Alliance One International Inc., formerly Standard Commercial Corp., and Standard Commercial Tobacco Co. Inc. v European Commission and European Commission v Alliance One International Inc. and Others.
Date: 2012-07-19
42. It must be borne in mind that, in accordance with settled case-law, the concept of an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed. That concept must be understood as designating an economic unit even if in law that unit consists of several natural or legal persons. When such an economic entity infringes the competition rules, it is for that entity, according to the principle of personal responsibility, to answer for that infringement (Case C-90/09 P General Química and Others  v Commission  [2011] ECR I-1, paragraphs 34 to 36 and case-law cited, and Case C-521/09 P Elf Aquitaine  v Commission [2011] ECR I-8947, paragraph 53).
43. Specifically, the conduct of a subsidiary may be imputed to the parent company in particular where, although having a separate legal personality, that subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links between those two legal entities (Case C-97/08 P Akzo Nobel and Others  v Commission  [2009] ECR I-8237, paragraph 58; Elf Aquitaine  v Commission , paragraph 54, and Case C-520/09 P Arkema  v Commission [2011] ECR I-8901, paragraph 38).
44. In such a situation, since the parent company and its subsidiary form a single economic unit and therefore form a single undertaking for the purposes of Article 81 EC, the Commission may address a decision imposing fines on the parent company, without having to establish the personal involvement of the latter in the infringement (see Akzo Nobel and Others  v Commission , paragraph 59; General Química and Others  v Commission , paragraph 38, and Elf Aquitaine  v Commission , paragraph 55).
45. In order to establish whether a subsidiary determines its conduct on the market independently, the Commission is, as a general rule, bound to take into consideration the economic, organisational and legal links which tie that 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).
46. The Court has made clear that, in the particular case of a parent company having a 100% shareholding in a subsidiary which has infringed the Union’s rules on competition, that parent company is able to exercise decisive influence over the conduct of its subsidiary, and there is a rebuttable presumption that the parent company does in fact exercise such influence (Joined Cases C-201/09 P and C-216/09 P ArcelorMittal Luxembourg  v Commission and Commission  v ArcelorMittal Luxembourg and Others [2011] ECR I-2239, paragraph 97, and Elf Aquitaine  v Commission , paragraph 56).
47. In those circumstances, it is sufficient for the Commission to prove that the entire capital of a subsidiary is held by its parent company in order for it to be presumed that the parent exercises decisive influence over the commercial policy of that subsidiary. The Commission will then be able to regard the parent company as jointly and severally liable for payment of the fine imposed on its subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to show that its subsidiary acts independently on the market ( Akzo Nobel and Others  v Commission , paragraph 61; Elf Aquitaine  v Commission , paragraph 57, and Arkema  v Commission , paragraph 41).
49. Further, that case-law does not imply that the Commission is bound to rely exclusively on that presumption. There is nothing to prevent the Commission from establishing that a parent company actually exercises decisive influence over its subsidiary by means of other evidence or by a combination of such evidence and that presumption.
50. In this case, as found by the General Court in paragraphs 134 to 147 of the judgment under appeal, it is clear from the contested decision and was confirmed by the Commission, in the procedure at first instance, that the Commission had decided, in order to assess whether the parent companies actually exercised decisive influence over the subsidiaries, to hold the parent companies liable only where there was evidence to support the presumption of actual exercise by the parent companies of decisive influence which arises from the control by the parent companies of the entire share capital of the subsidiaries (the ‘dual basis’ method) and, accordingly, had waived reliance on the application solely of the presumption of decisive influence.
53. Secondly, the General Court was correct to find, in paragraph 155 of the judgment under appeal, that, in choosing that method, the Commission imposed upon itself, in respect of the assessment of whether liability for the cartel at issue could be attributed to the parent companies, a standard of proof of the actual exercise of decisive influence which was more onerous than that which, as a general rule, would have been regarded as sufficient, in the light of the case-law cited in paragraphs 46 and 47 of this judgment.
