Keywords
Summary

Keywords

1 Procedure - Application initiating proceedings - Defence - Reply - Procedural requirements - Summary of the pleas in law on which the application is based - Pleas in law not set out in the application or other written pleadings - General reference made to other documents - Inadmissible

(Rules of Procedure of the Court of First Instance, Arts 44(1)(c), 46(1)(b) and 47(1))

2 Procedure - Absolute bar to proceeding with an action - Court may consider of its own motion whether any such bar exists - Cases in which new pleas in law are put forward in the course of the proceedings

(Rules of Procedure of the Court of First Instance, Arts 48(2) and 113)

3 Procedure - Res judicata - Cases in which final judgment in a dispute is given on appeal by the Court of Justice - Scope

(EC Statute of the Court of Justice, Art. 54, first para.)

4 Competition - Administrative proceedings - Commission decision, finding an infringement, adopted after annulment of an earlier decision on account of a procedural defect - Principle of non bis in idem - Whether breached - No such breach

(Treaty on European Union, Art. F(2))

5 Community law - Principles - Fundamental rights - Observance ensured by the Community judicature - European Convention on Human Rights taken into consideration

(EC Treaty, Arts 178 and 215, second para.; Council Regulation No 17)

6 Competition - Administrative proceedings - Obligations of the Commission - Action to be taken within a reasonable time - Criteria of assessment - Breach - Consequences

(EC Treaty, Arts 85, 173 and 189)

7 Actions for annulment - Judgment annulling a measure - Effects - Annulment of a Commission decision finding that the competition rules have been infringed - Effects vis-à-vis addressees who have not brought proceedings - None

(Council Regulation No 17, Art. 19(1); Commission Regulation No 99/63)

8 Actions for annulment - Judgment annulling a measure - Effects - Commission decision finding that the competition rules have been infringed - Annulled on account of a procedural defect occurring at the final stage of its adoption - Measures preparatory to that decision not affected

(EC Treaty, Arts 173 and 184)

9 Competition - Administrative proceedings - Hearings - Annulment, on account of a procedural defect, of a Commission decision finding an infringement - Measures preparatory to that decision not affected - New decision - Whether obligatory to hold another hearing - Conditions

(1993 Rules of Procedure of the Commission, Art. 16, first para.)

10 Plea of illegality - Scope - Measures in respect of which a plea of illegality may be raised - Internal rules of an institution

(Council Regulation No 1, Art. 3; Commission Regulation No 99/63, Art. 2(1))

11 Acts of the institutions - Authentication of measures adopted - Detailed rules - Internal rules of the Commission

(EC Treaty, Art. 173; Council Regulation No 17, Art. 14(3))

12 Community law - Principles - Whether there is a principle requiring continuity in the composition of administrative bodies - No such principle

(Council Regulation No 17, Art. 14(2))

13 Competition - Administrative proceedings - Rules governing languages - Annexes to the statement of objections - To be available in the original language

(Council Regulation No 17, Art. 11)

14 Competition - Administrative proceedings - Observance of the rights of the defence - Whether the parties involved in a proceeding are entitled to have sight of the report of the hearing officer and to comment thereon - No such right

(Council Regulation No 17, Arts 14 and 20(1))

15 Actions for annulment - Actionable measures - Investigation decision pursuant to Article 14 of Regulation No 17 - Conditions governing admissibility

(EC Treaty, Art. 85(1); Council Regulation No 17)

16 Competition - Administrative proceedings - Powers of the Commission in investigations - Investigations carried out pursuant to an authorisation - Protection against arbitrary or undue interference by public authorities - Conditions

(Commission Regulation No 99/63, Art. 4)

17 Community law - Principles - Rights of the defence - Observance thereof during administrative proceedings - Competition - Decision to request information, addressed to an undertaking - Right to refuse to provide an answer which might involve an admission of an infringement

(EC Treaty, Art. 85(1))

18 Competition - Administrative proceedings - Powers of the Commission in investigations - Purposes for which information acquired during an investigation may be used - Limits

