Keywords
Summary

Keywords

1. Community law — Principles — Protection of legitimate expectations — Conditions — Protection against exercise by the Commission of its power to raise the level of fines penalising infringements of the competition rules — None — (Council Regulation No 17)

2. Community law — General principles of law — Non-retroactivity of criminal provisions — Scope — Fines imposed for infringements of the competition rules — Included — Infringement by reason of the application of the Guidelines for the calculation of fines to an infringement prior to their introduction — None — (European Convention for the Protection of Human Rights and Fundamental Freedoms, Art. 7; Council Regulation No 17, Art. 15(2))

3. Competition — Fines — Amount — Commission ' s margin of discretion — Possibility of increasing the fines in order to strengthen their deterrent effect — (Council Regulation No 17, Art. 15)

4. Competition — Fines — Amount — Determination thereof — Guidelines adopted by the Commission — Obligation on the Commission to comply with them — (Council Regulation No 17, Art. 15(2))

5. Competition — Fines — Amount — Determination thereof — Criteria — Seriousness of the infringements — Taking into account of the total turnover of the undertaking concerned and the turnover achieved by sales of goods which were the subject-matter of the infringement — Limits — (Council Regulation No 17, Art. 15(2))

6. Competition — Fines — Amount — Determination thereof — Criteria — Seriousness of the infringements — Measure of the effective capacity to cause damage on the relevant market — Relevance of the market share held by the undertaking concerned — (Art. 81(1) EC; Council Regulation No 17, Art. 15(2))

7. Competition — Fines — Amount — Determination thereof — Criteria — Seriousness of the infringements — Measure of the actual impact on competition of the infringing conduct of each undertaking — Relevance of the turnover achieved with the products forming the subject-matter of a restrictive practice — (Art. 81(1) EC; Council Regulation No 17, Art. 15(2))

8. Competition — Fines — Amount — Determination thereof — Criteria — Seriousness of the infringements — Mitigating circumstances — Passive or follow-my-leader role of the undertaking — (Council Regulation No 17, Art. 15)

9. Competition — Fines — Amount — Determination thereof — Criteria — Seriousness of the infringements — Mitigating circumstances — Agreement not implemented in practice — Assessment at the level of the individual conduct of each undertaking — (Council Regulation No 17, Art. 15)

10. Competition — Fines — Amount — Appropriateness — Review by the Court — Factors which may be taken into account by the Community judicature — Information not contained in the decision imposing the fine and not required in the statement of reasons — Included — (Arts 229 EC, 230 EC and 253 EC; Council Regulation No 17, Art. 17)

11. Acts of the institutions — Statement of reasons — Obligation — Scope — Decision imposing fines — Indication of the factors by which the Commission assessed the seriousness and duration of the infringement — Sufficient indication — (Art. 253 EC; Council Regulation No 17, Art 15(2), second subpara.)

12. Competition — Fines — Amount — Determination thereof — Method of calculation defined by guidelines laid down by the Commission — Application of percentages to the basic amount of the fine — (Council Regulation No 17, Art. 15(2))

Summary

1. The right to rely on the principle of the protection of legitimate expectations extends to any individual in a situation where the Community authorities have caused him to entertain legitimate expectations. However, a person may not plead infringement of the principle unless he has been given precise assurances by the administration.

Traders cannot have a legitimate expectation that an existing situation which is capable of being altered by the Community institutions in the exercise of their discretionary power will be maintained. In the field of Community competition rules, effective application of those rules requires that the Commission may at any time adjust the level of fines to match the needs of competition policy. Consequently, the fact that, in the past, the Commission imposed fines at a certain level for certain types of infringements does not preclude it from raising that level, subject to the limits indicated in Regulation No 17.

see paras 33-35

2. The principle that penal provisions may not have retroactive effect is one which is common to all the legal orders of the Member States and is enshrined in Article 7 of the European Convention on Human Rights, and is an integral part of the general principles of law whose observance is ensured by the Community judicature.

Although Article 15(4) of Regulation No 17 provides that Commission decisions imposing fines for infringement of competition law are not of a criminal nature, the Commission is none the less required to observe the general principles of Community law, and in particular the principle of non-retroactivity, in any administrative procedure capable of leading to fines under the Treaty rules on competition. Such observance requires that the fines imposed on an undertaking for infringing the competition rules correspond with those laid down at the time when the infringement was committed.

The change to the Commission ' s administrative practice brought about by the 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 does not constitute an alteration of the legal framework determining the level of fines which can be imposed that is contrary to the principles of non-retroactivity of penalties and legal certainty.

The Commission ' s practice in previous decisions does not itself serve as a legal framework for the fines imposed in competition matters, since that framework is defined solely in Regulation No 17, from which the Guidelines do not diverge. Moreover, having regard to the wide discretion which Regulation No 17 leaves the Commission, the fact that the latter introduces a new method of calculating fines, which may, in certain cases, lead to an increase in the general level of fines but does not exceed the maximum level established by that regulation, cannot be regarded as an aggravation, with retroactive effect, of the fines as legally provided for by Article 15(2) of Regulation No 17.

see paras 43-45, 55-59

3. Under Regulation No 17, the Commission has a margin of discretion when fixing fines, in order that it may direct the conduct of undertakings towards compliance with the competition rules. The fact that it may in the past have imposed fines of a certain level for certain types of infringement does not deprive it of the possibility of raising that level within the limits indicated in Regulation No 17 if that is necessary to ensure the implementation of Community competition policy. On the contrary, the proper application of the Community competition rules requires that the Commission may at any time adjust the level of fines to the needs of that policy.

