Case T‑616/18

Polskie Górnictwo Naftowe i Gazownictwo S.A.

v

European Commission

Judgment of the General Court (Eighth Chamber, Extended Composition), 2 February 2022

(Competition – Abuse of a dominant position – Gas markets of central and eastern Europe – Decision to make binding the individual commitments proposed by an undertaking – Article 9 of Regulation (EC) No 1/2003 – Whether the commitments are adequate in the light of the competition concerns initially identified in the statement of objections – Commission decision not to require commitments in relation to some of the initial concerns – Principle of sound administration – Transparency – Obligation to state reasons – Energy-policy objectives of the European Union – Principle of energy solidarity – Misuse of powers)

1. Judicial proceedings – Measures of organisation of procedure – Request for production of documents – Discretion of the Courts of the Union – Duties of the person making the request – Identification of the documents requested and provision of information indicating their utility for the purposes of the proceedings

   (Statute of the Court of Justice, Art. 24; Rules of Procedure of the General Court, Arts 88 and 89)

   (see paragraphs 60-64)

2. Competition – Administrative procedure – Bringing infringements to an end – Decision by the Commission that commitments assumed under Article 9 of Regulation No 1/2003 are to be made binding – Observance of the principle of proportionality – Scope – No commitments addressing certain competition concerns initially identified by the Commission – Obligation for the Commission to justify withdrawing objections in the course of the procedure – Discretion

   (Council Regulation No 1/2003, Art. 9(1))

   (see paragraphs 75-85, 93-108)

3. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision to apply competition rules – Decision by the Commission that commitments assumed under Article 9 of Regulation No 1/2003 are to be made binding

   (Art. 296 TFEU; Council Regulation No 1/2003, Art. 9(1))

   (see paragraphs 120-122, 427)

4. Competition – Administrative procedure – Bringing infringements to an end – Decision by the Commission that commitments assumed under Article 9 of Regulation No 1/2003 are to be made binding – Binding nature with regard to the national competition authorities and national courts – Scope

   (Art. 4(3) TEU; Council Regulation No 1/2003, Arts 9(1) and 16(1))

   (see paragraphs 130-134)

5. Competition – Division of jurisdiction between the Commission and national competition authorities – Initiation by the Commission of proceedings in respect of abuse of a dominant position – Relieving the national competition authority of its competence to apply EU competition rules – Consequence – Protection of the undertakings concerned from parallel proceedings

   (Council Regulation No 1/2003, Art. 11(6))

   (see paragraphs 135, 138)

6. Competition – Administrative procedure – Bringing infringements to an end – Decision by the Commission that commitments assumed under Article 9 of Regulation No 1/2003 are to be made binding – Observance of the principle of proportionality – Scope – Whether the commitments are adequate in the light of the competition concerns initially identified by the Commission – Assessment

   (Council Regulation No 1/2003, Art. 9(1))

   (see paragraphs 142-281, 302-399)

7. Judicial proceedings – Time limit for producing evidence – Article 85(2) and (3) of the Rules of Procedure of the General Court – Evidence submitted for the first time in an annex to the applicant’s observations regarding a statement in intervention – Inadmissibility – Exception – Evidence in rebuttal intended to respond to evidence submitted in an annex to the statement in intervention

   (Rules of Procedure of the General Court, Art. 85(2) and (3))

   (see paragraph 243)

8. Competition – EU rules – Prohibition of agreements, decisions and concerted practices and of abuse of a dominant position – Mandatory – Obligation for national courts to apply those public policy provisions of their own motion – Decision by the Commission that commitments assumed under Article 9 of Regulation No 1/2003 are to be made binding – Arbitration award that is contrary to such a decision – National courts able to grant an application for annulment of that award

   (Arts 101 and 102 TFEU; Council Regulation No 1/2003, Art. 9(1))

   (see paragraphs 289-293)