(EC Treaty, Art. 85(1))

19 Competition - Agreements, decisions and concerted practices - Proof of participation - Refusal or inability of an undertaking to comply with requests for information - Does not constitute proof

(EC Treaty, Art. 85(1))

20 Competition - Administrative proceedings - Statement of objections - Whether additional documents may subsequently be sent to the parties - Conditions - Observance of the rights of the defence

(EC Treaty, Art. 85(1))

21 Competition - Agreements, decisions and concerted practices - Complex infringement comprising elements both of an agreement and of a concerted practice - Classified singly as an `agreement and/or concerted practice' - Whether permissible - Consequences as to the evidence required

(EC Treaty, Art. 85(1))

22 Competition - Agreements, decisions and concerted practices - Concerted practice - Concept - Coordination and cooperation incompatible with the obligation on each undertaking to determine its market conduct independently

(EC Treaty, Art. 85(1))

23 Competition - Agreements, decisions and concerted practices - Concerted practice - Parallel market conduct - Presumption of concerted practice - Provision of evidence of concerted action

(Council Regulation No 17)

24 Competition - Agreements, decisions and concerted practices - Whether an undertaking may be held responsible for an overall cartel - Criteria

(Council Regulation No 17)

25 Competition - Community rules - Infringements - Attribution of responsibility - Legal person responsible for the operation of the undertaking at the material time - Where that person has ceased to exist - Liability to be attributed to the legal person who has become responsible

(Council Regulation No 2988/74, Art. 3)

26 Competition - Community rules - Infringement by a subsidiary - Parent company may be held responsible - Conditions

(EC Treaty, Art. 190; Council Regulation No 17, Art. 15)

27 Competition - Administrative proceedings - Access to the file - Purpose - Observance of the rights of the defence - Utility of documents for the defence - Assessent of utility by the Commission alone - Not permissible

(Council Regulation No 17, Art. 15)

28 Competition - Administrative proceedings - Observance of the rights of the defence - Failure to give proper access to the file - Consequences

(Council Regulation No 17, Art. 3(1))

29 Competition - Administrative proceedings - Limitation periods in proceedings - Suspension of the limitation period - Consequential status of a Commission decision imposing a fine

(Council Regulation No 2988/74, Art. 3)

30 Acts of the institutions - Statement of reasons - Obligation - Scope - Decision imposing fines for infringement of the competition rules - Desirable that the method of calculating the fine be disclosed

(EC Treaty, Art. 190; Council Regulation No 17, Art. 15)

31 Competition - Fines - Determined on the basis of an undertaking's own conduct - Where another trader has not been penalised - Irrelevant

(Council Regulation No 17, Art. 15)

32 Competition - Administrative proceedings - Cessation of the infringements - Powers of the Commission - May direct undertakings to desist - Limits

(Council Regulation No 17, Art. 3(1))

Summary

1 Under Article 44(1)(c) of the Rules of Procedure of the Court of First Instance, all applications must indicate the subject-matter of the proceedings and include a brief statement of the grounds relied on. The information given must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to give a ruling, if appropriate, without recourse to other information.

In order to ensure legal certainty and the sound administration of justice, for an action to be admissible the essential facts and law on which it is based must be apparent from the text of the application itself, even if only stated briefly, provided the statement is coherent and comprehensible. Although specific points in the text of the application can be supported and completed by references to specific passages in the documents attached, a general reference to other documents cannot compensate for the lack of essential information in the application itself, even if those documents are attached to the application. Moreover, it is not for the Court to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental purpose.

That interpretation of Article 44(1)(c) of the Rules of Procedure also applies to the conditions for admissibility of a reply, which according to Article 47(1) of the Rules of Procedure is intended to supplement the application; pursuant to Article 46(1)(b) of the Rules of Procedure, Article 44(1)(c) also applies to the conditions for admissibility of the defence.

2 Under Article 113 of its Rules of Procedure, the Court of First Instance may of its own motion consider whether there is any absolute bar to proceeding with an action. Accordingly, pleas in law which are set out for the first time at the reply stage and which are not based on matters of law or of fact coming to light in the course of the procedure, must be declared inadmissible under Article 48(2) of those Rules of Procedure.

