Keywords

Summary



Keywords

1. Competition – Fines – Amount – Determination – Criteria – Obligation to take account of the actual impact on the market – Measurability – Meaning

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1 A, first para.)

2. Competition – Fines – Amount – Determination – Criteria – Overall turnover of the undertaking concerned – Turnover corresponding to the goods covered by the infringement – Both to be taken into consideration – Limits

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

3. Competition – Fines – Amount – Determination – Criteria – Gravity and duration of the infringement – Increase in the amount on account of the duration of the infringement – Not necessary to establish a direct relation between that duration and increased prejudice to the competition rules

(Art. 81(1) EC; Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1 B)

4. Competition – Fines – Amount – Determination – Criteria – Attenuating circumstances – Conduct deviating from that agreed within the cartel – Assessment

(Council Regulation No 17, Art. 15; Commission Notice 98/C 9/03, Section 3, second indent)

5. Competition – Fines – Amount – Determination – Criteria – Financial situation of the undertaking concerned – To be taken into consideration – No obligation

(Council Regulation No 17, Art. 15)

6. Competition – Fines – Amount – Determination – Complex economic assessment – Commission’s margin of discretion – Judicial review – Review of legality – Scope

(Art. 263 TFEU; Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

7. Competition – Fines – Amount – Determination – Criteria – Gravity and duration of the infringement

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

8. Competition – Fines – Amount – Determination – Application of the Guidelines on the method of setting fines – Statement of reasons for a decision – Scope

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

9. Competition – Fines – Amount – Determination – Discretion of the Commission – Judicial review – Unlimited jurisdiction of the Courts of the European Union – Scope

(Art. 261 TFEU; Council Regulations No 17, Art. 17, and No 1/2003, Art. 31)

10. European Union law – Principles – Right to effective judicial protection – Judicial review of decisions adopted by the Commission in competition matters – Review of legality and in the Court’s unlimited jurisdiction of both the law and the facts – Infringement – None

(Art. 263 TFEU; Charter of Fundamental Rights of the European Union, Art. 47; Council Regulation No 1/2003, Art. 31)

Summary

1. According to Section 1 A of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, in assessing the criterion of the gravity of the infringement, account is to be taken of its actual impact on the market only where this can be measured. Determination of the actual impact of a cartel on the market requires a comparison of the market situation resulting from the cartel with that which would have resulted from free competition. Such a comparison necessarily involves recourse to assumptions, given the multiplicity of variables capable of having an impact on the market.

(see paras 38-39)

2. While it is permissible, for the determination of the fine for infringement of the competition rules, to take into account both the undertaking’s overall turnover, which is an indication of the size of the undertaking and its economic strength, and that part of the turnover which derives from the goods which are the subject of the infringement and which therefore is capable of giving an indication of the scale of the infringement, the overall turnover of an undertaking nevertheless gives only an approximate and imperfect indication of the size of that undertaking. Moreover, it is important not to confer on one or the other of those figures an importance which is disproportionate in relation to the other factors to be assessed in relation to the gravity of the infringement.

(see paras 59-60)

3. Where, in accordance with Section 1 B of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, the amount determined for the gravity of the infringement is increased to take account of the duration of the infringement, it is not necessary to establish in practical terms a direct relation between that duration and increased damage to the Community objectives pursued by the competition rules. For the purpose of applying Article 81(1) EC, there is no need to take account of the concrete effects of an agreement once it appears that it has as its object the prevention, restriction or distortion of competition. That applies in particular in the case of obvious restrictions of competition such as price-fixing and market-sharing.

(see paras 74-75)

4. In order to benefit from the attenuating circumstance set out in the second indent of Section 3 of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, the offenders must show that they adopted competitive conduct or, at the very least, that they clearly and substantially breached the obligations relating to the implementation of the cartel to the point of disrupting its very operation and did not give the appearance of complying with the agreement, thereby encouraging other undertakings to implement the cartel in question.

An undertaking which, despite colluding with its competitors, follows a more or less independent policy in the market may simply be trying to exploit the cartel for its own benefit. If attenuating circumstances were recognised, it would be too easy for undertakings to reduce the risk of being required to pay a heavy fine if they were able to take advantage of an unlawful agreement and then benefit from a reduction in the fine on the ground that they had played only a limited role in implementing the infringement, whereas their attitude encouraged other undertakings to act in a way that was more harmful to competition.

Therefore, an undertaking which ceases to participate in a cartel is not in the same position as an undertaking which is a member of that cartel but does not implement it or ceases to do so. In the latter case, the undertaking continues to harm competition by its participation in any discussions and by the fact that its participation in the cartel is likely to encourage other undertakings to act in a way that is harmful to competition.

