This document is an excerpt from the EUR-Lex website
Document 62007CC0101
Opinion of Mr Advocate General Mazák delivered on 16 October 2008.#Coop de France bétail et viande (C-101/07 P) and Fédération nationale des syndicats d’exploitants agricoles (FNSEA) and Others (C-110/07 P) v Commission of the European Communities.#Appeals - Competition - Market in beef and veal - Agreement between national federations of farmers and slaughterers with the object of suspending imports of beef and veal and fixing a minimum purchase price - Fines - Regulation No 17 - Article 15(2) - Taking into account of the turnover of undertakings which are members of the federations.#Joined cases C-101/07 P and C-110/07 P.
Opinion of Mr Advocate General Mazák delivered on 16 October 2008.
Coop de France bétail et viande (C-101/07 P) and Fédération nationale des syndicats d’exploitants agricoles (FNSEA) and Others (C-110/07 P) v Commission of the European Communities.
Appeals - Competition - Market in beef and veal - Agreement between national federations of farmers and slaughterers with the object of suspending imports of beef and veal and fixing a minimum purchase price - Fines - Regulation No 17 - Article 15(2) - Taking into account of the turnover of undertakings which are members of the federations.
Joined cases C-101/07 P and C-110/07 P.
Opinion of Mr Advocate General Mazák delivered on 16 October 2008.
Coop de France bétail et viande (C-101/07 P) and Fédération nationale des syndicats d’exploitants agricoles (FNSEA) and Others (C-110/07 P) v Commission of the European Communities.
Appeals - Competition - Market in beef and veal - Agreement between national federations of farmers and slaughterers with the object of suspending imports of beef and veal and fixing a minimum purchase price - Fines - Regulation No 17 - Article 15(2) - Taking into account of the turnover of undertakings which are members of the federations.
Joined cases C-101/07 P and C-110/07 P.
European Court Reports 2008 I-10193
ECLI identifier: ECLI:EU:C:2008:233
OPINION OF ADVOCATE GENERAL
Mazák
delivered on 17 April 2008 (1)
Joined Cases C‑101/07 P and C‑110/07 P
Coop de France Bétail et Viande, formerly Fédération nationale de la coopération bétail et viande (FNCBV)
and
Fédération nationale des syndicats d’exploitants agricoles (FNSEA) and Others
v
Commission of the European Communities
(Appeal – Competition – Article 81(1) EC – Cartel – Beef and veal – Suspension of imports – Fixing of a union price scale – Fines – Determination of legal maximum of fine – Article 15(2) of Regulation No 17 – Taking into account of turnover of members of an association of undertakings)
I – Introduction
1. In these joined appeal cases, Coop de France Bétail et Viande, formerly Fédération nationale de la coopération bétail et viande (‘FNCBV’) (Case C‑101/07 P) and Fédération nationale des syndicats d’exploitants agricoles (‘FNSEA’), Fédération nationale bovine (‘FNB’), Fédération nationale des producteurs de lait (‘FNPL’) and Jeunes agriculteurs (‘JA’) (Case C‑110/07 P) (‘the appellant associations’) are challenging the judgment of the Court of First Instance (First Chamber) of 13 December 2006 in FNCBV and FNSEA and Others v Commission (2) (‘the contested judgment’) in which that court largely confirmed Commission Decision No 2003/600/EC of 2 April 2003 relating to a proceeding pursuant to Article 81 of the EC Treaty (Case COMP/C.38.279/F3 – French beef) (3) (‘the contested decision’), and, which imposed fines on, inter alia, the appellant associations for infringing Article 81(1) EC by concluding agreements which had the object of suspending imports of beef into France and fixing a minimum price for certain categories of cattle.
II – Background to the appeal
A – Legal framework
2. Article 15(2) of Council Regulation No 17 (4) provides:
‘The Commission may by decision impose on undertakings or associations of undertakings fines of from [EUR] 1 000 to [EUR] 1 000 000, or a sum in excess thereof but not exceeding 10% of the turnover in the preceding business year of each of the undertakings participating in the infringement where, either intentionally or negligently:
a) they infringe Article [81](1) or Article [82] [EC]; …
In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’
3. The Commission’s Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty (5) (‘the Guidelines’) lay down a method for determining the amount of such fines. Pursuant to Article 5(c) of the Guidelines ‘[i]n cases involving associations of undertakings, decisions should as far as possible be addressed to and fines imposed on the individual undertakings belonging to the association. If this is not possible (e.g. where there are several thousands of affiliated undertakings) … an overall fine should be imposed on the association, calculated according to the principles outlined above but equivalent to the total of individual fines which might have been imposed on each of the members of the association.’
B – Factual and procedural background
4. The appellant in Case C‑101/07 P, FNCBV, is comprised of 300 cooperative groups of producers in the cattle, pig and sheep-farming sectors and 30 slaughter and meat-processing groups or undertakings in France. The appellants in Case C‑110/07 P, namely, FNSEA, FNB, FNPL and JA, are trade unions governed by French law. FNSEA is the main French farmer’s union. FNSEA is also comprised of specialised associations representing the interests of each type of producer, including FNB and FNPL. JA represents farmers under 35 years of age.
5. The underlying competition case which has given rise to the present appeals arose as a result of the so-called second ‘mad cow’ crisis. From October 2000 new cases of bovine spongiform encephalopathy, commonly known as ‘mad cow disease’, were discovered in several Member States. At the same time, there was an outbreak of foot-and-mouth disease in sheep in the United Kingdom. This situation had an impact on meat consumption in Europe and created a crisis in the beef sector. Despite a number of measures adopted by the Community institutions in order to deal with the crisis, these measures were deemed insufficient by French farmers. In September and October 2001 relations between farmers and slaughterers became particularly tense in France. Groups of farmers stopped lorries illegally in order to check the origin of the meat being transported and blockaded abattoirs. These acts sometimes led to the destruction of plant and of meat. In return for lifting the blockade of abattoirs, the protesting farmers demanded undertakings from the slaughterers to suspend imports and to apply a so-called ‘union’ price scale.
6. In October 2001 several meetings took place between the associations representing beef farmers (6) and those representing the slaughterers. (7) Following a meeting on 24 October 2001, organised at the request of the French Minister for Agriculture, an agreement was concluded between the six associations, namely FNSEA, FNB, FNPL, JA, FNCBV and FNICGV.
7. The agreement consisted of two parts. The first was a ‘temporary commitment to suspend imports’ of beef. The second consisted of a ‘commitment to apply the slaughterhouse entry price scale to culled cows’. The agreement contained, inter alia, a list of prices per kilogram of carcass for certain categories of cows. The agreement was to enter into force on 29 October 2001 and to be applied until the end of November 2001.
8. On 30 October 2001, the Commission sent the French authorities a letter requesting information on the agreement of 24 October 2001. On 9 November 2001, the French authorities replied to the Commission’s request for information of 30 October 2001. On 9 November 2001, the Commission wrote to FNSEA, FNB, FNPL, JA and FNICGV requesting information pursuant to Article 11 of Regulation No 17. The five associations in question replied to the requests for information on 15 and 23 November 2001. On 26 November 2001, the Commission wrote a letter of formal notice to FNSEA, FNB, FNPL, JA, FNCBV and FNICGV stating that the facts which had come to its knowledge indicated that the Community competition rules had been infringed and the associations were asked to submit their observations and proposals by 30 November 2001 at the latest. On 17 December 2001, the Commission carried out investigations on the premises of a number of the associations pursuant to Article 14(2) of Regulation No 17. On 24 June 2002, the Commission adopted a statement of objections addressed to FNSEA, FNB, FNPL, JA, FNCBV and FNICGV who submitted their written observations thereon between 23 September and 4 October 2002. The associations were heard on 31 October 2002.
C – The contested decision
9. On 2 April 2003, the Commission adopted the contested decision. According to the contested decision, the appellant associations and FNICGV infringed Article 81(1) EC by concluding on 24 October 2001 a written agreement in order to set a minimum purchase price for certain categories of cattle and to suspend imports of beef into France, and by concluding, between the end of November and the beginning of December 2001, a verbal agreement having the same object, applicable following the expiry of the written agreement.
