Keywords

Summary



Keywords

1. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Assessment – Obligation to take into account actual impact on the market – None – Major role played by criterion of the nature of the infringement

(Art. 81(1)(a) and (b) EC; Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A)

2. Competition – Fines – Guidelines on the method of setting fines – Legal nature

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03)

3. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Very serious infringements

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A)

4. Competition – Fines – Amount – Determination – Criteria – Effect of an anti-competitive practice – Criterion not conclusive

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A)

5. Competition – Fines – Amount – Determination – Criteria – Market shares held by the undertaking concerned

(Art. 81(1) EC; Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A)

6. Competition – Fines – Amount – Determination – Criteria – Actual impact on the market – Criteria for assessment

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A)

7. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Determination of the fine in proportion to the factors for assessment of the gravity of the infringement

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A)

8. Competition – Fines – Decision imposing fines – Duty to state reasons – Scope

(Art. 253 EC; Council Regulation No 1/2003, Art. 23(2) and (3))

9. Procedure – Introduction of new pleas during the proceedings – Conditions – New plea –Meaning

(Rules of Procedure of the General Court, Art. 48(2))

10. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Burden of proving the infringement and its duration on the Commission – Applicability of principle of presumption of innocence

(Art. 81(1) EC; Charter of Fundamental Rights of the European Union, Art. 48(1))

11. Competition – Agreements, decisions and concerted practices – Evidence – Degree of detail required in evidence selected by the Commission

(Art. 81(1) EC)

12. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Assessment – Economic reality at the time the infringement was committed to be taken into account

(Council Regulation No 1/2003, Art. 23(3); Commission Notice 98/C 9/03, Section 1A)

13. Competition – Fines – Amount – Determination – Division of undertakings concerned into categories – Conditions – Respect for the principle of equal treatment

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A)

14. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – Threats and pressure suffered by an undertaking – Not included

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 3)

15. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – Passive or ‘follow-my-leader’ role of the undertaking – Criteria for assessment

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 3, first indent)

16. Competition – Fines – Amount – Determination – Criteria – Undertakings concerned being small and medium-sized undertaking – No effect

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 1A, fifth para.)

17. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances – Conduct deviating from that agreed within the cartel

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 3, second indent)

18. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances – Assessment

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 3)

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

(Council Regulation No 1/2003, Art. 23(2); Commission Notice 98/C 9/03)

20. Competition – Fines – Amount – Determination – Criteria – Financial situation of the undertaking concerned – No obligation to take into consideration

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

21. Competition – Fines – Amount – Discretion of the Commission – Judicial review – Unlimited jurisdiction

(Art. 229 EC; Council Regulation No 1/2003, Art. 31; Commission Notice 98/C 9/03)

22. Competition – Fines – Amount – Determination – Criteria – Deterrent effect – Observance of the principle of proportionality

(Art. 81 EC; Council Regulation No 1/2003, Art. 23(2))

Summary

1. Article 81(1)(a) and (b) EC expressly declare that agreements and concerted practices which consist in directly or indirectly fixing purchase or selling prices or other transaction conditions or in limiting or controlling production or outlets are incompatible with the common market. Infringements of that kind, particularly in the case of horizontal cartels, are classified as ‘particularly serious’ since they involve direct interference with the essential parameters of competition on the market in question or clear infringements of the competition rules.

The gravity of infringements of European Union competition law 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.

According to the method set out in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS, the assessment of the gravity of the infringement must take account of the nature of the infringement, its actual impact on the market, where that can be measured, and the size of the relevant geographic market. However, those three aspects of assessment of the gravity of the infringement do not carry the same weight in the overall examination of an infringement. The nature of the infringement plays a major role, in particular, for the qualification of ‘very serious’ infringements. On the other hand, neither the actual impact on the market nor the extent of the geographic market is a factor necessary for the infringement to be classified as very serious in the case of horizontal agreements concerning, inter alia, price fixing. Thus, horizontal agreements of that type may be classified as ‘very serious’ on the sole basis of their actual nature, without the Commission being required to demonstrate that the infringement had an actual impact on the market.

