Schindler Holding Ltd and Others v European Commission.
Date: 2013-07-18
31. The decision at issue was adopted on 21 February 2007, that is to say before the Treaty of Lisbon was adopted, on 13 December 2007, and, a fortiori , before the Treaty of Lisbon entered into force, on 1 December 2009. It is settled case-law that, in an action for annulment, the legality of the contested measure must be assessed on the basis of the facts and the law as they stood at the time when the measure was adopted (see Joined Cases 15/76 and 16/76 France  v Commission  [1979] ECR 321, paragraph 7; Case C‑449/98 P IECC  v Commission  [2011] ECR I‑3875, paragraph 87; and Case C‑309/10 Agrana Zucker  [2011] ECR I‑7333, paragraph 31).
32. Furthermore, whilst, as Article 6(3) TEU confirms, fundamental rights recognised by the ECHR constitute general principles of the European Union’s law and whilst Article 52(3) of the Charter requires rights contained in the Charter which correspond to rights guaranteed by the ECHR to be given the same meaning and scope as those laid down by the ECHR, the latter does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into European Union law (see Case C‑571/10 Kamberaj  [2012] ECR I‑0000, paragraph 62, and Case C‑617/10 Åkerberg Fransson  [2013] ECR I‑0000, paragraph 44).
35. In paragraph 59 of its judgment in A. Menarini Diagnostics v. Italy , the European Court of Human Rights explained that, in administrative proceedings, the obligation to comply with Article 6 of the ECHR does not preclude a ‘penalty’ from being imposed by an administrative authority in the first instance. For this to be possible, however, decisions taken by administrative authorities which do not themselves satisfy the requirements laid down in Article 6(1) of the ECHR must be subject to subsequent review by a judicial body that has full jurisdiction. The characteristics of such a body include the power to quash in all respects, on questions of fact and law, the decision of the body below. The judicial body must in particular have jurisdiction to examine all questions of fact and law relevant to the dispute before it.
36. Ruling on the principle of effective judicial protection, a general principle of European Union law to which expression is now given by Article 47 of the Charter and which corresponds, in European Union law, to Article 6(1) of the ECHR, the Court of Justice has held that, in addition to the review of legality provided for by the FEU Treaty, the European Union judicature has the unlimited jurisdiction which it is afforded by Article 31 of Regulation No 1/2003, in accordance with Article 261 TFEU, and which empowers it to substitute its own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or periodic penalty payment imposed ( Chalkor  v Commission , paragraph 63).
37. As regards the review of legality, the Court has pointed out that the European Union judicature must carry it out on the basis of the evidence adduced by the applicant in support of the pleas in law put forward and that it cannot use the Commission’s margin of discretion – either as regards the choice of factors taken into account in the application of the criteria mentioned in the 1998 Guidelines or as regards the assessment of those factors – as a basis for dispensing with the conduct of an in-depth review of the law and of the facts ( Chalkor  v Commission , paragraph 62).
38. As the review provided for by the Treaties involves review by the European Union judicature of both the law and the facts, and means that it has the power to assess the evidence, to annul the contested decision and to alter the amount of a fine, the Court has concluded that the review of legality provided for under Article 263 TFEU, supplemented by the unlimited jurisdiction in respect of the amount of the fine, provided for under Article 31 of Regulation No 1/2003, is not contrary to the requirements of the principle of effective judicial protection which is currently set out in Article 47 of the Charter ( Chalkor  v Commission , paragraph 67).
43. As follows from Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union, and Article 112(1)(c) of the Rules of Procedure of the Court of Justice in the version applicable on the date upon which the present appeal was brought, an appeal must indicate precisely the contested elements of the judgment which the appellant seeks to have set aside and also the legal arguments specifically advanced in support of the appeal (see, inter alia, Case C‑352/98 P Bergaderm and Goupil  v Commission [2000] ECR I‑5291, paragraph 34, and Case C‑248/99 P France  v Monsanto and Commission  [2002] ECR I‑1, paragraph 68).
44. As the Commission has pointed out in its response, the second plea is couched in abstract terms and does not indicate the paragraphs of the judgment under appeal that are contested. The only identifying factor is the reference to the fourth plea in the action at first instance, which alleged that the 2002 Leniency Notice was unlawful in that it breached the principles nemo tenetur se ipsum accusare , nemo tenetur se ipsum prodere and in dubio pro reo  and the principle of proportionality. It is apparent that this plea is unrelated to the second plea of the appeal.
