Keywords
Summary

Keywords

1. Competition – Administrative procedure – Commission decision finding an infringement – Burden of proving the infringement and its duration on the Commission – Scope of the burden of proof

(Art. 81(1) EC; Council Regulation No 1/2003)

2. Competition – Agreements, decisions and concerted practices – Adverse effect on competition – Criteria for assessment – Anti-competitive purpose – Sufficiency for a finding of infringement

(Art. 81(1) EC)

3. Competition – Agreements, decisions and concerted practices – Infringement – Single infringement – Criteria for assessment

(Art. 81(1) EC; EEA Agreement, Art. 53)

4. Competition – Fines – Principle of the individualisation of sanctions – Reconciliation with the notion of undertaking

(Art. 81(1) EC)

5. Competition – Fines – Amount – Determination – Criteria – Turnover taken into consideration

(Art. 81(1) EC)

6. Competition – Community rules – Infringement committed by a subsidiary – Attribution to the parent company – Burden of proof on the Commission – Limits

(Art. 81(1) EC)

7. Competition – Community rules – Infringements – Attribution – Attribution to the parent company of responsibility for the infringement committed by a subsidiary – Limits

(Art. 81(1) EC; EEA Agreement, Art. 53)

8. Competition – Agreements, decisions and concerted practices – Undertaking – Concept – Economic entity – Attribution of infringements – Parent company and subsidiaries – Joint and several liability of the undertakings concerned

(Art. 81(1) EC; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2))

9. Competition – Fines – Amount – Determination – Criteria – Taking account of global turnover made from sales of the goods which are the subject of the infringement – Admissibility – Conditions

(Council Regulation No 17, Art. 15)

10. Competition – Fines – Amount – Determination – Commission's margin of discretion

(Art. 81(1) EC)

11. Competition – Fines – Amount – Determination – Maximum amount – Calculation – Turnover to be taken into consideration – Cumulative turnover of all the companies constituting the economic unit acting as an undertaking

(Art. 81(1) EC; Council Regulation No 1/2003, Art. 23(2) and (3))

12. Competition – Community rules – Infringement committed by a subsidiary – Attribution to the parent company – Effects – Retaining the individual liability of the subsidiary

(Art. 81(1) EC)

13. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances – Commission's margin of discretion

(Art. 81(1) EC; Council Regulation No 1/2003, Art. 23; Commission Communication 98/C 9/03, Section 3)

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

(Art. 81(1) EC; Council Regulation No 1/2003, Art. 23; Commission Communication 98/C 9/03)

15. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned – Need for conduct which facilitated the Commission's finding of an infringement

(Art. 81(1) EC; Council Regulation No 1/2003, Art. 23; Commission Communication 2002/C 45/03)

16. Competition – Administrative procedure – Observance of the rights of the defence – Scope of the principle – Limits – Right of the undertaking to cross-examine the witnesses – Not included

(Art. 81(1) EC)

17. Competition – Fines – Amount – Determination – Discretion of the Commission – Judicial review – Finding of an illegality – Need for the Court to amend the decision under its unlimited jurisdiction

(Art. 229 EC)

Summary

1. It is for the party or the authority alleging an infringement of the competition rules to prove its existence by establishing, to the requisite legal standard, the facts constituting an infringement, and it is for the undertaking invoking a defence against a finding of an infringement to demonstrate that the conditions for applying such a defence are satisfied, so that the authority will then have to resort to other evidence.

The principle that the Commission is required to prove every constituent element of the infringement, including its duration, which is likely to have an effect on its definitive findings as to the gravity of that infringement is not called into question by the fact that the undertakings concerned raised a defence of limitation, the burden of proof for which is in principle borne by them. Reliance on such a defence necessarily requires that the duration of the infringement and the date on which it ceased be established. However, those circumstances alone cannot provide justification for transferring the burden of proof in this regard to those undertakings. The duration of the infringement, which requires that the date on which it ended be known, is one of the essential elements of the infringement, which must be proved by the Commission, irrespective of the fact that the disputing of those elements also forms part of the defence of limitation. That conclusion is also justified by the fact that a Commission proceeding, under Regulation No 1/2003 on limitation, is not time-barred and constitutes an objective legal criterion, which derives from the principle of legal certainty, and, thus, is a condition for the validity of any decision imposing a penalty. The Commission is required to comply with this condition even if the undertaking concerned has raised no defence in this regard.