9. Competition – Administrative procedure – Bringing infringements to an end – Decision by the Commission that commitments assumed under Article 9 of Regulation No 1/2003 are to be made binding – Taking account of objectives pursued by provisions of the Treaty – Taking account of energy-policy objectives of the European Union – Limits

   (Arts 7 and 194 TFEU; Council Regulation No 1/2003, Art. 9(1))

   (see paragraphs 418-420)

10. Competition – Administrative procedure – Bringing infringements to an end – Decision by the Commission that commitments assumed under Article 9 of Regulation No 1/2003 are to be made binding – Respect for the principle of equal treatment – No comparable situations

    (Council Regulation No 1/2003, Art. 9(1))

    (see paragraphs 433-440)

11. Competition – Administrative procedure – Bringing infringements to an end – Decision by the Commission that commitments assumed under Article 9 of Regulation No 1/2003 are to be made binding – Misuse of powers – None

    (Council Regulation No 1/2003, Art. 9(1))

    (see paragraphs 448-451, 459-470, 506-510)

12. Competition – Administrative procedure – Bringing infringements to an end – Decision by the Commission that commitments assumed under Article 9 of Regulation No 1/2003 are to be made binding – Advisory Committee on Restrictive Practices and Dominant Positions – Obligation to consult – Essential procedural requirement – Scope – No infringement

    (Council Regulation No 1/2003, Arts 9(1) and 14)

    (see paragraph 466)

13. Competition – Administrative procedure – Examination of complaints – Obligations of the Commission –Opening of separate proceedings to handle a complaint containing claims forming the subject matter of another investigation – Whether permissible

    (Council Regulation No 1/2003)

    (see paragraphs 476-479)

14. Competition – Administrative procedure – Statement of objections – Participation of complainants in the procedure – Obligation for the Commission to provide them with a non-confidential version of the statement of objections – Right of complainants to submit observations relating to that document – Scope

    (Commission Regulation No 773/2004, Art. 6(1))

    (see paragraphs 484-499)

Résumé

The General Court dismisses the action brought against a decision by the Commission to make binding on Gazprom commitments proposed by the latter in order to address competition concerns raised by the former in relation to the national markets for the upstream wholesale supply of gas in the countries of eastern and central Europe

The decision to approve those commitments is not vitiated by the procedural or substantive errors claimed by the applicant

Between 2011 and 2015, the European Commission took several measures in order to investigate the functioning of the gas markets in central and eastern Europe. In that context, it launched an investigation into Gazprom PJSC and Gazprom export LLC (together, ‘Gazprom’) in relation to the supply of gas in eight Member States, namely Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland and Slovakia (‘the countries concerned’).

On 22 April 2015, the Commission sent a statement of objections ( 1 ) to Gazprom, claiming that it was abusing its dominant position on the national markets for the upstream wholesale supply of gas in the countries concerned for the purpose of preventing the free flow of gas there in breach of Article 102 TFEU, which prohibits such abuse.

In the statement of objections, the Commission, more specifically, considered that Gazprom’s strategy involved three sets of potentially anticompetitive practices:

In order to resolve those competition issues, Gazprom submitted formal proposed commitments to the Commission and, after receiving observations from interested parties, submitted revised proposed commitments (‘the final commitments’).

In parallel with those proceedings, the applicant lodged a complaint on 9 March 2017, alleging abusive practices by Gazprom, which overlapped to a great extent with the concerns already expressed in the statement of objections. However, the Commission rejected that complaint. ( 2 )

By decision of 24 May 2018 (‘the contested decision’), ( 3 ) the Commission approved and made binding the final commitments proposed by Gazprom and closed the administrative proceedings, in accordance with Article 9 of Regulation No 1/2003. ( 4 )

The applicant brought an action for annulment of that decision before the General Court, arguing that the Commission, in particular, had in a number of respects infringed Article 9 of Regulation No 1/2003 and the principle of proportionality, inasmuch as the commitments were incomplete and insufficient, and also that it had infringed several provisions of the FEU Treaty, in particular inasmuch as the decision was contrary to Article 194 TFEU and the energy-policy objectives of the European Union. ( 5 )

That action has been dismissed by the Eighth Chamber (Extended Composition) of the General Court.

