Toshiba Corporation and Others v Úřad pro ochranu hospodářské soutěže.
Date: 2012-02-14
45. In that regard, it should be remembered that account must be taken, as to the interpretation and application of Article 81 EC and Regulation No 1/2003, of the particular situation of a State, such as the Czech Republic, which became a member of the Union with effect from 1 May 2004 (see, in relation to Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital (OJ, English Special Edition, 1969(II), p. 412), Case C‑366/05 Optimus — Telecomunicações  [2007] ECR I‑4985, paragraph 25, and Case C‑441/08 Elektrownia Pątnów II  [2009] ECR I‑10799, paragraph 30).
47. According to settled case-law, procedural rules are generally held to apply to all proceedings pending at the time when they enter into force, whereas substantive rules are usually interpreted as not applying, in principle, to situations existing before their entry into force (Joined Cases 212/80 to 217/80 Meridionale Industria Salumi and Others  [1981] ECR 2735, paragraph 9; Joined Cases C‑121/91 and C‑122/91 CT Control (Rotterdam) and JCT Benelux  v Commission  [1993] ECR I‑3873, paragraph 22; Case C‑201/04 Molenbergnatie  [2006] ECR I‑2049, paragraph 31; and Case C‑450/06 Varec  [2008] ECR I‑581, paragraph 27).
50. Such substantive rules cannot in principle be applied retroactively, irrespective of whether such application might produce favourable or unfavourable effects for the persons concerned. The principle of legal certainty requires that any factual situation should normally, in the absence of any express contrary provision, be examined in the light of the legal rules existing at the time when the situation obtained (see, to that effect, Case C‑120/08 Bavaria  [2010] ECR I‑13393, paragraphs 40 and 41).
51. Article 11(6) of [Regulation No 1/2003] states that the initiation by the Commission of proceedings for the adoption of a decision under [Regulation No 1/2003] shall relieve all [competition authorities of Member States] of their competence to apply Articles 81 [EC] and 82 [EC]. This means that once the Commission has opened proceedings, [national competition authorities] cannot act under the same legal basis against the same agreement(s) or practice(s) by the same undertaking(s) on the same relevant geographic and product market.
...
53. Two situations can arise. First, where the Commission is the first competition authority to initiate proceedings in a case for the adoption of a decision under [Regulation No 1/2003], national competition authorities may no longer deal with the case. Article 11(6) of [Regulation No 1/2003] provides that once the Commission has initiated proceedings, [national competition authorities] can no longer start their own procedure with a view to applying Articles 81 [EC] and 82 [EC] to the same agreement(s) or practice(s) by the same undertaking(s) on the same relevant geographic and product market.
...’
National law
16. The relevant provision of Czech law is Article 3 of the Law on the Protection of Competition. That provision applied until 30 June 2001 in the version of Law No 63/1991 Sb. (Zákon č. 63/1991 Sb., o ochraně hospodářské soutěže), as amended, and, as from 1 July 2001, in the version of Law No 143/2001 Sb. (Zákon č. 143/2001 Sb., o ochraně hospodářské soutěže).
17. According to Article 3(1) of the Law on the Protection of Competition, in the version in force until 30 June 2001:
‘1. All agreements between competitors, all decisions of associations of undertakings and all concerted practices of competitors ... which have the effect or may have the effect of distorting competition on the product market are prohibited and void, save for contrary provision by this Law or by a special law or in the event of exemption granted by the ministry of Competition ...’.
18. The prohibition of agreements and practices restricting competition, set out in Article 3(1) of Law No 143/2001 Sb., which replaced Law No 63/1991 Sb. on 1 July 2001, remained essentially unchanged.
Facts, administrative procedure and the dispute in the main proceedings
19. This case concerns an international cartel on the market for gas insulated switchgear (‘GIS’) in which a number of European and Japanese undertakings in the electrical engineering sector participated for different periods between 1988 and 2004. Both the Commission and the Úřad pro ochranu hospodářské soutěže dealt with certain aspects of this case in 2006 and 2007 and each imposed fines on the undertakings concerned.