57. However, in paragraphs 156 and 157 of the judgment under appeal, the General Court held that the principle of equal treatment requires that, where the Commission adopts a method such as that in the present case in order to determine whether liability should be attributed to parent companies whose subsidiaries have taken part in the same cartel, the Commission must, save in specific circumstances, rely on the same criteria in the case of all those parent companies.
58. In that regard, in accordance with the Court’s settled case-law, when the amount of the fine is determined, there cannot, by the application of different methods of calculation, be any discrimination between the undertakings which have participated in an agreement or a concerted practice contrary to Article 81(1) EC (see, to that effect, Case C-280/98 P Weig  v Commission [2000] ECR I-9757, paragraphs 63 to 68, and Case C-291/98 P Sarrió  v Commission [2000] ECR I-9991, paragraphs 97 to 100).
59. Since the attribution of responsibility to a parent company for an infringement committed by a subsidiary may have, according to the method of calculation adopted by the Commission, a significant effect on the amount of the fine which may be jointly and severally imposed on those companies, the General Court was correct to hold, in paragraph 156 of the judgment under appeal, that the same logic applies where the Commission adopts, in respect of one cartel and within the framework set by the case-law, one specific method for the determination of the responsibility of the parent companies concerned for the infringements of their subsidiaries.
64. Lastly, as regards the alleged failure to state sufficient reasons in the judgment under appeal, it must be recalled that, in accordance with the Court’s settled case-law, the duty incumbent upon the General Court under Article 36 and the first paragraph of Article 53 of the Statute of the Court of Justice of the European Union to state reasons for its judgments does not require the General Court to provide an account that follows exhaustively and one by one all the arguments articulated by the parties to the case. The reasoning may therefore be implicit, on condition that it enables the persons concerned to know the grounds on which the judgment under appeal is based and provides the Court of Justice with sufficient material for it to exercise its powers of review on appeal (Case C-480/09 P AceaElectrabel Produzione  v Commission [2010] ECR I-13355, paragraph 77 and case-law cited).
72. It must be recalled that the statement of reasons required by Article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the court having jurisdiction to exercise its power of review ( Elf Aquitaine  v Commission , paragraph 147).
73. In the context of individual decisions, according to the Court’s settled case-law, the purpose of the obligation to state reasons for an individual decision is both to enable the Court to review the legality of the decision and to provide the person concerned with sufficient information to make it possible to ascertain whether the decision may be vitiated by a defect which may permit its legality to be contested ( Elf Aquitaine  v Commission , paragraph 148).
74. The statement of reasons must, therefore, in principle be notified to the person concerned at the same time as the decision adversely affecting him. A failure to state the reasons cannot be remedied by the fact that the person concerned learns the reasons for the decision during the proceedings before the European Union courts ( Elf Aquitaine  v Commission , paragraph 149 and case-law cited).
75. In particular, where a decision concerning the application of the competition rules of European Union law affects several addressees and relates to whether liability for the infringement can be attributed, the decision must contain an adequate statement of reasons with respect to each of the addressees, in particularly those of them who, according to that decision, must bear the liability for that infringement. Accordingly, with regard to a parent company held to be responsible for the unlawful conduct of its subsidiary, such a decision must, as a general rule, contain a statement of reasons capable of justifying the attribution of liability for that infringement to the parent company.
76. In the present case, it must be borne in mind that the General Court found that (i) the Commission had decided, as is clear from the contested decision, that it would attribute responsibility to each of the parent companies concerned only if there were sufficient evidence to support, in each individual case, the presumption of actual exercise of decisive influence arising from ownership of the entire share capital of their respective subsidiaries, (ii), as regards TCLT, that decision makes no mention of any evidence in support of that presumption and (iii) the lack of such evidence led the Commission not to attribute responsibility to the parent companies Intabex, Universal and Universal Leaf.
77. Accordingly, by ruling in paragraph 196 of the judgment under appeal that a fact relied on by the Commission for the first time in its defence before the General Court cannot be taken into account, the General Court did not err in law.