10. In view of the nature and the geographic extent of the relevant market, the infringement was described as very serious. To determine the degree of responsibility of each association, the Commission took into account the ratio between the amount of the annual membership fees collected by the main farmers’ association, FNSEA, and that of each of the other associations. As the infringement was of short duration, the Commission did not increase the basic amount. The Commission also took into account several aggravating and mitigating circumstances in relation to the six associations and adjusted the basic amount of the fine to be imposed thereon accordingly.
11. Article 1 of the operative part of the contested decision provides:
‘[FNSEA], [FNB], [FNPL], [JA], [FNICGV] and [FNCBV] infringed Article 81(1) [EC] by concluding on 24 October 2001 an agreement which had the object of suspending imports of beef into France and fixing a minimum price for certain categories of cattle, and by concluding verbally an agreement with a similar object at the end of November and beginning of December 2001.
The infringement began on 24 October 2001 and continued to have effect at least until 11 January 2002.’
12. In accordance with Article 2 of the operative part of the contested decision the associations named in Article 1 were required, inter alia, to immediately bring the infringement to an end. Pursuant to Article 3 of the operative part of the contested decision fines of EUR 12 million, EUR 1.44 million, EUR 600 000, EUR 1.44 million, EUR 720 000, EUR 480 000 were imposed on FNSEA, FNB, JA, FNPL, FNICGV and FNCBV respectively.
D – Proceedings before the Court of First Instance
13. By application lodged at the registry of the Court of First Instance on 19 June 2003 and registered as Case T‑217/03, FNCBV brought an action against the contested decision. By application lodged at the registry of the Court of First Instance on 20 June 2003 and registered as Case T‑245/03, FNSEA, FNB, FNPL and JA also brought an action against the contested decision. The applicants is Cases T‑217/03 and T‑245/03 sought, inter alia, the annulment of the contested decision and in the alternative, the cancellation of the fines imposed on them or, in the further alternative, the reduction of the fines. France applied to intervene in each case in support of the forms of order sought by the applicants in Cases T‑217/03 and T‑245/03 and by order of 6 November 2003, the President of the Fifth Chamber of the Court of First Instance granted leave to intervene. On 3 April 2006, the President of the First Chamber of the Court of First Instance, after hearing the parties, ordered the joinder of Cases T‑217/03 and T‑245/03.
14. The Court of First Instance (First Chamber) delivered its judgment on 13 December 2006 in Joined Cases T‑217/03 and T‑245/03. The Court of First Instance dismissed all the pleas save two raised by the applicants in those Joined Cases. In that regard, the Court of First Instance found firstly, that the Commission had failed in its obligation to state reasons in that it did not state in the contested decision that it had used the turnover of the applicants’ basic members for the purpose of verifying that the fines did not exceed the upper limit of 10% provided for by Article 15(2) of Regulation No 17, nor did it set out the circumstances that enabled it to take account of those aggregate turnover figures. However, as the Court of First Instance found that the Commission was justified in taking into account the turnover of the applicants’ basic members for the purpose of calculating the upper limit, provided that they operated in the markets affected by the infringements sanctioned in the contested decision, that court took the view that, in that situation, the failure to state reasons should not entail the annulment of the contested decision because that can only lead to the adoption of another decision identical in substance to the decision annulled or entail any alteration in the amount of the fines. Secondly, the Court of First Instance found that the fines imposed on the applicants should be reduced by 70% on the basis of Section 5(b) of the Guidelines, instead of the 60% reduction applied by the Commission.
15. The Court of First Instance thus set the amount of the fine imposed on FNCBV at EUR 360 000, on FNSEA at EUR 9 000 000, on FNB at EUR 1 080 000, on FNPL at EUR 1 080 000 and on JA at EUR 450 000 and dismissed the remainder of the applications.
III – Appeal procedure
16. On 19 February 2007, FNSEA, FNB, FNPL and JA lodged an appeal against the contested judgment which was registered as Case C‑110/07 P. On 20 February 2007, FNCBV lodged an appeal against the same judgment which was registered as Case C‑101/07 P. On 18 April 2007, the President of the Court, after hearing the parties, ordered the joinder of Cases C‑101/07 P and C‑110/07 P.
17. In Cases C‑101/07 P and C‑110/07 P, the appellant associations request the Court to:
– annul the contested judgment;
– cancel the fines imposed on them;
– in the alternative, reduce the fines imposed on them;
– order the Commission to pay the costs of the proceedings for interim measures and the main proceedings before the Court of First Instance and the costs of the proceedings before the Court.
18. The French Government claims that the Court should:
– annul the contested judgment;
– order the Commission to pay the costs.
19. The Commission contends that the Court should:
– dismiss the appeals in both cases in their entirety;
– order the appellant associations to pay the costs.
20. No hearing was requested or held.
IV – Preliminary remarks
21. The appellant in Case C‑101/07 P, FNCBV, adduces five pleas in support of its application to have the contested judgment annulled and a sixth plea seeking reduction of the fine imposed. The first plea alleges error in law as the Court of First Instance failed to recognise that the Commission breached the rights of the defence by means of the statement of objections. The second plea alleges distortion by the Court of First Instance of certain facts namely, the handwritten notes of the FNB director concerning the meeting of 29 November 2001 (paragraphs 169 to 174 of the contested judgment), the interview given on 4 December 2001 by the FNB vice-president to Vendée Agricole (paragraph 176 of the contested judgment), memo from the Vendée federation of 5 December 2001 (paragraphs 175 to 177 of the contested judgment), information bulletin issued by FNPL and sent by fax on 10 December 2001 (paragraph 179 of the contested judgment), and handwritten notes of the FNB director concerning meeting of 5 December 2001 (paragraph 180 of the contested judgment). The third plea alleges that the Court of First Instance erred in law as it based its finding that FNCBV had participated in the extension of the agreement of 24 October 2001 on a presumption. By its fourth plea, FNCBV argues, in the alternative, that in the event that the Court considers that FNCBV participated in the extension of the agreement of 24 October 2001, the Court of First Instance erred in law firstly, by qualifying the agreement as anti-competitive and secondly, by failing to analyse the effects of the agreement. By its fifth plea, FNCBV alleges that the Court of First Instance erred in law in its application of Article 15(2) of Regulation No 17 as it failed, firstly, to fulfil its obligation to state reasons concerning the use of the turnover of members of FNCBV in order to verify whether the 10% ceiling outlined in that provision had not been exceeded and, secondly, the Court of First Instance used contradictory reasoning as it stressed the active and direct role of the appellant associations in the alleged practice while at the same time stating that the appellant associations were merely the vehicle for the actions of their members. By its sixth plea, which seeks a reduction of the fine imposed, FNCBV claims that the Court of First Instance erred in law as it infringed Article 15(2) of Regulation No 17 by imposing a fine on FNCBV in excess of 10% of its turnover.
22. The appellants in Case C‑110/07 P, FNSEA, FNB, FNPL and JA, adduce four pleas in support of their application to have the contested judgment annulled and the fines imposed reduced. The first plea alleges distortion of the facts as the Court of First Instance failed to consider two essential pieces of evidence which demonstrate that the agreement of 24 October 2001 was not extended beyond 30 November 2001. The second plea alleges violation of the rights of defence as the Court of First Instance considered that the statement of objections of the Commission was sufficiently clear and precise (paragraphs 210 to 225 of the contested judgment). The third plea alleges infringement of Article 15(2) of Regulation No 17 as the Court of First Instance took into account the turnover of the members of the appellant associations when verifying that the fines did not exceed the legal ceiling. The fourth plea alleges breach of the rule on prohibition of multiple sanctions and the principle of proportionality of sanctions in that the Court of First Instance imposed a fine on each of the appellant associations taking into account the turnover of members common to more than one association.
23. In my view, only the fifth and sixth pleas of the FNCBV and the third plea of FNSEA, FNB, FNPL and JA raise a new point of law. I shall therefore confine myself to providing a detailed analysis of those pleas and I shall provide a brief analysis of the remaining pleas of the appellants.