45. It follows from the foregoing that the second plea is too obscure for a response to be given and must be declared inadmissible.
46. In any event, in so far as the appellants criticise the fact that witnesses were not heard before the General Court, it need merely be recalled that, in an action challenging a Commission competition decision, it is as a rule for the applicant to raise pleas in law against that decision and to adduce evidence in support of those pleas (see Chalkor v Commission , paragraph 64). As the Advocate General has observed in point 48 of her Opinion, the appellants did not contest the facts set out in the statement of objections or apply to the General Court for the examination of witnesses.
55. It follows that that argument must be declared inadmissible, since in an appeal the jurisdiction of the Court of Justice is in principle confined to review of the findings of law on the pleas argued at first instance (Case C‑380/09 P Melli Bank  v Council  [2012] ECR I‑0000, paragraph 92).
57. In paragraph 96 of the judgment under appeal, the General Court, without committing an error of law, recalled that the principle of legality requires legislation to define clearly offences and the penalties which they attract (Case C‑413/08 P Lafarge  v Commission  [2010] ECR I‑5361, paragraph 94). In paragraph 99 of that judgment, it likewise did not commit an error of law in recalling the criteria for assessing the clarity of the law under the case-law of the European Court of Human Rights, namely that the clarity of a law is assessed having regard not only to the wording of the relevant provision but also to the clarification provided by settled, published case-law (see, to this effect, the judgment of the European Court of Human Rights in G. v. France , 27 September 1995, § 25, Series A no. 325-B) and that the fact that a law confers a discretion is not in itself inconsistent with the requirement of foreseeability, provided that the scope of the discretion and the manner of its exercise are indicated with sufficient clarity, having regard to the legitimate aim in question, to give the individual adequate protection against arbitrary interference (judgment of the European Court of Human Rights in Margareta and Roger Andersson v. Sweden , 25 February 1992, § 75, Series A no. 226-A).
58. According to the case-law of the Court of Justice, although Article 23(2) of Regulation No 1/2003 leaves the Commission a discretion, it nevertheless limits the exercise of that discretion by establishing objective criteria to which the Commission must adhere. Thus, first, the amount of the fine that may be imposed on an undertaking 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 of conduct which the Commission imposed on itself in the 2002 Leniency Notice and the 1998 Guidelines. Furthermore, the Commission’s well-known and accessible administrative practice is subject to unlimited review by the European Union judicature, whose settled case-law has enabled the concepts that Article 23(2) might contain to be defined. A prudent trader, if need be by taking legal advice, can thus foresee in a sufficiently precise manner the method of calculation and order of magnitude of the fines which he incurs for a given line of conduct, and the fact that that trader 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 (see also, to this effect, the judgment of 22 May 2008 in Case C‑266/06 P Evonik Degussa  v Commission and Council , paragraphs 50 to 55).
67. The 1998 Guidelines form rules of practice from which the administration may not depart in an individual case without giving reasons compatible with the principle of equal treatment (see Case C‑397/03 P Archer Daniels Midland and Archer Daniels Midland Ingredients  v Commission  [2006] ECR I‑4429, paragraph 91) and merely describe the method used by the Commission to examine infringements and the criteria that the Commission requires to be taken into account in setting the amount of a fine (see Chalkor  v Commission , paragraph 60).
68. No provision of the Treaties prohibits an institution from adopting such rules of practice.
69. It follows that the Commission had competence to adopt the 1998 Guidelines, so that the fourth plea is unfounded.
The fifth plea: breach of the principles of non-retroactivity and of the protection of legitimate expectations
Arguments of the parties
75. As the Advocate General has stated in points 169 and 170 of her Opinion, the General Court did not commit an error of law when, in paragraphs 118 to 129 of the judgment under appeal, it recalled and applied the settled case-law of the European Union judicature that neither the 1998 Guidelines nor the Commission’s practice as regards the level of the fines imposed in competition matters infringe the principle of non-retroactivity or the principle of the protection of legitimate expectations (see Dansk Rørindustri and Others  v Commission , paragraphs 217, 218 and 227 to 231; Archer Daniels Midland and Archer Daniels Midland Ingredients  v Commission , paragraph 25; and Case C‑3/06 P Groupe Danone  v Commission  [2007] ECR I‑1331, paragraphs 87 to 92).
