ABB, Dansk Rør[industri], Løgstør, Pan-Isovit … from about November/December 1990 to at least March or April 1996,

– in the case of [the] Henss/Isoplus [Group], from about October 1991 up to the same time,

– in the case of Brugg from about August 1994 up to the same time,

– in the case of [KE KELIT] from about January 1995 up to the same time,

…

The principal characteristics of the infringement consisted in:

– dividing national markets and eventually the whole European market amongst themselves on the basis of quotas,

– allocating national markets to particular producers and arranging the withdrawal of other producers,

– agreeing prices for the product and for individual projects,

– allocating individual projects to designated producers and manipulating the bidding procedure for those projects in order to ensure that the assigned producer was awarded the contract in question,

– in order to protect the cartel from competition from the only substantial non-member, Powerpipe …, agreeing and taking concerted measures to hinder its commercial activity, damage its business or drive it out of the market altogether.

…

Article 3

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

(a) ABB …, a fine of ECU 70 000 000;

(b) Brugg …, a fine of ECU 925 000;

(c) Dansk Rørindustri …, a fine of ECU 1 475 000;

(d) [the] Henss/Isoplus [group], a fine of ECU 4 950 000, for which the following companies are jointly and severally liable:

– HFB Holding für Fernwärmetechnik Beteiligungsgesellschaft mbH & Co. KG,

– HFB Holding für Fernwärmetechnik Beteiligungsgesellschaft mbH Verwaltungsgesellschaft,

– Isoplus Fernwärmetechnik Vertriebsgesellschaft mbH (formerly Dipl.-Kfm Walter Henss GmbH Rosenheim),

– Isoplus Fernwärmetechnik GmbH, Sondershausen,

– Isoplus Fernwärmetechnik Ges.mbH – stille Gesellschaft,

– Isoplus Fernwärmetechnik Ges mbH, Hohenberg;

(e) [KE KELIT], a fine of ECU 360 000;

…

(g) Løgstør Rør A/S, a fine of ECU 8 900 000;

(h) Pan-Isovit GmbH, a fine of ECU 1 500 000;

…’

III – The actions before the Court of First Instance and the judgments under appeal

30 By applications lodged at the Registry of the Court of First Instance, eight of the 10 undertakings fined by the contested decision, including the seven present appellants, brought actions for annulment of that decision in whole or in part and, in the alternative, for annulment of or a reduction in the fine imposed on them.

31 By the judgment in Dansk Rørindustri v Commission, the Court of First Instance:

– annulled Article 1 of the contested decision in that it found that Dansk Rørindustri had participated in the infringement between April and August 1994;

– dismissed the remainder of the application;

– ordered Dansk Rørindustri to bear its own costs and to pay 90% of those incurred by the Commission;

− ordered the Commission to bear 10% of its own costs.

32 By the judgment in HFB and Others v Commission, the Court of First Instance:

– annulled Articles 3(d) and 5(d) of the contested decision as regards HFB Holding für Fernwärmetechnik Beteiligungsgesellschaft mbH & Co. KG and HFB Holding für Fernwärmetechnik Beteiligungsgesellschaft mbH Verwaltungsgesellschaft;

– dismissed the remainder of the application;

– ordered the companies in the group to bear their own costs, including those relating to the interlocutory proceedings, and to pay 80% of the costs incurred by the Commission, including those relating to the interlocutory proceedings;

− ordered the Commission to bear 20% of its own costs, including those relating to the interlocutory proceedings.

33 By the judgments in KE KELIT v Commission, LR AF 1998 v Commission, Brugg Rohrsysteme v Commission and Lögstör Rör v Commission, the Court of First Instance:

– dismissed the actions;

– ordered the applicants to pay the costs.

34 By the judgment in ABB Asea Brown Boveri v Commission, the Court of First Instance:

– ordered that the fine imposed on ABB in Article 3 of the contested decision be reduced to EUR 65 million;

– dismissed the remainder of the application;

– ordered the applicant to bear its own costs and pay 90% of the costs incurred by the Commission;

− ordered the Commission to bear 10% of its own costs.

IV – Forms of order sought by the parties to the appeal

35 Dansk Rørindustri claims that the Court should:

– reduce the amount of the fine imposed on it by the contested decision;

– in the alternative, set aside the judgment in Dansk Rørindustri v Commission and refer the case back to the Court of First Instance for a fresh adjudication on the amount of the fine;

– order the Commission to pay the costs incurred by the appellant in the proceedings before the Court of First Instance and before the Court of Justice.

36 The Henss/Isoplus Group claims that the Court should:

– set aside the judgment in HFB and Others v Commission, with the exception of the first paragraph of the operative part, and annul the contested decision;

– in the alternative, set aside the judgment under appeal with the exception of the first paragraph of the operative part and refer the case back to the Court of First Instance so that the latter may complete the proceedings and give judgment afresh;

– further in the alternative, set aside the judgment under appeal in the second paragraph of the operative part and reduce the amount of the fine imposed on the companies in the group by the contested decision;

– order the Commission to pay the costs incurred by those companies in the proceedings before the Court of First Instance and before the Court of Justice.

