Keywords

Summary



Keywords

1. Competition – Community rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Presumption that a parent company exercises decisive influence over a subsidiary when it holds 100% of the share capital

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

2. Competition – Community rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Presumption that a parent company exercises decisive influence over a subsidiary when it holds 100% of the share capital – Subsidiary owned by a non-operational holding company

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

3. Appeals – Grounds – Necessity of some specific criticism of a point in the General Court’s reasoning

(Art. 256 TFEU; Statute of the Court of Justice, Art. 58, first para.; Rules of Procedure of the General Court, Art. 112(1)(c))

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

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

5. Competition – Fines – Amount – Determination – Criteria – Guidelines on the method of setting fines for infringements of the competition rules

(Art. 81(1) EC; Commission Notice 98/C 9/03)

Summary

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

In the specific case in which a parent company has a 100% shareholding in a subsidiary which has infringed the competition rules of the European Union, first, the parent company can exercise a decisive influence on the conduct of the subsidiary and, second, there is a rebuttable presumption that the parent company does in fact exercise such a decisive influence. In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to presume that the parent company exercises a decisive influence over the commercial policy of the subsidiary. The Commission will then be able to regard the parent company as jointly and severally liable for the payment of the fine imposed on its subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to show that its subsidiary acts independently on the market.

(see paras 37-38, 40-41)

2. The possibility cannot be ruled out that a ‘non-operational holding company’, despite the fact that it does not act directly in the market, may exercise decisive influence over the commercial policy of its subsidiaries, in view in particular of its function of coordination and financial management, and that therefore the exercise of such influence may be presumed actually to take place when all or virtually all the share capital of the subsidiary are held by the parent company. That is why it is not sufficient to claim that the parent company is non-operational in order to rebut the presumption that it actually exercises decisive influence over the commercial policy of subsidiaries, which remains a rebuttable presumption, capable of being overturned.

(see paras 48-49)

3. It follows from Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice and indent (c) of the first subparagraph of Article 112(1) of its Rules of Procedure that an appeal must indicate precisely the contested elements of the judgment which the appellant seeks to have set aside and also the legal arguments specifically advanced in support of the appeal.

In that regard, even if it does allow the contested element of the judgment under appeal to be identified, an appeal in which the argument is not clear and precise enough to enable the Court to exercise its judicial review must be dismissed. When the essential points are not indicated sufficiently coherently and intelligibly in the text of the appeal itself, which is worded in a vague and ambiguous manner, the Court is not in a position to exercise its judicial review without running the risk of ruling ultra petita .

(see paras 59-61)

4. The subject-matter of the proceedings before the General Court may not be changed in the appeal. The Court’s jurisdiction in an appeal is confined to a review of the findings of law on the pleas argued before the General Court. A party may not, therefore, change the subject-matter of the dispute by putting forward for the first time before the Court of Justice a plea in law which it could have raised before the General Court but did not raise, for to do so would be to allow it to bring before the Court of Justice, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the General Court. Such a plea in law must therefore be regarded as inadmissible at the stage of the appeal.

(see para. 64)

5. In accordance with the method specified 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, the components of a fine relating to aggravating circumstances such as repeated infringement are calculated according to a ‘basic amount’ which is in turn calculated on the basis of a ‘starting amount’ increased by a multiplier related to the duration of the infringement.

That starting amount is set essentially by reference to the gravity of the infringement and to the real impact on competition of the offending conduct of the entity concerned. Where appropriate, that amount may be adjusted, in the light of the economic capacity of the entity concerned, to ensure that the fine has a sufficiently deterrent effect. According to points 2 and 3 of the Guidelines, the Commission, having determined the basic amount of the fine taking into account the gravity and duration of the infringement, subsequently increases or decreases that amount, as appropriate, according to aggravating or mitigating circumstances.

However, the Guidelines merely constitute rules of practice from which the administration may not depart in an individual case without giving reasons that are compatible with the principle of equal treatment.

(see paras 72-73, 81, 88)