24. As a number of the pleas of the appellant associations in the present proceedings overlap to a considerable extent, I shall deal with them together.
V – Breach of the rights of the defence
25. By their first and second pleas, the appellant associations in Cases C‑101/07 P and C‑110/07 P respectively claim that the Court of First Instance erred in law by failing to consider that the Commission had breached their rights of defence. According to the appellant associations the breach of the rights of defence arose as the Commission failed to indicate in the statement of objections that it intended to take into consideration the turnover of the members of those associations for the purpose of calculating the 10% ceiling pursuant to Article 15(2) of Regulation No 17. The appellant associations consider that the obligation of the Commission to indicate that it intended to take into consideration their members’ turnover was of particular importance in the instant case as the Commission in the contested decision did not adhere to its usual method of calculating the fine.
26. The Commission considers that it is obliged to indicate in the statement of objections that it is contemplating imposing a fine on the undertakings or associations of undertakings concerned and to indicate the main factual and legal criteria capable of attracting a fine. The Commission claims that it is not obliged to indicate in the statement of objections the methodology for calculating the fine which it may subsequently adopt in its decision. The Commission also notes that the possibility of taking into account the turnover of the members of an association of undertakings for the purposes of calculating the 10% ceiling pursuant to Article 15(2) of Regulation No 17 is envisaged by the case-law and Section 5(c) of the Guidelines.
A – Assessment
27. The Court of First Instance considered that the Commission did not infringe the appellant associations’ rights of defence by failing to indicate, in the statement of objections, that the Commission proposed to take into account their members’ turnover for the purposes of calculating the basic amount of the fines and verifying the 10% upper limit laid down by Article 15(2) of Regulation No 17. (8) The Court of First Instance considered, in accordance with the settled case-law of the Court, that to give indications in the statement of objections as regards the level of the fines envisaged, including the 10% ceiling, before the undertaking has been invited to submit its observations on the allegations against it, would be to anticipate the Commission’s decision and would thus be inappropriate. (9)
28. It is settled case-law that respect for the rights of defence will be ensured where the Commission in its statement of objections indicates whether it would consider imposing a fine and indicates the main legal and factual criteria capable of attracting a fine, such as the gravity and the duration of the alleged infringement and whether that infringement was committed intentionally or negligently. Such details are considered sufficient to enable undertakings or associations of undertakings to defend themselves against the finding of an infringement and against the imposition of fines. (10)
29. In my view the determination, inter alia, of the basic amount of fines, the adjustment of that basic amount taking into consideration any aggravating or mitigating circumstances and the subsequent verification that the fines do not exceed the 10% ceiling provided for by Article 15(2) of Regulation No 17 are part of a process of calculating the fine to be imposed and ensuring compliance with that maximum legal limit of the fine. It is clear from the case-law of the Court that such a level of detail in relation to the actual calculation and verification of fines is not required to be furnished by the Commission in its statement of objections in order to enable undertakings or associations of undertakings to defend their interests. In addition, in the case of fines imposed on associations of undertakings, the possibility of verifying, by reference to the turnover of members of those associations, that the 10% ceiling provided by Article 15(2) of Regulation No 17 has not been exceeded has been accepted by both the Court of First Instance and the Court. (11) Thus the possibility that the Commission could have verified that the maximum legal limit of fines imposed on the appellant associations was respected by reference to the turnover of their members could have been anticipated by those associations of undertakings.
30. I am therefore of the view that the first and second pleas of the appellant associations in Cases C‑101/07 P and C‑110/07 P respectively, should be dismissed as unfounded.
VI – Error of law by the Court of First Instance in its application of Article 15(2) of Regulation No 17
A – The contested judgment
31. At first instance, the appellant associations argued that the Commission breached Article 15(2) of Regulation No 17 in setting the amount of the fines in excess of the limit of 10% of their turnover. (12) The appellant associations claimed that it is clear from the case-law that the turnover of the members of associations of undertakings may only be taken into account for the purpose of calculating the upper limit of the fine where the association in question is able, by virtue of its internal rules, to bind its members. In that regard, the appellant associations claimed that they could not bind their respective members.
32. The Court of First Instance found at paragraphs 317 to 319 of the contested judgment that:
‘317 According to settled case-law, the upper limit of 10% of the turnover must be calculated by reference to the turnover achieved by each of the undertakings that are parties to the agreements and concerted practices or by all the members of the associations of undertakings, at least where the internal rules of the association empower it to bind its members. The possibility of taking into account for that purpose the turnover of all the undertakings that are members of an association is justified by the fact that, in determining the amount of the fines, account may be taken inter alia of such influence as the undertaking may have been able to exercise in the market, in particular by reason of its size and economic power, of which its turnover may give an indication, and the deterrent effect that fines must have. The influence which an association of undertakings may have had on the market depends not on its own turnover, which reveals neither its size nor its economic power, but rather on the turnover of its members which gives an indication of its size and economic power …
318 However, that case-law does not rule out the possibility that, in certain cases, the turnover of the members of an association could also be taken into account even if the association does not possess formal power to bind its members, there being no internal rules enabling it to do so…
319 … the Court considers that other specific circumstances, beyond the existence of internal rules enabling the association to bind its members, may justify taking account of the aggregate turnover of the members of the association in question. This applies in particular to cases where an infringement on the part of an association involves its members’ activities and where the anti-competitive practices at issue are engaged in by the association directly for the benefit of its members and in cooperation with them, the association having no objective interests independent of those of its members. Although, in some of those situations, the Commission could impose individual fines on each of the member undertakings in addition to sanctioning the association in question, this could be particularly difficult or impossible where the number of members is very large.’
33. The Court of First Instance went on to find at paragraphs 320 and 324 of the contested judgment that in the light of the circumstances in the case at hand, it was justified to take into account the turnover of the appellant associations’ basic members for the purpose of calculating the upper limit of a fine pursuant to Article 15(2) of Regulation No 17 (13) as, first, the primary task of the appellant associations was to defend and to represent the interests of their basic members, namely farmers, cooperative associations and slaughterers. (14) Second, the disputed agreement did not relate to the activity of the appellant associations themselves but to that of their basic members as the former do not sell, buy, or import beef. (15) Third, the disputed agreement was concluded directly for the benefit of the appellant associations’ basic members. (16) Fourth, the disputed agreement was, inter alia, put into effect by the conclusion of local agreements between members of the appellant associations. (17)
B – Argument
34. By their fifth and third pleas respectively, the appellants in Cases C‑101/07 P and C‑110/07 P claim that the Court of First Instance erred in law by misapplying Article 15(2) of Regulation No 17. FNCBV’s fifth plea is divided into two parts.
35. FNSEA, FNB, FNPL, JA, (third plea), the French Government and FNCBV (first part of fifth plea) claim essentially that in accordance with the case-law of the Court of First Instance, (18) as confirmed by the Court in Case C‑298/98 P Finnboard v Commission, (19) the turnover of the members of an association may only be taken into account for the purpose of calculating the 10% ceiling laid down in Article 15(2) of Regulation No 17 where the association, by virtue of its internal rules, can bind its members. In that regard, the appellant associations consider that the Court of First Instance in the contested judgment thus reversed the settled case-law on the matter by calculating the 10% ceiling on the basis of the turnover of the members of the appellant associations despite the fact that those associations are not able to bind their members. In their reply, FNSEA, FNB, FNPL and JA maintain that while a number of earlier cases (20) may have been somewhat ambiguous as they state that the upper limit of 10% may be calculated by reference to the turnover of the members of an association ‘at least where’, by virtue of its internal rules, the association is able to bind its members, this ambiguity was removed by the Court in its judgment in Finnboard v Commission. It is clear from the wording of paragraph 66 of the latter judgment which states that ‘[i]t is not necessary that the members of the association should have actually participated in the infringement, but the association must, by virtue of its internal rules, have been able to bind its members’, that the ability of an association to bind its members is a necessary condition in order for the turnover of those members to be taken into account for the purposes of the 10% ceiling. FNCBV also considers that the Court of First Instance failed to provide any reasoning for its reversal of the previous case-law and that the reversal is contrary to the principle of legal certainty.
