Case C-207/02 P: Appeal brought on 4 June 2002 by Brugg Rohrsysteme GmbH against the judgment delivered on 20 March 2002 by the Fourth Chamber of the Court of First Instance of the European Communities in Case T-15/99 between Brugg Rohrsysteme GmbH and the Commission of the European Communities
Date: 2002-08-24
Institutions: Court of Justice
Subjects: European Commission, action for annulment (EU), heating, restriction on competition, restrictive trade practice, type of business

24.8.2002

EN

Official Journal of the European Communities

C 202/5

Infringement of the principles of legitimate expectations and
of non-retroactivity: the Court of First Instance erred in law in
considering that the discretion of the Commission to set fines
and its right ‘to raise the general level of fines’ take precedence
over Article 7 of the European Convention of Human Rights
and Fundamental Freedoms, as introduced in EC law by
Article 49 of the Charter of Fundamental Rights of the
European Union. The Appellant was entitled to rely on the
Commission’s practice on the setting of fines applicable at the
time when it approached the Commission. Moreover, a right
to increase the general level of fines within the prescribed
ceiling cannot be compared with the adoption in casu of a true
quasi-legislation in the form of guidelines and notices which
alter entirely the whole method of setting the fines.

Insufficient regard to mitigating circumstances

Incorrect application of the Leniency Notice

The appellant claims that the Court should:

1. At the same time as setting aside the judgment at first
instance of 20 March 2002, set aside Article 1 of the
Commission Decisions of 21 October 1998 (Com(1998)
3117 fin.) and 6 November 1998 (Com(1098) 3415 fin.
and Com(1998) 3117 fin. corrig.) (2) to the extent to
which the appellant is therein accused of participating in
an agreement and in the conduct of concerted practices
against Powerpipe AB; annul Article 3 of those Com-
mission decisions. In the alternative the appellant seeks a
reduction, as the Court deems fit, of the fine imposed on
it in Article 3.

2. Order the Commission to pay the appellant’s costs at first

instance and on appeal.

(1) OJ C 86, 27.03.1999, p. 31.
(2) EEC Council: Regulation No 17: First Regulation implementing
Articles 85 and 86 of the Treaty (OJ L 13, 21.02.1962, p. 204
[SE SER1 (59-62) p. 87]).

Pleas and main arguments

— Infringements of the prohibition of retroactive effect, the
principle of protection of legitimate expectations and the
principle of sound administration in the setting of fines:
the retroactive application of the ‘guidelines’ leads in the
appellant’s case more or less to a trebling of the fine in
consequence not of an individual assessment but of a
regulation operating in the nature of a penalty.

— Infringement of the principle of protection of legitimate
expectations as a result of the alteration of the method
for setting fines after cooperation with the appellant. An
undertaking which cooperates has a legitimate expec-
tation that the Commission will not subsequently alter
the principles determining the calculation of fines in such
a way that cooperation is in the end to no avail.

— Infringement of the rights of the defence as a result of
application of the new guidelines on setting fines without
affording the appellant the right to be heard.

Appeal brought on 4 June 2002 by Brugg Rohrsysteme
GmbH against the judgment delivered on 20 March 2002
by the Fourth Chamber of the Court of First Instance of
the European Communities in Case T-15/99 between
Brugg Rohrsysteme GmbH and the Commission of the
European Communities

(Case C-207/02 P)

(2002/C 202/06)

An appeal against the judgment delivered on 20 March 2002
by the Fourth Chamber of the Court of First Instance of the
European Communities in Case T-15/99 between Brugg
Rohrsysteme GmbH and the Commission of the European
Communities (1) was brought before the Court of Justice of the
European Communities on 4 June 2002 by Brugg Rohrsysteme
GmbH, represented by Dr Thomas Jestaedt, Prof. Dr Hans-
Joachim Salger and Dr Martin Sura, of the law firm, Lovells, in
Brussels, with an address for service in Luxembourg at the
Chambers of Philippe Dupont, of Arendt & Medernach.

— Infringement of the principle of equal treatment by failure
to reduce the starting amount for setting the appellant’s
fine: the Court and the Commission are mistaken as to
the scope and significance of the 10 percent limit in
Article 15(2) of Regulation No 17. It is not only the final
amount of the calculation which is decisive: rather in the
course of the calculation no amount may exceed the 10 %
limit. On account of the ratio of 5 to 1 (which is not
disputed) between the third and fourth categories of the
undertakings concerned the starting amount should also
have been reduced for the appellant.

