Erste Group Bank AG (C-125/07 P), Raiffeisen Zentralbank Österreich AG (C-133/07 P), Bank Austria Creditanstalt AG (C-135/07 P) and Österreichische Volksbanken AG (C-137/07 P) v Commission of the European Communities.
Date: 2009-09-24
36. With a view to extensive, countrywide implementation of (or for the purpose of coordination with) the agreements concluded in the abovementioned Vienna committee meetings, there was also a regular flow of information to the various regional committees in the provinces and from the latter to the central committees in Vienna. From time to time, regional committees sent representatives to federal committee meetings on lending and/or deposit rates.
37 The Commission states, in the contested decision, that, during the period covered by its investigation (namely from 1 January 1994 to the end of June 1998), at least 300 meetings took place in Vienna alone, quite apart from the numerous regional committee meetings. …
38 The Commission draws attention to the particular role played by the lead institutions in the Lombard network as coordinators and representatives of their respective bank groupings, namely, in the case of Erste (previously GiroCredit), the savings bank sector; in the case of RZB, the Raiffeisen sector; and, in the case of ÖVAG, the credit union sector. According to the Commission, that role was directly utilised for the smooth functioning of the Lombard network. First, the lead institutions organised the mutual transfer of information between Vienna and the provinces within the respective bank groupings; second, they represented the interests of their grouping vis-à-vis the other groupings in the cartel. According to the Commission, they were thus perceived as representatives of their respective groupings by the other participants. The agreements were therefore reached not only between the individual institutions themselves but also between the groupings.’
III – The actions before the Court of First Instance and the judgment under appeal
11. By applications received at the Registry of the Court of First Instance on 30 August and 2 September 2002, the eight undertakings penalised by the contested decision, including the four appellants herein, Erste, RZB, BA-CA and ÖVAG, brought actions under Article 230 EC for the annulment of that decision, wholly or in part, and, in the alternative, cancellation of the fines imposed on each of them or reduction of the amount thereof.
12. By the judgment under appeal, the Court of First Instance dismissed the applications of, among others, Erste, BA-CA and ÖVAG and ordered those applicants to pay the costs.
13. It also dismissed both RZB’s application and the Commission’s counterclaim, and ordered RZB to pay its own costs and 90% of those incurred by the Commission.
IV – Forms of order sought by the parties
14. Erste claims that the Court should:
– set aside the judgment under appeal in so far as it dismisses Erste’s claim for annulment;
– annul the contested decision to the extent to which it imposes a fine on Erste;
– in the alternative, reduce the amount of the fine imposed on it in Article 3 of the contested decision;
– in the further alternative, set aside the judgment under appeal and refer the case back to the Court of First Instance;
– order the Commission to pay the costs in any event.
15. RZB claims that the Court should:
– set aside the judgment under appeal in so far as it dismisses RZB’s action for annulment;
– annul Article 3 of the contested decision in so far as it pertains to RZB;
– in the alternative, reduce the amount of the fine imposed on it in Article 3 of the contested decision;
– order the Commission to pay the costs.
16. BA-CA claims that the Court should:
– set aside the judgment under appeal in so far as it dismisses BA-CA’s action for annulment;
– annul Article 3 of the contested decision in so far as it pertains to BA-CA;
– in the alternative, reduce the amount of the fine imposed on it in Article 3 of the contested decision;
– order the Commission to pay the costs.
17. ÖVAG claims that the Court should:
– set aside paragraphs 2 and 4 of the judgment under appeal;
– annul the contested decision in so far as it pertains to ÖVAG;
– in the alternative, reduce the amount of the fine imposed on it in Article 3 of the contested decision;
– in the further alternative, refer the case back to the Court of First Instance;
– order the Commission to pay the costs or reserve the costs if the case is referred back to the Court of First Instance.
18. The Commission contends that the Court should:
– dismiss the appeals;
– order the appellants to pay the costs.
V – The grounds of appeal
19. Erste submits four grounds of appeal:
– breach of the rights of the defence;
– infringement of Article 81(1) EC owing to the absence of any appreciable effect on trade between Member States;
– infringement of Article 15(2) of Regulation No 17 through the imputation to Erste of the conduct of GiroCredit for the period prior to its acquisition; and
– infringement of that article, read in conjunction with the Guidelines for the setting of fines and determination of their amount.
