LG Display Co. Ltd and LG Display Taiwan Co. Ltd v European Commission.
Date: 2015-04-23
46. It must however be observed that, as is clear from paragraphs 136 to 145 of the judgment under appeal, the General Court held that the Commission was justified in reaching a conclusion which the appellants did not dispute before that court, that the appellants did not form with LGE and Philips a single undertaking for the purposes of application of Article 101 TFEU and therefore did not constitute a vertically-integrated undertaking, and consequently the appellants’ relevant sales to LGE and Philips were included in the category of ‘direct EEA sales’, relating to the sales of cartelised LCD panels to independent third parties. That finding has also not been challenged by the appellants in their appeal. On the contrary, at the hearing, the appellants expressly stated that the sales of cartelised LCD panels to their parent companies were not internal sales.
47. That being the case, in so far as, in the first part of the first ground of appeal, the appellants complain that the General Court was wrong to conclude that the Commission was entitled to include LGD’s internal sales to its parent companies in the value of sales taken into account for the calculation of the fine, their arguments must be rejected, since those arguments are based on a misreading of the judgment under appeal.
49. As the Court has previously held, the Commission must assess, in each specific case and having regard both to the context and the objectives pursued by the scheme of penalties created by that regulation, the intended impact on the undertaking in question, taking into account in particular a turnover which reflects the undertaking’s real economic situation during the period in which the infringement was committed (judgments in Britannia Alloys & Chemicals  v Commission , C‑76/06 P, EU:C:2007:326, paragraph 25, and Guardian Industries and Guardian Europe  v Commission , C‑580/12 P, EU:C:2014:2363, paragraph 53).
50. In accordance with the Court’s settled case-law, it is permissible, for the purpose of fixing the fine, to have regard both to the total turnover of the undertaking, which gives an indication, albeit approximate and imperfect, of the size of the undertaking and of its economic power, and to the proportion of that turnover accounted for by the goods in respect of which the infringement was committed, which gives an indication of the scale of the infringement (judgments in Musique Diffusion française and Others  v Commission , 100/80 to 103/80, EU:C:1983:158, paragraph 121; Dansk Rørindustri and Others  v Commission , C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 243; Archer Daniels Midland and Archer Daniels Midland Ingredients  v Commission , C‑397/03 P, EU:C:2006:328, paragraph 100; and Guardian Industries and Guardian Europe  v Commission , C‑580/12 P, EU:C:2014:2363, paragraph 54).
51. According to the Court’s case-law, 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. Secondly, the exercise of that discretion is also limited by rules of conduct which the Commission imposed on itself, in particular in the Guidelines on the method of setting fines (judgment in Guardian Industries and Guardian Europe v Commission , C‑580/12 P, EU:C:2014:2363, paragraph 55).
53. It follows that, as the Court has previously held, point 13 of the Guidelines on the method of setting fines pursues the objective of adopting, as the starting point for the setting of the fine imposed on an undertaking, an amount which reflects the economic significance of the infringement and the relative size of the undertaking’s contribution to it. Consequently, while the concept of the value of sales referred to in point 13 of those guidelines admittedly cannot extend to encompassing sales made by the undertaking in question which do not fall within the scope of the alleged cartel, it would, however, be contrary to the goal pursued by that provision if that concept were to be understood as applying only to turnover achieved by the sales in respect of which it is established that they were actually affected by that cartel (judgments in Team Relocations and Others  v Commission , C‑444/11 P, EU:C:2013:464, paragraphs 76 and 88, and Guardian Industries and Guardian Europe  v Commission , C‑580/12 P, EU:C:2014:2363, paragraph 57).
54. Such a limitation would, in addition, have the effect of artificially minimising the economic significance of the infringement committed by a particular undertaking, since the mere fact that a limited amount of direct evidence of sales actually affected by the cartel had been found would lead to the imposition of a fine which bore no actual relation to the scope of application of the cartel in question. Such a reward for secrecy would also adversely affect the objective of effective investigation and sanctioning of infringements of Article 101 TFEU and, therefore, cannot be permitted (judgments in Team Relocations and Others  v Commission , C‑444/11 P, EU:C:2013:464, paragraph 77, and Guardian Industries and Guardian Europe  v Commission , C‑580/12 P, EU:C:2014:2363, paragraph 58).
55. In any event, it must be stated that the proportion of the overall turnover deriving from the sale of products in respect of which the infringement was committed is best able to reflect the economic importance of that infringement (judgment in Guardian Indus tries and Guardian Europe v Commission , C‑580/12 P, EU:C:2014:2363, paragraph 59 and case-law cited).
56. In this case, the General Court was therefore correct to hold, in paragraph 97 of the judgment under appeal, that ‘the Commission’s ability to include sales of cartelised LCD panels made by [the appellants] to LGE and Philips in the value of relevant sales for the purpose of calculating the fine does not depend on whether those sales were made at prices influenced by the cartel but merely on the fact that the sales were made on a market affected by a cartel in which [the appellants] were participating’.
57. In that regard, the General Court was correct to rely (i) on point 13 of the Guidelines on the method of setting fines, in paragraphs 65 and 66 of that judgment, in finding that point 13 covers, in fact, sales in the relevant market, which is the market concerned by the infringement, and not only the cases for which the Commission has documentary evidence of the infringement, (ii) on the objective of the EU competition rules, in paragraph 67 of the judgment under appeal, after observing that the interpretation put forward by the appellants would mean that, in order to determine the basic amount of the fines to be imposed in cartel cases, the Commission would be obliged in each case to ascertain the individual sales which were affected by the cartel, and (iii), in paragraph 68 of that judgment, on the case-law stemming from the judgment in Musique Diffusion française and Others  v Commission  (100/80 to 103/80, EU:C:1983:158) referred to in paragraph 50 of this judgment.