(see paras 67, 69, 74, 76-78)

2. The Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS are an instrument designed to clarify, in compliance with superior rules of law, the criteria which the Commission intends to apply when exercising the discretion conferred on it by Article 23(2) of Regulation No 1/2003 for the purpose of setting fines. Those Guidelines do not constitute the legal basis of a decision imposing fines, which is based on Regulation No 1/2003, but they determine, generally and abstractly, the method which the Commission has bound itself to use in assessing the fines imposed by that decision and, consequently, ensure legal certainty on the part of the undertakings.

Thus, although the Guidelines may not be regarded as rules of law which the administration is always bound to observe, they nevertheless form rules of practice from which the administration may not depart in an individual case without giving reasons.

The fact that the Commission has limited its own discretion by adopting the Guidelines is not however incompatible with its maintaining a significant discretion. The fact that, in the Guidelines, the Commission set out its approach to assessment of the gravity of an infringement does not prevent it from assessing infringements as a whole by reference to all the relevant circumstances of the case, including factors that are not expressly mentioned in the Guidelines.

(see paras 71-73)

3. The minimum starting amount of EUR 20 million fixed by the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS for very serious infringements refers to a single undertaking and not to all the undertakings that committed the infringement.

(see para. 86)

4. As regards the actual impact on the market of a restrictive practice contrary to European Union competition rules, for the purposes of determination of the amount of the fine imposed for such an infringement, it is necessary to take into account the duration and all the factors capable of entering into the assessment of the gravity of the infringement, 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 and the value of the goods concerned and also the threat that infringements of that kind pose to the objectives of the European Union. It follows that the effect of an anti-competitive practice is not, in itself, a conclusive criterion for assessing the proper amount of a fine. In particular, factors relating to the intentional aspect may be more significant than those relating to the effects, particularly where they relate to infringements which are particularly serious, such as market sharing.

(see para. 90)

5. The market share of each of the undertakings concerned in the market which formed the subject-matter of a restrictive practice within the meaning of European Union competition law constitutes an objective factor which, even in the absence of proof that the infringement had an actual effect on the market, gives a fair measure of the responsibility of each of them as regards the potential harmfulness of that practice for the normal operation of competition. Thus, for the purposes of setting the amount of the fine, the market shares held by an undertaking are relevant in order to determine what influence it may exert on the market.

(see para. 97)

6. In order to assess the gravity of the infringement, it is decisive to ascertain that the cartel members had done all they could to give concrete effect to their intentions. What then happened, so far as the market prices actually obtained were concerned, was liable to be influenced by other factors outside the control of the cartel members, which cannot benefit from external factors, such as an increase in prices in the market concerned, which counteracted their own efforts, by turning them into factors justifying a reduction of the fine.

(see paras 99-100)

7. The principle of proportionality requires that measures adopted by the Union institutions must not exceed the limits of what is appropriate and necessary in order to attain the objective pursued. In the procedures initiated by the Commission in order to penalise infringements of the competition rules, the application of that principle requires that fines must not be disproportionate to the objectives pursued, that is to say, by reference to compliance with those rules, and that the amount of the fine imposed on an undertaking for an infringement in competition matters must be proportionate to the infringement, seen as a whole, having regard, in particular, to the gravity thereof. In particular, the principle of proportionality requires the Commission to set the fine proportionately to the factors taken into account for the purpose of assessing the gravity of the infringement and also to apply those factors in a way which is consistent and objectively justified.

In those circumstances, the Commission is not in breach of the principle of proportionality by setting the starting amount of the fine for an infringement of the competition rules at EUR 10 million, since that infringement is a very serious and deliberate infringement of the competition rules and that amount was set at a level well below the minimum threshold provided for in the Guidelines for an infringement of that type.

(see paras 104-105, 107)

8. In the context of the setting of fines for infringement of European Union competition law, the obligation to state reasons is fulfilled where the Commission indicates in its decision the elements of assessment which enabled it to measure the gravity and the duration of the infringement.