36. FNSEA, FNB, FNPL and JA claim that the first three of the four ‘specific’ circumstances outlined by the Court of First Instance in paragraphs 320 to 323 of the contested judgment are not specific circumstances but are ‘naturally’ fulfilled in the case of associations as it is the primary task of all associations to defend and represent the interests of their members. Moreover, as regards the fourth circumstance concerning the participation of the members of an association in the infringement, FNSEA, FNB, FNPL and JA claim that the fact that a number of the members of the appellant associations may have participated in putting into effect the terms of the disputed agreement does not demonstrate that all the members of the associations indirectly participated in the infringement.
37. The French Government also notes that as two of the conditions required by the Court of First Instance in order to base the 10% ceiling provided by Article 15(2) of Regulation No 17 on the turnover of the members of an association will be met in nearly all cases, this will lead to the systematic use of the turnover of members of associations for the purposes of fixing the ceiling in question. According to the French Government, the two conditions which will nearly always be met are, firstly, the condition that an infringement on the part of an association should involve its members’ activities and, secondly, the condition that the anti-competitive practices at issue must be engaged in by the association directly for the benefit of its members and in cooperation with them.
38. FNCBV also considers that the Court of First Instance erred in law as it incorrectly applied its new approach on Article 15(2) of Regulation No 17 in the specific case before it. FNCBV maintains that two of the four cumulative and specific circumstances outlined by that court at paragraphs 320 to 323 of the contested judgment were not met in that case. Firstly, the agreement of 24 October 2001 was contrary to the interests of FNCBV’s members as it fixed a minimum purchase price for cattle. Moreover, the agreement did not result in the lifting of blockades against abattoirs. Secondly, the fact that FNCBV interests are independent of those of its members is demonstrated not only by the fact that it is unable to bind its members but also by the limited number of local agreements after the agreement of 24 October 2001. FNCBV also maintains that the Court of First Instance erred in law as it failed to demonstrate that it was impossible to address the contested decision to the members of FNCBV and to impose individual fines on its members. According to FNCBV, pursuant to Section 5(c) of the Guidelines the Commission may only impose a fine on an association of undertakings equivalent to the sum of the fines that would have been imposed on the association’s members where the Commission demonstrates that it was impossible to fine the individual members of the association.
39. In the second part of its fifth plea, FNCBV considers that in paragraph 320 et seq. of the contested judgment the fact that the agreement of 24 October 2001 did not relate to the activities of the appellant associations is stressed, while at paragraph 341 of the contested judgment the fact that the appellant associations signed, participated in, were responsible for, played an individual role in and even executed that agreement was emphasised. The Court of First Instance thus adopted contradictory reasoning in the contested judgment. In reality, by stating at paragraph 341 of the contested judgment that the appellant associations participated in the agreement, the Court of First Instance implicitly recognised that the taking into account of the turnover of the members of the associations was not justified pursuant to Article 15(2) of Regulation No 17. The appellant associations claim that the contested judgment should therefore be annulled.
40. The Commission claims that pursuant to the case-law of the Court of First Instance ‘the upper limit of 10% of the turnover must be calculated by reference to the turnover achieved by each of the undertakings that are parties to the agreements and concerted practices concerned or by all the members of the associations of undertakings, at least where the internal rules of the association empower it to bind its members’. (21) The Commission considers, however, that the fact that an association of undertakings cannot necessarily bind its members does not mean that the turnover of its members may not be taken into consideration when fixing the ceiling, in accordance with Article 15(2) of Regulation No 17, of a fine imposed on the association.
41. In order to guarantee the effectiveness of fines imposed on associations of undertakings with very low turnover but bringing together a large number of undertakings, the Court of First Instance considered in the contested judgment that if four specific conditions are met, the turnover of the members of the association can be taken into account for the purpose of calculating the ceiling of the fine in question. The Commission thus considers that the claim of the appellant associations that the Court of First Instance has failed to comply with or has reversed the case-law on the matter in the contested judgment should be dismissed, given that the previous case-law also seeks to preserve the effectiveness of fines. The Commission notes that even if the solution adopted by the Court of First Instance clarifies or extends the existing case-law, such a clarification or extension does not constitute an error of law, provided that the solution adopted is reasoned and well founded. Indeed, the previous case-law on the matter does not exclude the possibility of taking into account the turnover of the members of an association where the association cannot bind its members in accordance with its internal rules. This can be seen from the use of the words ‘at least where’ in the case-law, (22) which suggests that the possibility to bind one’s members is but one example of when the turnover of the members of an association may be taken into account for the purpose of fixing the ceiling of a fine in accordance with Article 15(2) of Regulation No 17. In its rejoinder, the Commission argues that in Case C‑298/98 P Finnboard v Commission, (23) the Court considered that it is not necessary to demonstrate that the members of an association participated in an infringement, in order to take into account their turnover, provided that the association has the capacity to bind its members. The Court of First Instance could thus, without contradicting this case-law, find that where the members of an association have actively participated in the execution of an infringement, their turnover may be taken into account for the purposes of the 10% ceiling.
42. The Commission considers that if the arguments of the appellant associations are followed this would encourage all undertakings seeking to cartelise a market to do so using as a vehicle an association which cannot formally bind its members. The Commission also maintains, contrary to the claims of FNCBV, that the Court of First Instance did not specify that the four specific conditions retained by it when calculating the 10% ceiling on the basis of the turnover of members of an association were cumulative. Rather, the Court of First Instance merely enumerated the circumstances which justified such an approach in the case at hand. Moreover, FNCBV incorrectly claims that the disputed agreement was not in the interest of its members. The fixing of prices and the suspension of imports were agreed in return for the lifting of blockades against abattoirs. Furthermore, the fact that some blockades persisted does not contradict this finding. The Commission notes that FNCBV cannot demonstrate that its interests are distinct from those of its members. In addition, FNCBV has not defined its distinct interests nor explained why an association of slaughterers signed an agreement on prices and the importation of beef despite the fact that it does not exercise such activities. Indeed, as the Court of First Instance restated at paragraph 321 of the contested judgment, the disputed agreement did not relate to FNCBV’s activities but to those of its members. The Commission also claims that the fact, as indicated by FNSEA, FNB, FNPL and JA, that three of the four circumstances indicated by the Court of First Instance are naturally fulfilled by all associations, does not lead to the conclusion that the Court of First Instance committed an error of law in the light of the necessity to ensure that all fines are sufficiently dissuasive.
43. The Commission claims, in response to FNCBV’s allegation that the Commission and the Court of First Instance did not provide adequate reasons for departing from the terms of Section 5(c) of the Guidelines, that that court did not rely on the provision in question in the contested judgment despite the fact that it could easily have done so, given the very large membership of the appellants.
44. The Commission also considers that FNCBV’s argument that the Court of First Instance failed to provide any reasoning for reversing its previous case-law concerning Article 15(2) of Regulation No 17 is unfounded. The contested decision at paragraphs 312 to 334 explains in detail the analysis on the matter carried out by the Court of First Instance. Moreover, the Commission considers that paragraphs 320 et seq. and 341 of the contested judgment are not contradictory. The fact that the appellant associations committed the infringement does not contradict the fact that they did so for the benefit of their members.
45. The Commission notes that the appellants have not contested the finding of the Court of First Instance at paragraphs 325 and 327 to 333 of the contested judgment that the ceiling of 10% of the turnover of their basic members has not been exceeded.
C – Assessment
46. Pursuant to Article 15(2) of Regulation No 17, the Commission may impose on undertakings or associations of undertakings fines not exceeding, inter alia, 10% of the turnover in the preceding business year of each of the undertakings participating in the infringement. Article 15(2) of Regulation No 17 further provides that in fixing the amount of the fine the gravity and duration of the infringement must be taken into account.
