Keywords
Summary

Keywords

1. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Effect on trade between Member States – Criteria – Restrictive practices extending to the whole of a Member State’s territory – Existence of a strong presumption of an effect

(Art. 81(1) EC)

2. Competition – Agreements, decisions and concerted practices – Effect on trade between Member States – Criteria for assessment – Overall cartel involving most banks in a Member State and a wide range of financial services and products

(Art. 81(1) EC)

3. Competition – Agreements, decisions and concerted practices – Definition of the market – Object

(Arts 81(1) EC and 82 EC)

4. Competition – Community rules – Infringements – Attribution – Legal person responsible for the operation of the undertaking at the time of the infringement – Disappearance

5. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement

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

6. Competition – Fines – Amount – Determination – Criteria – Actual impact on the market

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1A, first indent)

7. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Horizontal price cartel – Very serious infringement

(Art. 81(1) EC; Commission Notice 98/C 9/03)

8. Competition – Fines – Amount – Determination – Placing of the undertakings in different categories – Conditions

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1A, fourth and sixth indents)

9. Competition – Fines – Amount – Determination – Placing of the undertakings in different categories – Conditions

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1A)

10. Competition – Fines – Amount – Determination – Criteria – Attenuating circumstances

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 3)

11. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned – Requirement that conduct has facilitated the finding of the infringement by the Commission

(Council Regulation No 17, Art. 15(2); Commission Notice 96/C 207/04)

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

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

13. Community law – Principles – Rights of the defence – Observance in administrative proceedings – Competition

(Council Regulation No 17, Art. 11(2) and (5))

14. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned – Requirement that conduct has facilitated the finding of the infringement by the Commission

(Council Regulation No 17, Art. 15(2); Commission Notice 96/C 207/04)

15. Competition – Administrative procedure – Statement of objections – Legal nature – Preparatory nature

(Council Regulation No 17)

Summary

1. For an agreement, decision or practice to be capable of affecting trade between Member States, it must be possible to foresee with a sufficient degree of probability, on the basis of a set of objective factors of law or of fact, that it may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States in such a way as to cause concern that it might hinder the attainment of a single market between Member States. Moreover, that effect must not be insignificant. Thus, an effect on intra-Community trade is normally the result of a combination of several factors which, taken separately, are not necessarily decisive. In order to assess whether a cartel has an appreciable effect on trade between Member States, it is necessary to examine it in its economic and legal context.

The fact that a cartel relates only to the marketing of products in a single Member State is not sufficient to preclude the possibility that trade between Member States might be affected. A cartel extending over the whole of the territory of a Member State has, by its very nature, the effect of reinforcing the partitioning of markets on a national basis, thus impeding the economic interpenetration which the EC Treaty is designed to bring about. In the case of such a cartel there is a strong presumption that trade between Member States is affected, which can be rebutted only if an analysis of the characteristics of the agreement and its economic context demonstrates the contrary. The Court of First Instance may therefore find, when exercising its power to assess the facts, that the presumption has not been overturned and is not thereby reversing the burden of proof.

(see paras 36-39, 43)

2. An overall cartel involving most of those operating in the financial sector of a Member State and a wide range of financial services and products, based on an agreement in principle and implemented in the context of separate committee meetings dedicated to specific products, constitutes a single infringement which justifies and necessitates an examination of the extent to which that generalised cartel as a whole was likely to affect intra-Community trade. It is not therefore necessary to consider the aptitude of each individual committee meeting to affect trade between Member States.

(see paras 55-56, 59)

3. The definition of the market plays a different role according to whether Article 81 EC or Article 82 EC is to be applied. Consequently, the definition of the relevant market is of no consequence where the Commission concludes that the agreement in question distorts competition and is liable appreciably to affect trade between Member States.

(see para. 60)

4. When an entity infringes competition rules, it falls to that entity, by virtue of the principle of personal responsibility, to answer for that infringement.

An entity that is not the author of an infringement can nevertheless be penalised for that infringement, if the entity that committed the infringement has ceased to exist in law. When an entity that committed an infringement of the competition rules is subject to a legal or organisational change, that change does not necessarily create a new undertaking free of liability for its predecessor’s infringements of the competition rules, when, from an economic point of view, the two are identical.

Moreover, an undertaking’s anti-competitive conduct can be attributed to another undertaking where it has not decided independently upon its own conduct on the market, but carried out, in all material respects, the instructions given to it by that other undertaking, having regard in particular to the economic and legal links between them. The fact that a subsidiary has separate legal personality does not therefore exclude the possibility that its conduct may be attributed to the parent company.

