Case C-499/11 P

The Dow Chemical Company and Others

v

European Commission

‛Appeal — Agreements, decisions and concerted practices — Market in butadiene rubber and emulsion styrene butadiene rubber — Fixing price targets, sharing clients by non-aggression agreements and exchanging commercial information — Imputability of the offending conduct — Discretion enjoyed by the Commission — Multiplier for deterrence — Equal treatment’

Summary — Judgment of the Court (First Chamber), 18 July 2013

1. Competition — Fines — Imposition — Discretion enjoyed by the Commission — Limits — Observing the principle of equal treatment

   (Arts 101 TFEU and 105(1) TFEU; Council Regulation No 1/2003, Art. 23(2))

2. Competition — EU rules — Infringements — Imputation — Parent company and subsidiaries — Economic unit — Criteria for assessment

   (Art 101 TFEU; Council Regulation No 1/2003)

3. Appeal — Grounds — Inadequate or contradictory statement of reasons — Scope of the obligation to state reasons — Use of implicit reasoning by the General Court — Whether permissible — Conditions

   (Art. 256(1) TFEU; Statute of the Court of Justice, Arts 36 and 53, first para; Rules of Procedure of the General Court, Art. 81)

4. Competition — Administrative procedure — Statement of objections — Necessary content — Respect for the rights of the defence — Indication of the principal elements of fact and of law that may give rise to a fine

   (Art. 101 TFEU; Council Regulation No 1/2003, Art. 27)

5. Competition — Fines — Amount — Determination — Deterrent effect — Taking account of the size and global resources of the fined undertaking — Relevance — Application of a multiplier to the starting amount — Discretion enjoyed by the Commission — Need to fit the penalty to the size and conduct of the individual undertakings concerned

   (Council Regulation No 1/2003, Art. 23(2))

6. Competition — Fines — Amount — Determination — Judicial review — Powers of unlimited jurisdiction of the EU Courts

   (Art. 296 TFEU; Council Regulation No 1/2003, Arts 23 and 31)

1.  In matters of competition law, the Commission has discretion when choosing whether or not to impose a fine on an undertaking which has infringed Article 101 TFEU. Any possible limits to the discretion thus conferred on the Commission are governed exclusively by EU law, given that Article 23(2) of Regulation No 1/2003 makes no reference to the laws of the Member States. As regards the limits placed by EU law on the Commission’s discretion in such matters, Article 105(1) TFEU requires the Commission to ensure that the principles laid down in Article 101 TFEU, inter alia, are observed.

   One of those principles is indisputably the imposition of fines, on the basis of Article 23(2) of Regulation No 1/2003, on undertakings which have entered into an anti-competitive agreement, which means that, where the Commission decides, exceptionally, not to impose a fine on an undertaking even though that undertaking has infringed the EU rules on competition, it must base its decision on objective reasons capable of justifying such a departure from the principles set out in Article 101 TFEU. One such objective reason can be the fact that the Commission is unable, in a specific case, to prove to the requisite legal standard that the parent company has exercised a decisive influence over the conduct of its subsidiary, that being the company which was immediately involved in the infringement. Proving such influence is significantly easier where a parent company holds 100% of the capital of a subsidiary.

   In addition, the Commission’s obligation under Article 105(1) TFEU to ensure the application of the principles laid down in Article 101 TFEU, inter alia, when deciding whether or not to impose a fine applies in the same way, whichever of the two companies is concerned, the parent company or its subsidiary. There is no order of priority when the Commission is imposing a fine on one or other of those companies. Moreover, where the Commission adopts, in respect of a cartel, one specific method for determining whether the parent companies concerned are liable for the infringements engaged in by their subsidiaries, it must — unless there are special circumstances — use the same criteria for all those parent companies. It is only if there are objective reasons capable of justifying a departure from the principles laid down in Article 101 TFEU and if that decision does not lead to preferential treatment of one parent company as compared with the other parent companies involved in the infringement that the Commission is justified in not imposing a fine on that company.