47. The Court of First Instance has, on a number of occasions, found that the assessment of the upper ceiling of a fine imposed on an association of undertakings in accordance with Article 15(2) of Regulation No 17 may be based on the turnover of the members of that association rather than on the turnover of the association itself, where the association can bind its members. (24)
48. Thus, in accordance with the settled case-law of the Court of First Instance given that the term ‘infringement’ in Article 15(2) of Regulation No 17 covers without distinction agreements, concerted practices and decisions of associations of undertakings, ‘the upper limit of 10% of turnover must be calculated by reference to the turnover of each of the undertakings which are parties to those agreements and concerted practices or of all of the undertakings which were members of the association of undertakings, at least where, by virtue of its internal rules, the association is able to bind its members.’ (25)
49. The Court of First Instance justified the correctness of such an approach by the fact that ‘the influence which an association of undertakings has been able to exert on the market does not depend on its own “turnover”, which discloses neither its size nor its economic power, but rather on the turnover of its members, which constitutes an indication of its size and economic power’. (26)
50. In addition, the Court at paragraph 66 of the judgment in Case C‑298/98 P, Finnboard v Commission, considered that ‘when a fine is imposed on an association of undertakings, whose own turnover most often does not reflect its size or power on the market, it is only when the turnover of the member undertakings is taken into account that a fine with deterrent effect can be determined (see, to that effect, the judgment in Joined Cases 100/80 to 103/80 Musique Diffusion française and Others v Commission, [1983] ECR 1825, paragraphs 120 and 121). It is not necessary that the members of the association should have actually participated in the infringement, but the association must, by virtue of its internal rules, have been able to bind its members.’
51. The case-law of the Court of First Instance and of the Court indicates that the legal capacity of an association of undertakings to bind its members is sufficient in order for the turnover of the members of that association to be taken into account for the purposes of verifying that the maximum legal limit of a fine imposed on that association is not exceeded.
52. The question however arises whether that capacity is an absolute prerequisite in order to calculate the maximum legal limit of a fine imposed on an association of undertakings, as provided by Article 15(2) of Regulation No 17, by reference to the turnover of the members of an association. In that regard, the appellants and the French Government essentially consider that the use of the terms ‘must, by virtue of its internal rules, have been able to bind its members’ in paragraph 66 of the judgment of the Court in Case C‑298/98 P Finnboard v Commission underscores the mandatory nature of an association of undertakings’ capacity to bind its members. I consider that the arguments of the appellant associations and the French Government on the matter must be rejected.
53. It should be noted as a preliminary matter that the Court at paragraph 66 of the judgment in Case C‑298/98 P Finnboard v Commission considered that in most cases the turnover of an association of undertakings does not reflect its size or power on the market. Moreover, I consider that it emerges from the wording of paragraph 66 of the judgment in Case C‑298/98 P Finnboard v Commission that, where the members of an association have not participated in an infringement, the association must have the capacity to bind its members in order for the members’ turnover to be taken into account. In my view, the Court’s requirement that an association have the capacity to bind its members is thus premissed on the non-participation of those members in the infringement.
54. I therefore consider that it is clear from the reasoning of the judgment of the Court in Case C‑298/98 P Finnboard v Commission that in cases where members of the association have actually participated in the infringement, it cannot be excluded that the maximum legal limit of a fine imposed on an association of undertakings may be based on the turnover of its members despite the fact that the association does not have the capacity to bind its members.
55. In my view, the correct application of Article 15(2) of Regulation No 17 in the case of associations of undertakings should ensure that the level of the fine imposed on an association is proportionate in relation to the economic influence it deploys on the market, thereby safeguarding the effectiveness of fines as a means to suppress illegal activities and prevent their reoccurrence.
56. Indeed in a very recent competition case concerning the level of a fine, the Court has emphasised the need to assess the economic reality of circumstances surrounding an undertaking and thus the actual influence exerted by it on the market. Thus in Britannia Alloys v Commission, (27) the Court noted that Article 15(2) of Regulation No 17 seeks to prevent fines imposed by the Commission from being disproportionate in relation to the size of the undertaking concerned. (28) The Court also emphasised the fact that the purpose of Article 15(2) of Regulation No 17 is to empower the Commission to impose fines with a view to enabling it to carry out the task of supervision conferred on it by Community law. That task includes, in particular, suppressing illegal activities and preventing their reoccurrence. The Court in that case thus considered that the Commission is entitled, where the undertaking concerned has not achieved any turnover for the business year preceding the adoption of the Commission decision, to refer to another business year in order to correctly assess the financial resources of that undertaking and thus ensure that the fine imposed has sufficient deterrent effect.
57. The deterrent objective of fines imposed for infringement of EC competition rules and the need to ensure that that objective is not jeopardised or frustrated by the restructuring of undertakings was also recently stressed by the Court in ETI and Others. (29)
58. In the contested judgment, the Court of First Instance considered that where an infringement on the part of an association involves its members’ activities and where the anti-competitive practices at issue are engaged in by the association directly for the benefit of its members and in cooperation with them, the association having no objective interests independent of those of its members, the turnover of the members of the association may be taken into consideration for the purposes of Article 15(2) of Regulation No 17. (30)
59. In my view, the circumstances or criteria identified by the Court of First Instance, if fulfilled, demonstrate that an infringement of the competition rules by an association of undertakings was inherently connected to the activities and interests of its members and was endorsed by members of that association. I thus consider that the criteria selected by the Court of First Instance are appropriate in seeking to ascertain the true economic power or influence deployed by associations of undertakings on the market. The approach of the Court of First Instance ensures in my view that the effectiveness of sanctions imposed on associations of undertakings for infringements of EC competition law is maintained where the turnover of those associations does not reflect the economic influence which they exert on the market. Associations of undertakings thus cannot evade in great measure those sanctions merely because they cannot formally bind their members but can in fact draw, where necessary, on the economic influence of those members on the market in order to infringe EC competition law.
60. This finding is not undermined by the arguments of FNSEA, FNB, FNPL, JA and the French Government (31) that the ‘specific’ criteria or circumstances identified by the Court of First Instance will be met in many cases involving associations of undertakings. In my view, the criteria selected by the Court of First Instance are correct and coherent as they seek to ascertain the actual influence of an association of undertakings on the market. The fact that perhaps in many, or indeed most, cases the turnover of an association of undertakings does not reflect its influence on the market does not impair the validity of the criteria identified by the Court of First Instance.
61. Moreover, in my view the argument raised by FNCBV that the agreement was not in fact in the interest of its members is a finding of fact which cannot be called into question in appeal proceedings. In any event, it is clear from the file in this case, as argued by the Commission, that FNCBV agreed to the fixing of prices and the suspension of imports in consideration for the lifting of blockades against, inter alia, the abattoirs of its members. I would also note as an aside that the fact that such arrangements are not ‘normally’ in the interests of abattoirs cannot undermine this finding, given the specific context in which the infringement arose. In addition, the fact as argued by FNCBV that the agreement did not result in the lifting of the blockades is wholly irrelevant in this context.
62. The finding of the Court of First Instance that the agreement did not relate to the activities of the appellant undertakings but to that of their basic members as the former do not sell, buy, or import beef (32) is also a finding of fact which cannot be called into question in appeal proceedings. In any event, FNCBV has failed to adduce any arguments which would undermine this finding.
63. As regards FNSEA, FNB, FNPL and JA’s claim that one of the specific conditions laid down by the Court of First Instance was not fulfilled as it has not been demonstrated that all the members of the appellant associations cooperated in the infringement, (33) I consider that such a requirement cannot be accepted. (34) In order for the 10% ceiling provided by Article 15(2) of Regulation No 17 in respect of a fine imposed on those associations to be based on the turnover of their members, it is sufficient to demonstrate, in relation to that criterion, that members of an association of undertakings cooperated in the infringement of competition law. (35) It is clear from the contested judgment that the appellant associations were able to draw upon members, from amongst their membership, to put into effect the agreement. (36)
64. As regards FNCBV’s allegation that the Court of First Instance failed to correctly apply Section 5(c) of the Guidelines, (37) I consider that that provision is not relevant in the present proceedings as it is clear from the contested decision that it is the appellant associations themselves, rather than their individual members, which were found to have infringed Article 81(1) EC. Moreover, I do not consider that the reasoning of the Court of First Instance at paragraphs 320 et seq. and 341 of the contested judgment is contradictory, as the Court of First Instance in effect stated in those paragraphs that the agreement was concluded by the appellant associations for the benefit of their members and put into effect at local level by their members.