The Commission is entitled to choose to penalise either the subsidiary that participated in the infringement or the parent company which controlled it during the period covered by the contested decision. It is not obliged first to verify whether the conditions were fulfilled for attribution of the infringement to the parent company of the undertaking that committed the infringement. The Commission cannot be required, as a matter of principle, first to carry out such verification before being entitled to consider taking action against the undertaking that committed the infringement, even if the latter has undergone changes regarding its status as a legal entity. The principle of personal responsibility does not prevent the Commission from considering the possibility of penalising the latter undertaking before investigating whether the infringement might be possibly attributed to the parent company. If the position were otherwise, the Commission’s inquiries would be made considerably more laborious by the need to verify, in each case where there were successive controllers of an undertaking, to what extent the latter’s acts could be imputed to the former parent company.

Furthermore, in a situation where an undertaking which participates in a cartel acquires another undertaking which is also participating in the cartel, it must be noted that the first undertaking knows, when it takes over the second undertaking, that the latter might be the subject of proceedings under Article 81 EC and that, as the holder of rights in respect of that company, it thereby is exposing itself to the consequences of such proceedings in terms of fines.

(see paras 76-83)

5. When determining the amount of fines to be imposed for infringement of the Community competition rules, regard must be had to duration and to all the factors capable of affecting the assessment of the gravity of the infringements. The gravity of an infringement must be assessed in the light of numerous factors, such as the particular circumstances of the case, its context and the dissuasive effect of fines, although no binding or exhaustive list of the criteria to be applied has been drawn up. It is therefore incumbent on the Court of First Instance to review the manner in which the Commission exercised its discretion in relation to those factors. The Court of First Instance does not contradict itself by holding that the Commission may assess overall the gravity of the infringement in relation to all the relevant circumstances, including factors not expressly mentioned in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, or by holding that a horizontal price cartel in an important economic sector cannot escape classification as a very serious infringement.

(see paras 90-93)

6. In observing, when assessing the gravity of an infringement for the purposes of determining the amount of a fine, that a cartel has had an actual impact on the market, citing numerous examples of the implementation of the anti‑competitive agreements in question and stating that, even if those agreements have not always been respected, that does not suffice to undermine the finding that they were implemented and had effects on the market, the Court does not confine itself to a finding that the cartel had been implemented. It cannot therefore be argued that it relied solely on the implementation of the cartel in finding that it had an actual impact on the market.

(see paras 116-118)

7. A horizontal price cartel ranks as a serious infringement within the meaning of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, even in the absence of other restrictions on competition such as partitioning of the markets. Such a cartel, in a sector as important as the banking industry, covering a wide range of banking products and involving the great majority of economic operators, cannot, in principle, escape classification as a very serious infringement, whatever its context.

(see para. 141)

8. When determining the amount of fines for an infringement of Article 81 EC in the banking sector, the fact that the Commission took into account the market shares of banks in the decentralised sectors when it divided the lead institutions within a banking group into different categories, does not constitute imputation of their unlawful conduct to the lead institutions. It is a step designed to ensure that the level of the fines imposed on the lead institutions should adequately reflect the gravity of their unlawful conduct. In order to assess the gravity of that conduct it is necessary, in accordance with the fourth and sixth indents of Section 1A of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty to take account of the actual economic capacity of undertakings to distort competition and their specific weight and therefore the real impact of their unlawful conduct on competition. That makes it necessary for the stable structural links between the lead institutions and the banks in the decentralised sectors, in terms, in particular, of representation and exchange of information, also to be taken into account because, by virtue of those links, the effective economic strength of those companies and therefore their capacity to harm competition is likely to be greater than their own turnover would indicate. If the market shares of the decentralised entities were not taken into account, the deterrent effect of the fine would be likely to be absent. Such a criterion, relating to the banks’ economic power, differs from the criterion of the frequency of participation in the most important meetings, which the Commission may apply when deciding which banks must be the addressees of the final decision.

(see paras 172-177, 214-215)

9. When it divides the members of a cartel into categories in order to determine the starting amount of fines for infringement of the Community competition rules, the Commission may refrain from fixing precise thresholds for the categories which it identifies and indicate ‘guide values’ for the market shares of undertakings placed in the same category. The differences between those guide values must be coherent and objectively justified.

(see paras 189, 191)

10. Whilst it is not excluded that, in certain circumstances, a national legal framework or conduct on the part of national authorities may constitute mitigating circumstances, the approval or tolerance of the infringement by the national authorities cannot be taken into account under that heading where the undertakings in question have the resources available to obtain precise and accurate legal information.