37 KE KELIT claims that the Court should:

– set aside the judgment in KE KELIT v Commission;

– in the alternative, set aside that judgment and refer the case back to the Court of First Instance for reconsideration;

– further in the alternative, reduce the amount of the fine imposed on it by the contested decision;

– in any event, order the Commission to pay the costs incurred by the appellant in the proceedings before the Court of First Instance and before the Court of Justice.

38 LR A/S claims that the Court should:

– set aside the judgment in LR AF 1998 v Commission;

– annul the contested decision imposing a fine on the appellant or, at least, substantially reduce the amount of the fine, or, in the alternative, refer the case back to the Court of First Instance;

– declare the Guidelines illegal pursuant to Article 184 of the EC Treaty (now Article 241 EC);

– order the Commission to pay the costs.

39 Brugg claims that the Court should:

– set aside the judgment in Brugg Rohrsysteme v Commission and annul Articles 1 and 3 of the contested decision;

– in the alternative, reduce the amount of the fine imposed on Brugg by that decision;

– in any event, order the Commission to pay the costs incurred by the appellant in the proceedings before the Court of First Instance and before the Court of Justice.

40 LR GmbH claims that the Court should:

– set aside the judgment in Lögstör Rör v Commission and make a definitive determination as follows: annul the contested decision in so far as it concerns Brugg and, on a subsidiary basis, reduce the amount of the fine and order the Commission to pay the costs;

– very much in the alternative, set aside the judgment under appeal and refer the case back to the Court of First Instance for a determination.

41 ABB claims that the Court should:

– set aside paragraphs 2 and 3 of the operative part of the judgment in ABB Asea Brown Boveri v Commission;

– annul Article 3 of the contested decision in so far as it concerns ABB;

– further reduce the amount of the fine imposed on it by that decision;

– in the alternative, refer the case back to the Court of First Instance for a determination in accordance with the judgment of the Court of Justice;

– order the Commission to pay all the costs of the proceedings, including those incurred by ABB in connection with the appeal.

42 The Commission contends, in all of the present cases, that the Court should:

– uphold the judgments under appeal;

– order the applicants to pay the costs of the proceedings.

V – The grounds for setting aside the judgments under appeal

43 Dansk Rørindustri puts forward three pleas in law:

– breach of Regulation No 17 and of the principles of proportionality and equal treatment, in that the Court of First Instance did not condemn the fact that the amount of the fine imposed on it is disproportionate to the infringement;

– breach of Regulation No 17 and of the principles of protection of legitimate expectations and non-retroactivity, in that the Court of First Instance did not condemn the fact that the fine imposed on the appellant was determined on the basis of the principles of the Guidelines, when they are appreciably different from the principles in force at the time of the infringements, of the statement of objections and of the hearing;

– breach of the rights of defence, in that the Court of First Instance did not condemn the fact that Dansk Rørindustri was not given the opportunity during the administrative procedure to comment on the changes made by the Guidelines to the Commission’s practice in determining the amount of the fine for infringement of the competition rules.

44 The Henss/Isoplus Group puts forward seven pleas in law, some of which contain a number of parts:

– unlawfulness of the Guidelines owing to:

– the Commission’s lack of competence;

– breach of the principle of equal treatment;

– breach of the rights of defence;

– breach of the principle of non-retroactivity;

– breach of the right to be heard in respect of the application of the Guidelines when setting the amount of the fines;

– breach of Article 15(2) of Regulation No 17 when setting the amount of the fines, owing to:

– failure to apply the Leniency Notice to the companies concerned;

– breach of the rights of defence as a fundamental right when assessing aggravating circumstances;

– breach of Article 85(1) of the Treaty owing to the consequences drawn from the participation of the companies concerned in a meeting having an anti-competitive object;

– breach of Article 85(1) of the Treaty on account of the fact that the companies concerned were deemed to constitute the Henss/Isoplus group and the infringement was imputed to that group as an ‘undertaking’;

– procedural defect owing to the Court of First Instance’s refusal to order the hearing of witnesses as a measure of investigation, as requested by the applicant;

– procedural defect owing to contradictions between the judgment under appeal and the case-file.

45 KE KELIT puts forward five pleas in law:

– breach of the principles of equal treatment and protection of legitimate expectations owing to the determination of the fine according to the Guidelines;

– breach of the principle of equal treatment as regards the duration of the infringement;

– breach of the principle of non-retroactivity;

– breach of the rights of the defence;

– breach of the obligation to state reasons.

46 LR A/S puts forward four pleas in law:

– breach of the principles of proportionality and equal treatment and also of Regulation No 17, owing to the excessive and discriminatory nature of the fine and, in the alternative, unlawfulness of the Guidelines;

– breach of the principles of protection of legitimate expectations and of non-retroactivity and also of Article 190 of the EC Treaty (now Article 253 EC), in that the Commission wrongly departed from its previous practice in relation to cooperation and retroactively applied the Guidelines and also a stricter code on cooperation and, at the very least, failure to state the reasons for such retroactive application;

– failure to take sufficient account of the attenuating circumstances applicable to the appellant;

– failure to take sufficient account of the appellant’s cooperation.