That apportionment of the burden of proof is likely to vary, however, inasmuch as the evidence on which a party relies may be of such a kind as to require the other party to provide an explanation or justification, failing which it is permissible to conclude that the burden of proof has been discharged. Where the Commission has adduced evidence of the existence of an agreement, it is for an undertaking which has taken part in that agreement to adduce evidence that it distanced itself from that agreement, evidence which must demonstrate a clear intention, brought to the notice of the other participating undertakings, to withdraw from that agreement.

(see paras 52-55, 60)

2. It follows from the actual wording of Article 81(1) EC that agreements between undertakings are prohibited, regardless of their effect, where they have an anti-competitive object. Consequently, it is not necessary to show actual anti-competitive effects where the anti-competitive object of the conduct in question is proved.

(see para. 75)

3. The Courts of the Union have identified several relevant criteria for assessing whether there is a single infringement of Article 81 EC and Article 53 of the Agreement on the European Economic Area (EEA), namely the identical nature of the objectives of the practices at issue, the identical nature of the goods or services concerned, the identical nature of the undertakings which participated in the infringement, and the identical nature of the detailed rules for its implementation. Other relevant criteria are whether the physical persons involved on behalf of the undertakings are identical and whether the geographical scope of the practices at issue is identical.

(see para. 90)

4. According to the principle that penalties must be specific to the offender and the offence, a natural or legal person may be penalised only for acts imputed to him individually; that principle applies in any administrative procedure that may lead to the imposition of sanctions under Community competition law. However, that principle must be reconciled with the notion of undertaking for the purposes of Article 81 EC. In that regard, it should be noted that the notion of undertaking includes economic units which consist of a unitary organisation of personal, tangible and intangible elements which pursues a specific economic aim on a long-term basis and can contribute to the commission of an infringement of the kind referred to in that provision. Community competition law recognises that different companies belonging to the same group form an economic unit and therefore an undertaking within the meaning of Article 81 EC if the companies concerned do not determine independently their own conduct on the market.

Consequently, it is necessary to reject the assertion that the fact that an undertaking involved in an infringement is made up of several different companies does not mean that they have to be treated as a single participant to the infringement. That assertion results from confusion of the notions of undertaking and company and is not supported by the case‑law.

(see paras 122-123)

5. In competition matters, the retroactive application by the Commission, for the purposes of calculating the fine, of the concept of economic unit does not lead to a heavier penalty and, therefore, does not infringe Article 7(1) of the European Convention on Human Rights, pursuant to which a heavier penalty is not to be imposed than the one that was applicable at the time the offence was committed. The Commission’s practice of taking account, for the purposes of calculating fines, of the turnover of undertakings – and, therefore, where necessary, the cumulative turnover of all the companies which make up an undertaking – has always been consistent and should therefore be familiar to economic operators. In addition, the Commission’s consistent practice of taking account, for the purposes of determining the starting amount of fines, of turnover for the last full year of the infringement, has been implicitly accepted in the case‑law.

In that regard, first, the deterrence of fines is one of the factors by reference to which the gravity of infringements must be determined. The dissuasive nature of a fine depends to a large extent on whether it is sufficiently material for the undertaking concerned. Therefore, in order to be able to measure the dissuasive effect of a fine in respect of a company which participated in an infringement, account needs to be taken of the situation as it stood at the end of the infringement and not the situation as it may have stood at an earlier point in time. Second, it would be impractical and completely excessive, in the light of the principle of good administration and the requirements of procedural economy, to require the Commission to take account of the evolution of the turnovers of the undertakings at issue throughout the entire duration of the cartel. Such an approach would involve calculating a separate starting amount of the fine for each year of participation in the cartel and, to that end, determining the respective market shares of the participants for each year of the infringement.

(see paras 124-127)

6. In competition cases, the Commission may reasonably presume that a wholly-owned subsidiary carries out, in all material respects, the instructions given to it by its parent company and that that presumption means that the Commission is not required to check whether the parent company has actually exercised that power. The attribution to the parent company of the conduct of a wholly‑owned subsidiary is thus not conditional on evidence that the parent company had knowledge of its subsidiary’s actions. On the contrary, it is for the parent company, when it considers that, despite the 100% shareholding in its subsidiary, the subsidiary determines its conduct independently on the market, to rebut that presumption by providing sufficient evidence.

(see para. 130)

7. Legal entities which have participated in their own right in an infringement of Article 81 EC or Article 53 of the EEA Agreement and which have subsequently been acquired by another company continue to bear responsibility themselves for their unlawful conduct prior to their acquisition, where they have not been purely and simply absorbed by the acquiring undertaking, but continued their activities as subsidiaries. In such a case, the acquiring undertaking may be held responsible only for the conduct of its subsidiary with effect from its acquisition if the subsidiary continues the infringement and if the liability of the new parent company can be established.