65. FNCBV also argued that the Court of First Instance failed to provide any reasoning for reversing the previous case-law on Article 15(2) of Regulation No 17 and associations of undertakings. (38) In my view, FNCBV in its pleadings essentially questions the correctness of the Court of First Instance’s findings in relation to the application of Article 15(2) of Regulation No 17 rather than the lack of reasons provided. I would note in any event that the Court of First Instance provided extensive reasons in the contested judgment for basing the 10% ceiling imposed by Article 15(2) of Regulation No 17 on the turnover of the basic members of the appellant associations. Moreover, FNCBV’s argument that the reversal by the Court of First Instance of the previous case-law is contrary to the principle of legal certainty, cannot, in my view, prosper. I consider that the ruling of the Court of First Instance in the contested judgment is wholly in line with the previous case-law of that court and of the Court. (39) It is worth stressing that the Court in paragraph 66 of its judgment in Finnboard v Commission indicated that in most cases the turnover of an association of undertakings does not reflect its size or power on the market.
66. I therefore propose that the Court dismiss the fifth and third pleas respectively of the appellant associations in Cases C‑101/07 P and C‑110/07 P as unfounded.
VII – Breach of the rule on prohibition of multiple sanctions and the principle of proportional sanctions
67. In their fourth plea, the appellants in Case C‑110/07 P, supported by the French Government, claim that the Court of First Instance erred in law as it breached the rule on prohibition of multiple sanctions and the principle of proportional sanctions as that court imposed a separate fine on each of those associations while also taking into account the aggregate turnover of their common members for the purpose of verifying the level of the fine imposed on those associations in accordance with Article 15(2) of Regulation No 17. In that regard, the appellants in Case C‑110/07 P point out, inter alia, that FBN, FNPL and JA are all members of FNSEA and that their members are thus common.
68. The Commission claims that the fines imposed in the contested decision were not based on the aggregate turnover of the members of the appellant associations. The fine was calculated by reference, on the one hand, to the gravity of the infringement, which in turn was evaluated by reference to the nature of the infringement, the geographical scope of the infringement and its measurable impact and, on the other hand, by reference to the duration of the infringement. The turnover of the members of the associations was only taken into account in order to verify that the upper limit provided by Article 15(2) of Regulation No 17 was not exceeded.
A – Assessment
69. In the contested judgment the Court of First Instance stated that:
‘340 It is clear from the case-law that the principle ne bis in idem is a general principle of Community law which is upheld by the Community Courts. In the field of Community competition law, the principle precludes an undertaking from being sanctioned by the Commission or made the defendant to proceedings brought by the Commission a second time in respect of anti-competitive conduct for which it has already been penalised or of which it has been exonerated by a previous decision of the Commission that is not amenable to challenge … The application of the principle ne bis in idem is subject to the threefold condition of identity of the facts, unity of offender and unity of the legal interest protected. Under that principle, therefore, the same person cannot be sanctioned more than once for a single unlawful course of conduct designed to protect the same legal asset ...
341 … [T]he Commission was entitled to fine each [association] which took part in the disputed agreement on the basis of the individual role played by each one in the signature and implementation of the agreement and of the attenuating and aggravating circumstances relevant to each of them.
342 … [T]his finding cannot be undermined by the fact that FNB, FNPL and JA are members of FNSEA. The fact is that those [associations] have independent legal personality and separate budgets and their objects do not always coincide. They thus carry out their respective union activities in defence of their own specific interests ... The fact that those [associations] to a large extent coordinated their actions and those of their respective members in the present case in the pursuit of common aims does not diminish the respective responsibility of each [association] for the infringement.
343 Furthermore, contrary to what the applicants appear to argue, the contested decision did not impose penalties on their basic members, whether direct or indirect. Taking into account the turnover of the members of an association of undertakings in determining the 10% limit does not mean that a fine has been imposed on them ...
344 It follows that the offenders in the present case are not identical, as the contested decision does not penalise the same entities more than once or the same persons for the same acts. Therefore, it must be concluded that the principle ne bis in idem was not infringed. Likewise, as the applicants’ members, whether direct or indirect, were not fined twice for one and the same infringement, contrary to the French Government’s argument, nor was the principle of proportionality infringed.’ (40)
70. In my view, it is clear from the above cited passages of the contested judgment that the fines imposed by the contested decision were imposed on each of the appellant associations for their individual infringement of Article 81(1) EC. (41) The members of the appellant associations were not held to have infringed Article 81(1) EC, nor were any fines imposed on those members. It is thus evident that multiple sanctions were not imposed on each of the associations FNSEA, FNB, FNPL and JA.
71. As regards the claim that the fines imposed on FNSEA, FNB, FNPL and JA are disproportionate as the turnover of members who are common to those associations was taken into account for the purpose of verifying the level of the fine imposed on those associations in accordance with Article 15(2) of Regulation No 17, I consider that this claim cannot be accepted.
72. It is not disputed that FNSEA, FNB, FNPL and JA have common members.
73. However, the Court of First Instance emphasised, in my view correctly, the fact that the appellant associations are independent legal persons, with separate budgets and that their objects do not always coincide. The fact that the appellant associations chose to align their behaviour on the market by no means indicates that they pursued the same interests. Moreover, the fact that the associations in question have common members does not in my view necessarily detract from the economic influence which each individual association may exert on the market. In any event, the appellants in Case C‑110/07 P do not seem to contest the finding of the Court of First Instance at paragraph 331 of the contested judgment that for the purpose of verifying observance of the upper limit of 10% of turnover, the aggregate total of the fines imposed on the four appellants in question is below 10% of the turnover of the farmers who are basic members of FNSEA, the federation which brings together the FNB, FNPL and JA. I consider therefore that the appellants in Case C‑110/07 P have failed to adequately demonstrate that the fines imposed on them were disproportionate.
74. I therefore propose that the Court dismiss the fourth plea of the appellants in Case C‑110/07 P as unfounded.
VIII – Reduction of fine
75. By their sixth and third pleas, the appellant associations in Cases C‑101/07 P and C‑110/07 P respectively consider that, even if the Court does not annul the contested judgment, the Court should nonetheless find that the Court of First Instance infringed Article 15(2) of Regulation No 17 and thus reduce the fines imposed on them. FNCBV notes that the fine imposed on it was equivalent to nearly 20% of its turnover (based on its receipts). The Court should therefore reduce the fine imposed on FNCBV to an amount which does not exceed EUR 360 000, the equivalent of 10% of its turnover.
76. The Commission considers that this plea should be rejected in the light of its submissions at points 40 to 45 above. The Commission also claims in the alternative that if the Court accepts the arguments of the appellant associations concerning breach of Article 15(2) of Regulation No 17, the fine imposed should be based on the receipts of the associations rather than on the subscriptions charged.
A – Assessment
77. In the light of my conclusions at points 46 to 66 above that the Court of First Instance did not err in law in its application of Article 15(2) of Regulation No 17, I propose that the sixth and third pleas of the appellant associations in Cases C‑101/07 P and C‑110/07 P which seek a reduction of the fines imposed due to infringement of that provision by that court, should be dismissed.
IX – Distortion by the Court of First Instance of elements of proof concerning the extension of the agreement of 24 October 2001 beyond 30 November 2001
78. In the second plea in Case C‑101/07 P and the first plea in Case C‑110/07 P, the appellant associations claim that the Court of First Instance distorted evidence.
79. In Case C‑101/07 P, FNCBV alleges distortion by the Court of First Instance of certain facts namely, the handwritten notes of the FNB director concerning the meeting of 29 November 2001 (paragraphs 169 to 174 of the contested judgment), the interview given on 4 December 2001 by the FNB vice-president to Vendée Agricole (paragraph 176 of the contested judgment), the memo from the Vendée federation of 5 December 2001 (paragraphs 175 to 177 of the contested judgment), the information bulletin issued by FNPL and sent by fax on 10 December 2001 (paragraph 179 of the contested judgment) and the handwritten notes of the FNB director concerning the meeting of 5 December 2001 (paragraph 180 of the contested judgment). FNCBV claims essentially that the Court of First Instance altered the meaning of the above documents or evidence and that that court’s legal assessment of the evidence was thus incorrect.