47 Brugg puts forward five pleas in law:

– breach of the principles of non-retroactivity, protection of legitimate expectations and good administration, owing to the application of the Guidelines in determining the amount of the fine;

– breach of the principle of protection of legitimate expectations owing to the change in the method of calculating the fine after the appellant had cooperated;

– breach of the rights of defence owing to the application of the Guidelines without the appellant having been heard;

– breach of the principle of equal treatment owing to the non-reduction of the basic amount used in setting the appellant’s fine;

– errors in the application of Article 85(1) of the Treaty as regards the appellant’s participation in the boycott of Powerpipe.

48 LR GmbH puts forward four pleas in law:

– breach of the principles of non-retroactivity and protection of legitimate expectations owing to the retroactive application of the Guidelines;

– breach of Article 15(2) of Regulation No 17 and of the principle of the lawfulness of administrative action owing to the Commission’s failure, in the exercise of its discretion, to observe the limits on the use of that power laid down in that provision and also misuse of that power in applying that provision in the present case, owing to breach of the principles of proportionality and equal treatment, to the appellant’s detriment;

– breach of the obligation to state reasons referred to in Article 190 of the Treaty, in that the contested decision contains no reasoning in relation to the retroactive application of the Guidelines;

– breach of the rights of defence owing to the Commission’s failure to respect the appellant’s right to be heard in relation to the retroactive application of the Guidelines.

49 ABB puts forward three pleas in law:

– breach of Articles 44(1)(c) and 48(2) of the Rules of Procedure of the Court of First Instance as regards the Court’s decision to dismiss as inadmissible a legal opinion annexed to the reply;

– breach of the principle of protection of legitimate expectations in that, particularly in the light of the Leniency Notice, the applicant was entitled to rely on the Commission’s established practice in calculating the amount of the fine, so that the Commission could not arbitrarily depart from such a practice;

– breach of Article 15(2) of Regulation No 17, in that the Court of First Instance approved the Commission’s determination of the gravity of the infringement committed by ABB without taking account of its turnover on the relevant market.

VI – The appeals

50 The parties and the Advocate General having been heard on that point, it is appropriate, on account of the connection between them, to join the present cases for the purposes of the judgment, in accordance with Article 43 of the Rules of Procedure of the Court.

A – The procedural pleas

51 It is appropriate first of all to deal with the pleas whereby the Henss/Isoplus group and ABB allege a number of breaches of the Rules of Procedure of the Court of First Instance.

1. The plea alleging breach of Article 68(1) of the Rules of Procedure of the Court of First Instance, in that the Court rejected the Henss/Isoplus group’s application for certain witnesses to be heard by way of a measure of investigation

52 By its sixth plea, the Henss/Isoplus group complains that the Court of First Instance, at paragraphs 36 to 38 of the judgment in HFB and Others v Commission, dismissed its application to order that Mr Boysen, Mr B. Hansen, Mr N. Hansen, Mr Hybschmann, Mr Jespersen and Mr Volandt be heard as witnesses, in accordance with Article 68(1) of the Rules of Procedure of the Court of First Instance. It submits that the substance of those paragraphs is vitiated by a procedural defect.

53 Contrary to what is stated at paragraph 37 of that judgment, the application for the six persons in question to be heard did state the facts in respect of which proof by witnesses should be ordered. At paragraph 72 of the application which the Henss/Isoplus Group lodged before the Court of First Instance, it was stated that the application that witnesses be heard had been made in order to prove that the undertakings of the group had not participated in the cartel before October 1994.

54 That plea must be rejected.

55 It follows from paragraph 34 of the judgment under appeal that the Court of First Instance did indeed take note of the fact that a hearing had been requested ‘in order to prove that neither the applicants nor the Henss/Isoplus group participated in an illegal practice or measure or in any other similar conduct for the purposes of Article 85(1) of the … Treaty before October 1994’.

56 However, the Court of First Instance observed at paragraph 36 of that judgment that, according to the final subparagraph of Article 68(1) of its Rules of Procedure, an application by a party for the examination of a witness is to state precisely about what facts and for what reasons the witness should be examined.

57 At the following paragraph of that judgment, the Court noted that, particularly at paragraphs 20, 40, 50, 66 to 71, 94, 96, 125 and 142 of the application, there were references to certain persons who could act as witnesses in relation to the facts set out in each of the paragraphs in question but that the names of the six persons whom the Henss/Isoplus group expressly requested be called as witnesses before the Court of First Instance were not to be found in those paragraphs. The Court of First Instance therefore found that, for those six persons, the Henss/Isoplus group had failed to state the facts in respect of which proof by witnesses should be ordered.

58 The Court of First Instance concluded, at paragraph 38 of the judgment, that without there being any need to consider whether it was appropriate to hear the six persons in question, the application for witnesses to be heard should not be granted.