58. Consequently, since the General Court held, in paragraph 69 of the judgment under appeal, in its assessment of the facts against which there is no appeal, there being no claim by the appellants of any distortion of the sense of the evidence, that the appellants’ sales of cartelised LCD panels to LGE and Philips were made on the market concerned by the infringement, that court did not err in law in holding, in paragraphs 71 and 72 of that judgment, that the Commission was entitled to take account of those sales in order to calculate the amount of the fine to be imposed on them, irrespective of whether LGE and Philips actually paid the appellants higher prices because of the cartel and whether they passed on that possible overcharging in the prices of the finished products incorporating the cartelised LCD panels which they sold to consumers in the EEA.
60. In that regard, it must be observed that to ignore the value of sales made to independent third parties on the ground that the undertaking participating in the infringement has particular structural links with those third parties would give an unjustified advantage to such an undertaking by allowing it to avoid the imposition of a fine proportionate to its importance on the product market to which the infringement relates (see, by analogy, judgment in Guardian Industries and Guardian Europe  v Commission , C‑580/12 P, EU:C:2014:2363, paragraphs 59 and 63).
64. Contrary to what is claimed by the appellants, the General Court did not thereby in any way rely on an irrebuttable presumption that all sales made on the relevant market were affected by the infringement at issue. The General Court rather held, stating reasons which, as is clear from paragraphs 48 to 59 of this judgment, are not vitiated by any error of law, that, even in the absence of any evidence that the sales of cartelised LCD panels by the appellants to their parent companies were affected by that infringement, those sales may nonetheless be taken into account for the purposes of calculation of the fine to be imposed on the appellants, provided that they were made on the market affected by the infringement. The appellants’ arguments are therefore based on a misreading of the judgment under appeal and must accordingly be rejected.
67. Further, as regards the complaint that the General Court deviated from the Commission’s decision-making practice, suffice it to state, as the General Court did in paragraph 143 of the judgment under appeal, that, according to the Court’s settled case-law, the Commission’s practice in previous decisions does not serve as a legal framework for the fines imposed in competition matters (see judgments in JCB Service  v Commission , C‑167/04 P, EU:C:2006:594, paragraph 205; Tomra Systems and Others  v Commission , C‑549/10 P, EU:C:2012:221, paragraph 104; and Team Relocations and Others  v Commission , C‑444/11 P, EU:C:2013:464, paragraph 82).
69. In those circumstances, the second part of that ground of appeal, whereby the appellants seek to call into question the findings made by the General Court in paragraphs 73 to 89 and 147 to 154 of the judgment under appeal, to the effect that, in essence, as indicated in paragraph 73, it is apparent ‘in any event’ from the file that sales of cartelised LCD panels by the appellants to LGE and Philips had been included in the cartel discussions and that the Commission had proved to the requisite legal standard that the cartel also affected those sales, must be rejected as being ineffective since it concerns a ground included in that judgment purely for the sake of completeness (see, inter alia, judgment in Dansk Rørindustri and Others  v Commission , C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 148).
78. As the General Court correctly stated in paragraph 166 of the judgment under appeal, it follows from the very wording of that provision that the partial immunity provided for therein requires two conditions to be satisfied: first, the undertaking in question should be the first to prove facts previously unknown to the Commission; and, second, those facts, which have a direct bearing on the gravity or the duration of the suspected cartel, should enable the Commission to make new findings concerning the infringement.
79. As is stated in the Court’s case-law, the wording ‘facts ... unknown to the Commission’, in relation to the first of those conditions, is unambiguous and allows, as stated by the General Court in paragraph 167 of the judgment under appeal, the adoption of a restrictive interpretation of the final paragraph of point 23(b) of the Leniency Notice, by limiting that provision to cases in which a company party to a cartel provides the Commission with new information relating to the gravity or the duration of the infringement, and by excluding from it cases in which a company has merely provided information which strengthens the evidence of the existence of the infringement (see, to that effect, the order in Kuwait Petroleum and Others  v Commission , C‑581/12 P, EU:C:2013:772, paragraph 19).
84. Moreover, contrary to what is claimed by the appellants, that interpretation of the final paragraph of point 23(b) of the Leniency Notice is in no way at odds with the objective pursued by that notice, since, as the General Court held in paragraph 167 of the judgment under appeal, the effectiveness of leniency programmes would be undermined if undertakings no longer had an incentive to be the first to submit information revealing the existence of a cartel to the Commission (see, to that effect, the order in Kuwait Petroleum and Others  v Commission , C‑581/12 P, EU:C:2013:772, paragraph 20).
85. Accordingly, where the undertaking which is the first to submit to the Commission, in order to obtain total immunity from a fine under the Leniency Notice, evidence to enable the Commission to find an infringement of Article 101 TFEU has chosen not to disclose information which demonstrates that the duration of the infringement at issue was longer than disclosed by that evidence, any other undertaking participating in that infringement has an incentive, contrary to what is claimed by the appellants, to be the first to disclose such information, since such disclosure may justify the granting of partial immunity from a fine under the final paragraph of point 23(b) of the Leniency Notice. However, that is precisely not the situation in this case, as has been stated above in paragraph 80 of this judgment, as regards the knowledge which the Commission had of the continuation of the infringement during 2005.
87. However, the Leniency Notice is not designed to remove such uncertainty; on the contrary, the effect sought by that notice, as the General Court correctly held in paragraph 163 of the judgment under appeal, is the creation of a climate of uncertainty within cartels in order to encourage the reporting of them to the Commission.