Keywords
Summary

Keywords

1. Competition – Agreements, decisions and concerted practices – Prohibition – Infringements – Agreements and concerted practices capable of being treated as constituting a single infringement – Concept

(Art. 81(1) EC; Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(2))

2. Actions for annulment – Commission decision based on Articles 81 EC or 82 EC – Complex assessment of economic matters – Judicial review – Limits

(Arts 81 EC and 82 EC; Council Regulation Nos 17, Art. 15(2), and 1/2003, Art. 23(2))

3. Competition – Fines – Amount – Determination – Discretion of the Commission – Judicial review – Unlimited jurisdiction of the Community judicature

(Arts 81 EC, 82 EC, 229 EC and 253 EC; Council Regulations Nos 17, Art. 15(2), and 1/2003, Arts 23(2) and (3), and 31)

4. Competition – Fines – Amount – Determination – Discretion conferred on the Commission by Article 15(2), of Regulation No 17 – Infringement of the principle that penalties must have a sound legal basis – None

(Arts 81 EC and 82 EC; Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(2))

5. Competition – Fines – Amount – Determination – Criteria – Several infringements

(Arts 81 EC and 82 EC; Council Regulation No 17, Art. 15(2))

6. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

7. Competition – Fines – Amount – Determination – Actual capacity to cause significant damage to competition on the market concerned

(Council Regulation No 17, Art. 15(2))

8. Competition – Fines – Amount – Determination – Division of undertakings concerned into categories having the same starting point

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

9. Competition – Fines – Amount – Determination – Need to take account of the turnovers of the undertakings concerned and to ensure that fines are proportional to those turnovers – None

(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(3); Commission Notice 98/C 9/03)

10. Competition – Fines – Amount – Determination – Division of undertakings concerned into categories having the same starting point

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1A, sixth para.)

11. Competition – Fines – Decision imposing fines – Duty to state reasons – Scope

(Art. 253 EC; Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

12. Competition – Agreements, decisions and concerted practices – Participation in meetings of undertakings having an anti-competitive object – Circumstances from which, where the undertaking concerned has not distanced itself from the decisions adopted, it may be concluded that it participated in the ensuing cartel

(Art. 81(1) EC)

13. Competition – Fines – Amount – Determination – Criteria – Duration of the infringement –Infringements of average and long duration – 10% increase of the starting amount per year

(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(3); Commission Notice 98/C 9/03, Section 1B)

14. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances

(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(2); Commission Notice 98/C 9/03, Section 3, third indent)

15. Competition – Fines – Amount – Determination – Turnover to be taken into account in calculating the fine

(Commission Notice 98/C 9/03, Section 1A)

16. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Taking account of the impact of the infringement

(Council Regulation No 17, Art. 15)

17. Competition – Administrative procedure – Commission decision finding an infringement – Evidence which has to be gathered

(Council Regulation No 1/2003, Art. 27(1))

18. Competition – Administrative procedure – Request for information – Rights of the defence

(Council Regulation No 17, Art. 11(5))

19. Competition – Fines – Amount – Determination – Criteria – Cooperation by the undertaking during the administrative procedure

(Council Regulation No 17, Art. 11(4) and (5))

Summary

1. The concept of a single infringement covers a situation in which a number of undertakings have participated in an infringement consisting in continuous conduct in pursuit of a single economic aim designed to distort competition or, yet again, in individual infringements linked to one another by the same object (all the elements sharing the same purpose) and the same subjects (the same undertakings, who are aware that they are participating in the common object). An infringement of Article 81(1) EC may result not only from an isolated act but also from a series of acts or from continuous conduct. That interpretation cannot be challenged on the ground that one or more elements of that series of acts or continuous conduct could also constitute, in themselves and in isolation, an infringement of that provision. Where the various actions form part of an ‘overall plan’ because their identical object distorts competition within the common market, the Commission is entitled to impute responsibility for those actions on the basis of participation in the infringement considered as a whole. In addition, the concept of a single infringement can be applied to the legal characterisation of anti-competitive conduct consisting in agreements, in concerted practices and in decisions of associations of undertakings.