59 The Court of First Instance was faced, first, with a significant body of precise facts in respect of which the Henss/Isoplus group had offered to provide proof in its application by having a series of persons called for examination and, second, with a formal request that six different persons be called as witnesses pursuant to Article 68(1) of the Rules of Procedure of the Court of First Instance, also formulated in that application, in order to prove generally that the group undertakings concerned had not participated in the agreement before October 1994, although the application did not refer to the precise facts in respect of which proof was being offered.

60 Faced with the manifest lack of clarity on that point of what was a voluminous application, the Court of First Instance correctly held that the request that the six persons concerned be examined did not indicate precisely the facts in respect of which those persons should be heard as witnesses.

61 The Henss/Isoplus group further submits that the examination of persons other than those six persons should be taken not as a mere offer of proof but as a request that they be examined as witnesses, within the meaning of Article 68(1) of the Rules of Procedure of the Court of First Instance.

62 By that complaint, the Henss/Isoplus group therefore criticises the Court of First Instance for having distorted the scope of its application on that point.

63 That complaint is unfounded.

64 It follows from that application, and in particular from paragraph 145, to which the appellant makes specific reference, moreover, that the appellant itself drew a distinction between the evidence offered within the meaning of Article 44(1) of the Rules of Procedure of the Court of First Instance and its formal request for the measure of investigation consisting in the examination of six other persons pursuant to Article 68(1) of the Rules of Procedure. The appellant has thus failed to demonstrate any distortion on this point.

65 In the alternative, the Henss/Isoplus group maintains that, even on the assumption that its request for the persons concerned to be examined as witnesses was not submitted in accordance with Article 68(1) of the Rules of Procedure, the Court of First Instance should in any event have ordered their examination of its own motion.

66 It submits that, since fines imposed under competition law must be classified as ‘criminal’ for the purposes of Article 6 of the ECHR, the Court of First Instance is in any event required, pursuant to paragraph 3 of that provision and to the general principle of Community law of the right to a fair hearing, to summon and hear the witnesses for the defence designated by name by the defendant.

67 In that regard, it should be borne in mind that the Court of First Instance is the sole judge of whether the information available concerning the cases before it needs to be supplemented (see, in particular, Joined Cases C-57/00 P and C-61/00 P Freistaat Sachsen and Others v Commission [2003] ECR I-9975, paragraph 47, and Case C-136/02 P Mag Instrument v OHIM [2004] ECR I-0000, paragraph 76).

68 Furthermore, as the Court has held in another case concerning competition law, even where a request for the examination of witnesses, made in the application, states precisely about what facts and for what reasons the witness or witnesses should be examined, it falls to the Court of First Instance to assess the relevance of the application to the subject-matter of the dispute and the need to examine the witnesses named (Case C-185/95 P Baustahlgewebe v Commission [1998] ECR I-8417, paragraph 70).

69 The existence of a discretion in that regard on the part of the Court of First Instance cannot be challenged on the basis, relied on by the Henss/Isoplus group, of the general principle of Community law inspired by Article 6(1) of the ECHR, which provides that everyone is entitled to a fair hearing, and, more particularly, the principle laid down in paragraph 3(d) of that article, which provides that everyone charged with a criminal offence has the right to obtain the attendance and examination of witnesses on his behalf on the same conditions as witnesses against him, a principle that constitutes a particular aspect of the right to a fair hearing.

70 It follows from the case-law of the European Court of Human Rights that that provision does not confer on the accused an absolute right to obtain the attendance of witnesses before a court and that it is in principle for the national court to determine whether it is necessary or appropriate to call a witness (see, among other authorities, Pisano v Italy, judgment of 27 July 2000, unreported, § 21; S.N. v Sweden, judgment of 2 July 2002, Reports of Judgments and Decisions, 2002-V, § 43; and Destrehem v France, judgment of 18 May 2004, unreported, § 39).

71 According to that case-law, Article 6(3) of the ECHR does not require that every witness be called but is aimed at full equality of arms, ensuring that the procedure in issue, considered in its entirety, gave the accused an adequate and proper opportunity to challenge the suspicions concerning him (see, in particular, Pisano v Italy, § 21).

72 In the present case, it is common ground, as may be seen from paragraph 21 of the judgment in HFB and Others v Commission, that the Court of First Instance, by way of a measure of organisation of procedure, requested the Henss/Isoplus group to answer certain written questions and to produce certain documents and that the parties complied with those requests. The Court of First Instance cannot therefore be accused of having been in breach of its duty to investigate the facts (see, to that effect, Baustahlgewebe v Commission, paragraph 76).

73 At paragraphs 137 to 181 of that judgment, moreover, the Court of First Instance examined a large number of documents on the file and concluded that the Commission was entitled to find that the Henss/Isoplus group had participated in a cartel from October 1991 until October 1994.

74 It follows that the appellant had ample opportunity to demonstrate that the undertakings belonging to it had not participated in the cartel before October 1994.

75 Contrary to what the Henss/Isoplus group contends, therefore, the Court of First Instance was not required to order of its own motion the examination of the witnesses for the defence concerned.