The administrative procedure at EU level
20. According to the information contained in the order for reference, on 30 September 2004 the Commission sent the Úřad pro ochranu hospodářské soutěže a letter informing it that it intended to initiate a proceeding concerning a cartel on the GIS market. The Commission indicated in that letter that the anti-competitive conduct under examination had taken place, in large part, before 1 May 2004 and that, taking account of the difficulty posed by the imposition of a fine as regards only the final days of that conduct (from 1 May to 11 May 2004), the procedure before it would concern only the activities of that cartel carried out in the territory of the European Union before the enlargement of the latter on 1 May 2004. According to the Commission, it was thus unlikely that it would initiate a proceeding concerning the Czech Republic.
21. On 20 April 2006, the Commission initiated proceedings for the imposition of fines on the basis of Article 81 EC and Article 53 of the EEA Agreement in conjunction with Regulation No 1/2003. Those proceedings, which had been preceded by a leniency application and investigations carried out at the premises of several members of the cartel in 2004, were directed against a total of 20 legal persons, including the Toshiba Corporation and the other applicants in the main proceedings.
22. In points 2 and 3 of the grounds of the Commission Decision of 24 January 2007 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/F/38.899 — Gas Insulated Switchgear) (‘the Commission Decision’), which terminated the proceedings, the Commission states that, from 15 April 1988 until 11 May 2004, the aforementioned cartel committed a single and continuous infringement of Article 81 EC and, as from 1 January 1994, also of Article 53 of the EEA Agreement, covering the territory of the EEA and in which the individual members of the cartel participated for differing periods of time. In section 6.6.2 of that decision, the Commission identified the termination date of that cartel as 11 May 2004, by reference to the date on which the last working meeting of which it was aware had taken place, which ended when the representatives of Siemens AG informed the other members of the said cartel that the Commission had carried out unannounced inspections on that day.
23. According to the findings in points 2, 3, 218 and 248 of the grounds of the Commission’s decision, this was a complex cartel operated worldwide (except in the USA and Canada), including in the European Union and the European Economic Area, under which the participating undertakings, inter alia, exchanged sensitive market information, shared markets, fixed prices and terminated collaboration with non-cartel members.
24. Apart from one undertaking, ABB Ltd, which benefited from the Commission’s leniency programme, all the parties to the proceedings, including all the applicants in the main proceedings, were ordered to pay fines of a total amount of more that EUR 750 million. The highest individual fine, amounting to more than EUR 396 million, was imposed on Siemens AG.
The administrative procedure at national level
25. On 2 August 2006, the Úřad pro ochranu hospodářské soutěže initiated a proceeding for infringement of the Law on the Protection of Competition, concerning the members of the cartel at issue in the main proceedings. On 9 February 2007, it adopted a first decision against which the applicants in the main proceedings formed an internal administrative action. Following that action, by decision of 26 April 2007, the President of the Úřad pro ochranu hospodářské soutěže amended that first decision.
26. In that decision of 26 April 2007, the said authority held that ABB Management Services Ltd (holder of the rights of ABB Power Technologies Management Ltd), ABB Switzerland Ltd, ABB Ltd, Alstom, Areva T & D SA, Fuji Electric Holdings Co. Ltd, Fuji Electric Systems Co. Ltd, Hitachi Ltd, Hitachi Europe Ltd, Mitsubishi Electric Corp., Toshiba Corporation, Schneider Electric SA, Siemens AG, Siemens AG Österreich (holder of the rights of VA Technologie AG and VA Tech T & D GmbH), VA Tech Transmission & Distribution GmbH & Co. KEG, Siemens Transmission and Distribution Ltd (formerly VA Tech Transmission & Distribution Ltd) and Nuova Magrini Galileo SpA had participated in a cartel in the territory of the Czech Republic. By so doing, those competitor undertakings had, during the period up to 30 June 2001, infringed the prohibition set out in Article 3(1) of the Law on the Protection of Competition, in the version thereof arising from Law No 63/1991 Sb., as amended, and, during the period from 1 July 2001 to 3 March 2004, infringed the prohibition appearing in Article 3(1) of that law, in the version thereof arising from Law No 143/2001 Sb. Those undertakings thus infringed the Law on the Protection of Competition during the period up to 3 March 2004.
