Keywords

Summary



Keywords

1. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Concept – Joint intention as to the conduct to be adopted on the market

(Art. 81(1) EC)

2. Competition – Agreements, decisions and concerted practices – Concerted practice – Concept – Contact incompatible with the obligation for each undertaking to determine independently its conduct on the market – Exchange of information – Presumption – Conditions

(Art. 81(1) EC)

3. Competition – Administrative procedure – Commission decision finding an infringement – Means of proof – Reliance on a body of evidence

(Art. 81(1) EC)

4. Competition – Administrative procedure – Commission decision finding an infringement – Means of proof – Documentary proof

(Art. 81(1) EC)

5. Community law – Principles – Fundamental rights – Presumption of innocence – Procedure in competition matters – Applicability

(Art. 81(1) EC)

6. Competition – Administrative procedure – Commission decision finding an infringement – Use as evidence of statements submitted in the context of the Leniency Notice by other undertakings which participated in the infringement – Whether permissible – Conditions

(Arts 81 EC and 82 EC)

7. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Burden of proving the infringement borne by the Commission – Limits

(Art. 81(1) EC)

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

(Art. 81(1) EC)

9. Competition – Administrative procedure – Commission decision finding an infringement – Burden of proving the infringement and its duration on the Commission – Probative value of evidence provided voluntarily against an undertaking by the main participants in an unlawful agreement in order to benefit from the application of the Leniency Notice

(Art. 81(1) EC; Commission Notice 96/C 207/04)

10. Competition – Agreements, decisions and concerted practices – Complex infringement comprising elements both of an agreement and of a concerted practice – Classified singly as an ‘agreement and/or concerted practice’ – Whether permissible

(Art. 81(1) EC)

11. Competition – Agreements, decisions and concerted practices – Participation in meetings having an anti-competitive object

(Art. 81(1) EC)

12. Competition – Administrative procedure – Observance of the rights of the defence – Access to the file – Scope – Refusal to communicate a document – Consequences – Need to draw a distinction, in relation to the burden of proof borne by the undertaking concerned, between incriminating and exculpatory documents

(Council Regulation No 1/2003, Art. 27(2))

13. Competition – Administrative procedure – Access to the file – Documents not contained in the investigation file and not retained by the Commission to be used as evidence – Documents capable of assisting the defence of the parties

(Arts 81(1) EC and 82 EC; EEA Agreement, Arts 53, 54 and 57; Council Regulation No 139/2004; Commission Notice 2005/C 325/07, Section 27)

14. Competition – Administrative procedure – Observance of the rights of the defence – Incriminating document – Concept

(Council Regulation No 1/2003, Art. 27(2))

15. Competition – Administrative procedure – Commission decision finding an infringement – Duty of the Commission to examine carefully and impartially all the relevant aspects of the individual case

16. Competition – Administrative procedure – Commission’s premature display of its belief as to the existence of an infringement

17. Competition – Administrative procedure – Obligations of the Commission – Duty to act within a reasonable time – Criteria for assessment – Infringement – Consequences

(Council Regulation No 1/2003)

18. Competition – Administrative procedure – Request for information – General duty of care attaching to undertakings or associations of undertakings

(Council Regulation No 17, Art. 11)

19. Competition – Fines – Amount – Determination – Commission’s margin of discretion – Limits – Compliance with the Guidelines adopted by the Commission – Judicial review

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

20. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Actual impact on the market taken into account – Scope

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

21. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Consideration of effects on a specific geographic area – Scope

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

22. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Discretion of the Commission

(Council Regulations No 17 and No 1/2003; Commission Notice 98/C 9/03)

23. Competition – Fines – Amount – Determination – Division of the undertakings concerned into different categories – Conditions

(Commission Notice 98/C 9/03, Section 1A, sixth para.)

24. Competition – Fines – Decision imposing fines – Obligation to state the reasons on which the decision is based – Scope – Indication of the factors which enabled the Commission to determine the gravity of the infringement – Sufficient indication

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

25. Competition – Fines – Amount – Determination – Deterrent effect – Criteria for appraising the deterrent

(Commission Notice 98/C 9/03, Section 1A, fourth para.)