102. The authors of the Treaties chose to use the concept of an undertaking to designate the perpetrator of an infringement of competition law, who is liable to be punished pursuant to Articles 81 EC and 82 EC, now Articles 101 TFEU and 102 TFEU, and not the concept of a company or firm or of a legal person, used in Article 48 EC, currently Article 54 TFEU. The secondary legislation cited by the appellants is connected with the latter provision and therefore is not relevant to determining the perpetrator of an infringement of competition law.
103. The concept of an undertaking has been defined by the European Union judicature and designates an economic unit even if in law that economic unit consists of several natural or legal persons (see, to this effect, Akzo Nobel and Others  v Commission , paragraph 55, and Elf Aquitaine  v Commission , paragraph 53 and the case-law cited).
104. It follows that, after recalling that case-law in paragraph 66 of the judgment under appeal, the General Court did not commit an error of law in holding, in paragraph 67 of the judgment, that, when an economic entity infringes the competition rules, it falls to that entity to answer for that infringement.
105. By the second part of the seventh plea, the appellants contend that the European Union does not have legislative competence to determine the rules governing attribution of infringements in the context of the relationship between a parent company and its subsidiary and that it is for the legislature and not the European Union judicature to define a rule of law as elementary as the concept of a perpetrator of an infringement of the competition rules.
106. However, the appellants do not indicate what aspects of the judgment under appeal they contest and paragraphs 63 to 92 of that judgment do not reveal the slightest reference to such an argument. That argument must therefore be declared inadmissible because it is new or, in any event, utterly imprecise.
107. In their reply, the appellants contest the basis of the case-law resulting from Akzo Nobel and Others  v Commission  in the light of Article 6 of the ECHR, submitting that the question of the legality, in the light of that provision, of the presumption that the parent company exercises decisive influence over its subsidiary is still not decided. The Court pointed out, however, in Elf Aquitaine  v Commission , paragraph 62, that a presumption, even where it is difficult to rebut, remains within acceptable limits so long as it is proportionate to the legitimate aim pursued, it is possible to adduce evidence to the contrary and the rights of the defence are safeguarded (see, to this effect, Case C‑45/08 Spector Photo Group and Van Raemdonck  [2009] ECR I‑12073, paragraphs 43 and 44, and the judgment of the European Court of Human Rights in Janosevic v. Sweden , no. 34619/97, § 101 et seq., ECHR 2002-VII).
108. The presumption that decisive influence is exercised over a subsidiary wholly or almost wholly owned by its parent company is intended, in particular, to strike a balance between, on the one hand, the importance of the objective of combatting conduct contrary to the competition rules, in particular to Article 81 EC, and of preventing a repetition of such conduct and, on the other hand, the requirements flowing from certain general principles of European Union law such as the principle of the presumption of innocence, the principle that penalties should be applied solely to the offender and the principle of legal certainty as well as the rights of the defence, including the principle of equality of arms ( Elf Aquitaine  v Commission , paragraph 59). It follows that such a presumption is proportionate to the legitimate aim pursued.
109. Furthermore, first, the aforesaid presumption is based on the fact that, save in quite exceptional circumstances, a company holding all, or almost all, the capital of a subsidiary can, by dint merely of holding it, exercise decisive influence over that subsidiary’s conduct and, second, it is within the sphere of operations of those entities against which the presumption operates that evidence of the lack of actual exercise of that power to influence is generally apt to be found. The presumption is, however, rebuttable and the entities wishing to rebut it may adduce all factors relating to the economic, organisational and legal links tying the subsidiary to the parent company that they consider to be capable of demonstrating that the subsidiary and the parent company do not constitute a single economic entity, but that the subsidiary acts independently on the market (see Case C‑286/98 P Stora Kopparbergs Bergslags  v Commission  [2008] ECR I‑9925, paragraph 29; Akzo Nobel and Others  v Commission , paragraph 61; and Elf Aquitaine  v Commission , paragraphs 57 and 65).
110. Finally, the parent company must be heard by the Commission before the latter adopts a decision against it and review of that decision may be sought from the European Union judicature which must, in deciding the case, observe the rights of the defence.
111. Accordingly, the General Court did not make an error of law in adopting, in paragraph 71 of the judgment, the principle that the parent company is presumed to be liable for the conduct of its wholly-owned subsidiary.
