Keywords
Summary

Keywords

1. Competition – Community rules – Undertaking – Concept – Economic unit

(Art. 81(1) EC)

2. Competition – Community rules – Infringements – Attribution – Legal person responsible for the running of the undertaking at the time of the infringement – Exceptions

(Art. 81(1) EC)

3. Competition – Community rules – Infringement committed by a subsidiary – Attribution to the parent company having regard to the economic and legal links between them

(Art. 81(1) EC)

4. Acts of the institutions – Statement of reasons – Obligation – Scope – Plea based on absence or inadequacy of the statement of reasons – Plea based on inaccuracy of the statement of reasons – Distinction

(Art. 253 EC)

5. Community law – General principles of law – Non-retroactivity of penal provisions – Scope – Competition

(Council Regulations Nos 17, Art. 15(4), and 1/2003, Art. 23(5))

6. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Commission bearing the burden of proving the duration of the infringement

(Art. 81(1) EC; Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(3))

7. Competition – Administrative procedure – Time-limit with regard to proceedings – Point from which time starts to run

(Art. 81 EC; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 25)

8. Acts of the institutions – Statement of reasons – Obligation – Scope

(Art. 253 EC)

9. Competition – Fines – Joint and several liability for payment – Conditions

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

10. Competition – Fines – Joint and several liability for payment – Scope

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

11. Competition – Fines – Joint and several liability for payment – Possibility for each of the debtors to bring an annulment action against such a decision

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

12. Competition – Community rules – Infringements – Attribution – Principle that penalties must be specific to the offender and the offence – Scope

(Art. 81(1) EC)

13. Community law – Principles – Right to effective judicial protection – Enshrined by the European Convention on the Protection of Human Rights reaffirmed by the Charter of Fundamental Rights of the European Union

(Charter of Fundamental Rights of the European Union, Art. 47)

14. Competition – Principles – Commission decision finding an infringement – Effective judicial review of the Commission’s decisions – Independent and impartial court – Unlimited jurisdiction

(Arts 81 EC, 229 EC and 230 EC; Council Regulations Nos 17, Art. 17, and 1/2003, Art. 31)

15. Competition – Community rules – Mandatory

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

16. Competition – Administrative procedure – Decision finding an infringement and imposing a fine – Duty to comply with principle of conferred powers

(Arts 5 EC and 81 EC; EEA Agreement, Art. 53; Council Regulations Nos 17, Art. 15(2), and 1/2003, Arts 7(1) and 23(2))

17. Competition – Administrative procedure – Observance of the rights of the defence – Statement of objections – Provisional nature – Abandonment of objections shown to be unfounded with regard to certain companies involving a deterioration in the position of the company maintained as the addressee of the decision – Admissibility in the light of the exercise by the company of its right to be heard

(Council Regulations Nos 17, Art. 19(1), and 1/2003, Art. 27(1))

18. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Aggravating circumstances – Role of leader or instigator of the infringement – Concept

(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(2); Commission Communication 98/C 9/03, Sections 2 and 3)

19. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Aggravating circumstances – Role of leader of the infringement – Role played successively by various undertakings and companies managing them

(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(2); Commission Communication 98/C 9/03, Section 2)

20. Competition – Fines – Amount – Discretion of the Commission – Judicial review – Unlimited jurisdiction

(Art. 229 EC; Council Regulations Nos 17, Art. 17, and 1/2003, Art. 31)

21. Competition – Fines – Amount – Determination – Criteria – Taking account of the worldwide turnover during the last complete year of the infringement with respect to the goods and services covered by it

(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(2); Commission Communication 98/C 9/03, Section 1A)

Summary

1. In competition law, the term ‘undertaking’ must be understood as designating an economic unit for the purpose of the subject-matter of the infringement in question. In prohibiting undertakings inter alia from entering into agreements or participating in concerted practices which may affect trade between Member States and having as their object or effect the prevention, restriction or distortion of competition within the common market, Article 81(1) EC is aimed at 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.

(see para. 63)

2. In competition matters, in accordance with the principle of personal liability, under which a person can be held liable only for his own acts, it falls, in principle, to the person managing the undertaking when the infringement was committed to answer for that infringement, even if, at the date of the decision finding the infringement, that undertaking is the responsibility or under the management of a different person.

In certain exceptional circumstances, the case‑law accepts that it is possible to derogate from the principle of personal liability under the so-called ‘economic continuity’ criterion, under which an infringement of the rules on competition may be imputed to the economic successor of the legal person which committed it, even where the latter has not ceased to exist on the date of adoption of the decision finding the infringement, in order that the effectiveness of those rules will not be compromised owing to the changes to, inter alia, the legal form of the undertakings concerned.