In addition, the same principle must apply, mutatis mutandis , in the case where, prior to its acquisition, the company acquired participated in the infringement not independently, but as a subsidiary of another group.

(see paras 139, 141)

8. Joint and several liability between companies for the payment of fines due as a result of an infringement of Article 81 EC and Article 53 of the EEA Agreement is a legal effect which follows as a matter of law from the substantive provisions of those articles.

The unitary conduct of the undertaking on the market justifies, for the purposes of the application of competition law, that the companies or, more generally, the persons which can be held personally liable for it may be held liable jointly and severally. The joint and several liability for the payment of fines imposed for an infringement of Article 81 EC and Article 53 of the EEA Agreement, inasmuch as it contributes to the effective recovery of those fines, is part of the objective of deterrence which is pursued generally by competition law and respects the principle of non bis in idem , a fundamental principle of European Union law, also laid down in Article 4 of Protocol No 7 of the European Convention on Human Rights, which precludes penalising more than once, for the same infringement of competition law, the same conduct of the undertaking on the market through the persons which may be held personally liable for it.

The fact that the personal liabilities incurred by a number of companies on account of the participation of the same undertaking in an infringement are not the same does not preclude those companies from being jointly and severally liable for a fine, where the joint and several liability for the payment of the fine covers only the period of the infringement during which they formed an economic unit and thus constituted an undertaking for the purposes of competition law. In that regard, it follows from the principle that penalties must be specific to the offender and to the offence concerned that each company must be able to discern from the decision imposing a fine on it to be paid jointly and severally with one or more other companies the amount which it is required to bear in relation to the other joint and several debtors, once payment has been made to the Commission. To that end, the Commission must, inter alia, specify the periods during which the companies concerned were jointly liable for the unlawful conduct of the undertakings which participated in the cartel and, where necessary, the degree of liability of those companies for that conduct.

Thus, the decision by which the Commission imposes on several companies the payment of a fine jointly and severally necessarily produces all the effects which are inherent, by force of law, in the legal rules governing the payment of competition law fines, both in relations between creditors and joint and several debtors and in those between joint and several debtors.

It is therefore exclusively for the Commission, in exercising its power to impose fines under Article 23(2) of Regulation No 1/2003, to determine the respective shares of the various companies of the fines imposed on them jointly and severally, in so far as they formed part of the same undertaking, and that task cannot be left to the national courts.

In the absence of a contrary indication in the decision by which the Commission has imposed a fine jointly and severally on several companies for an infringement by an undertaking, that decision attributes that infringement to them in equal measure. Companies on which a fine has been imposed jointly and severally and which incur, unless otherwise specified in the decision imposing the fine, liability in equal measure for the infringement must, in principle, contribute in equal amounts to the payment of the fine imposed on account of that infringement. Although the decision imposing a fine on several companies jointly and severally does not make it possible to determine, from the outset, which of those companies will actually be called on to pay the amount of the fine to the Commission, it does not leave any doubt as to the shares of the fine for which they are personally liable, with the result that each of them will be able, where necessary, to bring an action against its joint and several codebtors for repayment of the sums which it might have paid in excess of that share.

(see paras 149, 151-153, 156-158)

9. In the case where a worldwide cartel which, in addition to price fixing, also allocates markets, the Commission may legitimately rely on the global turnover from sales of the product concerned so that the starting amounts reflect the nature of the infringement, its actual impact on the market and the scope of the geographic market, having regard to the considerable disparity in size between the members of the cartel. Given that the United Kingdom and Ireland, taken together, make up a significant part of the common market, harm caused to competition on those markets cannot therefore be classed as minor. Since the infringement imputed to the applicants in the contested decision includes precisely the complaint that the undertakings concerned allocated different national markets at the European level, by means of a ‘home countries’ system, the fact that, under such an unlawful agreement, the applicant limited its business activities within the common market to its domestic markets cannot be regarded as a mitigating circumstance. Finally, while the participants to an unlawful cartel had themselves taken account of their global turnover when setting the individual quotas within the cartel, quotas which applied both at the European level – outside of ‘home countries’ – and at the global level, the Commission is also entitled to take account of their global turnover when assessing the specific weight of the various undertakings involved.

(see paras 170-171)

10. Community law does not require that the fines imposed on various companies within the same undertaking be proportionate to the duration of the participation imputed to each of those companies. Consequently, a comparison between the amount in euros, per month of participation in the infringement, applied to several companies accused of participating for different periods of time cannot amount to unequal treatment.