27. To determine the date on which the infringement ceased, the Úřad pro ochranu hospodářské soutěže used the last date on which proof of the existence of the infringement could be brought, namely 3 March 2004, on which date the last email communication demonstrating the existence of links between the participants in the cartel at issue in the main proceedings had been registered. According to the information given at the hearing by the agent of the Czech Republic and by the representative of the Úřad pro ochranu hospodářské soutěže, for the purposes of determining the end of a cartel, Czech competition law uses assessment criteria different from those used by the Commission.
28. Apart from one undertaking, which benefited from leniency measures laid down by national law, all the undertakings concerned by the proceeding brought at national level had fines imposed upon them.
The procedure before the Czech courts
29. The applicants in the main proceedings brought an action against the decision of the Úřad pro ochranu hospodářské soutěže before the Krajský soud v Brně (Regional Court, Brno). They argued inter alia that that authority had determined the duration of the cartel at issue in the main proceedings in an erroneous manner, and that it had knowingly placed the cessation of the latter at a date prior to the accession of the Czech Republic to the Union, in order to justify the application of the Law on the Protection of Competition. According to those applicants, it follows from Article 11(6) of Regulation No 1/2003 that the said authority no longer had the power to implement a proceeding at national level, since the Commission had already initiated a proceeding at European level in the same case. They concluded that the proceeding brought at national level infringed the ne bis in idem principle, prohibiting the cumulation of penalties.
30. By judgment of 25 June 2008, the Krajský soud v Brně annulled the decision of the Úřad pro ochranu hospodářské soutěže of 26 April 2007, and the initial decision, adopted on 9 February 2007.
31. The Krajský soud v Brně took the view that the conduct of the applicants in the main proceedings constituted a single and continuous infringement and based its reasoning on the Commission’s decision to conclude that the Úřad pro ochranu hospodářské soutěže had wrongly concluded that the infringement had ended on 3 March 2004. The latter continued until 11 May 2004, that is to say after the accession of the Czech Republic to the Union and after the entry into force of Regulation No 1/2003. It should therefore be regarded as having been committed under the ‘new law’, namely Article 81 EC and Regulation No 1/2003. The Commission having already initiated a proceeding under Article 81 EC against the cartel of ‘worldwide scope’ at issue in the main proceedings and imposed penalties, the new proceeding opened in the same case infringed the ne bis in idem principle. The Krajský soud v Brně considered, moreover, that the Úřad pro ochranu hospodářské soutěže no longer had the power, under the first sentence of Article 11(6) of Regulation No 1/2003, to deal with the case at issue on the basis of Article 81 EC.
32. The Úřad pro ochranu hospodářské soutěže appealed on a point of law against the judgment of the Krajský soud v Brně before the Nejvyšší správní soud (Supreme Administrative Court). It considers that it still has the power to prosecute the applicants in the main proceedings by reason of their conduct prior to the date of accession of the Czech Republic to the Union, since, until that date, the Commission was not able to prosecute any of the infringements concerning that State. According to that authority, the fact of penalising a cartel of worldwide scope in the context of different competences does not constitute an infringement of the ne bis in idem principle. The said authority argues that the Commission and itself have examined territorially different consequences of that cartel. Moreover, the case-law of the Court of Justice, arising from the judgment in Case 14/68 Wilhelm and Others  [1969] ECR 1, authorises the parallel application of Union and national competition law.
33. By judgment of 10 April 2009, the Nejvyšší správní soud set aside the judgment of the Krajský soud v Brně.
34. The Nejvyšší správní soud took the view that the Krajský soud v Brně had wrongly held that participation of the undertakings concerned in the cartel constituted a continuous infringement. According to the former court, the existence of two distinct infringements should be recognised, the date of the accession of the Czech Republic to the Union having constituted a pivotal date in that regard by reason of the modification of competences which followed. In particular, until that accession, the cartel practised on Czech territory fell exclusively within national jurisdiction and could be prosecuted only under national law. The Nejvyšší správní soud thus referred the case back to the Krajský soud v Brně for a new ruling.
