Case C‑580/12 P
Guardian Industries Corp.
and
Guardian Europe Sàrl
v
European Commission
‛Appeal — Agreements, decisions and concerted practices — Market for flat glass in the European Economic Area (EEA) — Price-fixing — Calculation of the amount of the fine — Inclusion of an undertaking’s internal sales — Reasonable time — Admissibility of documents produced with a view to the General Court hearing’
Summary — Judgment of the Court (Third Chamber), 12 November 2014
Judicial proceedings — Duration of the proceedings before the General Court — Reasonable time — Proceedings concerning the existence of an infringement of the competition rules — Failure to adjudicate within a reasonable time — Consequences — Non-contractual liability — Claim based on an excessive length of the proceedings before the General Court — Composition of the chamber hearing the case
(Art. 256(1) TFEU; Charter of Fundamental Rights of the European Union, Art. 47, second para.)
EU law — Principles — Rights of the defence — Principle of equality of arms — Observance in the context of judicial proceedings — Scope — Lodging a new procedural document the last working day before the hearing — Admissibility — Conditions
(Instructions to the Registrar of the General Court, Art. 11(3))
Competition — Fines — Amount — Determination — Discretion of the Commission — Limits — Observance of the principle of equal treatment — Calculation of the basic amount of the fine — Method of calculation laid down by the guidelines drawn up by the Commission — Sales to which the infringement directly or indirectly relates — Turnover taken into consideration — Exclusion of the turnover internal to the group of undertakings — Discrimination against non-vertically integrated undertakings — Infringement of the principle of equal treatment
(Art. 81(1) EC; Council Regulation No 1/2003, Art. 23(2) and (3); Commission Notice 2006/C 210/02, point 13)
Competition — Fines — Amount — Determination — Judicial review — Unlimited jurisdiction of the EU judicature — Scope — Limit — Observance of the principle of non-discrimination — Commission decision vitiated by an infringement of the principle of equal treatment — Consequence — Reduction of the amount of the fine in favour of the undertaking discriminated against
(Council Regulation No 1/2003, Arts 23(2) and (3) and 31)
The sanction for a breach, by a Court of the European Union, of its obligation under the second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union to adjudicate on the cases before it within a reasonable time must be an action for damages brought before the General Court, since such an action constitutes an effective remedy.
It follows that a claim for compensation in respect of the damage caused by the General Court’s failure to adjudicate within a reasonable time may not be made directly to the Court of Justice in the context of an appeal, but must be brought before the General Court itself.
In that regard, it is for the General Court, which has jurisdiction under Article 256(1) TFEU, to determine such claims for damages, sitting in a different composition from that which heard the dispute giving rise to the procedure whose duration is criticised and applying the criteria set out in paragraphs 91 to 95 of the judgment in Gascogne Sack Deutschland v Commission (EU:C:2013:768).
(see paras 17-19)
The principle of respect for the rights of the defence is a fundamental principle of EU law. That principle would be infringed if a judicial decision were to be based on facts and documents of which the parties themselves, or one of them, have not been able to take cognisance and in relation to which they have not therefore been able to formulate an opinion. The principle of equality of arms, which is a corollary of the very concept of a fair hearing and the aim of which is to ensure a balance between the parties to proceedings, guaranteeing that any document submitted to the court may be examined and challenged by any party to the proceedings, implies that each party must be afforded a reasonable opportunity to present his case, including his evidence, under conditions that do not place him at a substantial disadvantage vis-à-vis his opponent.
In that regard, it is not a breach of the rights of the defence to hold that a document lodged by one of the parties is admissible inasmuch as, first, the other party had three days to acquaint itself with its contents prior to the hearing and such a period cannot, because of the nature and content of that document — regardless of whether the General Court failed to have regard to the provisions of Article 11(3) of the Instructions to the Registrar — be considered excessively short and, secondly, the other party neither asked for an opportunity to comment on that document in writing nor requested that the hearing be postponed.
(see paras 30, 31, 33, 34)
In the field of competition law, although the Commission has discretion, as regards the calculation of the amount of the fine, the exercise of that discretion is limited, inter alia, by the rules of conduct which the Commission has imposed on itself, in particular in the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003.