The Commission is entitled not to use the ‘economic continuity’ criterion and to hold personally liable for the participation of the undertaking in the infringement a parent company which directly managed that undertaking before transferring it to the wholly-owned or majority-owned subsidiaries, until the date on which those subsidiaries and that undertaking were finally transferred to another group.

(see paras 65-66, 72, 78)

3. In competition matters, it is, in principle, for the Commission to demonstrate that the parent company exercises a decisive influence on its subsidiary’s conduct on the market on the basis of factual evidence, including, in particular, any management power which the parent company exerted over its subsidiary. However, 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 implies that the Commission is not required to check whether the parent company has actually exercised that controlling power over its subsidiary. When, in the statement of objections, the Commission indicates its intention to hold a parent company personally liable for an infringement for which its subsidiary was responsible, relying on the presumption of liability which results from the fact that the parent company holds all the capital of that subsidiary, it is for the parent company which intends to dispute the liability attributed to it to produce, during the administrative procedure or, at the latest, before the Court, sufficiently conclusive evidence to rebut the presumption by demonstrating that, despite the parent company holding all of its capital, the subsidiary actually determined its conduct on the market independently.

The Commission must be able to take into account, in the decision finding an infringement, the replies by the undertakings concerned to the statement of objections. In that regard, it must be able not only to accept or reject the arguments of the undertakings concerned but also make its own analysis of the matters put forward by them in order either to abandon such objections as have been shown to be unfounded or to supplement or adapt its arguments both in fact and in law in support of the complaints which it maintains. That is the case where the Commission’s decision is based not only on the presumption of liability resulting from the fact that the parent company holds all the capital in the subsidiaries, but also on facts provided during the administrative procedure and showing that:

– within the group the operative organisation had primacy over the legal structure and the project activities concerned were managed, at the highest level, by the parent company and its predecessors;

– six members of the board of the subsidiary companies had been, simultaneously or consecutively, members of the board of the ultimate parent companies before their transfer to a new group;

– the appointment by the parent company of a new member of the board of its subsidiaries active in the sector supports the finding that the former exercised a decisive influence over the latter and

– as regards the intergroup restructuring operations, the change of business name of subsidiaries active in the sector concerned, taking place immediately after the intergroup transfer, demonstrates their integration into the group.

Likewise, the Commission is entitled to consider that the delegation of commercial functions could not relieve the parent company of its responsibility where it has itself admitted that, at the time of the infringement, it had to approve every proposed bid for the projects at issue above a certain threshold or comprising certain substantial risks for the group.

(see paras 86-87, 91, 97, 116, 144)

4. As regards the duty on the Commission to state reasons, in particular where it adopts a decision finding an infringement of competition rules, the complaint alleging an absence of reasons or inadequacy of the reasons stated must be distinguished from an objection based on the inaccuracy of the grounds of the decision by reason of an error in fact or in the legal assessment. The latter falls within the assessment of the substantive legality of the contested decision and not of essential procedural requirements and cannot therefore constitute an infringement of Article 253 EC.

(see para. 88)

5. The principle that penal provisions may not have retroactive effect is common to all the legal orders of the Member States, is enshrined in Article 7 of the Convention for the Protection of Human Rights and Fundamental Freedoms, and takes its place among the general principles of law whose observance is ensured by the judicature of the European Union. Although Article 15(4) of Regulation No 17 and Article 23(5) of Regulation No 1/2003 provide that Commission decisions imposing fines for infringement of competition law are not of a criminal nature, the Commission is none the less required to observe the general principles of European Union law, and in particular the principle of non-retroactivity, in any administrative procedure capable of leading to fines under competition law.

Such observance requires that the rules on attributing liability to legal and natural persons for infringements of competition law correspond with those laid down at the time when the infringement was committed. Where a number of entities are held personally liable for the participation of one and the same undertaking, for the purposes of competition law, in an infringement, they must be considered to be jointly and severally liable for that infringement. Furthermore, the person who had direct responsibility for or managed the undertaking at the time the infringement was committed, or the person who, because it in fact exercised control over the undertaking and determined the undertaking’s conduct on the market, indirectly managed that undertaking at the time when the infringement was committed, may be held personally liable and jointly and severally liable for the participation of one and the same undertaking in an infringement.