see paras 60, 76

4. The Commission may not depart from rules which it has imposed on itself. In particular, whenever it adopts guidelines for the purpose of specifying, in accordance with the Treaty, the criteria which it proposes to apply in the exercise of its power to assess the seriousness of an infringement, there arises a self-imposed limitation of that discretion in as much as it must then follow those guidelines.

see para. 77

5. The criteria for assessing the seriousness of an infringement of Community competition rules may include the volume and value of the goods in respect of which the infringement was committed, the size and economic power of the undertaking and, consequently, the influence which it was able to exert on the market. It follows that, on the one hand, it is permissible, for the purpose of fixing a fine, to have regard both to the total turnover of the undertaking, which gives an indication, albeit approximate and imperfect, of the size of the undertaking and of its economic power, and to the proportion of that turnover accounted for by the goods in respect of which the infringement was committed, which gives an indication of the scale of the infringement. On the other hand, it follows that it is important not to confer on one or other of those figures an importance which is disproportionate in relation to other factors and that the fixing of an appropriate fine cannot be the result of a simple calculation based on total turnover.

see paras 61-62, 83

6. When determining the amount of fines imposed for infringement of Community competition rules, assessment of the effective capacity of the undertakings concerned to cause significant damage to a given market implies an assessment of the real importance of the undertakings on the market affected, that is to say their influence on it. For that purpose, an undertaking ' s share of the affected market is relevant, whereas its total turnover is not.

see para. 88

7. When determining the amount of fines imposed for infringement of Community competition rules, an assessment of the specific weight, that is to say of the real impact of the infringement committed by each of the undertakings, which the Commission must now carry out by virtue of the 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 where it considers that the starting amounts of the fines must be weighted because the infringement is one that involves several undertakings (a cartel) among which there is considerable disparity in size, involves establishing the scale of the infringement committed by each of them, rather than the importance of the undertaking in question in terms of its size or economic power. In that regard, the proportion of turnover derived from the goods in respect of which the infringement was committed is likely to give a fair indication of the scale of the infringement on the relevant market. In particular, the turnover in products which have been the subject of a restrictive practice constitutes an objective criterion which gives a proper measure of the harm which that practice causes to normal competition.

see paras 89, 91

8. Sections 2 and 3 of the 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 provide for the basic amount of fines to be varied in accordance with certain aggravating and mitigating circumstances.

In particular, in accordance with the first indent of Section 3 of the Guidelines, ‘an exclusively passive or “follow-my-leader” role in the infringement’ will, where it is established, constitute a mitigating circumstance. A passive role implies that the undertaking will adopt a ‘low profile’, that is to say not actively participate in the creation of any anti-competitive agreements.

One circumstance that may indicate the adoption by an undertaking of a passive role within a cartel is where the undertaking ' s participation in cartel meetings is significantly more sporadic than that of the ‘ordinary’ members of the cartel; another is where it enters the market affected by the infringement late, regardless of the length of its involvement in the infringement; and another is where a representative of another undertaking which has participated in the infringement makes an express declaration to such effect.

see paras 166-168

9. The second indent of Section 3 of the 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, which speaks of " non-implementation in practice of the offending agreements" , must therefore be understood not as referring only to cases where a cartel as a whole is not implemented, irrespective of the conduct of each undertaking, but must be understood as a fact based on the individual conduct of each undertaking.

see paras 187-189

10. The Court of First Instance has jurisdiction in two respects over actions contesting Commission decisions imposing fines on undertakings for infringement of the Community competition rules. First, under Article 230 EC, it has the task of reviewing the legality of those decisions. In that context, it must in particular review compliance with the duty to state reasons laid down in Article 253 EC, infringement of which renders a decision liable to annulment. Secondly, the Court of First Instance has power to assess, in the exercise of the unlimited jurisdiction accorded to it by Article 229 EC and Article 17 of Regulation No 17, the appropriateness of the amounts of fines. That assessment may justify the production and taking into account of additional information which the duty to state reasons does not as such require to be set out in the decision.

see para. 215

11. As regards the scope of the duty to state reasons for the calculation of the amount of a fine imposed for infringement of the Community competition rules, the second subparagraph of Article 15(2) of Regulation No 17 provides that " in fixing the amount of the fine, regard shall be had both to the seriousness and to the duration of the infringement" . In this connection, the 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 and the Leniency Notice indicate what factors the Commission takes into consideration in measuring the seriousness and duration of an infringement.

That being so, the essential procedural requirement to state reasons is satisfied where the Commission indicates in its decision the factors which it took into account in accordance with the Guidelines and, where appropriate, the Leniency Notice and which enabled it to determine the seriousness and duration of the infringement for the purpose of calculating the amount of the fine.

see paras 217-218

12. Given the wording of the 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, any percentage increases or reductions decided upon to reflect aggravating or mitigating circumstances must be applied to the basic amount of the fine set by reference to the seriousness and duration of the infringement, not to any increase already applied for the duration of the infringement or to the figure resulting from any initial increase or reduction to reflect aggravating or mitigating circumstances. That method for calculating fines ensures equal treatment between the various undertakings involved in a cartel.

see para. 229