35. The Krajský soud v Brně observes that, even if, under Article 110(3) of Law  150/2002 Sb., establishing the code of administrative procedure (Zákon č. 150/2002 Sb., soudní řád správní), it is required to follow the legal analysis adopted by the Nejvyšší správní soud, it nevertheless appears to it to be necessary to clarify certain points of Union law concerning, first, the accession of the Czech Republic to the Union on 1 May 2004 and, secondly, the entry into force of Regulation No 1/2003.
36. In those circumstances, the Krajský soud v Brně decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:
‘(1) Must Article 81 EC (now Article 101 TFEU) and [Regulation No 1/2003] be interpreted to mean that that legislation must be applied (in proceedings brought after 1 May 2004) to the whole period of operation of a cartel, which commenced in the Czech Republic before that state’s entry to the European Union (that is, before 1 May 2004) and continued and ended after the Czech Republic’s entry to the European Union?
(2) Must Article 11(6) of Regulation No 1/2003 in conjunction with Article 3(1) thereof and recital 17 in the preamble thereto, point 51 of the Commission Notice ..., the principle ne bis in idem under [the Charter], and the general principles of European law be interpreted as meaning that if the Commission brings proceedings after 1 May 2004 for infringement of Article 81 EC and makes a decision in that case:
(a) the competition authorities of the Member States are automatically relieved of their competence to deal with that conduct from that time onwards?
(b) the competition authorities of the Member States are relieved of their competence to apply to that conduct the provisions of domestic law containing parallel legislation to Article 81 EC ...?’
The questions referred for a preliminary ruling
Preliminary observations
37. The wording of the questions submitted by the referring court calls for the following observations. In the first question, which seeks to determine the law applicable to the effects on Czech territory of the cartel at issue in the main proceedings, reference is made to a proceeding brought after the accession of the Czech Republic to the Union, on 1 May 2004, in relation to a cartel which, in the territory of that State, commenced before that date, continued and did not cease until after that date. The second question concerns the impact of the adoption, by the Commission, of a decision penalising anti-competitive conduct on the possibility of a national competition authority initiating or pursuing a proceeding concerning that same conduct (‘those same facts’).
38. That formulation of the questions referred is explained by the fact that the referring court considers it necessary to regard the cartel on the market for GIS at issue in the main proceedings as a single and continuous line of conduct which did not cease until after the accession of the Czech Republic to the Union, and to assess that anti-competitive conduct, as a whole, having regard to the legislation in force on the day it ended, namely Article 81 EC and Regulation No 1/2003.
39. In that context, the referring court, like the applicants in the main proceedings, bases its argument on the Commission’s decision and considers that the latter penalised the conduct of the companies concerned in relation likewise to the Czech Republic, so that the Úřad pro ochranu hospodářské soutěže no longer had the power, after the accession of the Czech Republic to the Union and the entry into force of Regulation No 1/2003, to prosecute and penalise the effects of the cartel on that territory, even in relation to a period prior to that accession.
40. However, it is indicated in the order for reference that, on 30 September 2004, the Commission informed the Úřad pro ochranu hospodářské soutěže that it envisaged initiating a proceeding concerning the cartel on the GIS market at issue in the main proceedings, stating that the anti-competitive conduct examined had taken place, to a great extent, before 1 May 2004 and that the procedure brought by it would concern only the activities of the cartel carried out in the territory of the Union, as it existed before the enlargement of the latter on 1 May 2004.
41. In addition, in its written observations, the Commission has stated that the interpretation of the scope of its decision, which appears in point 29 of the order for reference, is inaccurate and that its decision does not penalise the effects of the collusive conduct which materialised in Czech territory before 1 May 2004.