26. Competition – Fines – Amount – Determination – Deterrent effect – Discretion of the Commission

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

27. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – Termination of the infringement as soon as the Commission intervenes – Scope

(Art. 81(1) EC; Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 3)

28. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – Non-implementation in practice of the unlawful agreements

(Art. 81(1) EC; Commission Notice 98/C 9/03, Section 3)

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

(Article 81 EC; Council Regulation No 1/2003)

30. Competition – Administrative procedure – Obligations of the Commission – Duty to act within a reasonable time – Infringement – Consequences – Equitable reduction in the amount of the fine

(Arts 81 EC and 288, second para., EC)

Summary

1. In order for there to be an agreement within the meaning of Article 81(1) EC, it is sufficient that the undertakings in question should have expressed their joint intention to conduct themselves on the market in a specific way. An agreement within the meaning of Article 81(1) EC can be regarded as having been concluded where there is a concurrence of wills on the very principle of a restriction of competition, even if the specific features of the restriction envisaged are still under negotiation.

The existence of an agreement within the meaning of Article 81 EC is not called into question either by the fact that the consensus between the brewers does not extend to the specific arrangements for implementing a price increase or the fact that that increase never actually took place on the market.

(see paras 44-45, 183)

2. The concept of a concerted practice refers to a form of coordination between undertakings which, without being taken to the stage where an agreement properly so-called has been concluded, knowingly substitutes for the risks of competition practical cooperation between them.

In this respect, Article 81(1) EC precludes any direct or indirect contact between economic operators of such a kind as either to influence the conduct on the market of an actual or potential competitor or to reveal to such a competitor the conduct which the operator concerned has decided to follow itself or contemplates adopting on the market, where the object or effect of those contacts is to restrict competition.

In this regard, subject to proof to the contrary, which the economic operators concerned must adduce, the presumption must be that the undertakings taking part in the concerted action and remaining active on the market take account of the information exchanged with their competitors for the purposes of determining their conduct on that market. That will be all the more true where the undertakings concert together on a regular basis over a long period.

(see paras 46-47, 186)

3. As regards establishing 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. Thus, the Commission must produce sufficiently precise and consistent evidence to establish the existence of the infringement.

However, it is important to emphasise that 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.

As anti-competitive agreements are known to be prohibited, the Commission cannot be required to produce documents expressly attesting to contacts between the operators concerned. The fragmentary and sporadic items of evidence which may be available to the Commission should, in any event, be capable of being supplemented by inferences which allow the relevant circumstances to be reconstituted. The existence of an anti-competitive practice or agreement may therefore 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.

(see paras 48-51)

4. Where the Commission has relied on documentary evidence in support of its finding of the existence of an anti-competitive agreement or practice, the burden is on the parties who are contesting that finding before the Court not only to put forward a plausible alternative to the Commission’s view but also to allege that the evidence relied on in the contested decision to establish the existence of the infringement is insufficient.

(see para. 52)

5. As regards the scope of review by the Court, wh ere the Court is faced with an application for the annulment of a decision applying Article 81(1) EC, it must undertake in a general manner a comprehensive review of the question whether or not the conditions for the application of Article 81(1) EC are met.

Any doubt of the Court must benefit the undertaking to which the decision finding an infringement was addressed, in accordance with the principle of the presumption of innocence, which, as a general principle of EU law, 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.

(see paras 53-54)

6. There is no provision or general principle of EU law that prohibits the Commission from relying, as against an undertaking, on statements made by other incriminated undertakings. If that were not the case, the burden of proving conduct contrary to Articles 81 EC and 82 EC, which is borne by the Commission, would be unsustainable and incompatible with the task of supervising the proper application of those provisions which is entrusted to it by the EC Treaty.

Admittedly, an admission by one undertaking accused of having participated in a cartel, the accuracy of which is contested by several other undertakings similarly accused, cannot be regarded as constituting adequate proof of an infringement committed by the latter unless it is supported by other evidence. Such a statement can thus not suffice, in itself, to establish the existence of an infringement but must be corroborated by other evidence. Nevertheless, the degree of corroboration required in this case is lesser, in terms both of precision and of depth, in the case of a statement that is of high reliability than in the case of a statement that is not particularly credible.

Thus, if it were to be held that a body of consistent evidence corroborated the existence and certain specific aspects of the practices mentioned in such a particularly reliable statement, that statement might be sufficient in itself, in such a case, to constitute evidence of other aspects of the Commission decision.

Moreover, provided that a document does not manifestly contradict the statement as to the existence or the essential content of the practices in question, the fact that it provides evidence of significant elements of the practices which it described is sufficient to endow it with a certain value within the body of inculpatory evidence.

(see paras 70, 92-94)

7. The Commission often has to prove the existence of an infringement under conditions which are hardly conducive to that task, in that several years may have elapsed since the time of the events constituting the infringement and a number of the undertakings covered by the investigation have not actively cooperated therein.