In that regard, although Article 253 EC requires the Commission to state the reasons for its decisions and to mention the facts forming the basis of the decision and the considerations which led it to adopt the decision, that provision does not require the Commission to discuss all the points of fact and of law dealt with during the administrative procedure.

In the case of a decision imposing fines on a number of undertakings, the scope of the duty to state reasons must be assessed inter alia in the light of the fact that the gravity of the infringement depends on numerous factors, such as the particular circumstances of the case, its context and the deterrent effect of the fines, although no binding or exhaustive list of the criteria to be applied has been drawn up.

(see paras 109, 233)

9. Under the first subparagraph of Article 48(2) of the Rules of Procedure of the General Court, the introduction of a new plea in law in the course of proceedings is not allowed unless it is based on matters of law or of fact which came to light in the course of the procedure. In that connection, a plea which amplifies a submission previously made, either expressly or by implication, and is closely connected with that submission, must be declared admissible.

(see para. 124)

10. It is for the Commission to prove not only the existence of a cartel contrary to European Union competition rules but also its duration. More particularly, as regards proof of an infringement of Article 81(1) EC, the Commission must prove the infringements which it has found and adduce evidence capable of demonstrating to the requisite legal standard the existence of the facts constituting an infringement. Any doubt in the mind of the Court must operate to the advantage of the undertaking to which the decision finding the infringement was addressed. The Court cannot therefore conclude that the Commission has established the infringement at issue to the requisite legal standard if it still entertains any doubts on that point, in particular in proceedings for annulment and/or variation of a decision imposing a fine. Indeed, in the latter situation, it is necessary to take account of the principle of the presumption of innocence, which is part of the fundamental rights protected in the legal order of the European Union and has been enshrined in Article 48(1) of the Charter of Fundamental Rights of the European Union. Given the nature of the infringements in question and the nature and degree of severity of the ensuing penalties, the principle of the presumption of innocence applies in particular to the procedures relating to infringements of the competition rules applicable to undertakings that may result in the imposition of fines or periodic penalty payments. It is thus necessary for the Commission to produce sufficiently precise and consistent evidence to support the firm conviction that the alleged infringement took place.

It is not necessary for every item of evidence produced by the Commission to satisfy those criteria in relation to every aspect of the infringement. It is sufficient if the body of evidence relied on by the institution, viewed as a whole, meets that requirement.

(see paras 129-130, 143)

11. It is normal for the activities which anti-competitive agreements entail to take place clandestinely, for meetings to be held in secret and for the associated documentation to be reduced to a minimum. It follows that, even if the Commission discovers evidence explicitly showing unlawful contact between traders, such as the minutes of meetings, it will normally be only fragmentary and sparse, so that it is often necessary to reconstitute certain details by deduction. Accordingly, in most cases, the existence of an anti-competitive practice or agreement must be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules.

Moreover, if there is no evidence directly establishing the duration of an infringement, the Commission should adduce at least evidence of facts sufficiently proximate in time for it to be reasonable to accept that that infringement continued uninterruptedly between two specific dates.

In that regard, 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. The reason underlying that principle of law is that, having participated in the meeting without publicly distancing itself from what was discussed, the undertaking gave the other participants to believe that it subscribed to what was decided there and would comply with it. On the other hand, the Commission errs in its assessment of the facts in considering that an undertaking participated in a cartel contrary to European Union competition rules where there are not sufficient indicia in that regard.

(see paras 131-132, 158, 165-166)

12. As regards the choice of the reference year for the purpose of establishing the relative weight of the undertakings in relation to a cartel contrary to European Union competition rules, while the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS provide, at the fourth and fifth paragraphs of Section 1A, for the differentiated treatment of undertakings according to their economic size, they do not specify the year by reference to which the relative weight of the undertakings must be established.

In that regard, the Commission is required to choose a calculation method that enables it to take account of the size and economic power of each undertaking concerned and also of the scope of the infringement committed by each of them, in the light of the economic reality as it appeared at the time when the infringement was committed. Furthermore, the period to be taken into consideration should be ascertained in such a way that the resulting turnovers, and market shares, are as comparable as possible. It follows that the reference year need not necessarily be the last full year during which the infringement was in existence.