20. RZB submits four grounds of appeal:
– infringement of Article 81 EC, in that the effect on trade between Member States was not established;
– infringement of the Guidelines, in that the meetings of the banks concerned were characterised as ‘very serious infringements’;
– infringement of Regulation No 17 and of the Guidelines, in that the shares of the entire ‘Raiffeisen sector’ market were wrongly attributed to it; and
– error of law in the assessment of its cooperation with the Commission.
21. BA-CA submits three grounds of appeal:
– incorrect finding, in connection with determination of the amount of the fine, that the committee meetings brought about economic effects;
– failure to take account of circumstances justifying a reduction of the fine when determining the basic amount; and
– failure to take account of its cooperation in the form of responses to the requests for information, the joint exposition of facts, the voluntary disclosure of additional documents and the response to the statement of objections.
22. ÖVAG submits three grounds of appeal:
– incorrect finding as to the obstruction of trade between Member States;
– incorrect attribution of the decentralised sector in connection with the division into categories; and
– failure to take account of attenuating circumstances.
VI – The appeals
23. By order of the President of the Court of Justice of 25 October 2007, after the views of the parties and the Advocate General had been heard on this point, the four cases were joined for the purposes of the oral procedure and the judgment, pursuant to Article 43 of the Rules of Procedure of the Court of Justice.
24. Since the appellants’ submissions largely overlap, it is appropriate to consider them together.
A – The grounds of appeal alleging infringement of Article 81(1) EC
1. The ground of appeal alleging an error of law concerning assessment of the requirement that trade between Member States be affected
25. Erste, RZB and ÖVAG all put forward this ground of appeal, which comprises essentially three parts.
a) The first part: the Court of First Instance erred in law in its assessment of the ability of a cartel operating throughout the national territory to have an appreciable effect on trade between Member States
i) Arguments of the parties
26. RZB and ÖVAG maintain that the Court of First Instance erred in law by holding, in paragraph 181 of the judgment under appeal, that ‘there is, at least, a strong presumption that a practice restrictive of competition applied throughout the territory of a Member State is liable to contribute to compartmentalisation of the markets and to affect intra-Community trade’.
27. RZB claims, first, that the Court of First Instance oversimplified the requirement of an effect on trade between Member States when it took the view that the Commission was not required to prove the existence of compartmentalisation.
28. In paragraphs 182 to 184 of the judgment under appeal, the Court of First Instance did not take due account of the scope of the judgment of the Court of Justice in Joined Cases C‑215/96 and C‑216/96 Bagnasco and Others  [1999] ECR I‑135.
29. Second, RZB considers that, in holding that the mere fact that the committee meetings covered the entire territory of the Republic of Austria was sufficient to conclude that trade between Member States was affected, the Court of First instance wrongly interpreted the Court of Justice’s case-law.
30. In fact, the likelihood of affecting trade between Member States presupposes, in addition to ‘territorial cover’, the presence of at least one further factor, in this case the effects of compartmentalisation.
31. In addition, RZB states that, in paragraph 181 of the judgment under appeal, the Court of First Instance has reversed the burden of proof by passing it on to RZB, whereas it is incumbent on the Commission to produce evidence of the infringement of Article 81(1) EC and the ability of the cartel to affect trade between Member States.
32. ÖVAG, for its part, alleges that the Court of First Instance understated the scope of the criterion of the effect of market compartmentalisation.
33. It adds that the Court of First Instance did not take account, in paragraph 166 of the judgment under appeal, of the particular features of an assessment, ex post facto , of a past infringement. It wrongly failed to assess the specific impact of the agreements on trade between States.
34. ÖVAG also claims that the reasoning of the Court of First Instance is contradictory and insufficient. In paragraph 164 of the judgment under appeal, the Court of First Instance considered that the effect of partitioning the markets was not a strong indication that there was an effect on trade between Member States, whereas in paragraph 181 of that judgment it held, on the contrary, that there was a close link between the effect of a practice of compartmentalisation of the markets and the liability of that practice to affect cross-border trade.