Therefore, it does not appear that the Commission’s practice of setting fines in a manner which is not strictly proportionate to the duration goes beyond the limits of its recognised discretion under the case‑law.

(see paras 181-182)

11. The fact that several companies are held jointly and severally liable for a fine on the ground that they form an undertaking for the purposes of Article 81 EC does not mean, as regards the application of the maximum amount laid down by Article 23(2) of Regulation No 1/2003, that the obligation of each of them is limited to 10% of the turnover which it achieved during the last business year. The maximum amount of 10% of turnover within the meaning of that provision must be calculated on the basis of the total turnover of all the companies constituting the single economic entity acting as an undertaking for the purposes of Article 81 EC, since only the total turnover of the component companies can constitute an indication of the size and economic power of the undertaking in question.

The concept of undertaking, for the purposes of Article 23(2) and (3) of Regulation No 1/2003, is thus not different from the concept of undertaking for the purposes of Article 81(1) EC. Therefore, it is also not necessary, in the case of the joint and several liability of several companies within a group forming an undertaking for the purposes of those provisions, to determine the ceiling in relation to the company with the lowest turnover.

(see paras 186-187)

12. The fact that a parent company has the conduct of its subsidiary attributed to it for having determined the subsidiary’s commercial conduct does not mean that the parent company has to be regarded as having carried out that conduct instead of the subsidiary. In other words, the liability of a parent company for the conduct of its subsidiary in no way exonerates the subsidiary from its own liability as a legal person and the subsidiary thus remains individually liable for the anti‑competitive practices in which it participated.

(see para. 196)

13. Section 3 of the Commission’s Guidelines for the calculation of fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty provides for a reduction in the basic amount of the fine for ‘special mitigating circumstances’ such as an exclusively passive or ‘follow-my-leader’ role in the carrying out of the infringement, and termination of the infringement as soon as the Commission intervenes. The Guidelines do not set out in mandatory terms the mitigating circumstances that the Commission is required to take into account. 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.

In that regard, 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. Even if, in the past, the Commission has regarded voluntary termination of an infringement as an attenuating circumstance, it is entitled, when applying its Guidelines, to take account of the fact that, even though their illegality was established at the inception of Community competition policy, very serious manifest infringements are relatively frequent and, therefore, to take the view that it is appropriate to abandon that generous practice and no longer reward the termination of such an infringement by a reduction of the fine.

(see paras 207-208, 211, 213)

14. The fact that an undertaking, whose participation in a cartel prohibited by the competition rules – an infringement characterised as very serious – was demonstrated by the Commission to the required legal standard, was deceived by the other participants to that cartel, which thereby attempted to obtain additional advantages to those which they obtained under the cartel, cannot render that undertaking’s conduct less serious. Therefore, such circumstances are not capable of constituting a mitigating circumstance and, in particular, do not show the exclusively passive or ‘follow-my-leader’ role of that undertaking within the cartel.

(see para. 218)

15. The reduction of fines in cases where the undertakings which participated in infringements of Community competition law have offered cooperation is justified only where it is considered that the cooperation made it easier for the Commission to establish an infringement and, as the case may be, to put an end to it.

As is stated in point 29 of the notice on immunity from fines and reduction of fines in cartel cases, the notice has created legitimate expectations on which undertakings may rely when disclosing the existence of a cartel to the Commission. In view of the legitimate expectation which undertakings intending to cooperate with the Commission are able to derive from the notice, the Commission must therefore adhere to the notice when, for the purpose of determining the fine to be imposed on an undertaking, it assesses their cooperation. Within the limits laid down by the Leniency Notice, the Commission has a broad discretion in assessing whether the evidence provided by an undertaking represents added value within the meaning of point 22 of that notice and, on that basis, whether it is appropriate to grant a reduction to an undertaking under that notice. That assessment is the subject of limited review by the Court.

(see paras 219-221)

16. The fundamental principle of respect for the rights of the defence requires that the undertakings and associations of undertakings concerned be afforded the opportunity, from the stage of the administrative procedure, to make known their views on the truth and relevance of the facts, objections and circumstances put forward by the Commission. By contrast, that principle does not require that those undertakings be afforded, in the administrative procedure, the opportunity themselves to cross-examine the witnesses heard by the Commission.

(see paras 233-234)

17. Where the examination of the pleas raised by an undertaking against the legality of a Commission decision imposing on it a fine for infringement of the Community competition rules has revealed an illegality, it is necessary for the Court to consider whether it must, under its unlimited jurisdiction, amend the contested decision.

(see para. 238)