Whilst it is necessarily incumbent upon the Commission to establish that an illegal market-sharing agreement was concluded, it would be excessive also to require it to produce evidence of the specific mechanism by which that object was attained. It would be too easy for an undertaking guilty of an infringement to escape any penalty if it was entitled to base its argument on the vagueness of the information produced regarding the operation of an illegal agreement in circumstances in which the existence and anti-competitive purpose of the agreement had nevertheless been sufficiently established. Undertakings are able properly to defend themselves in such circumstances provided that they have an opportunity to comment on all the evidence relied on against them by the Commission.

(see para. 78)

8. It follows from the actual text of Article 81 EC that agreements and concerted practices between undertakings are prohibited, regardless of their effect on the market, when they have an anti-competitive object. Thus, where the Commission has established the existence of agreements and concerted practices which have an anti-competitive object, this finding cannot be refuted by information relating to the non-application of collusive arrangements or the absence of any effect on the market.

(see paras 79-80)

9. Even if some caution as to evidence provided voluntarily by the main participants in an unlawful agreement is generally called for, considering the possibility that they might tend to play down the importance of their contribution to the infringement and maximise that of others, the fact of seeking to benefit from the application of the Leniency Notice in order to obtain a reduction of the fine does not necessarily create an incentive for the other participants in the cartel to submit distorted evidence. Any attempt to mislead the Commission could call into question the sincerity and the completeness of the cooperation of the person seeking to benefit, and thereby jeopardise his chances of benefiting fully under the Leniency Notice.

(see para. 91)

10. Given such a complex factual situation, the dual characterisation by the Commission of anti-competitive conduct as ‘a complex of agreements and/or practices’, inasmuch as that conduct includes both elements that must be classified as ‘agreements’ and elements that must be classified as ‘concerted practices’, must be understood not as requiring, simultaneously and cumulatively, proof that each of those factual elements presents the constituent elements both of an agreement and of a concerted practice, but rather as referring to a complex whole comprising a number of factual elements some of which were characterised as agreements and others as concerted practices for the purposes of Article 81 EC, which lays down no specific category for a complex infringement of this type.

(see para. 191)

11. Where an undertaking has, even without playing an active role, attended a meeting during which unlawful concerted action has been mooted, it is deemed to have participated in that concerted action unless it proves that it openly distanced itself from it or informed the other participants that it intended to take part in that meeting in a spirit that was different from theirs.

(see para. 195)

12. The right of access to the file, which is a corollary of the principle of respect for the rights of the defence, means that the Commission must provide the undertaking concerned with the opportunity to examine all the documents in the investigation file that may be relevant for its defence. Those documents include both incriminating and exculpatory evidence, save where the business secrets of other undertakings, the internal documents of the Commission or other confidential information are involved.

As regards incriminating evidence, the failure to communicate a document constitutes a breach of the rights of the defence only if the undertaking concerned shows, first, that the Commission relied on that document to support its objection concerning the existence of an infringement and, second, that the objection could be proved only by reference to that document. It is thus for the undertaking concerned to show that the result at which the Commission arrived in its decision would have been different if that uncommunicated document had to be disallowed as evidence.

By contrast, where an exculpatory document has not been communicated, the undertaking concerned must only establish that its non-disclosure was able to influence, to its disadvantage, the course of the proceedings and the content of the Commission’s decision. It is sufficient for the undertaking to show that it would have been able to use the exculpatory documents in its defence, demonstrating inter alia that it would have been able to put forward evidence which did not agree with the findings made by the Commission at the stage of the statement of objections and would therefore have been able to have some influence on the assessment in the decision.

(see paras 235-238)

13. The statement of objections is a document whose aim is to delimit the scope of the procedure initiated against an undertaking and to ensure that the rights of the defence may be exercised effectively. It is from that aspect that the statement of objections is subject to procedural safeguards, pursuant to the principle of respect for the rights of the defence, one of which is the right of access to documents in the Commission’s file.

The replies to the statement of objections are not part of the investigation file proper. Since they are documents which are not part of the file compiled at the time of notification of the statement of objections, the Commission is required to disclose those replies to other parties involved only if it transpires that they contain new incriminating or exculpatory evidence. Similarly, under paragraph 27 of the Commission notice on the rules for access to the Commission file in cases pursuant to Articles 81 EC and 82 EC, Articles 53, 54 and 57 of the EEA Agreement and Regulation No 139/2004, as a general rule, the parties do not have access to the replies to the statement of objections of the other parties involved in the investigation. A party is granted access to such documents only where they may constitute new evidence, whether of an incriminating or of an exculpatory nature, pertaining to the allegations concerning that party in the Commission’s statement of objections.