78. Moreover, by that application of the relevant case-law, the General Court did not impose on the Commission any obligation to state reasons for the fact that the contested decision was not addressed to certain third parties or to set out every relevant argument that could possibly be used. The General Court did no more, in essence, than find, in paragraph 195 of the judgment under appeal, that the statement of reasons in the contested decision was inadequate in the light of the criteria which the Commission had imposed on itself and, in paragraph 196 of that judgment, that it was not possible for the Commission to remedy such an inadequacy in the proceedings before it.
79. Accordingly, the General Court was correct to rule that the Commission’s rights of defence do not extend to the possibility that the Commission may defend the lawfulness of the contested decision against claims of discrimination by producing, during the proceedings, evidence which serves to establish the responsibility of a parent company but which is not mentioned in that decision.
85. The Court has also stated that the appraisal of the facts by the General Court does not constitute, save where the clear sense of the evidence produced before it is distorted, a question of law which is subject, as such, to review by the Court of Justice (Case C-397/03 P Archer Daniels Midland and Archer Daniels Midland Ingredients  v Commission [2006] ECR I-4429, paragraph 85, and ThyssenKrupp Nirosta  v Commission , paragraph 180).
101. As regards the substance, the Court has previously ruled that the exercise of joint control, by two parent companies who are independent of each other, of their subsidiary does not, in principle, preclude a finding by the Commission of the existence of an economic unit comprising one of those parent companies and the subsidiary concerned, and that this applies even if the proportion of the subsidiary’s share capital owned by that parent company is smaller than that owned by the other parent company (see, to that effect, AceaElectrabel Produzione  v Commission, paragraph 64). That being the case, a fortiori a parent company and its subsidiary, which is itself a parent company of the company which has committed an infringement, can both be deemed to be members of an economic unit which includes the latter company.
111. In accordance with 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 General Court would in effect allow that party to bring before the Court a wider case than that heard by the General Court. In an appeal, the Court’s jurisdiction is, as a general rule, confined to a review of the assessment by the General Court of the pleas argued before it ( AceaElectrabel Produzione  v Commission , paragraph 113 and case-law cited).
121. However, as regards the substance, it must be stated at the outset that, contrary to what is claimed by AOI and SCTC, the General Court based its findings not on a new argument submitted by the Commission in the course of the proceedings, but on its own interpretation of the contested decision, considered as a whole, as is clear from paragraph 141 et seq. of the judgment under appeal. In particular, it is clear from paragraph 147 of that judgment that the statements made by the Commission in the course of the proceedings were taken into account by the General Court only to confirm its own interpretation of that decision.
132. First, as regards the dual basis test adopted, according to the findings of the General Court, by the Commission in order to determine the liability of parent companies whose subsidiaries took part in the cartel which was the subject of the contested decision, it must be recalled that the General Court inferred that approach to be that of the Commission from a detailed analysis of that decision and that that analysis is not vitiated by any error of law, as stated in paragraph 121 of this judgment.
133. In particular, the General Court was correct to interpret the decision in such a way as to refute the reading of recital 376 of the contested decision proposed by AOI and SCTC, that it was because of the absence of factors indicating the material involvement of Universal Leaf and Universal in the infringement that the Commission did not attribute liability to those companies, since such a reading was inconsistent with a reading of that decision as a whole, and in particular with recitals 18, 376, 384, 391, 392, 397, 399 and 400 thereof, examined indeed by the General Court in paragraph 133 et seq. of the judgment under appeal.
137. Suffice it to observe, in that regard, that the General Court correctly stated, in paragraphs 141 to 147 of the judgment under appeal, that the Commission applied the same legal test to all the parent companies and that, except in the case of TCLT, the Commission attributed or did not attribute liability to those companies according to whether there was evidence to support the presumption of exercise of decisive influence by those parent companies arising from their ownership of the entire share capital of their respective subsidiaries.