(see paras 176-177)

13. The method of dividing the members of a cartel into categories in order to apply differential treatment when setting the starting amounts of the fines, even though it ignores the differences in size between undertakings in the same category, results in a flat-rate starting amount for all the undertakings in the same category.

However, such division into categories must observe the principle of equal treatment, according to which comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified. Furthermore, the amount of the fine must at least be proportionate in relation to the factors taken into account in the assessment of the gravity of the infringement. In order to ascertain whether the division of the members of a cartel into categories is consistent with the principles of equal treatment and proportionality, it is appropriate to examine whether that division is coherent and objectively justified.

In that regard, while it is permissible for the Commission to take account of the market shares held by an undertaking belonging to a cartel in the last full year of the infringement found in order to evaluate its size and its economic power in a specific market and also the scope of the infringement committed by it, it must none the less ensure that the market shares of each of the undertakings involved properly reflect economic reality as it appeared at the time when the infringement was committed. As a general rule, in the case of infringements of long duration, it is only where the last full year of the infringement, as taken into account by the Commission, coincides with the duration of the participation of each of those undertakings that the associated market shares are capable of serving as relevant indications in that regard and of enabling results as comparable as possible to be obtained, especially for the purpose of dividing the undertakings involved into categories.

(see paras 180-182, 184, 186)

14. The existence of threats and pressure designed to induce an undertaking to participate in an infringement of European Union competition law is not among the mitigating circumstances listed in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS. The pressure exerted by undertakings and designed to induce other undertakings to participate in an infringement of European Union competition law does not, no matter how great, relieve the undertaking concerned of its liability for the infringement committed, does not alter the gravity of the cartel and cannot constitute a mitigating circumstance for the purpose of the setting of fines, since the undertaking concerned could have reported any pressure to the competent authorities and made a complaint to them. Consequently, the Commission was not required to take such threats into account as a mitigating circumstance.

(see paras 211-213)

15. One circumstance that may be held to indicate the adoption by an undertaking of a passive role within a cartel, which may justify a reduction of the fine under the first 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) CS, is where the undertaking’s participation in cartel meetings is significantly more sporadic than that of the other members of the cartel, likewise its belated entry to the market affected by the infringement, irrespective of the duration of its participation therein, or again the existence of express declarations to that effect made by representatives of other undertakings that participated in the infringement. In addition, an exclusively passive role of a member of a cartel implies that it adopts a ‘low profile’, that is to say, it does not actively participate in the making of the anti-competitive agreement or agreements.

In that regard, it is not sufficient that, during certain periods of the cartel, or with respect to certain of its agreements, the undertaking concerned adopted a ‘low profile’, even on the assumption that that were established. Convening, in other periods, meetings, proposing an agenda and distributing preparatory documents for meetings are incompatible with a passive, ‘follow-my-leader’ role adopting a low profile. Such initiatives show that an undertaking took a favourable and active approach to the constitution, continuation and control of the cartel.

Furthermore, where an undertaking has participated, even without playing an active role, in meetings having an anti-competitive object, it must be regarded as having participated in the cartel unless it proves that it publicly distanced itself from the unlawful concertation. Indeed, by its presence at the meetings the undertaking subscribed, or at least gave the other participants to believe that it subscribed, in principle to what was decided there.

(see paras 217-218, 220, 223, 225)

16. The fifth paragraph of Section 1A of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS enables the Commission to increase the fines imposed on large undertakings, but does not require it to reduce those imposed on undertakings of modest size. The size of the undertaking is taken into consideration by virtue of the upper limit laid down in Article 23(2) of Regulation No 1/2003 and the provisions of the Guidelines. Apart from those size-related considerations, there is no reason to treat small or medium-sized enterprises differently from other undertakings. The fact that the undertakings are small or medium-sized enterprises does not relieve them of their duty to comply with the competition rules.