The concept of a single objective cannot be determined by a general reference to the distortion of competition on the market concerned by the infringement, since an impact on competition, whether it is the object or the effect of the conduct in question, constitutes an element consubstantial with any conduct covered by Article 81(1) EC. Such a definition of the concept of a single objective is likely to deprive the concept of a single and continuous infringement of part of its meaning, since it would have the consequence that different instances of conduct which relate to a particular economic sector and are prohibited under Article 81(1) EC would have to be systematically characterised as constituent elements of a single infringement. Thus, for the purposes of characterising various instances of conduct as a single and continuous infringement, it is necessary to establish whether they display a link of complementarity in that each of them is intended to deal with one or more consequences of the normal pattern of competition and whether, through interaction, they contribute to the attainment of the set of anti-competitive effects desired by those responsible, within the framework of a global plan having a single objective. In that regard, it will be necessary to take into account any circumstance capable of establishing or of casting doubt on that link, such as the period of implementation, the content and, correlatively, the objective of the various agreements and concerted practices in question. For objective reasons, therefore, the Commission may initiate separate procedures, find a number of separate infringements and impose a number of separate fines.

The characterisation of certain unlawful actions as constituting one and the same infringement affects the penalty that may be imposed. A finding that multiple infringements exist may entail the imposition of a number of separate fines, each time within the limits laid down in Article 15(2) of Regulation No 17 and Article 23(2) of Regulation No 1/2003, on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC.

(see paras 89-94, 133-134)

2. As regards the validity of Article 15(2) of Regulation No 17 and Article 23(2) of Regulation No 1/2003, on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC, in the light of the principle that penalties must have a proper legal basis, as recognised by the Convention for the Protection of Human Rights and Fundamental Freedoms and the constitutional traditions of the Member States, the Commission does not have unlimited discretion in finding that the rules on competition have been infringed, or in determining whether the various unlawful acts constitute a single continuous infringement or a number of separate infringements, or in setting fines for those infringements.

First of all, the only infringements of the competition rules in respect of which the Commission may impose fines pursuant to Article 15(2) of Regulation No 17 and Article 23(2) of Regulation No 1/2003 are infringements of Article 81 EC or Article 82 EC. The question whether or not the conditions for the application of Article 81 EC or Article 82 EC are satisfied is, in principle, amenable to full review by the Community judicature. Moreover, although it is true that where such a finding involves complex economic or technical appraisals, the case-law recognises that the Commission has a certain discretion, that discretion is never unlimited. The existence of such a discretion does not mean, in the context of an annulment action, that the Court must refrain from reviewing the Commission’s interpretation of economic or technical data. The Community judicature must not only establish whether the evidence put forward is factually accurate, reliable and consistent, but must also determine whether that evidence contains all the relevant data that must be taken into consideration in appraising a complex situation and whether it is capable of substantiating the conclusions drawn from it.

(see paras 130-131)

3. The Commission does not have unlimited discretion in setting fines for infringements of the competition rules. While the objective yardstick of the upper limit for the fine and the subjective criteria of the gravity and the duration of the infringement leave the Commission a broad discretion, the fact remains that they are criteria which enable the Commission to take account of the degree of illegality of the conduct in question when adopting penalties. It must therefore be held that Article 15(2) of Regulation No 17 and Article 23(2) and (3) of Regulation No 1/2003, on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC, while leaving the Commission a certain discretion, lay down the criteria and limits by which the Commission is bound in the exercise of its power with regard to fines. In addition, in setting fines pursuant to those provisions, the Commission is required to comply with the fundamental principles of law, and especially with the principles of equal treatment and proportionality, as developed by the case-law of the Court of Justice and the General Court.

Under Article 229 EC and Article 31 of Regulation No 1/2003, the Court of Justice and the General Court have unlimited jurisdiction in actions challenging decisions whereby the Commission has fixed fines and may, accordingly, not only annul the decisions taken by the Commission but also cancel, reduce or increase the fine imposed. Thus, the Commission’s administrative practice is open to full review by the Community judicature.

Under Article 253 EC, the Commission is required, despite the generally known context of the decision, to provide a statement of reasons in a decision imposing a fine, inter alia for the amount of the fine imposed and for the method chosen in that regard. That statement of reasons must show clearly and unequivocally the reasoning followed by the Commission so as to enable those concerned to know the grounds justifying the measure taken in order that they may assess whether it is appropriate to bring the matter before the Community judicature and, if they do so, to enable the Court to carry out its review.

(see paras 140, 142-144, 148)

4. The characterisation of certain unlawful actions as constituting one and the same infringement or as constituting multiple infringements affects, in principle, the penalty that may be imposed, since a finding that multiple infringements exist may entail the imposition of a number of distinct fines, each time within the limits laid down in Article 15(2) of Regulation No 17 and Article 23(2) of Regulation No 1/2003, on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC, which provide that, for each undertaking and association of undertakings participating in the infringement, the fine is not to exceed 10% of its total turnover in the preceding business year. It follows that, where the Commission imposes two fines the total amount of which exceeds the upper limit of 10% of turnover, it does not infringe the principle of nulla poena sine lege .