76 In the light of the foregoing, the plea must be rejected.

2. The plea whereby ABB alleges a breach of Articles 44(1)(c) and 48(2) of the Rules of Procedure of the Court of First Instance owing to its refusal to consider a legal opinion annexed to the reply

77 By its first plea in law, ABB maintains that, in holding at paragraphs 112 to 114 of the judgment in ABB Asea Brown Boveri v Commission that the legal opinion of Professor J. Schwarze (‘the legal opinion’) annexed to the reply which it lodged at the Court of First Instance could not be taken into consideration in whole or in part, the Court of First Instance infringed Articles 44(1)(c) and 48(2) of the Rules of Procedure.

78 By the first part of this plea, ABB criticises the Court of First Instance for having erred in law in finding, at paragraph 112 of the judgment under appeal, that, in accordance with Article 48(2) of the Rules of Procedure of the Court of First Instance, the legal opinion was inadmissible since it contained certain general principles which supported pleas in law that had not been raised in the application before the Court of First Instance.

79 Since paragraphs 115 to 136 of the judgment deal only with the principle of protection of legitimate expectations, the Court of First Instance relied in that regard on the assumption that the plea was confined to that principle, so that any other principle of administrative law analysed in the legal opinion constitutes a new plea and is therefore inadmissible within the meaning of Article 48(2) of the Rules of Procedure of the Court of First Instance.

80 However, ABB maintains that the legal opinion, in referring in particular to certain principles of administrative law, develops only arguments which clarify the precise legal basis and in particular the scope of the principle of protection of legitimate expectations. Those arguments seek essentially to demonstrate that the Commission’s discretion in fixing the amount of the fine was limited in the circumstances of the present cases.

81 The appellant submits that the legal opinion therefore contains only arguments set out in support of a plea already raised in the application before the Court of First Instance, and no new plea in law.

82 In that regard, it must be held that the legal opinion, which amounts to 101 paragraphs in all, examines, inter alia, six principles of Community law, namely the principle of protection of legitimate expectations, the principle that the administration is bound by its own acts, the principle of estoppel, the principle of fair administration, the principle venire contra factum proprium and the right to a fair hearing, and indeed the protection of the rights of the defence.

83 It follows from paragraph 19 of the legal opinion that those principles are examined for the purposes of establishing whether Community law includes rules that limit the Commission’s discretion when imposing fines in the field of competition law and that preclude it from altering its established practice in determining the amount of fines and from applying its new practice in a case such as this.

84 Paragraph 43 of the legal opinion states that, from various aspects and possibly to varying degrees, none of those principles may restrict the Commission’s discretion.

85 At paragraphs 44 to 96 of the legal opinion, each of those principles is examined individually and applied to the present case.

86 At paragraphs 97 to 101 of the opinion, the conclusion is drawn that in the present case the Commission’s discretion was in fact limited in that it could not depart from its previous practice.

87 At paragraph 98 of the opinion, it is stated that in so far as those principles are binding, they are similar.

88 It follows from the structure and the content of the legal opinion that, although there are certain points of correspondence between the principles of administrative law set out in that opinion and the pleas in law raised in the application, the object of the opinion is clearly not limited to an account of the arguments clarifying or amplifying the plea relating to protection of legitimate expectations, as ABB contends, but consists in developing a number of autonomous principles intended to demonstrate that in the present case the Commission could not depart from its previous practice in determining the amount of fines. In that regard, it must be held that the principle of protection of legitimate expectations constitutes only one of the six principles developed for that purpose.

89 Accordingly, as the Commission maintained, it follows from the wording of the legal opinion that the latter sought to refer for the first time to certain principles not raised in the application before the Court of First Instance.

90 In the light of the foregoing, the first part of the first plea in law put forward by ABB must be rejected.

91 By the second part of its first plea in law, ABB maintains that the Court of First Instance erred in law in holding, at paragraph 113 of the judgment in ABB Asea Brown Boveri v Commission, that the legal opinion could not be taken into consideration in whole or in part, since under Article 4(1)(c) of the Rules of Procedure of the Court of First Instance, the application must state the subject-matter of the proceedings and a summary of the pleas in law on which the application is based.

92 ABB submits that the Court of First Instance found no defect in the application or in the reply that could justify the application of that provision. Consequently, it was wrong to hold that ABB sought to compensate for an inadequate plea in law by making a general reference to the legal opinion. Nor was there any basis for relying by analogy on that provision of the Rules of Procedure of the Court of First Instance, as the Court of First Instance did at paragraph 113 of the judgment under appeal.

93 In that regard, it is necessary to retrace the reasoning followed by the Court of First Instance at paragraph 113 of the judgment in ABB Asea Brown Boveri v Commission.

94 The Court of First Instance pointed out that it follows from Article 44(1)(c) of the Rules of Procedure that the essential facts and law on which an application is based must be apparent from the text of the application itself, even if only stated briefly, and that a reference in the application to such elements in an annex to the application is therefore not sufficient.

95 The Court of First Instance referred, in particular, to the settled case-law of the Court of Justice on the Commission’s obligation, in any application lodged under Article 226 EC, to state the precise facts on which the Court of Justice is to adjudicate and also, at least briefly, the elements of law and of fact on which those complaints are based.