In this respect, concerning, first, new incriminating evidence, it is settled case-law that, if the Commission wishes to rely on evidence from a reply to a statement of objections in order to prove the existence of an infringement, the other undertakings involved in that proceeding must be placed in a position in which they can express their views on such new evidence.

On the other hand, as regards new exculpatory evidence, the Commission is not obliged to make it available of its own initiative. If, during the administrative procedure, the Commission has rejected an applicant’s request for access to documents which are not in the investigation file, an infringement of the rights of the defence may be found only if it is proved that the outcome of the administrative procedure might have been different if the applicant had had access to the documents in question during that procedure.

(see paras 239-244, 253)

14. A document cannot be regarded as an inculpatory document unless it is used by the Commission in support of its finding of an infringement by an undertaking.

In order to establish a breach of its rights of defence, it is not sufficient for the undertaking in question to show that it was not able to express its views during the administrative procedure on a document used in a given part of the contested decision. It must demonstrate that the Commission used that document in the contested decision as further evidence of an infringement in which the undertaking participated.

(see para. 245)

15. The rights guaranteed by the EU legal order in administrative procedures include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case.

(see para. 268)

16. The existence of an infringement must be assessed having regard only to the evidence gathered by the Commission. Where the substance of an infringement is actually established at the end of the administrative procedure, evidence of a premature manifestation by the Commission, during that procedure, of its conviction that the infringement exists is not of such a kind as to deprive the actual evidence of the infringement itself of its reality.

(see para. 278)

17. Compliance with the reasonable time requirement in the conduct of administrative procedures relating to competition policy constitutes a general principle of EU law whose observance the EU judicature ensures.

For the purposes of the application of that principle, a distinction must be drawn between the two stages of the administrative procedure, namely the investigation stage preceding the statement of objections and the stage corresponding to the remainder of the administrative procedure. The first stage, covering the period up to notification of the statement of objections, begins on the date on which the Commission, under the powers conferred by the legislature, takes measures which imply an accusation of an infringement and must enable the Commission to adopt a position on the course which the procedure is to follow. The second stage covers the period from notification of the statement of objections to adoption of the final decision. It must enable the Commission to reach a final decision on the infringement alleged.

A period of 65 months of the first stage of the procedure, in the absence of further explanation or information from the Commission regarding the measures of inquiry undertaken during that period, must be regarded as excessive. However, a finding that there has been a breach of the reasonable time principle may result in the annulment of a decision establishing an infringement only where the length of the proceedings affected their outcome.

(see paras 286-288, 290, 292, 295)

18. By virtue of a general duty of care attaching to any undertaking or association of undertakings, the applicants are required to ensure the proper maintenance of records in their books or files of information enabling details of their activities to be retrieved, in order, in particular, to make the necessary evidence available in the event of legal or administrative proceedings.

When an undertaking receives requests for information from the Commission under Article 11 of Regulation No 17, it is a fortiori incumbent on it to act with greater diligence and to take all appropriate measures in order to preserve such evidence as might reasonably be available to them.

(see para. 301)

19. The Commission enjoys a broad discretion as regards the method for calculating fines. That 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) of the ECSC Treaty, displays flexibility in a number of ways, enabling the Commission to exercise its discretion in accordance with Regulation No 1/2003 on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC.

In addition, in areas such as determining the amount of a fine under Regulation No 1/2003, where the Commission has such a discretion, review of the legality of its assessments is limited to determining the absence of manifest error of assessment. The discretion enjoyed by the Commission and the limits which it has imposed in that regard have no bearing, however, on the exercise by the EU judicature of its unlimited jurisdiction, which empowers it to annul, reduce or increase the fine imposed by the Commission.

(see paras 308-310)

20. The gravity of an infringement is assessed in the light of numerous factors, such as the particular circumstances of the case, its context and the deterrent effect of fines, in respect of which the Commission has a margin of discretion.

In particular, according to the first paragraph of 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) 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. In the exercise of its unlimited jurisdiction, the Court must consider whether the amount of the fine imposed is proportionate to the gravity of the infringement and must weigh the seriousness of the infringement with the circumstances invoked by the undertaking.