35. The Commission contends that the Court of First Instance did not err in law.
ii) Findings of the Court
36. First, it must be borne in mind, on the one hand, that the Court of Justice has held that, if an agreement, decision or practice is to be capable of affecting trade between Member States, it must be possible to foresee with a sufficient degree of probability, on the basis of a set of objective factors of law or of fact, that it may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States in such a way as to cause concern that it might hinder the attainment of a single market between Member States. Moreover, that effect must not be insignificant (Case C-238/05 Asnef-Equifax and Administración del Estado  [2006] ECR I‑11125, paragraph 34 and the case-law there cited).
37. Thus, an effect on intra-Community trade is normally the result of a combination of several factors which, taken separately, are not necessarily decisive. In order to assess whether a cartel has an appreciable effect on trade between Member States, it is necessar y to examine it in its economic and legal context ( Asnef-Equifax and Administración del Estado , paragraph 35 and the case-law there cited).
38. On the other hand, the Court of Justice has already held that the fact that a cartel relates only to the marketing of products in a single Member State is not sufficient to preclude the possibility that trade between Member States might be affected. A cartel extending over the whole of the territory of a Member State has, by its very nature, the effect of reinforcing the partitioning of markets on a national basis, thus impeding the economic interpenetration which the EC Treaty is designed to bring about ( Asnef-Equifax and Administración del Estado , paragraph 37 and the case-law there cited).
46. Fourth, it must be borne in mind that, according to settled case-law, Article 81(1) EC does not require that the arrangements referred to in that provision have actually appreciably affected trade between Member States, but requires that it be established that those arrangements are capable of having that effect ( Asnef-Equifax and Administración del Estado , paragraph 43 and the case-law there cited).
66. According to settled case-law, Article 81(1) EC does not require that the collusive arrangements governed by that provision should have appreciably affected intra-Community trade but requires that it be established that such arrangements were capable of having such an effect (see Asnef-Equifax and Administración del Estado , paragraph 43).
77. When an entity infringes competition rules, it falls to that entity, by virtue of the principle of personal responsibility, to answer for that infringement (see, to that effect, Case C‑49/92 P Commission  v Anic Partecipazioni  [1999] ECR I‑4125, paragraph 145, and Case C‑279/98 P Cascades  v Commission  [2000] ECR I‑9693, paragraph 78).
78. As to the circumstances in which an entity that is not the author of an infringement can nevertheless be penalised for that infringement, this situation arises if the entity that has committed the infringement has ceased to exist in law (see, to that effect, Commission  v Anic Partecipazioni , paragraph 145).
79. As the Court of Justice has already held, when an entity that has committed an infringement of the competition rules is subject to a legal or organisational change, that change does not necessarily create a new undertaking free of liability for its predecessor’s infringements of the competition rules, when, from an economic point of view, the two are identical (see, to that effect, Joined Cases 29/83 and 30/83 CRAM and Rheinzink  v Commission  [1984] ECR 1679, paragraph 9, and Joined Cases C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P Aalborg Portland and Others  v Commission  [2004] ECR I‑123, paragraph 59).
80. Moreover, an undertaking’s anti-competitive conduct can be attributed to another undertaking where it has not decided independently upon its own conduct on the market, but carried out, in all material respects, the instructions given to it by that other undertaking, having regard in particular to the economic and legal links between them (Case C‑294/98 P Metsä‑Serla and Others  v Commission  [2000] ECR I‑10065, paragraph 27, and Case C‑196/99 P Aristrain  v Commission  [2003] ECR I‑11005, paragraph 96). The fact that a subsidiary has separate legal personality does not therefore exclude the possibility that its conduct may be attributed to the parent company.
81. Erste argues that, at the time of the infringements with which the contested decision is concerned, GiroCredit’s conduct was determined by its parent company, namely the BA group, and that consequently it is the latter company which should have been held responsible for the infringements committed in the past by GiroCredit. Erste thus challenges the finding of the Court of First Instance in paragraph 331 of the judgment under appeal, namely that the Commission is entitled to choose to penalise either the subsidiary that participated in the infringement or the parent company which controlled it during the period covered by the contested decision.