Findings of the Court

The Court finds that the contested decision is not vitiated by any of the procedural or substantive errors raised by the applicant in its six pleas in law.

In particular, first, the Court rejects the plea alleging that the Commission accepted the final commitments even though they do not address the Yamal objections.

In that respect, the Court notes that obligations related to observing the principle of proportionality, in the context of the commitments procedure provided for by Article 9 of Regulation No 1/2003, cannot mean that all the competition concerns set out in a preliminary assessment, including when, as in the present case, that assessment takes the form of a statement of objections, must necessarily be addressed in the commitments proposed by the undertakings concerned. Nevertheless, the Commission was required to justify the absence of commitments addressing the Yamal objections in the present case.

Thus, in accordance with its obligation in that regard, the Commission provided reasons why it had not required such commitments. In that respect, the Commission referred, in particular, to a decision of the Urząd Regulacji Energetyki (the Polish Energy Regulatory Office) adopted in May 2015, which, within the framework of the EU legislation relating to the gas sector, ( 6 ) certified the operator of the Polish section of the Yamal pipeline, Gaz-System S.A., as an independent system operator (‘the certification decision’). Consequently, even if Gazprom had attempted to increase its control over the management of investments regarding the Polish section of the Yamal pipeline, the fact remains that, at the stage of approving the final commitments and in accordance with the certification decision, it was Gaz-System that exercised decisive control over those investments and that, in addition, certain large-scale investments relating to that section had been implemented.

Accordingly, the certification decision was capable of dispelling the concerns on which the Yamal objections were based. Therefore, having regard to the discretion enjoyed by the Commission in the context of accepting commitments under Article 9 of Regulation No 1/2003, that institution was entitled to accept the final commitments, even though they do not include any measure addressing the Yamal objections.

Nor did the Commission, in accepting the final commitments, despite the absence of commitments relating to the Yamal objections, infringe the principle of sincere cooperation. In that regard, the Court rejects the claim that the Commission has prevented the national competition authorities and the national courts from taking action against the practices covered by those objections. While those bodies may not take decisions that would run counter to the contested decision, the Commission did not find that no infringement of EU competition law had taken place. Consequently, that decision is without prejudice to the power of the national competition authorities and the national courts to take steps as regards Gazprom’s conduct in relation to the Yamal objections and their power to apply Articles 101 and 102 TFEU.

Second, the Court rejects the plea calling into question the fact that the Commission accepted the final commitments although those commitments did not adequately address the objections concerning pricing practices. In that regard, Gazprom undertook to introduce, in gas supply contracts of at least three years’ duration entered into with its clients in the five countries concerned, a new procedure for revising the price formulas that determine contractual rates. That new procedure stipulates in particular that those formulas are to be in line with the pricing guidelines included in those commitments and provides for the possibility to refer possible disputes on that issue to an arbitration tribunal established within the European Union. According to the Court, the Commission did not commit a manifest error of assessment in that regard, including in so far as it accepted a commitment that provided for that new revision procedure rather than imposing an immediate change to the pricing formulas in the contracts concerned.

Nor did the Commission err in law in finding in the contested decision that an arbitration tribunal established within the European Union would be obliged to respect and apply EU competition law. In its judgment in Eco Swiss, ( 7 ) the Court of Justice confirmed that Articles 101 and 102 TFEU are public policy provisions which must be applied by national courts of their own motion, those courts being required to grant an application for annulment of an arbitration award if they consider that that award is contrary to those articles. In the light of those considerations and since Regulation No 1/2003 concerns the implementation of Articles 101 and 102 TFEU, the Court rules that national courts may also grant an application for annulment of an arbitration award if they consider that that award is contrary to a commitments decision adopted under Article 9 of Regulation No 1/2003.