96 In that regard, it follows from that case-law that that obligation is not satisfied if the Commission’s complaints are set out in the application only in the form of a reference to the grounds stated in the formal letter and in the reasoned opinion, or again in the part of the application devoted to the legal background (see, to that effect, inter alia, Case C-52/90 Commission v Denmark [1992] ECR I-2187, paragraphs 17 and 18; Case C-375/95 Commission v Greece [1997] ECR I-5981, paragraph 35; and Case C-202/99 Commission v Italy [2001] ECR I-9319, paragraphs 20 and 21).

97 The Court of First Instance also observed that it is not for it to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and ancillary purpose.

98 In the light of those elements, the Court of First Instance, since part of the legal opinion in question could not be taken into consideration, concluded that it was not for it to seek and identify in that opinion the passages that might be taken into account qua annexes supporting and supplementing ABB’s pleadings on specific points.

99 Regard being had to the grounds preceding it, that conclusion must be taken to mean that the purely probative and instrumental purpose of the annexes means that, in so far as the legal opinion contains, in addition to the new, and therefore inadmissible, pleas in law, elements of law on which certain pleas expressed in the application are based, those elements must be set out in the actual body of the reply to which that opinion is annexed or, at the very lest, be sufficiently identified in that reply.

100 In adopting those criteria and in holding that they were not satisfied in the present case, the Court of First Instance did not err in law.

101 Nor did the Court of First Instance distort the scope of the reply lodged before it. Paragraph 31 of the reply merely makes a general reference to the legal opinion. Furthermore, the fact, relied on by ABB, that in certain paragraphs of the reply references are made, in the form of footnotes, to passages in the legal opinion is not capable of calling in question the conclusion at which the Court of First Instance arrived on that point.

102 In those circumstances, the plea must be rejected.

B – The substantive pleas in law, relating to the imputability of the infringement

103 It is appropriate to examine, second, the substantive pleas in law raised by the Henss/Isoplus group and by Brugg, whereby the appellants challenge the judgments concerning them on certain points relating to the imputability of the infringement as found against them in the contested decision and confirmed by the Court of First Instance.

1. The plea in law alleging infringement of Article 85(1) of the Treaty owing to the fact that certain undertakings in the Henss/Isoplus group were taken into account and that the infringement was imputed to that group as an ‘undertaking’ within the meaning of that provision

104 By its fifth plea in law, the Henss/Isoplus group criticises the Court of First Instance for having held, at paragraphs 54 to 68 of the judgment in HFB and Others v Commission, that the Commission was correct in the contested decision to take into account certain undertakings in the Henss/Isoplus group and to impute the infringement to that group.

105 The appellant maintains, first of all, that at paragraph 66 of the judgment the Court of First Instance erred in law when it rejected its argument that an undertaking for the purposes of the Treaty provisions on competition must necessarily have legal personality.

106 That, in the appellant’s submission, is not the case for either the ‘Henss/Isoplus’ group, on the assumption that it constitutes an economic entity, or Mr Henss as the person who, according to the judgment, controlled the various undertakings belonging to the group.

107 The Henss/Isoplus group claims that its argument finds support in Article 1 of Protocol 22 to the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3), which provides that ‘undertaking’ for the purposes of the Treaty provisions on competition designates any entity (‘Rechtssubjekt’ in the German version) carrying out activities of a commercial or economic nature.

108 That is borne out, in particular, by the case-law of the Court of Justice on the provisions of the ECSC Treaty on competition (Joined Cases 17/61 and 20/61 Klöckner-Werke and Hoesch v High Authority [1962] ECR 325 and Case 19/61 Mannesmann v High Authority [1962] ECR 357).

109 In other judgments, notably those cited by the Court of First Instance at paragraph 66 of the judgment under appeal, the Court of Justice did not yet definitively settle the question of principle as to whether the classification of undertaking for the purposes of competition law requires in all circumstances that the entity concerned must have legal personality (Case 48/69 ICI v Commission [1972] ECR 619; Case 6/72 Europemballage and Continental Can v Commission [1973] ECR 215; Case 170/83 Hydrotherm [1984] ECR 2999; and Case C-41/90 Höfner and Elser [1991] ECR I-1979).

110 While it is true, in the Henss/Isoplus group’s submission, that the infringement committed by an undertaking having its own legal personality may be imputed to its parent company, a holding company, where the latter controls it and they therefore form the same economic unit (see, in particular, ICI v Commission, cited above, and also Europemballage and Continental Can v Commission, cited above), such imputation none the less requires that the controlling entity itself must have legal personality.

111 A natural person, such as Mr Henss in the present case, cannot, in his sole capacity as a member or shareholder, be classified as an undertaking within the meaning of Article 85(1) of the Treaty. Accordingly, that case-law is not relevant in this case.

112 In that regard, it should be observed that, according to settled case-law, in the field of competition law, the concept of an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed (see, in particular, Case C-309/99 Wouters and Others [2002] ECR I-1577, paragraph 46 and the case-law cited).