82. In that regard, the Court of First Instance was right to hold that the Commission was not obliged first to verify whether the conditions were fulfilled for attribution of the infringement to the parent company of the undertaking that committed the infringement. The Commission cannot be required, as a matter of principle, first to carry out such verification before being entitled to consider taking action against the undertaking that committed the infringement, even if the latter has undergone changes regarding its status as a legal entity. The principle of personal responsibility, referred to in paragraph 77 of the present judgment, certainly does not prevent the Commission from considering the possibility of penalising the latter undertaking before investigating whether the infringement might be possibly attributed to the parent company. Moreover, as the Court of First Instance observed in paragraph 335 of the judgment under appeal, if the position were otherwise, the Commission’s inquiries would be made considerably more laborious by the need to verify, in each case where there were successive controllers of an undertaking, to what extent the latter’s acts could be imputed to the former parent company.
90. As a preliminary point, it must be borne in mind that, according to the case-law of the Court of Justice, in fixing the amount of the fines, regard must be had to duration and to all the factors capable of affecting the assessment of the gravity of the infringements (Joined Cases C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P Dansk Rørindustri and Others  v Commission  [2005] ECR I-5425, paragraph 240).
91. The gravity of an infringement must be assessed in the light of numerous factors, such as the particular circumstances of the case, its context and the dissuasive effect of fines, although no binding or exhaustive list of the criteria to be applied has been drawn up ( Dansk Rørindustri and Others  v Commission , paragraph 241 and the case-law there cited).
103. Moreover, it is apparent from the Guidelines that the very nature of the infringement may suffice for it to be classified as ‘very serious’, regardless of its actual impact on the market and its geographic extent.
123. Moreover, according to settled case-law, the Commission enjoys a wide discretion in setting the amount of fines and is not bound by assessments made by it in the past (see Dansk Rørindustri and Others  v Commission , paragraphs 209 to 213, and Case C-510/06 P Archer Daniels Midland  v Commission  [2009] ECR I-0000, paragraph 82). It follows that the appellant cannot invoke the Commission’s decision-making policy before the Community judicature.
131. It must be borne in mind that, according to settled case-law, it is clear from Article 225 EC, from the first paragraph of Article 58 of the Statute of the Court of Justice and from Article 112(1)(c) of the Rules of Procedure that an appeal must indicate precisely the contested elements of the judgment which the appellant seeks to have set aside and the legal arguments specifically advanced in support of the appeal. Thus, an appeal which merely repeats or reproduces verbatim the pleas and arguments relied on before the Court of First Instance does not satisfy the requirement to state reasons under those provisions (see Case C-499/03 P Biegi Nahrungsmittel and Commonfood  v Commission  [2005] ECR I-1751, paragraphs 37 and 38 and the case-law there cited).
133. As regards the second complaint, alleging the lack of a statement of reasons, it must be borne in mind that the Court of First Instance’s obligation to give reasons for its decisions cannot be interpreted as meaning that it is required to reply in detail to every argument put forward by an applicant (see Case C‑274/99 P Connolly  v Commission  [2001] ECR I-1611, paragraph 121, and Joined Cases C-120/06 P and C-121/06 P FIAMM and Others  v Council and Commission  [2008] ECR I-6513, paragraph 91).
140. In its assessment of the gravity of the infringement, the Commission must take account not only of the particular circumstances of the case but also of the context in which the infringement occurs and, with a view to determining the amount of the fine, ensure that its action has a deterrent effect, above all in relation to types of infringement that particularly undermine the attainment of the Community’s objectives (see, to that effect, Archer Daniels Midland  v Commission , paragraph 63).
141. In the judgment under appeal, in particular in paragraphs 249, 250 and 254, the Court of First Instance noted in particular, and correctly, that a horizontal price cartel ranks as a very serious infringement, even in the absence of other restrictions on competition such as partitioning of the markets, and that a cartel of that kind in a sector as important as the banking sector, covering a wide range of banking products and involving the great majority of economic operators, cannot, in principle, escape classification as a very serious infringement, whatever its context (see, to that effect, the judgment of 22 May 2008 in Case C-266/06 P Evonik Degussa  v Commission , paragraph 104).