Third, the Court rejects the plea calling into question the fact that the Commission accepted the final commitments although those commitments did not adequately address the objections concerning territorial restrictions. According to the Court, the Commission did not commit a manifest error of assessment in that regard, including in so far as concerns the commitment to establish a mechanism to change gas delivery points.

Fourth, the Court rejects the plea that the Commission disregarded the energy-policy objectives of the European Union, as set out in Article 194(1) TFEU.

In that connection, the Court notes that as regards the commitments procedure, the Commission may, in its preliminary assessment, take account of objectives pursued by other provisions of the Treaty, in particular in order to find, on a preliminary basis, that there has been no infringement of the competition rules. However, with regard to the examination of proposed commitments, the Commission is to confine itself to determining, first, whether those commitments address the concerns it has expressed to the undertaking in question and, second, whether that undertaking has proposed less onerous commitments that equally adequately address those concerns, even if the procedure may not lead to a result which is contrary to the specific provisions of the Treaties.

In addition and in any event, the applicant has failed to demonstrate that the final commitments would, as such, be contrary to the energy-policy objectives or the principle of energy solidarity.

Fifth, as regards purported breaches of procedure connected with the handling of the Yamal objections, the Commission, according to the Court, committed no such breach during its consultation with the Advisory Committee on Restrictive Practices and Dominant Positions provided for by Article 14 of Regulation No 1/2003. While consultation with the Advisory Committee is an essential procedural requirement, there can be no question in the present case of conduct on the part of the Commission that prevented that committee from delivering its opinion in full awareness of the facts nor, therefore, of an infringement affecting the legality of the contested decision. In that respect, the Court also rejects the applicant’s argument that the Commission misled the interested parties during the market consultation.

Sixth, the Court rejects the applicant’s arguments alleging infringement of various procedural rights in the handling of its complaint of 9 March 2017 reporting various purportedly abusive practices by Gazprom which overlapped to a large extent with the concerns set out in the statement of objections.

As regards the Commission’s decision not to deal with that complaint as part of the administrative proceedings that were closed by the contested decision, the Court finds that the opening in the present case of separate proceedings to handle the complaint was not in itself improper, taking account of the legitimate grounds put forward by the Commission, which concerned procedural economy and its wish not to delay the investigation of a case that was at an advanced stage by widening its scope.

Nevertheless, the Court states that the opening of separate proceedings to deal with the complaint cannot deprive the applicant of the enjoyment of its right as a complainant to receive a copy of the non-confidential version of the statement of objections and to make known its views in writing in the context of the commitments procedure. In that respect, while the Commission, in conducting the two procedures in parallel, displayed some ambiguity with regard to the applicant’s participation in the commitments procedure and also with regard to its right to receive a copy of the statement of objections and to submit observations relating to that document in the context of that procedure, those circumstances stopped short of affecting the effective exercise of its rights in the procedure in question, which was brought to an end by the contested decision.

( 1 ) In accordance with Article 10 of Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles [101] and [102 TFEU] (OJ 2004 L 123, p. 18).

( 2 ) Commission Decision C(2019) 3003 final of 17 April 2019 rejecting the complaint (Case AT.40497 – Polish gas prices). The action for annulment of that decision was upheld by the General Court in its judgment of 2 February 2022, Polskie Górnictwo Naftowe i Gazownictwo v Commission (Rejection of a complaint) (T‑399/19).

( 3 ) Decision C(2018) 3106 final of the European Commission of 24 May 2018 relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA Agreement (Case AT.39816 – Upstream Gas Supplies in Central and Eastern Europe) (OJ 2018 C 258, p. 6).

( 4 ) Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101] and [102 TFEU] (OJ 2003 L 1, p. 1).

( 5 ) The Republic of Lithuania and the Republic of Poland, inter alia, intervened in these proceedings in support of the form of order sought by the applicant.

( 6 ) Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (OJ 2009 L 211, p. 94).

( 7 ) Judgment of 1 June 1999, Eco Swiss (C‑126/97, EU:C:1999:269).