Final report of the Hearing Officer in case COMP/M.2283 — Schneider/Legrand (drawn up in accordance with Article 15 of Commission Decision 2001/462/EC, ECSC of 23 May 2001 on the terms of reference of Hearing Officers in certain competition proceedings (OJ L 162, 19.6.2001, p. 21)) (Text with EEA relevance)
Date: 2004-04-06
Institutions: European Commission
Subjects: audit, competition law, electrical industry, report

6.4.2004

EN

Official Journal of the European Union

C 86/17

Final report of the Hearing Officer in case COMP/M.2283 — Schneider/Legrand

(drawn up in accordance with Article 15 of Commission Decision 2001/462/EC, ECSC of 23 May
2001 on the terms of reference of Hearing Officers in certain competition proceedings (OJ L 162,
19.6.2001, p. 21))

(2004/C 86/10)

(Text with EEA relevance)

During this case two questions were addressed to the Hearing Officer by Schneider's advisers by letters of
19 and 21 December 2001.

One relates
to the derogation decision adopted by the
Commission on 4 December 2001 pursuant to Article 7(4)
of the Merger Regulation and the other concerns access to
the file in the context of preparation of the Commission's
decision under Article 8(4) of the Merger Regulation on the
arrangements for demerging Schneider and Legrand.

I replied on 20 December 2001 stating that
the Hearing
Officer's terms of reference do not allow him to replace the
Competition Directorate-General's analysis of the merits of a
case with his own, but that his role is basically to ensure that,
since it is one of the fundamental rights of the defence, the
parties' right to be heard before a decision concerning them is
taken has been respected.

The Article 7(4) derogation decision

The Commission granted Schneider Electric a derogation under
Article 7(4) of the Merger Regulation allowing it to exercise the
voting rights attached to the shares it holds in Legrand via a
trustee (Salustro Reydel Management) appointed by Schneider
under contract.

The trustee accepted this task under terms and conditions
agreed by the parties.

Article 2(1) of those terms and conditions stipulated that the
trustee was, for the duration of its appointment, to exercise in
the name and on behalf of Schneider Electric the voting rights
attached to the preference shares and preferrred dividend
shares issued by Legrand and held by Schneider Electric, at
all the ordinary, extraordinary and special general meetings
which Schneider Electric was invited to attend as a shareholder.

Schneider Electric nevertheless wished to accompany its trustee
at the general meeting of 19 December 2001 in order, through
being present physically, to be informed of the proceedings at
the same time as the journalists and other Legrand share-
holders. Schneider Electric made this request on the day
before the general meeting, which had been convened four
weeks in advance of the appointed date.

contacting the

After
for
Competition replied by e-mail on the same day, refusing the
request.

the Directorate-General

trustee,

By letter, which I received on 19 December 2001, while the
general meeting was in progress, Schneider Electric challenged
the Commission's stance and requested me to confirm the
Commission's final position on this issue.

I also stated that I could not see, a priori, how Schneider's
rights of defence would be affected through not being
present at the general meeting of Legrand shareholders while
being represented by its trustee, and I stressed my willingness
to continue the discussion of the substantive aspects of the
issue on the basis of arguments
forward by
Schneider Electric.

to be put

By letter of 21 December 2001,
in reply, Schneider Electric
asked me to rule on whether the conditions in which the
Commission departments had refused its request physically to
attend Legrand's general meeting breached its rights of defence.

My opinion, which I communicated to Schneider Electric by
letter of 15 January 2002, examined separately the formal and
the substantive aspects of the question.

From a formal standpoint, I told Schneider Electric's advisers
that by acting so late they had placed themselves in a difficult
position with regard to the exercise of their right to be heard.
They had thus created an emergency which lay outside the
normal modus operandi of official
relations between the
such
Competition Directorate-General
relations are to function normally, requests have to take the
form of a reasoned written submission to the appropriate level
of authority, allowing the departments reasonable time to
examine them. In the circumstances, I am convinced that the
Competition Directorate-General cannot reasonably be accused
of having ignored Schneider's request, when Schneider received
a response from the Head of Unit on the same evening and
that position was, at
the request of Schneider's advisers,
confirmed on the following morning.

and businesses.

If

C 86/18

EN

Official Journal of the European Union

6.4.2004

As far as the substance of the issue is concerned, the question
is whether the fact that Schneider was prevented from accom-
panying its trustee at the general meeting constitutes in itself a
breach of its rights of defence. I consider, a priori, that that is
not the case.

The powers vested in the trustee were freely negotiated
between the parties over and above the statutory provisions
governing relations between trustees and principals.

Those powers furthermore specifically include, naturally, the
authority to safeguard Schneider's proprietary interests,
the
‘issues affecting proprietary interests’ having been carefully
defined. Consequently, a priori, Schneider's rights of defence
are not breached if the company is represented by its trustee
at general meetings.

The Article 8(4) decision

In its letter of 21 December 2001 Schneider Electric raised
concern with regard to the arrangements for exercising its
right of access
I was asked to ensure that
Schneider was able effectively to put forward its views on
the positions expressed by Legrand.

to the file.

soon as

the non-confidential versions of

Schneider was granted access to the file on 10 January 2002,
latest
as
the
furnished to the
documents provided by Legrand were
Commission. A final access
the same
conditions had been arranged at the time of writing of this
report.

to the file under

Furthermore, Schneider Electric requested a hearing on the
statement of objections;
this took place on 26 November
2001 and did not give rise to any challenges regarding
exercise of the rights of the defence.

reiterated my willingness

I nevertheless
to continue the
discussion, if Schneider Electric considered it worthwhile, on
the basis of substantive arguments which I mentioned in my
letter of 19 December 2001 and which Schneider had not so
far presented.

The draft final decision under Article 8(4) of the Merger Regu-
lation concerning the demerger of Schneider and Legrand does
not contain any objections other than those communicated to
the company in the statement of objections of 24 October
2001.

Neither does the reply from Schneider Electric's advisers, dated
include the requested reasoning as to the
17 January 2002,
substance of the issue.

I consider that,
defence have been guaranteed during these proceedings.

in all respects, Schneider Electric's rights of

Serge DURANDE