Keywords

Summary



Keywords

1. Competition – Fines – Amount – Determination – Criteria – Reduction of the fine for cooperation of the fined undertaking – Grant of conditional immunity from fines before adoption of the Commission’s final decision – Scope

(Council Regulation No 1/2003, Art. 23; Commission Notice 2002/C 45/03, Sections 8(a) and (b), 11(a) to (c), 15, 16, 18 and 19)

2. Competition – Fines – Amount – Determination – Criteria – Reduction of the fine for cooperation of the fined undertaking – Total immunity – Conditions

(Council Regulation No 1/2003, Art. 23; Commission Notice 2002/C 45/03, Section 11(a))

3. Competition – Administrative procedure – Observance of the rights of the defence – Statement of objections – Provisional nature

(Art. 81 EC; Council Regulation No 1/2003, Art. 27(1))

4. Competition – Fines – Amount – Determination – Criteria – Reduction of the fine for cooperation of the fined undertaking – Grant of conditional immunity from fines before adoption of the Commission’s final decision – Refusal of the Commission to grant final immunity – No breach of principle of the protection of legitimate expectations

(Art. 81 EC; Commission Notice 2002/C 45/03, Section 11)

5. Acts of the institutions – Guidelines on the method of setting fines for infringements of the competition rules – Measure designed to produce external effects – Scope

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

6. Competition – Fines – Amount – Determination – Infringements classified as very serious on the basis of their nature alone

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

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

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

8. Competition – Administrative procedure – Access to the file – Commission not obliged to disclose internal documents

(Art. 81 EC)

Summary

1. Once it has received an application for immunity from fines under the notice on immunity from fines and reduction of fines in cartel cases, the Commission assesses the evidence supplied by the undertaking concerned in support of the application in order to ascertain whether that undertaking satisfies the conditions set out at point 8(a) or (b), as appropriate, of the Leniency Notice. If the undertaking is the first to satisfy those conditions, the Commission will grant it, in writing, conditional immunity from fines.

The grant of conditional immunity therefore means the creation of a special procedural status, during the administrative procedure, for the undertaking that satisfies the conditions set out at point 8 of the Leniency Notice which produces certain legal effects. However, that conditional immunity cannot in any way be treated as final immunity from fines, which is granted only at the end of the administrative procedure.

More particularly, the grant of conditional immunity, first, shows that the undertaking concerned was the first to meet the conditions set out at point 8(a) or (b) of the Leniency Notice, with the consequence that the Commission will not consider other applications for immunity from fines before it has taken a position on that undertaking’s application and, second, provides assurance to that undertaking that the Commission will grant it immunity from fines if, at the end of the administrative procedure, it concludes that the undertaking has satisfied the conditions set out at point 11(a) to (c) of the Leniency Notice.

It is only at the end of the administrative procedure, when the Commission adopts the final decision, that it does or does not grant, in that decision, immunity from fines in the strict sense to the undertaking that was granted conditional immunity. It is at that precise time that the procedural status resulting from conditional immunity ceases to produce its effects. However, final immunity from fines is granted only if the undertaking in question has met, throughout the administrative procedure and until the time when the final decision is taken, the three cumulative conditions set out at point 11(a) to (c) of the Leniency Notice.

It thus follows from the system as provided for in the Leniency Notice that before the final decision is taken the undertaking seeking immunity does not obtain immunity from fines in the strict sense but benefits only from a procedural status that may be transformed into immunity from fines at the end of the administrative procedure if the requisite conditions are met.

(see paras 113-115, 117-118)

2. The grant of total immunity from fines constitutes an exception to the principle of the personal liability of the undertaking for the infringement of the competition rules which is justified by the aim of favouring the discovery, investigation and suppression and also the deterrence of the practices which form part of the most serious restrictions of competition. In those circumstances, it is therefore logical that, in exchange for the grant of total immunity from fines for its unlawful behaviour, the undertaking requesting immunity should be required to cooperate in the Commission’s investigation, in the words of point 11(a) of the notice on immunity from fines and reduction of fines in cartel cases, ‘fully, on a continuous basis and expeditiously’.

It follows from the qualification ‘fully’ that the cooperation that the applicant for immunity must provide to the Commission in order to be granted immunity must be complete, absolute and unreserved. The qualifications ‘on a continuous basis’ and ‘expeditiously’ mean that that cooperation must last throughout the administrative procedure and that it must, as a matter of principle, be immediate.

Moreover, a reduction of the fine 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, 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. That consideration applies for even stronger reasons to the cooperation necessary to justify the grant of total immunity from fines, in so far as immunity constitutes treatment even more favourable than a mere reduction of the fine.

Consequently, the concept of cooperation that is provided ‘fully, on a continuous basis and expeditiously’ and is capable of justifying the grant of total immunity from fines means genuine and full cooperation characterised by a real spirit of cooperation.

In this respect, an undertaking wishing to benefit from total immunity from fines on the basis of its cooperation in the investigation cannot fail to inform the Commission of relevant facts of which it is aware and which are capable of affecting, even potentially, the conduct of the administrative procedure and the effectiveness of the Commission’s investigation. Thus, genuine, full cooperation assumes that throughout the entire administrative procedure the undertaking concerned will inform the Commission promptly of any relevant circumstance capable of having an adverse effect of the smooth conduct of the investigation and also on the discovery and effective suppression of the cartel in question. That obligation to provide information is all the greater where such a circumstance concerns the relationship between that undertaking and the other members of the cartel and, a fortiori, if the possibility that the circumstance in question might arise has already been explicitly discussed by the Commission and that undertaking in the context of the administrative procedure.