(see paras 131-134)

6. With specific regard to the duration of an infringement, the principle of legal certainty requires that, if there is no evidence directly establishing it, the Commission should adduce at least evidence of facts sufficiently proximate in time for it to be reasonable to accept that that infringement continued uninterruptedly between two specific dates. As regards the means of proof which may be used by the Commission in that respect, it is normal for the activities which the anti-competitive practices and agreements entail to take place clandestinely, for meetings to be held in secret, most frequently in a non-member country, and for the associated documentation to be reduced to a minimum. Even if the Commission discovers evidence explicitly showing unlawful contact between traders, such as the minutes of a meeting, it will normally be only fragmentary and sparse, so that it is often necessary to reconstitute certain details by deduction. In most cases, the existence of an anti‑competitive practice or agreem ent must be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of competition law. In the context of an infringement extending over a number of years, the fact that the agreement is shown to have applied during different periods, which may be separated by longer or shorter periods, has no effect on the existence of the agreement, provided that the various actions which form part of the infringement pursue a single purpose and fall within the framework of a single and continuous infringement.

It follows that, in so far as, taken as a whole, those agreements, with regard to their date of entry into force and their period of validity, the Commission was entitled to find that those agreements constituted indicia that the infringement continued, uninterrupted, during the period in question. Thus, the proof of repeated manifestations of the cartel, and the set of indicia, gathered by the Commission, that the activities in which the undertaking in question participated in the context of the cartel continued throughout the period in question must be regarded as sufficient evidence that the cartel continued, uninterrupted, between the dates adopted by the Commission’s decision.

(see paras 164-166, 176-177)

7. Pursuant to Article 25 of Regulation No 1/2003, the Commission’s power to impose a fine for infringement of Article 81 EC and Article 53 of the Agreement on the European Economic Area is limited to five years. Time is to begin to run on the day on which the infringement is committed. However, in the case of continuing or repeated infringements, time is to begin to run on the day on which the infringement ceases.

(see para. 188)

8. The Commission cannot be criticised for not having given specific reasons for the fine imposed jointly and severally on two companies, in the event of infringement of the competition rules, in the light of the fact that those companies no longer formed a single economic unit on the date when the contested decision was adopted, since it is apparent from the contested decision that the Commission does not regard that fact as prohibiting the imposition of a fine jointly and severally on them. The Commission is not required to include, in its decision, specific reasons concerning the assessment of aspects which seem to it manifestly irrelevant or insignificant or plainly of secondary importance for its assessment.

(see para. 200)

9. Joint and several liability for the payment of fines on account of an infringement of Article 81 EC or Article 53 of the Agreement on the European Economic Area is a legal effect which follows as a matter of law from the substantive provisions of those articles.

Joint and several liability of a number of persons for payment of a fine on account of an undertaking’s participation in an infringement of Article 81 EC and Article 53 of the EEA Agreement follows from the fact that each of them can be held personally liable for the participation of that undertaking in the infringement. The unitary conduct of the undertaking on the market justifies the fact that, for the purposes of competition law, the companies or, more generally, the persons which can be held personally liable, may be held jointly and severally liable. Joint and several liability for the payment of fines 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 pursued generally by competition rules and respects the principle of non bis in idem which is a fundamental principle of EU law, also enshrined in Article 4 of Protocol No 7 to the European Convention on Human Rights, which precludes penalising more than once, for the same infringement of competition law, the same conduct of an undertaking on the market through the persons which may be held personally liable for that conduct.

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.

(see paras 204-206)

10. In so far as the plea alleging breach of the principle of legal certainty can be interpreted as a plea that the rules on joint and several liability for the payment of fines in the event of an infringement of competition rules are illegal, on the ground that they are the source of uncertainty as regards the payment of a fine, the determination of which debtor is obliged to pay and the legal position of other debtors who are jointly and severally liable, that plea seeks a ruling on the very legality of the system of ‘joint and several liability for the payment of fines’ in competition law and a determination whether the resultant rights and obligations can be known with sufficient precision by companies which are fined.

In that regard, like the concept of ‘undertaking’ for the purposes of competition law, of which it is merely an ipso jure effect, the concept of ‘joint and several liability for the payment of fines’ is an autonomous concept which must be interpreted by reference to the objectives of the competition law system of which it forms a part and, where necessary, by reference to the general principles which deriving from the national legal systems as a whole. In the absence of a contrary indication in the decision by which the Commission has imposed a fine jointly and severally on a number of companies for an infringement by an undertaking, that decision attributes that infringement to them in equal measure. It has, furthermore, already been held that companies which are jointly and severally liable to pay a fine are required to pay a single fine, the level of which is calculated by reference to the turnover of the relevant undertaking.