42. Finally, it is apparent from the information provided by the referring court itself that the decision of the Úřad pro ochranu hospodářské soutěže at issue in the main proceedings takes into account only the anti-competitive effects produced, in Czech territory, by the cartel between the undertakings concerned, before 1 May 2004. That decision thus concerns only the period before the accession of the Czech Republic to the Union.
43. It is therefore in the light of those preliminary considerations that the questions referred are to be examined.
The first question
44. By its first question, the referring court asks, in essence, whether the provisions of Article 81 EC and Article 3(1) of Regulation No 1/2003 must be interpreted as meaning that, in the context of a proceeding initiated after 1 May 2004, they can be applied to a cartel which produced effects in the territory of a Member State which acceded to the Union on 1 May 2004 during periods prior to that date.
45. In that regard, it should be remembered that account must be taken, as to the interpretation and application of Article 81 EC and Regulation No 1/2003, of the particular situation of a State, such as the Czech Republic, which became a member of the Union with effect from 1 May 2004 (see, in relation to Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital (OJ, English Special Edition, 1969(II), p. 412), Case C‑366/05 Optimus — Telecomunicações  [2007] ECR I‑4985, paragraph 25, and Case C‑441/08 Elektrownia Pątnów II  [2009] ECR I‑10799, paragraph 30).
46. Pursuant to Article 2 of the Act of Accession, as from the date of accession, that is to say from 1 May 2004, the provisions of the original Treaties and the acts adopted by the institutions and the European Central Bank before accession are binding on the new Member States and apply in those States under the conditions laid down in those Treaties and in the Act of Accession.
47. According to settled case-law, procedural rules are generally held to apply to all proceedings pending at the time when they enter into force, whereas substantive rules are usually interpreted as not applying, in principle, to situations existing before their entry into force (Joined Cases 212/80 to 217/80 Meridionale Industria Salumi and Others  [1981] ECR 2735, paragraph 9; Joined Cases C‑121/91 and C‑122/91 CT Control (Rotterdam) and JCT Benelux  v Commission  [1993] ECR I‑3873, paragraph 22; Case C‑201/04 Molenbergnatie  [2006] ECR I‑2049, paragraph 31; and Case C‑450/06 Varec  [2008] ECR I‑581, paragraph 27).
48. Regulation No 1/2003 contains procedural and substantive rules.
49. As the Advocate General has pointed out in point 43 of her Opinion, the said regulation, like Article 81 EC, contains substantive provisions which govern the assessment by the competition authorities of agreements between undertakings and therefore constitute substantive rules of EU law.
50. Such substantive rules cannot in principle be applied retroactively, irrespective of whether such application might produce favourable or unfavourable effects for the persons concerned. The principle of legal certainty requires that any factual situation should normally, in the absence of any express contrary provision, be examined in the light of the legal rules existing at the time when the situation obtained (see, to that effect, Case C‑120/08 Bavaria  [2010] ECR I‑13393, paragraphs 40 and 41).
51. According to settled case-law, in order to ensure observance of the principles of legal certainty and the protection of legitimate expectations, the substantive rules of Community law must be interpreted as applying to situations existing before their entry into force only in so far as it follows clearly from their terms, objectives or general scheme that such effect must be given to them (see Case C‑369/09 P ISD Polska and Others v Commission [2011] ECR I‑2011, paragraph 98 and case-law cited).
55. It should be recalled in that respect that, in paragraph 62 of the judgment in Dow Chemical Ibérica and Others  v Commission , the Court of Justice held that, as from the accession of the Kingdom of Spain on 1 January 1986, Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition, 1959-1962, p. 87), was applicable in that new Member State, so that undertakings established in Spain could be the subject of investigations with effect from 1 January 1986. It is clear from paragraph 63 of the same judgment that the Commission’s powers of investigation, after that date, with undertakings established in Spain could not be limited solely to conduct subsequent to accession and could therefore concern conduct prior to that date.