(see paras 150-151)

5. The objective of deterrence which the Commission is entitled to pursue when setting fines is intended to ensure that undertakings comply with the competition rules laid down in the Treaty when conducting their business within the European Community or the European Economic Area. In the case of multiple infringements, the Commission is fully entitled to take the view that that objective could not be attained merely by imposing a penalty for one of those infringements.

(see para. 160)

6. The principle of proportionality requires that the measures adopted by Community institutions must not exceed what is appropriate and necessary for attaining the objective pursued. When it comes to the calculation of fines, the gravity of infringements has to be determined by reference to numerous factors and it is important not to confer on one or other of those factors an importance which is disproportionate in relation to other factors. In this context, the principle of proportionality requires the Commission to set the fine proportionately to the factors taken into account for the purposes of assessing the gravity of the infringement and also to apply those factors in a way which is consistent and objectively justified.

In assessing the gravity of an infringement the Commission must have regard to a large number of factors, the nature and importance of which vary according to the type of infringement in question and the particular circumstances of the case. It cannot be ruled out that cases may arise in which one of the factors indicative of the gravity of an infringement is the size of the market for the product in question. Consequently, although market size may constitute a factor to be taken into account in establishing the gravity of the infringement, its importance varies according to the particular circumstances of the infringement concerned.

Such practices constitute horizontal restrictions of the ‘price cartel’ type within the meaning 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 and, accordingly, are inherently ‘very serious’. In such a context, the limited size of the relevant markets is of lesser importance than all the other factors indicative of the gravity of the infringement.

(see paras 171, 175-176, 178)

7. For the purposes of the analysis – undertaken with a view to setting the fine for an infringement of the competition rules – of the actual economic capacity of the offending companies to cause significant damage to competition, which involves an assessment of the actual importance of those undertakings on the market affected, that is to say, of their influence on the market, their overall turnover gives only an incomplete picture. The possibility cannot be ruled out that a powerful undertaking with many different activities may have only a limited presence on a specific product market. Similarly, the possibility cannot be ruled out that an undertaking occupying an important position on a geographical market outside the Community occupies only a weak position on the Community market or the European Economic Area. In such circumstances, the mere fact that the undertaking concerned has a high overall turnover does not necessarily mean that it has a decisive influence on the market affected. That is why, even though the turnovers of an undertaking on the markets affected cannot be a decisive factor in concluding that that undertaking belongs to a powerful economic entity, it is nevertheless relevant for the purposes of determining the influence which that undertaking may exert on the market.

Thus, 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. That turnover figure is likely to give a fair indication of the liability of each undertaking on those markets, since it constitutes an objective criterion which gives a proper measure of the harm which the offending conduct represents for normal competition and it is therefore a good indicator of the capacity of each undertaking to cause damage.

(see paras 187-188)

8. As regards the setting the amount of the fines to be imposed on the various participants in a cartel, the method of dividing the cartel members into a number of categories – a method which results in a flat-rate starting amount for the fines to be imposed on undertakings belonging to the same category, even though differences in size between undertakings in the same category are ultimately not reflected – cannot be criticised if the principles of proportionality and equal treatment are respected. It is not for the General Court to rule on the expediency of such a system, even supposing that it placed smaller undertakings at a disadvantage. As part of its review of the lawfulness of the Commission’s exercise of its discretion in the matter, the Court must confine itself to checking that the division of the cartel members into categories is consistent and objectively justified, and must not automatically substitute its own assessment for that of the Commission.

(see para. 196)

9. Article 23(3) of Regulation No 1/2003, on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC, does not lay down any requirement that, where fines are imposed on a number of undertakings involved in the same infringement, the fine imposed on an undertaking which is small- or medium-sized must be no higher, as a percentage of turnover, than the fines imposed on the larger undertakings. It is clear from that provision that, both for small or medium-sized undertakings and for larger undertakings, account must be taken, in determining the amount of the fine, of the gravity and duration of the infringement. Where the Commission imposes on undertakings involved in a single infringement fines which are justified, for each of them, by reference to the gravity and duration of the infringement, it cannot be criticised on the ground that, for some of the undertakings, the fine is higher in relation to its turnover than that imposed on the others. Thus, the Commission is not required to reduce the fines where the undertakings concerned are small- or medium-sized companies. The size of the undertaking is taken into consideration by virtue of the upper limit laid down in Article 15(2) of Regulation No 17, Article 23(2) of Regulation No 1/2003 and in 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. Apart from those considerations concerning size, there is no reason to treat small- or medium-sized undertakings differently from other undertakings. The fact that the undertakings concerned are small or medium-sized undertakings does not exempt them from their duty to comply with the competition rules.