   (see paras 44, 46, 47, 49-51)

2.  See the text of the decision.

   (see para. 48)

3.  See the text of the decision.

   (see paras 56-59)

4.  See the text of the decision.

   (see para. 70)

5.  See the text of the decision.

   (see paras 86-88)

6.  See the text of the decision.

   (see paras 89, 90)

Case C-499/11 P

The Dow Chemical Company and Others

v

European Commission

‛Appeal — Agreements, decisions and concerted practices — Market in butadiene rubber and emulsion styrene butadiene rubber — Fixing price targets, sharing clients by non-aggression agreements and exchanging commercial information — Imputability of the offending conduct — Discretion enjoyed by the Commission — Multiplier for deterrence — Equal treatment’

Summary — Judgment of the Court (First Chamber), 18 July 2013

1. Competition — Fines — Imposition — Discretion enjoyed by the Commission — Limits — Observing the principle of equal treatment

   (Arts 101 TFEU and 105(1) TFEU; Council Regulation No 1/2003, Art. 23(2))

2. Competition — EU rules — Infringements — Imputation — Parent company and subsidiaries — Economic unit — Criteria for assessment

   (Art 101 TFEU; Council Regulation No 1/2003)

3. Appeal — Grounds — Inadequate or contradictory statement of reasons — Scope of the obligation to state reasons — Use of implicit reasoning by the General Court — Whether permissible — Conditions

   (Art. 256(1) TFEU; Statute of the Court of Justice, Arts 36 and 53, first para; Rules of Procedure of the General Court, Art. 81)

4. Competition — Administrative procedure — Statement of objections — Necessary content — Respect for the rights of the defence — Indication of the principal elements of fact and of law that may give rise to a fine

   (Art. 101 TFEU; Council Regulation No 1/2003, Art. 27)

5. Competition — Fines — Amount — Determination — Deterrent effect — Taking account of the size and global resources of the fined undertaking — Relevance — Application of a multiplier to the starting amount — Discretion enjoyed by the Commission — Need to fit the penalty to the size and conduct of the individual undertakings concerned

   (Council Regulation No 1/2003, Art. 23(2))

6. Competition — Fines — Amount — Determination — Judicial review — Powers of unlimited jurisdiction of the EU Courts

   (Art. 296 TFEU; Council Regulation No 1/2003, Arts 23 and 31)

1.  In matters of competition law, the Commission has discretion when choosing whether or not to impose a fine on an undertaking which has infringed Article 101 TFEU. Any possible limits to the discretion thus conferred on the Commission are governed exclusively by EU law, given that Article 23(2) of Regulation No 1/2003 makes no reference to the laws of the Member States. As regards the limits placed by EU law on the Commission’s discretion in such matters, Article 105(1) TFEU requires the Commission to ensure that the principles laid down in Article 101 TFEU, inter alia, are observed.

   One of those principles is indisputably the imposition of fines, on the basis of Article 23(2) of Regulation No 1/2003, on undertakings which have entered into an anti-competitive agreement, which means that, where the Commission decides, exceptionally, not to impose a fine on an undertaking even though that undertaking has infringed the EU rules on competition, it must base its decision on objective reasons capable of justifying such a departure from the principles set out in Article 101 TFEU. One such objective reason can be the fact that the Commission is unable, in a specific case, to prove to the requisite legal standard that the parent company has exercised a decisive influence over the conduct of its subsidiary, that being the company which was immediately involved in the infringement. Proving such influence is significantly easier where a parent company holds 100% of the capital of a subsidiary.

   In addition, the Commission’s obligation under Article 105(1) TFEU to ensure the application of the principles laid down in Article 101 TFEU, inter alia, when deciding whether or not to impose a fine applies in the same way, whichever of the two companies is concerned, the parent company or its subsidiary. There is no order of priority when the Commission is imposing a fine on one or other of those companies. Moreover, where the Commission adopts, in respect of a cartel, one specific method for determining whether the parent companies concerned are liable for the infringements engaged in by their subsidiaries, it must — unless there are special circumstances — use the same criteria for all those parent companies. It is only if there are objective reasons capable of justifying a departure from the principles laid down in Article 101 TFEU and if that decision does not lead to preferential treatment of one parent company as compared with the other parent companies involved in the infringement that the Commission is justified in not imposing a fine on that company.

   (see paras 44, 46, 47, 49-51)

2.  See the text of the decision.

   (see para. 48)

3.  See the text of the decision.

   (see paras 56-59)

4.  See the text of the decision.

   (see para. 70)

5.  See the text of the decision.

   (see paras 86-88)

6.  See the text of the decision.

   (see paras 89, 90)