Very serious infringements within the meaning of the third indent of the second paragraph of Section 1.A of the Guidelines are generally ‘horizontal restrictions such as price cartels and market‑sharing quotas’. Cartels of this kind constitute one of the most serious forms of damage to competition, in that their aim is quite simply to eliminate competition between the undertakings which implement them, and therefore run counter to the fundamental objectives of the EU. Furthermore, the Commission may classify horizontal price or market‑sharing cartels as very serious infringements solely on account of their nature, without being required to demonstrate an actual impact of the infringement on the market.

While the existence of an actual impact of the infringement on the market is a factor to be taken into account in assessing the gravity of the infringement, it is one of a number of criteria, such as the nature of the infringement and the size of the geographic market. Likewise, it is apparent from the first paragraph of Section 1.A of the Guidelines that that impact is to be taken into account only where this can be measured.

(see paras 314-316, 319-320, 324-325)

21. The entire territory of a Member State constitutes a substantial part of the common market. Infringements such as agreements or concerted practices involving in particular price fixing or market sharing may be classified as very serious on the basis of their nature alone, it not being necessary for such conduct to cover a particular geographic area.

This conclusion is further confirmed by the fact that, while the indicative description of serious infringements 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 mentions that these will more often than not be horizontal or vertical restrictions but more rigorously applied, with a wider market impact, and with effects in extensive areas of the common market, the description of very serious infringements makes, by contrast, no mention of a requirement that there be a specific impact on the market or that there be effects in a particular geographic area.

Accordingly, the fact that the size of the geographic market in question has a national dimension does not, in any event, preclude categorisation of the infringement as very serious. The size of the relevant product market is not, in principle, a factor that must necessarily be taken into account but simply one relevant factor among others in assessing the gravity of the infringement and fixing the amount of the fine.

(see paras 337, 339-342)

22. The Commission, pursuant to Regulation No 17 and Regulation No 1/2003 on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC, has a margin of discretion when fixing the amount of fines, in order that it may direct the conduct of undertakings towards compliance with the competition rules and that it may at any time adjust the level of fines to the needs of that policy.

The Commission’s practice in previous decisions does not itself serve as a legal framework for the fines imposed in competition matters. Decisions in other cases can give only an indication for the purpose of determining whether there is discrimination, since the facts of those cases, such as markets, products, the undertakings and periods concerned, are not likely to be the same.

The Commission assesses the gravity of infringements by reference to numerous factors, which are not based on a binding or exhaustive list of the criteria which must be applied. Nor is it bound to apply a precise mathematical formula, either for the total amount of the fine or where it is broken down into different elements. In these circumstances, a direct comparison of the fines imposed on the addressees of the two decisions concerning distinct infringements is likely to distort the specific functions performed by the different stages in the calculation of a fine. The final amounts of the fines reflect the specific circumstances of each cartel.

(see paras 345, 347, 350-351)

23. According to the sixth paragraph of 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, for an infringement of a certain gravity, where an infringement involves several undertakings, such as cartels, it may be necessary to apply weightings to the starting amount in order to establish a specific starting amount which takes account of the specific weight and, therefore, the real impact of the offending conduct of each undertaking on competition, particularly where there is considerable disparity between the sizes of the undertakings committing infringements of the same type.

Consideration of the specific weight and, therefore, the real impact of the offending conduct of each undertaking on competition concerns the division of the members of a cartel into categories, in the light of their size on the market during the reference period, and does not mean that the impact on the market of the infringement taken as a whole must be taken into consideration.

The application of differential treatment on the basis of that provision does not require the actual impact of the infringement on the market to be taken into consideration.

(see paras 356-358)

24. The essential procedural requirement to state reasons for the method of calculation of the fine is satisfied, according to settled case-law, where the Commission indicates in its decision the factors which enabled it to determine the gravity and duration of the infringement.

In the statement of reasons explaining the increase in the level of the fine, the Commission is not required to indicate the figures which guided, in particular as regards the deterrent effect sought, the manner in which it exercised its discretion.

(see paras 360, 375)

25. In order to determine the amount of the fine, the Commission must ensure its deterrent effect.

In this respect, the Commission may inter alia take into consideration the size and the economic power of the undertaking in question.

Similarly, the fourth paragraph of 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 provides that it is also necessary to take account of the effective economic capacity of offenders to cause significant damage to other operators, in particular consumers, and to set the fine at a level which ensures that it has a sufficiently deterrent effect.

The Commission has a margin of discretion when fixing the amount of fines, in order that it may direct the conduct of undertakings towards compliance with the competition rules. 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 precluded from raising that level, at any time, to ensure the implementation of competition policy and to strengthen the deterrent effect of fines.