It follows that each company is liable to pay the whole of the fine with regard to the Commission and that payment by one of them releases all of them from their obligation vis‑à‑vis the Commission. Companies on which a fine has been imposed jointly and severally and which, unless otherwise specified in the decision imposing the fine, incur 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. Accordingly, where a company, against which the Commission proceeds, pays the whole of the fine, it may, on the basis of that Commission decision, make a claim for recovery against each of the other jointly and severally liable debtors in respect of its share. While the decision by which a number of companies are held jointly and severally liable for the payment of a fine thus does not enable it to be determined, from the outset, which of those companies will actually be required to pay the fine to the Commission, it does not prevent each of those companies from knowing, unambiguously, the share of the fine which will be its own share, or from bringing an action against the other jointly and severally liable debtors for recovery from them of the amounts which it has paid in excess of its share.

(see paras 213, 215)

11. Joint and several liability for the payment of fines in competition law does not hinder the right of each of the penalised companies to bring an action for annulment of the decision by which the Commission imposed the fine on them for which they are jointly and severally liable.

(see para. 217)

12. The principle that penalties must be specific to the offender and the offence, which is applicable in any administrative procedure that may lead to the imposition of sanctions under competition law, requires that a person is penalised only for acts imputed to him individually. That is the case where two companies have been penalised, on account of the participation of an undertaking in an infringement, for acts which have been attributed to them individually by the Commission, on account of their responsibility in, directly or indirectly, managing that undertaking.

(see paras 219-220)

13. The requirement of judicial review constitutes one of the general principles of EU law stemming from the constitutional traditions common to the Member States and has also been enshrined in Articles 6 and 13 of the European Convention on Human Rights. The right to an effective remedy is, moreover, reaffirmed in Article 47 of the Charter of Fundamental Rights of the European Union.

(see para. 224)

14. The requirement for effective judicial review applies to any Commission decision that finds and punishes an infringement of competition law. Pursuant to Article 17 of Regulation No 17, and Article 31 of Regulation No 1/2003, the Court has unlimited jurisdiction in relation to actions brought against decisions whereby the Commission fixes or has fixed a fine and it may cancel, reduce or increase the fine imposed.

In the context of actions based on Article 230 EC, the review of the legality of a Commission decision finding an infringement of competition law and imposing a fine in that respect on the natural or legal person concerned must be regarded as effective judicial review of that decision. The scope of the review carried out by the judicature of the European Union and, therefore, the effectiveness of actions brought against decisions in which the Commission finds an infringement of the competition rules and imposes a fine are strengthened by the unlimited jurisdiction granted to the General Court in that area. More than a simple review of legality, which merely permits dismissal of the action for annulment or annulment of the contested measure, the unlimited jurisdiction conferred on the judicature of the European Union authorises it to vary the contested measure, even without annulling it, by taking into account all of the factual circumstances, so as to amend, for example, the amount of the fine.

(see paras 225-227)

15. Article 81 EC and, by analogy, Article 53 of the Agreement on the European Economic Area (EEA), are public policy provisions, essential for the accomplishment of the tasks entrusted to the European Community and to the EEA, with the result that the nature of the liability and the penalty incurred by companies, where there has been an infringement of those provisions, cannot be left freely to those companies.

(see para. 229)

16. Under Article 5 EC, the European Community can act only within the limits of the competences conferred upon it by the EC Treaty and of the objectives assigned to it therein. It has therefore only those powers which have been conferred upon it.

Where the Commission opens a proceeding in order to adopt a decision finding an infringement of Article 81 EC and Article 53 of the Agreement on the European Economic Area, it alone is competent, pursuant to Article 15(2) of Regulation No 17, or Article 7(1) and Article 23(2) of Regulation No 1/2003, to find that infringement and impose fines on the undertakings which, either intentionally or negligently, participated in that infringement. The Commission cannot delegate to third parties powers which have thus been conferred on it by the provisions cited without thereby breaching the principle of conferred powers.

It cannot be considered that in a given case the Commission delegated to a national court or an arbitration panel some of the powers conferred on it to find and penalise such infringements, since the Commission determined, in the decision adopted in the same case, the respective share of liability of two separate companies in the participation of the undertaking concerned in the infringement found and, therefore, their respective shares of the amount of the fine for which they are jointly and severally liable to the Commission.

