Keywords
Summary

Keywords

1. Competition – Administrative procedure – Statement of objections – Necessary content – Observance of the rights of the defence

(Council Regulation No 17, Art. 19(1))

2. Appeals – Pleas in law – Mistaken assessment of the facts – Inadmissibility – Review by the Court of Justice of the assessment of the evidence – Possible only where the clear sense of the evidence has been distorted

(Art. 225 EC; Statute of the Court of Justice, Art. 58, first para.)

3. Competition – Fines – Guidelines on the method of setting fines

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

4. Appeals – Jurisdiction of the Court – Judgment of the Court of First Instance concerning the setting of a fine in a competition matter

(Art. 81 EC; Council Regulation No 17, Art. 15)

5. Procedure – Duration of proceedings before the Court of First Instance – Reasonable time – Action against a Commission decision imposing penalties for infringement of the competition rules – Criteria for assessment

Summary

1. In all proceedings in which sanctions, especially fines or penalty payments, may be imposed, observance of the rights of the defence is a fundamental principle of Community law which must be complied with even if the proceedings in question are administrative proceedings. That principle requires, in particular, that the statement of objections which the Commission sends to an undertaking on which it envisages imposing a penalty for an infringement of the competition rules contain the essential elements used against it, such as the facts, the characterisation of those facts and the evidence on which the Commission relies, so that the undertaking may submit its arguments effectively in the administrative procedure brought against it.

It follows from that principle that a competition decision in which the Commission imposes a fine on an undertaking without first having informed it of the objections relied on against it cannot be held to be lawful.

Furthermore, in view of its importance, the statement of objections must specify unequivocally the legal person on whom fines may be imposed and be addressed to that person. It is also necessary that the statement of objections indicate in which capacity an undertaking is called upon to answer the allegations.

A Commission decision must be annulled where it holds a parent company liable on account of (i) its direct involvement in the activities of a cartel and (ii) the participation of one of its subsidiaries in the cartel, whilst the statement of objections does not enable the parent company to acquaint itself with the objection based on its direct involvement or even with the facts finally established in the decision in support of that objection. The fact that the final decision held the company concerned liable on the ground that it was involved in its capacity as a parent company, as well as on the ground of its direct involvement, does not preclude the decision possibly having been based on conduct in respect of which the parent company was not able to defend itself. In such a situation, the Court of First Instance errs in law in failing to draw any legal conclusion from the finding that the rights of defence of the parent company have not been observed.

(see paras 34, 36-39, 41, 44-45, 48)

2. On an appeal the Court of Justice has no jurisdiction to establish the facts or, in principle, to examine the evidence which the Court of First Instance accepted in support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the Court of First Instance alone to assess the value which should be attached to the evidence produced to it. Save where the clear sense of the evidence has been distorted, that appraisal does not therefore constitute a point of law which is subject as such to review by the Court of Justice.

A distortion of the facts and evidence before the Court of First Instance must be obvious from the documents on the Court’s file without there being any need to carry out a new assessment of those elements.

(see paras 52-53, 75)

3. The Commission enjoys a broad discretion as regards the method for calculating fines imposed for infringement of the competition rules. That method, set out 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, displays flexibility in a number of ways, enabling the Commission to exercise its discretion in accordance with Article 15(2) of Regulation No 17. On an appeal, it is for the Court of Justice to verify whether the Court of First Instance has correctly assessed the Commission’s exercise of that discretion

In holding that the Commission does not exceed its discretion in drawing a distinction between the undertakings concerned by reference to their relative importance in the market concerned, based on product turnover in the European Economic Area, the Court of First Instance does not infringe the principle of equal treatment. Such a method is intended to prevent fines being set on the basis of a simple calculation based on the total turnover of each undertaking and thus giving rise to differences in treatment.

(see paras 112-113, 116-117)

4. In the context of an appeal against a judgment of the Court of First Instance concerning fines for infringement of the Community competition rules, the purpose of review by the Court of Justice is, first, to examine to what extent the Court of First Instance took into consideration, in a legally correct manner, all the essential factors to assess the gravity of particular conduct in the light of Article 81 EC and Article 15 of Regulation No 17 and, second, to consider whether the Court of First Instance responded to a sufficient legal standard to all the arguments raised in support of the action seeking cancellation or reduction of the fine.

In that context an argument raised for the first time before the Court of Justice is inadmissible.

(see paras 125, 128)

5. The general principle of Community law that everyone is entitled to a fair hearing, which is inspired by Article 6(1) of the European Convention on Human Rights, and in particular the right to legal process within a reasonable period, is applicable in the context of proceedings brought against a Commission decision imposing fines on an undertaking for infringement of competition law.

The reasonableness of a period is to be appraised in the light of the circumstances specific to each case and, in particular, the importance of the case for the person concerned, its complexity and the conduct of the applicant and of the competent authorities.

That list of criteria is not exhaustive and the assessment of the reasonableness of a period does not require a systematic examination of the circumstances of the case in the light of each of them, where the duration of the proceedings appears justified in the light of one of them. Thus, the complexity of a case may be deemed to justify a duration which is prima facie too long.

When a Commission decision imposing fines on several undertakings for infringement of the Community competition rules is subject to a number of actions for annulment and those actions are brought in different languages of the case, dispute virtually all the facts on which the decision is based and give rise to an intervention, the Court of First Instance is required to conduct a parallel examination of those actions and to carry out a thorough investigation whilst observing the language constraints imposed by the Rules of Procedure. In view of the complexity of such a case, the fact that the proceedings last five years from the lodging of the applications until the date of delivery of judgment can be justified and there is thus no breach of the requirements concerning completion of the proceedings within a reasonable period.

(see paras 143-149)