113 It follows clearly from that case-law that the concept of an undertaking for the purposes of the Treaty provisions on competition does not require that the economic unit concerned have legal personality. Nor, as the Henss/Isoplus group maintains, is that interpretation confined to the particular cases in which the Court of Justice gave judgment, such as the judgments in Hydrotherm or Höfner and Elser; it is an interpretation of general application.

114 The argument based on the German version of Article 1 of Protocol 22 to the Agreement on the European Economic Area and, in particular, the concept of a ‘subject of law’ (‘Rechtssubjekt’) in that article does not allow that interpretation to be called into question.

115 The concept of a ‘subject of law’ does not necessarily exclude natural persons. In any event, such a concept is lacking in all the other language versions, which contain only the concept of ‘entity’.

116 The Henss/Isoplus group contends, next, that undertakings which are not linked either from the point of view of capital or from the aspect of company law and which therefore are not dependent on a controlling undertaking cannot become a group merely because of the existence of possible links between natural persons who are not undertakings.

117 In that regard, it is settled case-law that the anti-competitive conduct of an undertaking can be attributed to another undertaking where it has not decided independently upon its own conduct on the market but carried out, in all material respects, the instructions given to it by that other undertaking, having regard in particular to the economic and legal links between them (see, in particular, Case C-294/98 P Metsä-Serla and Others v Commission [2000] ECR I-10065, paragraph 27).

118 It is true that the mere fact that the share capital of two separate commercial companies is held by the same person or the same family is insufficient, in itself, to establish that those companies are a single economic unit with the result that, under Community competition law, the actions of one company can be attributed to the other and that one can be held liable to pay the fine for the other (see Case C-196/99 P Aristrain v Commission [2003] ECR I-11005, paragraph 99).

119 However, in the present case the Court of First Instance did not infer the existence of the economic unit constituting the Henss/Isoplus group solely from the fact that the undertakings concerned were controlled from the viewpoint of their share capital by a single person, in this case Mr Henss.

120 It follows from paragraphs 56 to 64 of the judgment in HFB and Others v Commission that the Court of First Instance reached the conclusion that that economic unit existed on the basis of a series of elements which established that Mr Henss controlled the companies concerned, including, in addition to the fact that he or his wife held, directly or indirectly, all or virtually all the shares, the fact that Mr Henss held key functions within the management boards of those companies and also the fact that he represented the various undertakings at meetings of the directors’ club, as indicated at paragraph 20 of this judgment, and that the undertakings were allocated a single quota by the cartel.

121 The Henss/Isoplus group maintains, finally, and in the alternative, that the various undertakings grouped together by the Commission do not belong to the same economic entity since they are not deprived of autonomy and do not depend on outside instructions. By that argument, the appellant maintains that the undertakings concerned were not, in one way or another, under the de facto control of Mr Henss.

122 In that regard, it should be observed that considerations such as those set out by the Court of First Instance at paragraphs 56 to 64 of the judgment in HFB and Others v Commission, which seek to establish the existence of an economic unit, are based on a series of findings of fact which are not amenable to discussion on appeal, unless the relevant facts or evidence adduced before the Court of First Instance have been distorted or the material inaccuracy of the findings of the Court of First Instance is apparent from the documents placed on the case-file (see, to that effect, in particular, Metsä-Serla and Others v Commission, paragraph 37, and Mag Instrument v OHIM, paragraphs 39 and 76).

123 As regards paragraph 57 of the judgment, the Court of First Instance did not hold, as the Henss/Isoplus group maintains, that during the reference period, i.e. the infringement period established by the Commission, namely October 1991 to March/April 1996, Mr Henss was not only the director of but also a shareholder in Isoplus Fernwärmetechnik Vertriebsgesellschaft mbH. On that point, there is no inconsistency with the case-file, so that the procedural defect alleged in that regard by the appellant, as part of the seventh plea in law, must be rejected.

124 As regards paragraph 58 of that judgment, the Court of First Instance did not hold what the appellant maintains, namely that during the reference period Mr Henss held the majority of the shares in Isoplus Fernwärmetechnik Gesellschaft mbH through a trustee but never acted as director.

125 It must be held, therefore, that the specific criticism of paragraphs 57 and 58 does not establish any distortion of the relevant facts or of evidence on the part of the Court of First Instance or reveal the existence of a material inaccuracy in the findings of that court emerging from the documents placed on the case-file.

126 As regards Isoplus Fernwärmetechnik GmbH, the Henss/Isoplus group maintains that Mr Henss and Mr and Mrs Papsdorf were never directors and that the shares in that company, moreover, were held during the reference period on behalf of a third party by Isoplus Fernwärmetechnik Gesellschaft mbH in its own name, on behalf of a third party by Mr and Mrs Papsdorf through that company, acting as trustee, and for a third party by other natural persons, also through that trustee.

127 Those facts are the same as the facts found by the Court of First Instance at paragraph 59 of the judgment under appeal, so that a distortion of the relevant facts or of an item of evidence is not established on that point either. Nor is any material inaccuracy in the findings of the Court of First Instance apparent from the documents placed on the case-file.

