Case T-304/08: Action brought on 5 August 2008 — Smurfit Kappa Group v Commission
Date: 2008-08-05
Institutions: Court of First Instance
Subjects: European Commission, State aid, action for annulment (EU), pulp and paper industry, restriction on competition

C 272/30

EN

Official Journal of the European Union

25.10.2008

Pleas in law and main arguments

By the present action, the applicant seeks the partial annulment
of Commission Decision C(2008) 2626 final of 11 June 2008
in which the
in Case COMP/38.695 — Sodium chlorate,
Commission declared that certain undertakings,
including the
applicant, had infringed Article 81(1) EC and Article 53(1) of
the European Economic Area Agreement by allocating sales
volumes, fixing prices, exchanging sensitive commercial
infor-
mation about prices and sales volumes and by monitoring the
implementation of
those anti-competitive agreements in the
market for sodium chlorate in the European Economic Area.

In support of its claims, the applicant relies on eleven pleas in
law based on:

autonomy of a legal person and the taking of the deterrent
effect into account twice whilst fixing the level of the fine;

— infringement of

the principles and rules concerning the

calculation of fines;

— infringement of the leniency notice (1) by alleging that the
evidence adduced by the subsidiary Arkema France was
insufficient; and

— the fact that it is inequitable to impose the heaviest penalty
on the applicant by means of two separate fines when the
responsibility of the subsidiary Arkema France was signifi-
cantly less than that of EKA and Finnish Chemicals.

(1) Commission notice on immunity from fines and reduction of fines

in cartel cases (OJ 2002 C 45, p. 3).

(i)

in so far as

— infringement of the rules governing the responsibility for
offences within corporate groups
the
Commission incorrectly stated that it was not obliged to
adduce evidence supporting the presumption that a holding
company which owns 100 % of a subsidiary has a decisive
(ii) the evidence actually relied
influence over the latter;
upon by the Commission did not
this
presumption and (iii) the Commission rejected the body of
evidence presented by the applicant with a view to over-
turning that presumption;

such support

— infringement of the applicant's right to a fair hearing and
the principles of equality of arms, the presumption of inno-
cence,
individual responsibility and appropriateness of the
punishment, of legality and equal treatment as regards the
imputation of liability;

— distortion of the body of evidence adduced by the applicant;

Parties

Action brought on 5 August 2008 — Smurfit Kappa Group
v Commission

(Case T-304/08)

(2008/C 272/57)

Language of the case: English

— conflicting reasons with regard to the concept of an under-
taking for the purposes of Article 81(1) EC, with regard to
the independence of the subsidiary Arkema France vis-à-vis
the applicant and to the degree and nature of control that
must be exercised by a holding company over its subsidiary
for it to be held responsible for the breaches of the latter;

— infringement of the principle of sound administration in so
far as the Commission (i) did not carefully and impartially
examine all the relevant evidence, (ii) did not apply the same
rules to itself as it applied to the parties and (iii) did not
suspend the proceedings
the applicant
pending the passing of judgment in relevant cases pending
before the Court of First Instance;

initiated against

— infringement of the principle of

legal certainty, since the
Commission did not follow criteria applied in previous deci-
sions with respect
to the responsibility of a holding
company for the breaches a subsidiary;

— an abuse of power, since the penalties imposed deviated
that being to punish an

from their legitimate purpose,
undertaking for having committed an infringement;

— the unfounded nature of the imposition of a fine specific to
the

in infringement of

the principle of

the applicant

Applicant: Smurfit Kappa Group plc (Dublin,
sented by: T. R. Ottervanger, E. V. A. Henny, lawyers)

Ireland)

(repre-

Defendant: Commission of the European Communities

Form of order sought

— To annul the decision of the Commission in accordance

with Article 230 EC;

— To order the Commission to pay the costs incurred by the

applicants in the proceedings.

Pleas in law and main arguments

The applicant seeks pursuant to Article 230 EC annulment of
Commission decision N 582/2007 of 2 April 2008 (Case ‘Aid
in
to Propapier PM2 GmbH & Co. KG-LIP’ C(2008) 1107)
which the Commission approved the State aid notified by the
German State to Propapier PM2 GmbH & Co. KG.