C 202/6

EN

Official Journal of the European Communities

24.8.2002

— Substantive errors in the application of Article 81(1) EC
in relation to participation in the boycott of Powerpipe:
since the appellant as a mere dealer was not able to
contribute to a boycott its participation in a single
meeting at which boycott measures by the others were
discussed cannot be used as evidence of participation in
such a boycott.

(1) Brugg Rohrsysteme GmbH v Commission [2002] ECR II-0000.
(2) OJ 1999, L 24, p. 1.

Appeal brought on 4 June 2002 by LR af 1998 (Germany)
GmbH [formerly Lögstör Rör (Deutschland) GmbH]
against the judgment of 20 March 2002 by the Fourth
Chamber of the Court of First Instance of the European
Communities in Case T-16/99 between Lögstör Rör
(Deutschland) GmbH and the Commission of the Euro-
pean Communities

(Case C-208/02 P)

(2002/C 202/07)

An appeal against the judgment delivered on 20 March 2002
by the Fourth Chamber of the Court of First Instance of the
European Communities in Case T-16/99 between LR af 1998
(Germany) GmbH [formerly Lögstör Rör (Deutschland) GmbH]
and the Commission of the European Communities (1) was
brought before the Court of Justice of the European Communi-
ties on 4 June 2002 by LR af 1998 (Germany) GmbH [formerly
Lögstör Rör (Deutschland) GmbH], represented by Hans-
Joachim Hellmann, of Shearman & Sterlin in Mannheim, with
an address for service in Luxembourg at the Chambers of
Linklaters Loesch.

The appellant claims that the Court should:

1. Annul Commission Decision 1999/60/EC of 21 October
1998, notified to the plaintiff on 12 November 1998 and
published in the Official Journal of the EC of 30 January
1999 (2), relating to a proceeding under Article 85 of the
EC Treaty (Case No IV/35.691/E-4: — Pre-Insulated Pipe
Cartel) (OJ 1999 L 24, p. 1) in so far as it concerns the
applicant,

in the alternative,

reduce the fine.

2. Order the defendant to pay the costs;

in the further alternative,

set aside the judgment appealed against and refer the case
back for a decision by the Court of First Instance.

Pleas and main arguments

— Infringement of substantive law

— Infringement of the prohibition of retroactive effect
and non-observance of the principle of protection
of legitimate expectations

— By means of the ‘guidelines’ the Commission created
a system of fines which is not within the limits of its
authority under Article 15(2) of Regulation No 17
and applied that new system to factual situations
occurring before adoption of the ‘guidelines’. The
applicant made the legitimate assumption that the
practice in connection with the imposition of fines
and the principles concerning assessment of cooper-
ation in administrative proceedings would not fun-
damentally alter during the course of the adminis-
trative proceedings concerned in this dispute and
that fundamental changes would at any rate not be
applied with retroactive effect.

— Legally incorrect exercise of discretion in the application
and interpretation of Article 15(2) of Regulation No 17:
First, adoption of
together with the
the ‘guidelines’,
Commission’s new practice in setting fines, no longer
comes within the margin of discretion permitted under
Article 15(2) of Regulation No 17 and thus runs counter
to the fundamental principle according to which the
administration must act lawfully. Secondly, the actual
application of Article 15(2) of Regulation No 17 in regard
to the applicant reveals a misuse of discretion in several
respects. In its decision the Commission did not appraise
the individual differences in the duration of the infringe-
ment and the intensity thereof. Furthermore, with the
retroactive application of the ‘guidelines’ the Commission
is departing from its settled administrative practice in
procedures leading to the imposition of fines whereby,
until the well known cartonboard proceedings, it assessed
the individual contribution to the infringement in accord-
ance with the Court’s settled case-law. Finally, application
of the ‘guidelines’ leads to imposition of an exorbitant
fine in relation to other addressees of the decision.

— Infringement of essential formal requirements

— Infringement of the requirement to provide a state-

ment of reasons

— Infringement of the principle of the right to be heard

(1) Lögstör Rör (Deutschland) GmbH v Commission of the European

Communities [2002] ECR II-0000.

(2) OJ 1999 L 24, p. 1.