80. In Case C‑110/07 P, FNSEA, FNB, FNPL and JA allege distortion of facts as the Court of First Instance failed to consider two essential pieces of evidence which demonstrate that the agreement of 24 October 2001 was not extended beyond 30 November 2001. The first piece of evidence concerns a fax of 11 December 2001 sent by a director of FNB to a regional association and the second a memo of 12 December 2001 of Fédération régionale des syndicats d’exploitants agricoles (‘FRSEA’).
81. In accordance with Article 225 EC and the first paragraph of Article 58 of the Statute of the Court of Justice, the appeal must be limited to questions of law. Assessment of the facts does not, save where there may have been distortion of the facts or evidence, constitute a question of law submitted as such for review by the Court of Justice. (42) It should be recalled that there is distortion of the clear sense of the evidence where, without recourse to new evidence, the assessment of the existing evidence appears to be clearly incorrect. (43)
82. In Case C‑101/07 P, I consider that in the light of that criterion, and having examined the evidence outlined above, (44) I am satisfied that the Court of First Instance did not distort the evidence in question.
83. In Case C‑110/07 P, FNSEA, FNB, FNPL and JA claim that the Court of First Instance failed to examine two pieces of evidence, despite the fact that that court specifically reopened the oral procedure in Joined Cases T‑217/03 and T‑245/03 in order for that evidence to be placed on that court’s file. (45) This claim is based essentially on the fact that the Court of First Instance failed to mention in the contested judgment the evidence in question and on the fact that at paragraph 187 the Court of First Instance stated that the continuation of the agreement of 24 October 2001 cannot be denied solely on the basis of a memo from FNICGV.
84. In the light of the particular circumstances in which the fax of 11 December 2001 sent by a director of FNB and the memo of 12 December 2001 of FRSEA were placed on the Court of First Instance’s file in Cases T‑217/03 and T‑245/03 and the mere fact that that evidence was not specifically relied upon by the Court of First Instance in the contested judgment, I consider that the appellants in Case C‑110/07 P have failed to demonstrate that that court failed to examine the evidence in question.
85. In any event, having examined the evidence in question, I consider that the appellants in Case C‑110/07 P have failed to establish that the Court of First Instance distorted evidence or omitted or overlooked key evidence concerning the extension or otherwise of the agreement of 24 October 2001 beyond 30 November 2001.
86. I therefore propose that the Court should dismiss the second plea in Case C‑101/07 P and the first plea in Case C‑110/07 P as unfounded.
X – Error of law by the Court of First Instance in ruling that FNCBV participated in the extension of the agreement of 24 October 2001
87. By its third plea, which is divided in two parts, FNCBV claims, firstly, that the Court of First Instance erred in its evaluation of certain evidence and in its finding at paragraph 185 of the contested judgment that, in the contested decision, the Commission proved to the requisite legal standard that FNCBV continued to apply the agreement of 24 October 2001, verbally and in secret, beyond the end of November 2001. Secondly, FNCBV claims that the contested judgment is contradictory as it recognises the unilateral pressure, exerted by farmers on slaughterers, in order to ensure that the minimum price for beef was respected and that imports were suppressed, while at the same time finding that FNCBV participated in the extension of the agreement of 24 October 2001.
88. In the first part of this plea, FNCBV claims essentially that the Court of First Instance incorrectly construed the handwritten notes of the FNB director concerning the meeting of 29 November 2001 (paragraph 172 of the contested judgment), an email of 6 December 2001 sent by a representative of the FRSEA, Brittany, to the presidents of the FDSEA of its region (paragraph 178 of the contested judgment), the information bulletin issued by FNPL and sent by fax on 10 December 2001 (paragraph 179 of the contested judgment), the handwritten notes of the FNB director (paragraph 180 of the contested judgment), the ‘memo’ of the FDSEA of Vendée of 18 December 2001 (paragraph 182 of the contested judgment) (46) and written documentation concerning local action (paragraphs 183 and 184 of the contested judgment).
89. In my view, the Court of First Instance did not err in its evaluation of the above documentation and its finding that that documentation, together with the other elements of proof referred to in paragraphs 164 to 184 of the contested judgment, prove the participation of FNCBV in the extension of the agreement of 24 October 2001.
90. As regards the second part of this plea, FNCBV claims that the Court of First Instance cannot, without contradicting itself, consider on the one hand that FNCBV participated in the extension of the agreement of 24 October 2001 while at the same time acknowledging the acts of violence against slaughterhouses. In that regard, FNCBV highlights the fact that the Court of First Instance considered that the Commission was right to regard the use of violence as an aggravating circumstance against FNSEA, FNB and JA and to increase by 30% the fines imposed on them. (47) Moreover, the Court of First Instance acknowledged that the Commission reduced FNCBV’s fine by 60%, taking account as mitigating circumstances, inter alia, the illegal blockading of establishments of FNCBV’s members. (48) FNCBV considers that the Court of First Instance was required to demonstrate a clear expression of FNCBV’s will to adhere to the prolongation of the agreement proposed by the farmers.
91. FNCBV seeks in effect to establish that it did not participate in extension of the written agreement of 24 October 2001 and that the actions by farmer groups after the formal lapse of that agreement on 30 November 2001 were unilateral.
92. It is clear that the written agreement of 24 October 2001 was entered into during a period of extreme tension in the beef market in France in the wake of the second ‘mad cow’ crisis and that considerable pressure was exerted on slaughterers by farmers in the form, inter alia, of blockading slaughterhouses. Despite the context in which it was formed, FNCBV does not, however, contest the legal qualification of the agreement of 24 October 2001 as an agreement for the purposes of Article 81(1) EC. Moreover, as I previously indicated, (49) the fact that it may not ‘normally’ be economically advantageous for slaughterers to enter into an agreement or extend an agreement fixing minimum prices and suspending imports, I consider that this does not in itself undermine the finding of the Court of First Instance that FNCBV participated in the extension of the agreement of 24 October 2001. In the circumstances of the present case, I consider that the existence of a certain degree of pressure or coercion on slaughterers does not negate the fact that FNCBV actually participated in the extension in question.
93. As indicated above, (50) I consider that the Court of First Instance provided ample evidence in paragraphs 164 to 184 of the contested judgment that FNCBV joined in the extension of the agreement of 24 October 2001. Moreover, the finding by the Court of First Instance that FNCBV actually adhered to the extension in question is not undermined by the fact that that court considered that the Commission had acted correctly in taking into consideration, when fixing the level of the fines to be imposed, the economic and factual context in which the agreement of 24 October 2001 and its extension were formed.
94. In my view, FNCBV has failed to establish that the Court of First Instance erred in law in ruling that FNCBV joined in the extension of the agreement of 24 October 2001.
95. I therefore propose that the Court should dismiss the third plea in Case C‑101/07 P as unfounded.
XI – Error of law by the Court of First Instance in qualifying the agreement of 24 October 2001 as anti-competitive and failing to analyse the effects of the agreement
96. In its fourth plea, which is divided in two parts, FNCBV claims, in the alternative, that in the event that the Court considers that that association participated in the extension of the agreement of 24 October 2001, the Court should consider that the agreement is not anti-competitive and that the Court of First Instance could thus not avoid investigating the effect of that agreement.
97. In the first part of this plea, FNCBV claims essentially that an analysis of the agreement of 24 October 2001 in its particular legal and economic context should have led the Court of First Instance to consider that its restrictive character could not be inferred from simply reading the agreement. The agreement in question was adopted in order to compensate for the failure of the Community authorities. FNCBV also notes that consumers benefited from the agreement of 24 October 2001.
98. In the second part of this plea, FNCBV claims that the agreement did not have any significant effect on importations, on consumer prices nor on farmer/slaughterer relations.
99. In my view, the agreement of 24 October 2001 and the oral prolongation of that agreement had the object of suspending imports of beef into France and fixing a minimum price for certain cattle. Despite the context in which the agreement arose, which was examined by the Court of First Instance, I consider that that court did not err in law in qualifying the agreement of 24 October 2001 as anti-competitive.