(see paras 228, 230)

11. The Commission enjoys a discretion in deciding whether the information or documents voluntarily provided by undertakings have facilitated its task and whether the undertakings should be granted a reduction under Section D.2 of the Notice on the non-imposition or reduction of fines in cartel cases. Such an appraisal by the Commission is subject only to limited judicial review.

(see paras 248-249)

12. In an appeal against a judgment of the Court of First Instance concerning fines for infringement of Community competition law rules, the purpose of review by the Court of Justice is, first, to examine to what extent the Court of First Instance took into consideration, in a legally correct manner, all the essential factors needed to assess the gravity of a particular course of conduct in the light of Article 81 EC, Article 82 EC and Article 15 of Regulation No 17 and, second, to consider whether the Court of First Instance responded to a sufficient legal standard to all the arguments raised by the applicant with a view to having the fine cancelled or reduced. However, as far as the extent of the reduction of the fine is concerned, it is not for the Court of Justice to substitute, on grounds of fairness, its own assessment for that of the Court of First Instance in the exercise of its unlimited jurisdiction.

Where the Court of First Instance has examined the added value of the documents produced by the applicant, in the context of the Notice on the non-imposition or reduction of fines in cartel cases and then found that it did not justify a greater reduction of its fine, such an assessment of the facts is a matter solely for the Court of First Instance and the Court of Justice cannot substitute its own findings in an appeal.

Moreover, where the Court of First Instance has found that an applicant has been able to submit its observations, by presenting pleas for the reduction of the fine, in relation, in particular, to the Commission’s assessments as to the classification of the infringement, the existence of attenuating circumst ances and its cooperation in the procedure, the Court of Justice is not required, in an appeal, to rule as to whether the Court of First Instance, before exercising its unlimited jurisdiction, was required to invite the applicant to submit its observations on a possible amendment of the fine.

(see paras 254-256, 328-330)

13. In all proceedings in which sanctions, especially fines or penalty payments, may be imposed, observance of the rights of the defence is a fundamental principle of Community law which must be complied with even if the proceedings in question are administrative proceedings. Although, in order to preserve the useful effect of Article 11(2) and (5) of Regulation No 17, the Commission is entitled to compel an undertaking to provide all the necessary information concerning such facts as may be known to it and to disclose to it, if necessary, such documents relating thereto as are in its possession, even if the latter may be used to establish the existence of anti‑competitive conduct by it or another undertaking, it may not, by means of a decision calling for information, undermine the rights of defence of the undertaking concerned. That applies only where the Commission has taken a ‘decision’ within the meaning of Article 11(2) and (5) of Regulation No 17.

(see paras 270-273, 327)

14. A reduction under the Notice on the non-imposition or reduction of fines in cartel cases can be justified only where the information provided and, more generally, the conduct of the undertaking concerned may be considered to demonstrate genuine cooperation on its part. An undertaking that has provided an incomplete statement of facts, which was merely confirmatory and had no added value, cannot therefore rely on such conduct.

Whilst the Commission is required to state the reasons for which it considers that information provided by undertakings under the Leniency Notice constitutes a contribution which may or may not justify a reduction of the fine, it is incumbent on undertakings wishing to contest the Commission’s decision in that regard to show that, in the absence of such information provided voluntarily by the undertakings, the Commission would not have been in a position to prove the essential elements of the infringement and therefore adopt a decision imposing fines.

(see paras 281, 283, 297, 305)

15. The statement of objections is a procedural and preparatory document which, in order to ensure that the rights of the defence may be exercised effectively, delimits the scope of the administrative procedure initiated by the Commission, thereby preventing it from relying on other objections in its decision terminating the procedure in question. It is therefore inherent in the nature of that statement that it is provisional and liable to be changed during the assessment subsequently undertaken by the Commission on the basis of the observations submitted to it by the parties and other findings of fact. The Commission must take into account the factors emerging from the whole of the administrative procedure, in order either to abandon such objections as have been shown to be unfounded or to amend and supplement its arguments, both in fact and in law, in support of the objections which it maintains. Thus, the statement of objections does not prevent the Commission from altering its standpoint in favour of the undertakings concerned. Furthermore, there is no rule that undertakings may not, after receiving the statement of objections and in particular in their response thereto, provide the Commission with decisive information enabling the Commission to grant them a reduction of the fine under the Notice on the non-imposition or reduction of fines in cartel cases.

(see paras 310-313)