128 The Henss/Isoplus group further maintains that it follows from those facts that Isoplus Fernwärmetechnik GmbH was outside the influence of both Mr Henss and Mr and Mrs Papsdorf.

129 That complaint is inadmissible, since it raises the question as to whether the conditions of the existence of an economic unit were satisfied in this case. Such an examination, which is based on an appraisal of the facts, cannot as such be challenged in an appeal (see Metsä-Serla and Others v Commission, paragraph 30).

130 In those circumstances, the Court of First Instance cannot be criticised for having held, following an overall and, in principle, sovereign assessment of a range of facts, that the various undertakings constituting the Henss/Isoplus group must, for that purpose, be regarded as belonging to a single economic entity.

131 This plea must therefore be rejected.

2. The pleas in law alleging breach of Article 85(1) of the Treaty owing to the attribution to the Henss/Isoplus group and to Brugg of an infringement of the competition rules on account of their participation in a meeting having an anti-competitive object

132 By their fourth and fifth pleas in law respectively, the Henss/Isoplus group and Brugg each criticise the Court of First Instance for having found, at paragraphs 223 to 227 of the judgment in HFB and Others v Commission and paragraphs 52 to 66 of the judgment in BruggRohrsysteme v Commission, that the Commission was correct in the contested decision to impute the infringement or part thereof to them on account of their participation in meetings having an anti-competitive object.

133 The Henss/Isoplus group disputes, in particular, that Mr Henss’s participation before October 1994 in meetings having an anti-competitive object justified the conclusion that the group should be regarded as having participated in the cartel resulting from those meetings, which concerned the period October 1991 to October 1994.

134 Brugg contends that the Court of First Instance was wrong to infer from its participation in the meeting held on 24 March 1995, during which the boycott of Powerpipe was discussed, proof that it actually participated in that boycott.

135 The Henss/Isoplus group relies, by analogy, on the principle established by the case-law that the Commission may refuse access to certain documents on the ground that an undertaking in a dominant position is capable of taking retaliatory measures against an undertaking who collaborated in the investigation carried out by the Commission (Case C-310/93 P BPB Industries and British Gypsum v Commission [1995] ECR I-865, paragraphs 26 and 27, and Case T-65/89 BPB Industries and British Gypsum v Commission [1993] ECR II-389, paragraph 33).

136 It follows, in the appellant’s submission, that even if the economically weak undertakings who did not publicly distance themselves from what was discussed at meetings whose object was manifestly anti-competitive and to which they were summoned by undertakings in a dominant or economically more powerful position than they, those undertakings must be relieved of their liability for participating in an unlawful cartel when they do not implement the decisions taken at those meetings.

137 In the present case, the Henss/Isoplus group did not denounce what was discussed at the meetings which it attended, owing to the participation, in particular, of ABB, an undertaking in a dominant position, and LR A/S, an undertaking much more powerful than the appellant.

138 However, the appellant did not implement the results of those meetings, which is shown by the continuous fall in prices on the pre-insulated pipes market between October 1991 and October 1994.

139 Brugg claims that, as a mere reseller of the products concerned, it was not capable of implementing a boycott.

140 It further submits that the Court of First Instance was wrong to find at paragraph 62 of the judgment in Brugg Rohrsysteme v Commission that, in so far as Powerpipe was a direct competitor of Brugg on the German market, Brugg had an interest in any boycott of Powerpipe by other participants in the cartel.

141 The Court finds that the Court of First Instance was correct to reject those complaints.

142 It is settled case-law that it is sufficient for the Commission to show that the undertaking concerned participated in meetings at which anti-competitive agreements were concluded, without manifestly opposing them, to prove to the requisite standard that the undertaking participated in the cartel. Where participation in such meetings has been established, it is for that undertaking to put forward evidence to establish that its participation in those meetings was without any anti-competitive intention by demonstrating that it had indicated to its competitors that it was participating in those meetings in a spirit that was different from theirs (see, in particular, Joined Cases C-204/00 P, C-205/00 P, C‑211/00 P, C-213/00 P, C-217/00 P and C-219/00 P Aalborg Portland and Others v Commission [2004] ECR I-123, paragraph 81 and the case-law cited).

143 In that regard, a party which tacitly approves of an unlawful initiative, without publicly distancing itself from its content or reporting it to the administrative authorities, effectively encourages the continuation of the infringement and compromises its discovery. That complicity constitutes a passive mode of participation in the infringement which is therefore capable of rendering the undertaking liable in the context of a single agreement (see Aalborg Portland and Others v Commission, cited above, paragraph 84).

144 Nor is the fact that an undertaking does not act on the outcome of a meeting having an anti-competitive object such as to relieve it of responsibility for the fact of its participation in a cartel, unless it has publicly distanced itself from what was agreed in the meeting (see Aalborg Portland and Others v Commission, paragraph 85 and the case-law cited).

145 For the purposes of applying Article 85(1) of the Treaty, it is sufficient that the object of an agreement should be to restrict, prevent or distort competition irr