100. I therefore propose that the Court should dismiss the fourth ancillary plea in Case C‑101/07 P as unfounded.
101. Having examined the four pleas advanced by FNSEA, FNB, FNPL and JA and the six pleas advanced by FNCBV, I consider that none of them is well founded and that the appeals in Cases C‑101/07 P and C‑110/07 P should be dismissed.
102. In accordance with the first paragraph of Article 122 of the Rules of Procedure of the Court of Justice, where an appeal is unfounded, the Court is to make a decision as to costs. Under Article 69(2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the Commission has applied for the costs against the appellant associations and those associations have been unsuccessful, the appellant associations should in my view be ordered to pay the costs. I consider that the French Republic should be ordered to bear its own costs in accordance with Article 69(4) of the Rules of Procedure.
XII – Conclusion
103. I am therefore of the opinion that the Court should:
(1) dismiss the appeals;
(2) order FNCBV to pay the costs in Case C‑101/07 P and order FNSEA, FNB, FNPL and JA to pay the costs in Case C‑110/07 P;
(3) order the French Republic to pay its own costs.
1 – Original language: English.
2 – Joined Cases T‑217/03 and T‑245/03 [2006] ECR II‑4987.
3 – OJ 2003 L 209, p. 12.
4 – Regulation of 6 February 1962, First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition 1959-62, p. 87). The contested decision predates the entry into force of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ 2003 L 1, p. 1) and the adoption of the Commission’s new Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ 2006 C 210, p. 2). Pursuant to Article 23(2) of Regulation No 1/2003 ‘[t]he Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently: (a) they infringe Article 81 or Article 82 of the Treaty; ... For each undertaking and association of undertakings participating in the infringement, the fine shall not exceed 10% of its total turnover in the preceding business year. Where the infringement of an association relates to the activities of its members, the fine shall not exceed 10% of the sum of the total turnover of each member active on the market affected by the infringement of the association’ (emphasis added).
5 – OJ 1998 C 9, p. 3.
6 – FNSEA, FNB, FNPL and JA.
7 – Fédération nationale de l’industrie et des commerces en gros des viandes (‘FNICGV’) and FNCBV. The FNICGV is not a party to the present proceedings and its action before the Court of First Instance was dismissed by order of 9 November 2004 as inadmissible.
8 – See paragraph 224 of the contested judgment.
9 – See paragraph 222 of the contested judgment. See Joined Cases 100/80 to 103/80 Musique Diffusion française and Others v Commission [1983] ECR 1825, paragraph 21, and Case T‑31/99 ABB Asea Brown Boveri v Commission [2002] ECR II‑1881, paragraph 66.
10 – Musique Diffusion française and Others v Commission, cited in footnote 9, paragraph 21. See also 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 428.
11 – See for example, Joined Cases T‑39/92 and T‑40/92 CB and Europay v Commission [1994] ECR II‑49; Case T‑29/92 SPO and Others v Commission [1995] ECR II‑289; Case T‑338/94 Finnboard v Commission [1998] ECR II‑1617; and Case C‑298/98 P Finnboard v Commission [2000] ECR I‑10157.
12 – See paragraph 301 of the contested judgment. It is clear from Article 1 of the contested decision that that decision is addressed, inter alia, to the appellant associations, rather than their members. Moreover, pursuant to Article 3 of the contested decision fines ranging from EUR 480 000 to EUR 12 million were imposed on the appellant associations for their infringement of Article 81(1) EC, rather than on their members. The fines imposed on the appellant associations by the contested decision were reduced in the contested judgment and ranged from EUR 360 000 to EUR 9 million. Nonetheless, it is not disputed that the Commission when calculating, in accordance with Article 15(2) of Regulation No 17, the upper limit of the fine to be imposed on the appellant associations for breach of Article 81(1) EC did so, not by reference to the turnover of those associations of undertakings, but by reference to their members’ turnover. This approach was endorsed by the Court of First Instance. See, in particular, paragraphs 312 to 334 of the contested judgment. The appellant associations submitted in their pleadings before the Court of First Instance, without being contradicted by the Commission, that the fines imposed by the contested decision exceeded 10% of their turnover. In that regard, at paragraph 301 of the contested judgment the appellant associations submitted that the fines imposed represent more than 25% of FNCBV’s turnover, 200% of the annual membership fees of FNSEA, 240% of those of FNB, 80% of those of FNPL and 200% of those of JA. Despite the fact that the Court of First Instance reduced the fines imposed on the appellant associations by the contested decision those ‘adjusted’ fines would appear to remain in excess of 10% of the turnover of those associations of undertakings. Indeed, in its submissions to the Court, FNCBV maintains that the fine imposed on it pursuant to the contested judgment corresponds to nearly 20% of its turnover in terms of receipts.
13 – See paragraph 324 of the contested judgment.
14 – See paragraph 320 of the contested judgment.
15 – See paragraph 321 of the contested judgment.
16 – See paragraph 322 of the contested judgment.
17 – See paragraph 323 of the contested judgment.
18 – See CB and Europay v Commission, cited in footnote 11, paragraph 136; SPO and Others v Commission, cited in footnote 11, paragraph 385; and Case T‑338/94 Finnboard v Commission, cited in footnote 11, paragraph 270.
19 – Cited in footnote 11, paragraph 66.
20 – See cases cited in footnote 18.
21 – See SPO and Others v Commission, cited in footnote 11, paragraph 385; see also to that effect Joined Cases T‑213/95 and T‑18/96 SCK and FNK v Commission [1997] ECR II‑1739, paragraph 252.
22 – See cases cited in footnote 18.
23 – Cited in footnote 11.
24 – See cases cited in footnote 18.
25 – Case T‑338/94 Finnboard v Commission, cited in footnote 11, paragraph 270.
26 – Case T‑338/94 Finnboard v Commission, cited in footnote 11, paragraph 270.
27 – Case C‑76/06 P [2007] ECR I‑4405, paragraph 22.
28 – Ibid., paragraph 24.
29 – Case C‑280/06 [2007] ECR I‑0000, paragraphs 38 to 42. This case was not based on Article 15(2) of Regulation No 17 but rather on Article 81 EC and concerned the identification of the entity which may be penalised for infringement of the latter provision.
30 – See paragraph 319 of the contested judgment.
31 – See points 36 and 37 respectively above.
32 – See point 36 above and see, inter alia, paragraphs 319, 321 and 323 of the contested judgment.
33 – See argument of FNSEA, FNB, FNPL and JA at point 36 above.
34– Such a requirement appears excessive and could prove difficult if not impossible to fulfil in the case, for example, of associations of undertakings with more than a moderate number of members.
35 – In my view, the criteria identified by the Court of First Instance at paragraph 319 et seq. of the contested judgment seek to establish the influence of associations of undertakings on the market rather than ascertain whether they have actually exercised that influence to its full extent.
36 – See paragraph 112 et seq. of the contested judgment.
37 – See point 38 above.
38 – See point 35 above.
39 – See case-law cited at footnote 11.
40 – See paragraphs 340 to 344 of the contested judgment.
41 – See point 12 above.
42 – See Case C‑37/03 P BioID v OHIM [2005] ECR I‑7975, paragraphs 43 and 53.
43 – See Case C‑229/05 P PKK and KNK v Council [2007] ECR I‑439, paragraph 37, and Case C‑551/03 P General Motors v Commission [2006] ECR I‑3173, paragraph 54.
44 – See point 79 above.
45 – See paragraph 40 of the contested judgment.
46 – FNCBV claims that the documentation in question is unidentifiable from the contested judgment. I consider that the documentation in question can be identified and was referred to by the Commission at paragraph 93 of the contested decision. The documentation relied upon by the Court of First Instance was submitted by the Commission to that court as an annex to its defence in Case T‑245/03 and was referred to by the Commission in paragraph 76 of its defence in that case.
47 – See paragraph 289 of the contested judgment.
48 – See paragraph 294 of the contested judgment.
49 – See point 61 above.
50 – See point 89 above.