(see paras 199-200)

10. In the context 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 provide in the sixth paragraph of Section 1A that a considerable disparity in size between the undertakings committing infringements of the same type is a factor which particularly justifies differentiated treatment for the purposes of assessing the gravity of the infringement, a Commission decision placing a number of undertakings in the same category where one of those undertakings had an overall turnover which was clearly, even ‘significantly’, lower than that of the others, on the basis that their turnovers on the relevant market and their market shares were very similar, and applying to them the same specific starting amount does not infringe the principle of equal treatment.

(see paras 202, 205)

11. When calculating the fine for an infringement of the rules on competition, the essential procedural requirement of stating reasons is satisfied where the Commission indicates in its decision the factors which enabled it to determine the gravity of the infringement and its duration. Those requirements do not oblige the Commission to indicate in its decision the figures relating to the method of calculating the fines; in any event, the Commission cannot, by mechanical recourse to arithmetical formulae alone, divest itself of its own power of assessment. In the case of a decision imposing fines on a number of undertakings, the scope of the duty to state reasons must be assessed inter alia in the light of the fact that the gravity of the infringement depends on numerous factors, such as the particular circumstances of the case, its context and the deterrent effect of the fines, although no binding or exhaustive list of the criteria to be applied has been drawn up.

(see para. 226)

12. The fact that an undertaking has not participated in a multilateral meeting and has ceased reporting information to the other cartel members is not sufficient to show that it has ceased to participate in a cartel as long as it has not publicly distanced itself from the content of the cartel.

(see paras 240-241, 244)

13. Under Article 23(3) of Regulation No 1/2003, on the implementation of the rules on competition laid down in Articles 81 EC and 82 EC, the duration of the infringement is one of the factors to be taken into consideration when determining the amount of the fine to be imposed on undertakings which have infringed the competition rules.

Whilst the provisions of Section 1B 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 make no provision for an increase in respect of short-term infringements (generally less than one year), there will be an increase for infringements of average duration, generally between one and five years, which may, for example, be set as high as 50% of the starting amount of the fine. As regards long-term infringements, generally of over five years, it is provided only the amount may be increased by 10% per year. Those increases are not automatic, as the Guidelines leave the Commission a measure of discretion.

(see paras 237-247, 249)

14. 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 do not list in peremptory terms the mitigating circumstances that the Commission is required to take into account with a view to reducing the basic amount of the fine. Consequently, the Commission retains a measure of discretion in making an overall assessment of the size of any reduction in the fines to reflect mitigating circumstances. Thus, the Commission is under no obligation, in the exercise of its discretion, to reduce a fine because of the termination of a manifest infringement, whether that termination occurred before or after its intervention.

Termination of infringements of the competition rules as soon as the Commission intervenes, as referred to in the third indent of Section 3 of the Guidelines, can logically constitute a mitigating circumstance only if there are reasons for supposing that it was the Commission’s intervention that prompted the undertakings concerned to cease their anti-competitive activities. It appears that the purpose of that provision is to encourage undertakings to terminate their anti-competitive conduct as soon as the Commission launches an investigation in that regard. The fine cannot be reduced on that basis where a firm decision to terminate the infringement has already been taken by those undertakings before the date on which the Commission first intervenes or where the infringement has already come to an end before that date. The latter situation is sufficiently taken into account by the calculation of the duration of the infringement period established.

(see paras 259-260)

15. 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 to the subjective factors taken into account in setting the starting amount, the Guidelines state that it is necessary to take account of the effective economic capacity of offenders to cause significant damage to other operators, in particular consumers, and to set the fine at a level which ensures that it has sufficiently deterrent effect. It is also stated in the Guidelines that, in cases involving a number of undertakings, such as cartels, it may be necessary to apply weightings to the general starting amount in order to take account of the specific weight, hence the real impact on competition of the offending conduct of each undertaking, particularly where there is considerable disparity in size between undertakings which have committed infringements of the same type. Consequently, it may be necessary to adapt the general starting amount according to the specific nature of each undertaking.

The Guidelines do not preclude the Commission from taking the overall turnover of the undertakings concerned or their turnover on the relevant market into account in determining the amount of the fine, in order to ensure compliance with the fundamental principles of Community law and where circumstances so require.