(see paras 367-369, 372)

26. Legal certainty is a general principle of EU law which requires in particular that rules involving negative consequences for individuals should be clear and precise and their application predictable for those subject to them.

The corollary of this principle is the principle that penalties must have a proper legal basis, which requires that offences and the relevant penalties must be clearly defined by law.

Although Article 23(2) and (3) of Regulation No 1/2003 on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC leave the Commission a wide discretion, they nevertheless limit the exercise of that discretion by establishing objective criteria to which it must adhere.

Thus, first, the amount of the fine that may be imposed is subject to a quantifiable and absolute ceiling, so that the maximum amount of the fine that can be imposed on a given undertaking can be determined in advance.

Second, the exercise of that discretion is also limited by rules which the Commission has imposed upon itself 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, and the Commission’s administrative practice is fully subject to review by the Courts of the EU.

A prudent operator, if need be by taking legal advice, can foresee in a sufficiently precise manner the method and order o f magnitude of the fines which he incurs for a given line of conduct, and the fact that the operator cannot know in advance precisely the level of the fines which the Commission will impose in each individual case cannot constitute a breach of the principle that penalties must have a proper legal basis. In addition, undertakings involved in an administrative procedure in which fines may be imposed must take account of the possibility that the Commission may decide at any time to raise the level of the fines by reference to that applied in the past. The fact that the Commission could at any time review the general level of fines when implementing another competition policy is therefore reasonably foreseeable for the undertakings involved.

(see paras 383-386)

27. Under 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 basic amount of the fine set by the Commission is to be reduced when, for example, the undertaking which is the subject of the complaint terminates the infringement as soon as the Commission intervenes.

The grant of such a reduction of the basic amount of the fine is linked to the circumstances of the particular case, which may lead the Commission not to grant that reduction to an undertaking which is party to an unlawful agreement. In particular, to recognise a mitigating circumstance in situations where an undertaking is party to a manifestly unlawful agreement which it knew or could not be unaware constituted an infringement could encourage undertakings to continue a secret agreement as long as possible, in the hope that their conduct would never be discovered, while knowing that if it were discovered they could expect, by then curtailing the infringement, their fine to be reduced.

Such a recognition would deprive the fine imposed of any deterrent effect and would undermine the effectiveness of Article 81(1) EC. It is an attenuating circumstance which, with a view to the effectiveness of Article 81(1) EC, must be given a strict interpretation, and only the particular circumstances of the specific case can warrant it being taken into account.

In particular, the fact that an intentional infringement was terminated cannot be regarded as a mitigating circumstance where it was terminated as a result of the Commission’s intervention.

The mere fact that the Commission has found in its previous decisions that certain factors constituted mitigating circumstances for the purpose of setting the fine does not mean that it is obliged to do so also in a subsequent decision.

(see paras 394-397, 401)

28. Although the fact that an undertaking does not act on unlawful arrangements is not capable in itself of excluding its liability, it is nevertheless a circumstance which must be taken into account, as a mitigating circumstance, in the determination of the amount of the fine.

(see para. 409)

29. 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 precluded from raising that level within the limits indicated in Regulation No 1/2003 on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC if that is necessary to ensure the implementation of competition policy. On the contrary, the proper application of the competition rules requires that the Commission may at any time adjust the level of fines to the needs of that policy.

An undertaking cannot validly claim that its penalty could have been lower if the Commission had concluded the administrative procedure earlier, since it increased the general level of penalties in the course of the administrative procedure.

In the light of the foregoing, the length of the administrative procedure, although excessive, cannot be regarded as having an effect on the content of the contested decision simply because the Commission increased the level of fines in the meantime.

(see paras 418-420)

30. A procedural irregularity, even though it is not capable of resulting in the annulment of the decision, may justify a reduction of the fine. Failure to adjudicate within a reasonable time can justify the Commission’s decision to make an equitable reduction in the amount of a fine, the possibility of granting such a reduction falling within the scope of the Commission’s powers. The exercise of that power by the Commission does not prevent the Court, in the exercise of its unlimited jurisdiction, granting a further reduction of the amount of the fine.

The purpose of reducing the fine is to rectify the breach of the reasonable time principle and it must therefore be determined at an appropriate level having regard to the fine imposed on the undertaking. Nevertheless, that reduction is made on an equitable basis and does not have to be preceded by an examination of the conditions for the non‑contractual liability of the European Union within the meaning of the second paragraph of Article 288 EC.

(see paras 425-426, 428, 432)