181. The Court of Justice has already held that, where the Commission makes it clear in its statement of objections that it will consider whether it is appropriate to impose fines on the undertakings concerned and it indicates the main factual and legal criteria capable of giving rise to a fine, such as the gravity and the duration of the alleged infringement and whether that infringement was committed intentionally or negligently, it fulfils its obligation to respect the undertakings’ right to be heard. In doing so, it provides them with the necessary means to defend themselves not only against the finding of an infringement but also against the imposition of fines (see Dansk Rørindustri and Others  v Commission , paragraph 428 and the case-law there cited).
182. As regards the level of the envisaged fines, it is settled case-law that to give indications of the level of the contemplated fines, when the undertakings have not been in a position to put forward their observations on the objections held against them, would be tantamount to anticipating inappropriately the Commission’s decision (see Dansk Rørindustri and Others  v Commission , paragraph 434 and the case-law there cited).
187. As regards the fourth complaint, whereby Erste maintains that the Court of First Instance was wrong to maintain its classification in the first category and thus breached the principles of equal treatment and proportionality, it must be borne in mind that while, in an appeal, the Court cannot substitute, on grounds of fairness, its assessment for that of the Court of First Instance giving judgment in the exercise of its unlimited jurisdiction as to the amount of the fines imposed on undertakings by reason of their infringement of Community law, the exercise of that power cannot give rise, upon determination of the amount of those fines, to discrimination between the undertakings which participated in an agreement or concerted practice contrary to Article 81(1) EC (Case C-411/04 P Salzgitter Mannesmann  v Commission  [2007] ECR I-959, paragraph 68 and the case-law there cited).
192. Moreover, the part of the Guidelines concerning the amount of the fines that may be imposed on members of a cartel does not lay down an arithmetical calculation method for such fines (see, to that effect, Dansk Rørindustri and Others  v Commission , paragraph 266 and the case-law there cited).
199. It is for the Court of First Instance alone to assess the value which should be attached to the evidence produced to it, that appraisal not constituting a point of law which is subject as such to review by the Court of Justice, save where such evidence has been distorted (see Case C-113/04 P Technische Unie  v Commission  [2006] ECR I-8831, paragraph 83 and the case-law there cited).
213. As regards the error of law allegedly committed by the Court of First Instance in paragraph 483 of the judgment under appeal, it must be borne in mind that the Court of Justice has held that the responsibility of a given undertaking in respect of an infringement of Article 81(1) EC is properly established where it participated in the meetings with knowledge of their object, even if it did not subsequently implement any measure or measures agreed at the meetings (see Joined Cases C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C-252/99 P and C-254/99 P Limburgse Vinyl Maatschappij and Others  v Commission  [2002] ECR I-8375, paragraph 509).
221. According to settled case-law, to allow a party to put forward for the first time before the Court of Justice a plea in law which it has not raised before the Court of First Instance would be to allow it to bring before the Court, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the Court of First Instance. In an appeal, the Court’s jurisdiction is confined to a review of the findings of law on the pleas argued before the Court of First Instance (see, in particular, Dansk Rørindustri and Others  v Commission , paragraph 165).
228. In paragraph 505 of the judgment under appeal, the Court of First Instance observed:
‘As regards the participation of certain public authorities ([Austrian National Bank], the Ministry of Finance and the Wirtschaftskammer) in the meetings, the information produced by the applicants is not sufficient to show reasonable doubt as to the illegality of the committees under Community competition law. Whilst it is not excluded that, in certain circumstances, a national legal framework or conduct on the part of national authorities may constitute mitigating circumstances (see, by analogy, CIF , … paragraph 57), the approval or tolerance of the infringement by the Austrian authorities cannot be taken into account under that heading in this case, having regard in particular to the resources available to the banks to obtain precise and accurate legal information.’
233. Also, BA-CA cannot invoke any breach of the principle of equal treatment. The Court of Justice has repeatedly held that the Commission’s practice in previous decisions does not itself serve as a legal framework for the fines imposed in competition matters and that decisions in other cases can give only an indication for the purpose of determining whether there is discrimination (see Case C-167/04 P JCB Service  v Commission  [2006] ECR I-8935, paragraph 205).
248. In paragraph 394 of Dansk Rørindustri and Others  v Commission , the Court of Justice held that the Commission enjoys a wide discretion in deciding whether the information or documents voluntarily provided by undertakings have facilitated its task and whether the undertakings should be granted a reduction under Section D.2 of the Leniency Notice.