(see paras 233-234, 236)

17. The statement of objections constitutes a preparatory document containing assessments of fact and law which are purely provisional. For that reason, the Commission may, and even must, take into account the factors emerging from the administrative procedure in order, inter alia, to abandon such objections as have been shown to be unfounded. If a company penalised for infringements of competition law was in a position to properly make known its point of view on the abandonment by the Commission, in the contested decision, of a complaint that the latter had previously made against other companies, to hold them jointly and severally liable with the first company for the participation of one and the same undertaking in an infringement, before the adoption of that decision, the rights of the defence have not been breached on account of the inconsistency between the statement of objections and the contested decision.

(see paras 248-249, 262)

18. The role of ‘ringleader’ played by one or more undertakings in a cartel must be taken into account for the purposes of calculating the fine, since the undertakings which have played such a role must bear particular responsibility by comparison with the other undertakings. In order to be characterised as a leader, the undertaking must have represented a significant driving force in the cartel. That is the case where an undertaking has played the role of ringleader by taking on the functions of ‘European Secretary’, functions which conferred on it the role of leader in coordinating the cartel and, in any event, in its actual functioning, and, more specifically when the ‘European Secretary’ was the point of contact between members of the cartel and played a pivotal role in its actual functioning, in that it facilitated the exchange of information within the cartel, that it bundled, compiled and exchanged with the other members of the cartel essential information on its functioning and, in particular, information concerning certain particularly important projects, in that it acted as secretariat for the working groups and that from time to time it amended the codes intended to conceal those meetings and contacts.

(see paras 280, 283, 287)

19. In competition matters, in the case of an infringement over a long period during which different undertakings, managed by various companies, have successively played, for well‑established periods, the role of leader in the infringement, the principles of equal treatment and proportionality require that the companies which managed one or more undertakings which, under their management, played the role of ‘leader in the infringement’ should have a different increase in the basic amount of their fine where the period during which the undertakings under their management played that role is substantially different. The role of leader relates to the functioning of the cartel and that, unlike the role of instigator of the cartel, is bound to occur over a certain period. Therefore, account must be taken of the fact that a company which managed one of the undertakings which participated in the cartel can be found liable for being the driving force for that undertaking in the functioning of the cartel for, at most, a little over one quarter of the period of the infringement, while another company which managed a different undertaking participating in the cartel can be found liable for being the driving force in the functioning of the cartel during almost three quarters of the period of the infringement.

It follows that the Commission has breached the principles of equal treatment and proportionality by imposing an identical increase in the basic amount of the fine on the companies which played, via the undertakings they directed, the role of leader in the cartel, although the periods during which the relevant undertaking(s) carried out, under their management, the duties of leader of the cartel were substantially different.

However, even if the Commission had unlawfully applied criteria concerning the classification of an undertaking as leader in the infringement, by not classifying an undertaking, despite the significant role which that undertaking played in the cartel, such an unlawful application, in favour of a third party, would not justify upholding the grounds based on failure to comply with the principles of equal treatment and non-discrimination.

(see paras 307-308, 311-312)

20. By virtue of the unlimited jurisdiction conferred by Article 17 of Regulation No 17 and Article 31 of Regulation No 1/2003 the judicature of the European Union is empowered, in addition to carrying out a mere review of lawfulness of the penalty, to substitute its own appraisal for that of the Commission and, consequently to cancel, reduce or increase the fine imposed where the question of the amount of the fine is before it. In that appraisal the increase related to the role of leader in the infringement played by the undertaking in question must be set at a level which guarantees its deterrent effect.

(see paras 318-319)

21. When imposing fines on several companies for the participation of undertakings, under their management, in an infringement of the competition rules and the determination of their respective amounts, the Commission does not deviate from the calculation method laid down in the Guidelines for the calculation of fines in Article15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, does not exceed the legal framework for penalties established by Article 15 of Regulation No 17 and Article 23 of Regulation No 1/2003 and does not breach the principle of proportionality by deciding to refer, in principle, to the worldwide turnover in relation to the projects at issue achieved by each undertaking in the last full year of the infringement, in order to assess the relative size and economic power of each undertaking at the time of the infringement. That is the case, in particular, where the Commission considers that, given the global character of a cartel, it is appropriate to take the share of worldwide turnover in relation to the projects covered by the cartel held by each undertaking in the last full year of the infringement as the basis for comparison of the relative significance of each undertaking, that basis giving the most appropriate picture of the capacity of each undertaking to cause significant damage to other operators in the European Economic Area and to give an indication of its contribution to the effectiveness of the cartel as a whole, or conversely of the instability which have affected the cartel had it not participated.

(see paras 360, 362)