The applicant, an Irish based international packaging company,
lodged an informal complaint to the Commission against the
grant of a substantial subsidy for the construction (in the
Region of Brandenburg-Nordost in Germany) of what would be,

25.10.2008

EN

Official Journal of the European Union

C 272/31

according to the applicant, the largest paper mill in the Euro-
pean Union. The applicant submits that although there were
clear indications that
the subsidised investment would have
serious and disproportionate effects on it and on the sector as a
whole, the Commission considered that no formal investigation
was necessary as the regional aid did not meet the market share
and capacity increase thresholds laid down in paragraph 68
under
the Guidelines on national aid for
2007-2013 (1) (‘The Regional Aid Guidelines’) and, consequently
declared the aid compatible with the Treaty.

(a) and (b) of

Finally, the applicants argue that the Commission infringed its
obligations in relation to the preliminary investigation to state
adequate reasons on which it based its decision.

(1) OJ 2006 C 54, p. 13.
(2) Council Regulation (EC) No 659/1999 of 22 March 1999 laying
down detailed rules for the application of Article 93 of the EC Treaty
(OJ 1999 L 83, p. 1).

The applicant, being a direct competitor of the aid beneficiary,
challenges the Commission's decision not to open the formal
procedure provided for in Article 88(2) EC on the basis of the
following grounds:

First, according to the applicant, the Commission should have
initiated the formal procedure under Article 88(2) EC and
Article 4(4) of Council Regulation No 659/1999 (2) and exam-
ined the aid more thoroughly in light of the doubts arising in
connection with the structural difficulties of the market and in
accordance with a more appropriate assessment of the market.
The applicant claims that the Commission mistakenly confined
itself to applying the rigid thresholds of paragraph 68 of the
Regional Aid Guidelines and made a manifest error of assess-
ment when calculating the capacity increase.

Action brought on 11 August 2008 — Italian Republic v
Commission

(Case T-305/08)

(2008/C 272/58)

Language of the case: Italian

the

effect of

conditions

aid on trading

Second, the applicant submits that the Commission infringed
Article 87(3) EC and the Regional Aid Guidelines in as much as
the contested decision (i) does not contain any analysis of the
adverse
and
(ii) misinterprets the Regional Aid Guidelines. On that basis, it is
submitted that, rather than balancing the benefits of the region
against the repercussions of substantial aid for the sector as a
whole, the Commission simply applied a per se 5 % capacity
increase test while refraining from an economic analysis. Also, it
is submitted that the application of the test laid down in para-
graph 68 of the Regional Aid Guidelines is contrary to the EC
Treaty since the said provision does not require the Commission
to automatically approve all aid measures that follow below the
thresholds set therein.

Parties

Applicant: Italian Republic (represented by: F. Arena, Avvocato
dello Stato)

Defendant: Commission of the European Communities

Third, according to the applicant,
the contested decision is
vitiated by errors of fact and manifest errors of assessment in
respect of market definition and capacity increase.

Form of order sought

it

is

submitted that

Fourth,
the Commission infringed
Article 87(3) EC and the Regional Aid Guidelines in so far as
the contested decision contains a manifest error of assessment
as to the qualification of the aid measure.

Fifth, the decision is also vitiated, allegedly, by serious errors of
law in so far as it considers the Regional aid Map 2007-2013 of
Germany to be compatible with the EC treaty, allowing the
Region Brandenburg-Nordost
to be eligible for regional aid
pursuant to the derogation laid down in Article 87(3)(a) EC for
the whole period of 2007-2013. In addition the contested deci-
sion is flawed since it ignores other aid concerning the same
project.

— Annul Article

1

of Commission Regulation

(EC)
No 530/2008 of 12 June 2008 establishing emergency
measures as regards purse seiners fishing for bluefin tuna in
the Atlantic Ocean, east of
longitude 48° W, and in the
Mediterranean Sea, published in Official Journal L 155 of
13 June 2008, in so far as it bans, as from 16 June 2008,
fishing for bluefin tuna in the Atlantic Ocean, east of longi-
tude 48° W, and in the Mediterranean Sea by vessels flying
the Italian flag and prohibits those vessels from retaining on
board, placing in cages for fattening or farming, tranship-
ping, transferring or landing bluefin tuna stock.

— Order the Commission to pay the costs.