254. As regards the second argument, it must be borne in mind that, in an appeal, the purpose of review by the Court of Justice is, first, to examine to what extent the Court of First Instance took into consideration, in a legally correct manner, all the essential factors needed to assess the gravity of particular conduct in the light of Article 81 EC and Article 15 of Regulation No 17 and, second, to consider whether the Court of First Instance responded to a sufficient legal standard to all the arguments raised by the appellant with a view to having the fine cancelled or reduced ( Dansk Rørindustri and Others  v Commission , paragraph 244 and the case-law there cited).
255. However, as far as the extent of the reduction of the fine is concerned, it is not for the Court of Justice to substitute, on grounds of fairness, its own assessment for that of the Court of First Instance exercising its unlimited jurisdiction (see, to that effect, Dansk Rørindustri and Others  v Commission , paragraph 245).
270. As regards the second argument, concerning observance of the rights of the defence, it must be pointed out that in all proceedings in which sanctions, especially fines or penalty payments, may be imposed observance of the rights of the defence is a fundamental principle of Community law which must be complied with even if the proceedings in question are administrative proceedings (see Case C-308/04 P SGL Carbon  v Commission  [2006] ECR I-5977, paragraph 94).
272. However, in this case, it need merely be pointed out that the Commission has never taken any ‘decision’ within the meaning of Article 11(2) and (5) of Regulation No 17. Consequently, the argument in paragraph 541 of the judgment under appeal, that the Court of First Instance did not comply with the rule in Orkem  v Commission , must be rejected.
280. It must be borne in mind that the Commission enjoys a discretion in that regard, as is apparent from the very wording of Section D.2 of the Leniency Notice and in particular the introductory words ‘Such cases may include …’ ( Dansk Rørindustri and Others  v Commission , paragraph 394).
281. Above all, a reduction of the fine under the Leniency Notice can be justified only where the information provided and, more generally, the conduct of the undertaking concerned might be considered to demonstrate genuine cooperation on its part ( Dansk Rørindustri and Others  v Commission , paragraph 395).
282. As is clear from the very concept of cooperation, as described in the text of the Leniency Notice and in particular in its introduction and Section D.1, it is only where the conduct of the undertaking concerned reveals such a spirit of cooperation that a reduction may be granted on the basis of that notice ( Dansk Rørindustri and Others  v Commission , paragraph 396).
310. In that regard, it must be emphasised that the statement of objections is a procedural and preparatory document which, in order to ensure that the rights of the defence may be exercised effectively, delimits the scope of the administrative procedure initiated by the Commission, thereby preventing it from relying on other objections in its decision terminating the procedure in question (see, in particular, the order in Joined Cases 142/84 and 156/84 British American Tobacco and Reynolds Industries  v Commission  [1986] ECR 1899, paragraphs 13 and 14). It is therefore inherent in the nature of that statement that it is provisional and liable to be changed during the assessment subsequently undertaken by the Commission on the basis of the observations submitted to it by the parties and other findings of fact (see, to that effect, SGL Carbon  v Commission , paragraph 62).
311. The Commission must take into account the factors emerging from the whole of the administrative procedure, in order either to abandon such objections as have been shown to be unfounded or to amend and supplement its arguments, both in fact and in law, in support of the objections which it maintains. Thus, the statement of objections does not prevent the Commission from altering its standpoint in favour of the undertakings concerned (see the order in British American Tobacco and Reynolds Industries  v Commission , paragraph 13).
319. It must be pointed out that the Court of First Instance is the sole judge of whether the information available to it concerning the cases before it needs to be supplemented (see, in particular, Joined Cases C-57/00 P and C-61/00 P Freistaat Sachsen and Others  v Commission  [2003] ECR I-9975, paragraph 47, and Case C‑136/02 P Mag Instrument  v OHIM  [2004] ECR I-9165, paragraph 76).
320. Even where a request made in the application for the examination of witnesses sets out the reasons on which it is based, it falls to the Court of First Instance to assess the relevance of the request to the subject-matter of the dispute and the need to examine the witnesses named (see Dansk Rørindustri and Others  v Commission , paragraph 68).