Moreover, Article 23(2) of Regulation No 1/2003 does not require that, where fines are imposed on several undertakings involved in the same infringement, the fine imposed on a small or medium-sized undertaking must not be greater, as a percentage of turnover, than those imposed on the larger undertakings. It is clear from that provision that, both for small or medium-sized undertakings and for larger undertakings, account must be taken, in determining the amount of the fine, of the gravity and duration of the infringement.

(see paras 226, 228, 260)

17. The Commission is required to recognise the existence of an mitigating circumstance owing to the failure to implement a cartel, pursuant to the second indent of Section 3 of of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS, only where the undertaking relying on the failure to implement the cartel is able to demonstrate that it clearly and substantially opposed the implementation of that cartel, to the point of having disrupted its very operation, and that it did not give the impression of subscribing to the agreement and thus encourage other undertakings to implement the cartel in question. 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 of the fine on the ground that they had played only a limited role in implementing the infringement, when their attitude encouraged other undertakings to act in a way that was more harmful to competition.

(see paras 240-241)

18. The Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS do not state that the Commission must systematically take separate account of each of the mitigating circumstances set out at Section 3 of those guidelines. It follows that the Commission is not required to grant an automatic additional reduction on that basis, as the appropriateness of any reduction of the fine for mitigating circumstances must be assessed from a global point of view that takes all the relevant circumstances into account.

(see para. 242)

19. The maximum limit of 10% of total turnover, provided for in Article 23(2) of Regulation No 1/2003, has a distinct and autonomous objective by comparison with the criteria of gravity and duration of the infringement, namely 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. Thus, that limit 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. The only possible consequence of such a limit is that the amount of the fine calculated on the basis of the criteria of gravity and duration of the infringement will be reduced to the maximum permitted level where it exceeds that level. Its application implies that the undertaking concerned will not pay the full amount of the fine which in principle would be payable if it were assessed on the basis of those criteria.

Further, Article 23(2) of Regulation No 1/2003 does not prevent the Commission from referring, in the course of its calculation, to an intermediate amount in excess of that limit, provided that the fine eventually imposed does not exceed it. It follows that the Commission cannot be required, at any stage in the application of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS, to ensure that the intermediate amounts of the fines adopted reflect all existing differences between the overall turnover figures of the undertakings concerned. Furthermore, the Commission is also not required to ensure that the final amounts of the fines to which its calculations lead for the undertakings concerned reflect every difference between those undertakings with respect to their turnover.

(see paras 257, 259)

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

(see para. 258)

21. The unlimited jurisdiction conferred on the Court, in application of Article 229 EC, by Article 31 of Regulation No 1/2003 empowers the Court, in addition to carrying out a mere review of the lawfulness of the penalty, which enables the Court only to dismiss the action for annulment or to annul the contested measure, to substitute its own appraisal for the Commission’s and, consequently, to vary the contested measure, even without annulling it, taking into account all the factual circumstances, by amending, in particular, the fine imposed where the question of the amount of the fine is before it.

By its nature, the fixing of a fine by the Court is not an arithmetically precise exercise. Furthermore, the Court is not bound by the Commission’s calculations or by the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS when it adjudicates in the exercise of its unlimited jurisdiction, but must make its own appraisal, taking account of all the circumstances of the case.

(see paras 265-266)

22. Fines imposed for infringements of Article 81 EC, as laid down in Article 23(2) of Regulation No 1/2003, are designed to penalise the unlawful acts of the undertakings concerned and to deter both the undertakings in question and other economic operators from infringing, in future, the rules of European Union competition law. Thus, since the purpose of taking into consideration the size and global resources of the undertaking in order to ensure that the fine has sufficient deterrent effect lies in the impact which the fine is intended to have on that undertaking, the sanction must not be negligible in the light, in particular, of its financial capacity.

Moreover, the principle of proportionality requires that measures adopted by the institutions must not exceed the limits of what is appropriate and necessary in order to attain the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued. It follows that fines must not be disproportionate to the objectives pursued, that is to say, by reference to compliance with the competition rules, and that the amount of the fine imposed on an undertaking for an infringement in competition matters must be proportionate to the infringement, seen as a whole, having regard, in particular, to the gravity thereof.

(see paras 279-280)