Point 13 of those guidelines states that, in determining the basic amount of the fine to be imposed, the Commission is to take the value of the undertaking’s sales of goods or services to which the infringement directly or indirectly relates in the relevant geographic area within the European Economic Area. Point 13 pursues the objective of adopting, as the starting point for the calculation of the fine imposed on an undertaking, an amount which reflects the economic significance of the infringement and the relative size of the undertaking’s contribution to it. In that regard, while the concept of the value of sales referred to in point 13 of the guidelines admittedly cannot extend to encompassing sales made by the undertaking in question which do not fall within the scope of the alleged cartel, it would, however, be contrary to the goal pursued by that provision if that concept were to be understood as applying only to turnover achieved by the sales in respect of which it is established that they were actually affected by that cartel. Such a limitation would, in addition, have the effect of artificially minimising the economic significance of the infringement committed by a particular undertaking since the mere fact that a limited amount of direct evidence of sales actually affected by the cartel had been found would lead to the imposition of a fine which bore no actual relation to the scope of application of the cartel in question. Such a reward for being secretive would also adversely affect the objective of the effective investigation and sanctioning of infringements of Article 81 EC and, therefore, cannot be permitted. Moreover, the proportion of the overall turnover deriving from the sale of products in respect of which the infringement was committed is best able to reflect the economic importance of that infringement.
A distinction must not therefore be drawn between those sales depending on whether they are to independent third parties or to entities belonging to the same undertaking. To ignore the value of the sales belonging to that latter category would inevitably give an unjustified advantage to vertically integrated companies by allowing them to avoid the imposition of a fine proportionate to their importance on the product market to which the infringement relates. In addition to the anticipated benefit from a horizontal price-fixing agreement when sales are made to independent third parties, vertically integrated undertakings may also benefit from such an agreement on the downstream market in processed goods made up of, inter alia, the goods which are the subject of the infringement, and this for two different reasons.
Since there cannot, by the application of different methods of calculation, be any discrimination between the undertakings which have participated in the same infringement of Article 81 EC, it follows that, in order to determine that turnover, vertically integrated undertakings are in a comparable situation to that of non-vertically integrated producers. Since the principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified, those two types of undertaking must therefore be treated equally. Excluding internal sales from the relevant turnover would effectively favour the first type of undertaking by reducing its relative weight in the infringement to the detriment of the other undertakings.
(see paras 51, 55-60, 62, 63)
Where a plea in law seeking a reduction in the amount of the fine imposed for infringement of the competition rules is well founded, it is for the Court of Justice, in the exercise of its unlimited jurisdiction, to assess for itself the circumstances of the case and the nature of the infringement in question in order to determine the amount of the fine.
As regards a fine which the Commission has determined in accordance with a method which fails to have regard to the principle of equal treatment, the Court of Justice may, inter alia, reduce that fine, provided that any discrimination between undertakings which have participated in the infringement is avoided.
(see paras 69, 72, 75, 78)
Case C‑580/12 P
Guardian Industries Corp.
and
Guardian Europe Sàrl
v
European Commission
‛Appeal — Agreements, decisions and concerted practices — Market for flat glass in the European Economic Area (EEA) — Price-fixing — Calculation of the amount of the fine — Inclusion of an undertaking’s internal sales — Reasonable time — Admissibility of documents produced with a view to the General Court hearing’
Summary — Judgment of the Court (Third Chamber), 12 November 2014
Judicial proceedings — Duration of the proceedings before the General Court — Reasonable time — Proceedings concerning the existence of an infringement of the competition rules — Failure to adjudicate within a reasonable time — Consequences — Non-contractual liability — Claim based on an excessive length of the proceedings before the General Court — Composition of the chamber hearing the case
(Art. 256(1) TFEU; Charter of Fundamental Rights of the European Union, Art. 47, second para.)
EU law — Principles — Rights of the defence — Principle of equality of arms — Observance in the context of judicial proceedings — Scope — Lodging a new procedural document the last working day before the hearing — Admissibility — Conditions
(Instructions to the Registrar of the General Court, Art. 11(3))
Competition — Fines — Amount — Determination — Discretion of the Commission — Limits — Observance of the principle of equal treatment — Calculation of the basic amount of the fine — Method of calculation laid down by the guidelines drawn up by the Commission — Sales to which the infringement directly or indirectly relates — Turnover taken into consideration — Exclusion of the turnover internal to the group of undertakings — Discrimination against non-vertically integrated undertakings — Infringement of the principle of equal treatment
(Art. 81(1) EC; Council Regulation No 1/2003, Art. 23(2) and (3); Commission Notice 2006/C 210/02, point 13)
Competition — Fines — Amount — Determination — Judicial review — Unlimited jurisdiction of the EU judicature — Scope — Limit — Observance of the principle of non-discrimination — Commission decision vitiated by an infringement of the principle of equal treatment — Consequence — Reduction of the amount of the fine in favour of the undertaking discriminated against
(Council Regulation No 1/2003, Arts 23(2) and (3) and 31)
The sanction for a breach, by a Court of the European Union, of its obligation under the second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union to adjudicate on the cases before it within a reasonable time must be an action for damages brought before the General Court, since such an action constitutes an effective remedy.