Thus, dividing the undertakings into two categories, by reference to their turnover, is not an unreasonable way of taking account of their relative importance on the market in order to set the starting amount of the fine, so long as it does not lead to a grossly inaccurate representation of the market concerned.

(see paras 273-275, 280)

16. In competition matters, the burden of proving the existence of the effects of the infringement on the market at issue – a burden which is borne by the Commission when it takes such effects into account for the purposes of calculating the fine by reference to the gravity of the infringement – is lighter than the burden of proof incumbent upon the Commission when it must show the existence as such of an infringement in the case of a cartel. For the purposes of taking account of the actual impact of the cartel on the market, it is sufficient for the Commission to provide ‘good reasons for taking them into account’.

(see para. 301)

17. The rights of the defence are infringed as a result of a discrepancy between the statement of objections and the final decision only where an objection stated in the final decision was not set out in the statement of objections in a manner sufficient to enable the addressees to defend their interests.

If documents have not been mentioned in the statement of objections, the undertaking concerned is entitled to consider that they are of no importance for the purposes of the case. By not informing an undertaking that certain documents would be used in the decision, the Commission prevents it from putting forward at the appropriate time its view of the probative value of such documents. It follows that they cannot be regarded as admissible evidence so far as that undertaking is concerned.

A document used by the Commission in support of an objection in the final decision, where the same document was used in the statement of objections in order to prove another objection, may be used in the decision as against the undertaking concerned only if the latter could reasonably deduce from the statement of objections and the contents of the document the conclusions which the Commission intended to draw.

(see paras 313-315)

18. An undertaking in receipt of a request for information pursuant to Article 11(5) of Regulation No 17 cannot be recognised as having an absolute right of silence. To acknowledge the existence of such a right would go beyond what is necessary in order to preserve the rights of defence of undertakings and would constitute an unjustified hindrance to the Commission’s performance of its duty to ensure that the rules on competition within the common market are observed. A right of silence can be acknowledged only to the extent that the undertaking concerned would be compelled to provide answers which might involve an admission on its part of the existence of an infringement which it is incumbent upon the Commission to prove.

In order to ensure the effectiveness of Article 11 of Regulation No 17, the Commission is therefore entitled to compel the undertakings to provide all necessary information concerning such facts as may be known to them and to disclose to the Commission, if necessary, such documents relating thereto as are in their possession, even if the latter may be used to establish the existence of anti-competitive conduct. This power of the Commission to obtain information does not fall foul of either Article 6(1) and (2) of the ECHR or the case-law of the European Court of Human Rights.

In any event, the mere fact of being obliged to answer purely factual questions put by the Commission and to comply with its requests for the production of documents already in existence cannot constitute a breach of the principle of respect for the rights of the defence or impair the right to fair legal process, which offer, in the specific field of competition law, protection equivalent to that guaranteed by Article 6 of the European Convention on Human Rights. There is nothing to prevent the addressee of a request for information from showing, whether later during the administrative procedure or in proceedings before the Community judicature, when exercising its rights of defence, that the facts set out in its replies or the documents produced by it have a different meaning from that ascribed to them by the Commission.

Lastly, where, in a request for information under Article 11 of Regulation No 17, the Commission, in addition to putting purely factual questions and requesting production of pre-existing documents, asks an undertaking to describe the object and course of a number of meetings in which it participated and also the results of or the conclusions reached in those meetings, when it is clear that the Commission suspects that the object of those meetings was to restrict competition, a request of that nature is of such a kind as to require the undertaking concerned to admit its participation in an infringement of the Community competition rules, so that the undertaking is not required to answer questions of that type. In such a situation, the fact that an undertaking none the less supplies information on those points must be regarded as spontaneous cooperation on the undertaking’s part capable of justifying a reduction in the amount of the fine, in application of the Leniency Notice. It is also apparent from the case-law that, in the same situation, undertakings cannot claim that their right not to incriminate themselves has been infringed where they voluntarily replied to such a request.

(see paras 326-329)

19. In the context of an administrative procedure initiated in respect of a prohibited cartel, the cooperation of the undertaking concerned in the investigation does not entitle it to a reduction in its fine where that cooperation went no further than the cooperation incumbent upon it under Article 11(4) and (5) of Regulation No 17. Where, however, in response to a request for information under Article 11, the undertaking provides information which goes much further than the information which the Commission may require under that provision, the undertaking may receive a reduction in its fine.

(see para 340)