Furthermore, as a general rule, cartels come into being when an economic sector is experiencing difficulties and such difficulties cannot, in principle, constitute an attenuating circumstance.

(see paras 93-95, 97)

5. The Commission is not required, when determining the amount of the fine, to take account of the undertaking’s financial losses since recognition of such an obligation would have the effect of conferring an unfair competitive advantage on the undertakings least well adapted to the conditions of the market. Nor is the Commission required to take account of a presumed inability to pay caused by a financial penalty imposed as a result of another infringement of competition law, since it is the undertaking that is primarily responsible for that situation which has arisen as a result of its unlawful conduct.

Furthermore, difficulties in comparing the level of fines imposed on undertakings which have participated in different agreements on different markets at times which, in some cases, are separated by long intervals may also arise from the conditions necessary for implementing an effective competition policy. Therefore, the fact that, in previous cases, the Commission took account of the financial difficulties of an undertaking does not mean that it is obliged to make the same assessment in a later case.

(see paras 103-105)

6. Whilst, in areas giving rise to complex economic assessments, such as the determination of the amount of fines imposed for infringement of the competition rules, the Commission has a margin of discretion with regard to economic matters, that does not mean that the Courts of the European Union must refrain from reviewing the Commission’s interpretation of information of an economic nature. In a review of legality, not only must those Courts establish, among other things, whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it.

The Courts of the European Union must carry out the review of legality incumbent upon them on the basis of the evidence adduced by the applicant in support of the pleas in law put forward. In carrying out such a review, the Courts cannot use the Commission’s margin of discretion – either as regards the choice of factors taken into account in the application of the criteria relating to the setting of a fine mentioned in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, or as regards the assessment of those factors – as a basis for dispensing with the conduct of an in-depth review of the law and of the facts.

(see paras 121, 129)

7. In order to determine the amount of a fine for infringement of the competition rules, it is necessary to take account of the duration of the infringements and of all the factors capable of affecting the assessment of their gravity, such as 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 European Community. Objective factors such as the content and duration of the anti-competitive conduct, the number of incidents and their intensity, the extent of the market affected and the damage to the economic public order must be taken into account. The analysis must also take into consideration the relative importance and market share of the undertakings responsible and also any repeated infringements.

(see paras 123-124)

8. In the interests of transparency the Commission adopted the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, in which it indicates the basis on which it will take account of one or other aspect of the infringement and what this will imply as regards the amount of the fine. Those guidelines, which form rules of practice from which the administration may not depart in an individual case without giving reasons compatible with the principle of equal treatment, merely describe the method used by the Commission to examine infringements and the criteria that the Commission requires to be taken into account in setting the amount of a fine. It is therefore for the Commission, when stating the reasons for its decision, in particular, to explain the weighting and assessment of the factors taken into account.

(see paras 126-128)

9. As regards the determination of the amount of a fine imposed for infringement of the competition rules, the unlimited jurisdiction which the Courts of the European Union were afforded by Article 17 of Regulation No 17 is now recognised by Article 31 of Regulation No 1/2003, in accordance with Article 261 TFEU. That jurisdiction empowers the Courts, in addition to carrying out a mere review of the lawfulness of the penalty, to substitute their own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or penalty payment imposed.

However, the exercise of unlimited jurisdiction does not amount to a review of the Court’s own motion, and proceedings before the Courts of the European Union are inter partes . With the exception of pleas involving matters of public policy which the Courts are required to raise of their own motion, such as the failure to state reasons for a contested decision, it is for the applicant to raise pleas in law against that decision and to adduce evidence in support of those pleas. That requirement, which is procedural in nature, does not conflict with the rule that, in regard to infringements of the competition rules, it is for the Commission to prove the infringements found by it and to adduce evidence capable of demonstrating to the requisite legal standard the existence of the circumstances constituting an infringement. What the applicant is required to do in the context of a legal challenge is to identify the impugned elements of the contested decision, to formulate grounds of challenge in that regard and to adduce evidence – direct or circumstantial – to demonstrate that its objections are well founded.

(see paras 130-132)

10. The review of Commission decisions relating to competition matters that is provided for by the Treaties involves review by the Courts of the European Union of both the law and the facts, and means that they have the power to assess the evidence, to annul the contested decision and to alter the amount of a fine. The review of legality provided for under Article 263 TFEU, supplemented by the unlimited jurisdiction in respect of the amount of the fine, provided for under Article 31 of Regulation No 1/2003, is not therefore contrary to the requirements of the principle of effective judicial protection in Article 47 of the Charter of Fundamental Rights of the European Union.

(see para. 133)