58. Secondly, some applicants in the main proceedings rely on the case-law according to which a new rule applies immediately to the future effects of a situation which arose under the old rules, in order to maintain that, after the accession of a State to the Union, EU law must apply immediately for the purposes of assessing facts which arose before that accession. In paragraph 14 of its judgment in Case C‑122/96 Saldanha and MTS [1997] ECR I‑5325, to which those companies referred, the Court held that, where the act governing the accession of a State, in that case the Republic of Austria, contains no specific conditions with regard to the application of a provision of the EC Treaty, the latter provision must be regarded as being immediately applicable and binding on that Member State from the date of its accession, with the result that it applies to the future effects of situations arising prior to that new Member State's accession.
64. In that respect, it should be noted that the principle of the retroactive application of the more lenient penalty, which forms part of the constitutional traditions common to the Member States and of the general principles of law, the observance of which the Court ensures (Joined Cases C‑387/02, C‑391/02 and C‑403/02 Berlusconi and Others  [2005] ECR I‑3565, paragraphs 67 and 68; Case C‑420/06 Jager  [2008] ECR I‑1315, paragraph 59; Case C‑61/11 PPU El Dridi  [2011] ECR I‑3015, paragraph 61), also appears in the third sentence of Article 49(1) of the Charter.
73. In interpreting a provision of EU law, it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part (see, in particular, Case 292/82 Merck  [1983] ECR 3781, paragraph 12; Case C‑162/09 Lassal  [2010] ECR I‑9217, paragraph 49).
77. The first sentence of Article 3(1) of Regulation No 1/2003 establishes a close link between the prohibition of cartels set out by Article 81 EC and the corresponding provisions of national competition law. Where the national competition authority applies provisions of national law prohibiting cartels to an agreement of undertakings which is capable of affecting trade between Member States within the meaning of Article 81 EC, the said first sentence of Article 3(1) requires that Article 81 EC also be applied to it in parallel.
78. In so far as the national competition authority is not authorised, under the first sentence of Article 11(6) of Regulation No 1/2003, to apply Article 81 EC, where the Commission has opened a proceeding for the adoption of a decision in application of Chapter III of that regulation, the said national authority also loses the possibility of applying provisions of national law prohibiting cartels.
81. In accordance with settled case-law, EU law and national law on competition apply in parallel ( Wilhelm and Others , paragraph 3; Case C‑137/00 Milk Marque and National Farmers’ Union  [2003] ECR I‑7975, paragraph 61; Joined Cases C‑295/04 to C‑298/04 Manfredi and Others  [2006] ECR I‑6619, paragraph 38). Competition rules at European and at national level view restrictions on competition from different angles ( Wilhelm , paragraph 3; Manfredi and Others , paragraph 38; Case C‑550/07 P Akzo Nobel Chemicals and Akcros Chemicals  v Commission  [2010] ECR I‑8301, paragraph 103) and their areas of application do not coincide (Case C‑505/07 Compañía Española de Comercialización de Aceite  [2009] ECR I‑8963, paragraph 52).
94. The ne bis in idem principle must be observed in proceedings for the imposition of fines under competition law (see, to that effect, 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 59; 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, paragraphs 338 to 340; Case C‑289/04 P Showa Denko  v Commission  [2006] ECR I‑5859, paragraph 50). That principle thus precludes an undertaking being found liable or proceedings being brought against it afresh on the grounds of anti-competitive conduct for which it has been penalised or declared not liable by an earlier decision that can no longer be challenged ( Limburgse Vinyl Maatschappij v Commission , paragraph 59).
97. The Court has held, in competition law cases, that the application of this principle is subject to the threefold condition that in the two cases the facts must be the same, the offender the same and the legal interest protected the same ( Aalborg Portland and Others  v Commission , paragraph 338).
98. In the case at issue in the main proceedings, it must be noted that, in any event, one of the conditions thus laid down, namely identity of the facts, is lacking.
99. Whether undertakings have adopted conduct having as its object or effect the prevention, restriction or distortion of competition cannot be assessed in the abstract, but must be examined with reference to the territory, within the Union or outside it, in which the conduct in question had such an object or effect, and to the period during which the conduct in question had such an object or effect.