112. By the third part of the seventh plea, the appellants contest the application by the General Court of the case-law resulting from Akzo Nobel and Others  v Commission , submitting that in paragraph 86 of the judgment under appeal the General Court adopted too broad an interpretation of the concept of commercial policy. It should, however, be recalled that, in order to ascertain whether a subsidiary determines its conduct on the market independently, account must be taken of all the relevant factors relating to economic, organisational and legal links which tie the subsidiary to the parent company, which may vary from case to case and cannot therefore be set out in an exhaustive list (see, to that effect, Akzo Nobel and Others v Commission , paragraphs 73 and 74, and Elf Aquitaine  v Commission , paragraph 58). Commercial policy is therefore only one of a number of factors and, moreover, contrary to the appellants’ assertions, must not be interpreted restrictively.
124. As the Cour t has recalled in paragraph 32 of the present judgment, as long as the European Union has not acceded to the ECHR, it does not constitute a legal instrument which has been formally incorporated into European Union law. However, in accordance with settled case-law, fundamental rights, which include the right to property, form an integral part of the general principles of law the observance of which the Court ensures (see, to this effect, Case 44/79 Hauer  [1979] ECR 3727, paragraphs 15 and 17). Protection of the right to property is, moreover, provided for in Article 17 of the Charter.
134. As the Advocate General has recalled in point 178 of her Opinion, it is settled case-law that, while the actual impact of an 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 (see, to this effect, Musique Diffusion française and Others  v Commission , paragraph 129). It follows from this that the effect of an anti-competitive practice is not, in itself, a conclusive criterion for assessing the proper amount of a fine. In particular, factors relating to the intentional aspect may be more significant than those relating to the effects, particularly where they relate to infringements which are intrinsically serious, such as market sharing, a factor which is present in this case (Case C‑194/99 P Thyssen Stahl v Commission  [2003] ECR I‑10821, paragraph 118; Case C‑534/07 P Prym and Prym Consumer  v Commission  [2009] ECR I‑7415, paragraph 96; and judgment of 12 November 2009 in Case C‑554/08 P Carbone-Lorraine  v Commission , paragraph 44).
135. Furthermore, it is apparent from the first paragraph of Section 1.A of the 1998 Guidelines that that impact is to be taken into account only where this can be measured (Case C‑511/06 P Archer Daniels Midland  v Commission  [2009] ECR I‑5843, paragraph 125, and Prym and Prym Consumer  v Commission , paragraph 74).
136. Consequently, had the General Court taken account of the actual impact of the infringement at issue on the market, assuming that that impact could in fact be measured, it would have done so for the sake of completeness (see, to this effect, the order of 13 December 2012 in Case C‑654/11 P Transcatab  v Commission , paragraph 43, and Case C‑511/11 P Versalis  v Commission  [2013] ECR I‑0000, paragraphs 83 and 84).
155. It is to be recalled that, when the European Union judicature reviews the legality of a decision imposing fines for infringement of the competition rules, it cannot use the Commission’s margin of discretion – either as regards the choice of factors taken into account in the application of the criteria mentioned in the 1998 Guidelines or as regards the assessment of those factors – as a basis for dispensing with the conduct of an in-depth review of the law and of the facts ( Chalkor  v Commission , paragraph 62). Such a rule also applies where the judicature determines whether the Commission applied the 2002 Leniency Notice correctly.
156. Whilst the principles set out by the General Court in paragraphs 295 to 300 do not correspond to that case-law, it is necessary, however, to examine the manner in which the General Court conducted its review in the present case in order to determine whether it infringed those principles. As the Advocate General has observed in point 191 of her Opinion, what matters is the criterion that the General Court in fact applied in the specific examination of the added value offered by the cooperation of the undertaking in question with the Commission.
164. In accordance with settled case-law, it is not for the Court of Justice, when ruling on questions of law in the context of an appeal, to substitute, on grounds of fairness, its own assessment for that of the General Court exercising its unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements of European Union law ( Dansk Rørindustri and Others  v Commission , paragraph 245).
165. It is only in so far as the Court of Justice considers that the level of the penalty is not merely inappropriate, but also excessive to the point of being disproportionate, that it would have to find that the General Court erred in law, due to the inappropriateness of the amount of a fine (Case C‑89/11 P E.ON Energie  v Commission [2012] ECR I‑0000, paragraph 126).