The assessment of the existence of conduct reflecting a spirit of genuine cooperation can be made only by reference to the circumstances existing at the time when that conduct took place. Indeed, in view of the ‘continuous’ nature of the necessary cooperation, which must last throughout the procedure, any conduct contrary to the spirit of genuine cooperation is in itself sufficient to constitute a breach of the obligation to cooperate. Thus any circumstance which arises subsequent to that conduct is not capable of justifying such a breach.

It follows that an ex post facto finding that the conduct in breach of the obligation to cooperate had no negative effects cannot be relied on in order to justify that conduct.

(see paras 125-130, 132-134)

3. In competition matters, the Commission may, in its final decision imposing a fine for the infringement of competition rules, amend the arguments set out in the statement of objections, provided that the decision respects the parties’ rights of defence and does not allege that the persons concerned have committed infringements other than those referred to in the statement of objections and takes into consideration only facts on which the persons concerned have had the opportunity to make known their views.

(see para. 176)

4. The right to rely on the principle of the protection of legitimate expectations assumes that three conditions are satisfied. First, precise, unconditional and consistent assurances originating from authorised and reliable sources must have been given to the person concerned by the administration. Second, those assurances must be such as to give rise to a legitimate expectation on the part of the person to whom they are addressed. Third, the assurances given must be consistent with the applicable rules.

In the context of an administrative procedure for infringement of the European Union competition rules, an undertaking having submitted an application for immunity from fines to the Commission cannot rely on any precise, unconditional and consistent assurance that it would obtain final immunity at the end of the administrative procedure. In accordance with point 19 of the notice on immunity from fines and reduction of fines in cartel cases, it is only when the Commission adopts the final decision that it determines whether the conditions set out at point 11 of that notice have been met. It follows that, in the procedural stage preceding the adoption of the final decision, the Commission could not give the undertaking concerned any precise assurance as to the benefit of final immunity.

Furthermore, the Commission is not required to inform applicants for immunity that they must comply with the obligations arising under the Leniency Notice and, in particular, the obligation to cooperate, as the Leniency Notice itself clearly sets out the consequences of such a breach.

(see paras 190-193)

5. 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 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. The 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 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 217-219)

6. According to the method provided for 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, in assessing the gravity of the infringement, account must be taken of its nature, its actual impact on the market, where this can be measured, and the size of the relevant geographic market.

However, the three factors to be taken into account in assessing the gravity of the infringement do not have the same weight in the context of the overall assessment. 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 price fixing. Thus, the Commission may classify horizontal agreements aimed in particular at price fixing as ‘very serious’ solely on account of their nature, without being required to demonstrate an actual impact of the infringement on the market and without such classification being precluded by the limited extent of the geographic market concerned.

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. Since 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, the cartel members cannot benefit, by transforming them into factors that would justify a reduction of the fine, from external factors which counteracted their own efforts.

The Commission cannot be required, where the implementation of a cartel has been established, systematically to demonstrate that the agreements in fact enabled the undertakings concerned to achieve a higher level or, in the case of buying cartels, a lower level of transaction prices than that which would have prevailed in the absence of a cartel. It would be disproportionate to require such proof, which would absorb considerable resources, given that it would necessitate making hypothetical calculations based on economic models whose accuracy it would be difficult for the Court to verify and whose infallibility is in no way proved.

The size of the geographic market is not an autonomous criterion in the sense that only infringements affecting most of the Member States would be classifiable as ‘very serious’. Neither the Treaty, nor Regulation No 1/2003, nor 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 supports the conclusion that only restrictions that are geographically very extensive can be so characterised. Furthermore, agreements or concerted practices relating, in particular, to the fixing of purchase prices and the sharing of quantities purchased can entail, on the sole basis of their actual nature, the classification of ‘very serious’, without there being any need to characterise such conduct by a specific geographic extent. It follows that the size of the relevant geographic market, even on the assumption that it is limited, does not as a matter of principle preclude the infringement found being classified as ‘very serious’.

(see paras 220, 222-224, 226, 248-250, 277, 279)

7. In the context of the setting of fines for infringement of 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 the case of a decision imposing fines on a number of undertakings, the scope of the obligation to state reasons must be assessed in particular in the light of the fact that the gravity of the infringement must be assessed by reference to a large number of 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.

The actual impact on the market is not a factor essential to the characterisation of the infringement as ‘very serious’ in the case of horizontal cartels aimed, in particular, at price fixing, the Commission is not required to take such impact into consideration when determining the gravity of the infringement. The fact that the Commission did not state its reasons for not taking into consideration a criterion which it was not required to take into account and which in its view there was no need to take into account in the present case cannot amount to a failure to state reasons with respect to the setting of the fine.

(see paras 282, 284)

8. The Commission is under no obligation to make internal documents of the institution available during the proceedings. Moreover, during the proceedings before the EU Courts internal Commission documents are not to be communicated to the applicants, unless the circumstances of the case are exceptional and the applicants make out a plausible case for the need to do so. That restriction on access to internal documents is justified by the need to ensure the proper functioning of the institution concerned when dealing with infringements of the competition rules.

(see para. 313)