It follows that a claim for compensation in respect of the damage caused by the General Court’s failure to adjudicate within a reasonable time may not be made directly to the Court of Justice in the context of an appeal, but must be brought before the General Court itself.
In that regard, it is for the General Court, which has jurisdiction under Article 256(1) TFEU, to determine such claims for damages, sitting in a different composition from that which heard the dispute giving rise to the procedure whose duration is criticised and applying the criteria set out in paragraphs 91 to 95 of the judgment in Gascogne Sack Deutschland v Commission (EU:C:2013:768).
(see paras 17-19)
The principle of respect for the rights of the defence is a fundamental principle of EU law. That principle would be infringed if a judicial decision were to be based on facts and documents of which the parties themselves, or one of them, have not been able to take cognisance and in relation to which they have not therefore been able to formulate an opinion. The principle of equality of arms, which is a corollary of the very concept of a fair hearing and the aim of which is to ensure a balance between the parties to proceedings, guaranteeing that any document submitted to the court may be examined and challenged by any party to the proceedings, implies that each party must be afforded a reasonable opportunity to present his case, including his evidence, under conditions that do not place him at a substantial disadvantage vis-à-vis his opponent.
In that regard, it is not a breach of the rights of the defence to hold that a document lodged by one of the parties is admissible inasmuch as, first, the other party had three days to acquaint itself with its contents prior to the hearing and such a period cannot, because of the nature and content of that document — regardless of whether the General Court failed to have regard to the provisions of Article 11(3) of the Instructions to the Registrar — be considered excessively short and, secondly, the other party neither asked for an opportunity to comment on that document in writing nor requested that the hearing be postponed.
(see paras 30, 31, 33, 34)
In the field of competition law, although the Commission has discretion, as regards the calculation of the amount of the fine, the exercise of that discretion is limited, inter alia, by the rules of conduct which the Commission has imposed on itself, in particular in the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003.
Point 13 of those guidelines states that, in determining the basic amount of the fine to be imposed, the Commission is to take the value of the undertaking’s sales of goods or services to which the infringement directly or indirectly relates in the relevant geographic area within the European Economic Area. Point 13 pursues the objective of adopting, as the starting point for the calculation of the fine imposed on an undertaking, an amount which reflects the economic significance of the infringement and the relative size of the undertaking’s contribution to it. In that regard, while the concept of the value of sales referred to in point 13 of the guidelines admittedly cannot extend to encompassing sales made by the undertaking in question which do not fall within the scope of the alleged cartel, it would, however, be contrary to the goal pursued by that provision if that concept were to be understood as applying only to turnover achieved by the sales in respect of which it is established that they were actually affected by that cartel. Such a limitation would, in addition, have the effect of artificially minimising the economic significance of the infringement committed by a particular undertaking since the mere fact that a limited amount of direct evidence of sales actually affected by the cartel had been found would lead to the imposition of a fine which bore no actual relation to the scope of application of the cartel in question. Such a reward for being secretive would also adversely affect the objective of the effective investigation and sanctioning of infringements of Article 81 EC and, therefore, cannot be permitted. Moreover, the proportion of the overall turnover deriving from the sale of products in respect of which the infringement was committed is best able to reflect the economic importance of that infringement.
A distinction must not therefore be drawn between those sales depending on whether they are to independent third parties or to entities belonging to the same undertaking. To ignore the value of the sales belonging to that latter category would inevitably give an unjustified advantage to vertically integrated companies by allowing them to avoid the imposition of a fine proportionate to their importance on the product market to which the infringement relates. In addition to the anticipated benefit from a horizontal price-fixing agreement when sales are made to independent third parties, vertically integrated undertakings may also benefit from such an agreement on the downstream market in processed goods made up of, inter alia, the goods which are the subject of the infringement, and this for two different reasons.
Since there cannot, by the application of different methods of calculation, be any discrimination between the undertakings which have participated in the same infringement of Article 81 EC, it follows that, in order to determine that turnover, vertically integrated undertakings are in a comparable situation to that of non-vertically integrated producers. Since the principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified, those two types of undertaking must therefore be treated equally. Excluding internal sales from the relevant turnover would effectively favour the first type of undertaking by reducing its relative weight in the infringement to the detriment of the other undertakings.
(see paras 51, 55-60, 62, 63)
Where a plea in law seeking a reduction in the amount of the fine imposed for infringement of the competition rules is well founded, it is for the Court of Justice, in the exercise of its unlimited jurisdiction, to assess for itself the circumstances of the case and the nature of the infringement in question in order to determine the amount of the fine.
As regards a fine which the Commission has determined in accordance with a method which fails to have regard to the principle of equal treatment, the Court of Justice may, inter alia, reduce that fine, provided that any discrimination between undertakings which have participated in the infringement is avoided.
(see paras 69, 72, 75, 78)