3 The principle of res judicata extends only to the matters of fact and law actually or necessarily settled by a judicial decision.

The second sentence of the first paragraph of Article 54 of the Statute of the Court of Justice does not mean that, where the Court, in the exercise of its appellate jurisdiction, itself gives final judgment in a dispute by accepting one or more pleas raised by the appellants, it automatically settles all points of fact and law raised by the latter in the context of the case.

4 Where the Court of Justice has annulled a Commission decision - finding that the competition rules have been infringed and imposing fines - because it has not been duly authenticated, without disposing of the substantive pleas in law raised by the applicant undertakings, and the Commission then adopts a fresh decision finding against those undertakings, thus merely remedying the formal defect found by the Court, the Commission cannot be said to be taking action against the applicants twice in relation to the same set of facts or to be penalising them twice in respect of the same infringement, contrary to the principle of non bis in idem.

5 Fundamental rights form an integral part of the general principles of Community law whose observance the Community judicature ensures. For that purpose, the Court of Justice and the Court of First Instance rely on the constitutional traditions common to the Member States and the guidelines supplied by international treaties and conventions on the protection of human rights on which the Member States have collaborated or to which they are signatories. The European Convention on Human Rights, to which express reference is made in Article F(2) of the Treaty on European Union, has special significance in that respect.

6 Infringement of the general principle of Community law that decisions following administrative proceedings relating to competition policy must be adopted within a reasonable time justifies annulment of a Commission decision only in so far as it also constituted an infringement of the rights of defence of the undertakings concerned. Where it has not been established that the undue delay has adversely affected the ability of the undertakings concerned to defend themselves effectively, failure to comply with the principle that the Commission must act within a reasonable time cannot affect the validity of the administrative procedure and can therefore be regarded only as a cause of damage capable of being relied on before the Community judicature in the context of an action based on Article 178 and the second paragraph of Article 215 of the Treaty.

Whether the time taken for a procedural stage is reasonable must be assessed in relation to the individual circumstances of each case, and in particular its context, the conduct of the parties during the procedure, what is at stake for the various undertakings concerned and its complexity.

7 A Commission decision finding that several undertakings have infringed Article 85 of the Treaty and imposing a fine on each of them must be treated as a series of individual decisions even though it is drafted and published in the form of a single decision.

Accordingly, if an addressee decides to bring an action for annulment, the Community judicature has before it only the elements of the decision which relate to that addressee. The unchallenged elements of the decision relating to other addressees, on the other hand, do not form part of the subject-matter of the dispute which the Court is called on to resolve. Consequently, the decision can be annulled only as regards the addressees who have been successful in such actions.

Where, on grounds of procedural irregularity, the Court has annulled a decision concerning competition matters, and the Commission subsequently addresses a fresh decision solely to the addressees of the annulled decision who were successful in their actions, the Commission does not thereby infringe the principle of non-discrimination.

8 Where a Commission decision finding that the competition rules have been infringed is annulled by the Court of Justice on account of a procedural defect which occurred at the final stage of its adoption, and which affects only the manner in which it was finally adopted - for instance, lack of due authentication - the annulment does not affect the validity of the measures preparatory to that decision, taken before the stage at which the defect was found.

9 Given that, where a Commission decision finding that the competition rules have been infringed is annulled by the Court of Justice on account of a procedural defect relating to lack of due authentication, the annulment does not affect the validity of the measures preparatory to that decision, taken before the stage at which the defect occurred, a new hearing of the undertakings concerned is required, prior to the adoption by the Commission of a new decision, only to the extent that the latter contains objections which are new in relation to those set out in the decision annulled. In that regard, the fact that the new decision is adopted in factual and legal circumstances different from those which existed at the time when the original decision was adopted does not in any sense mean that the new decision contains new objections.

10 Article 184 of the Treaty expresses a general principle conferring upon any party to proceedings the right to challenge, for the purpose of obtaining the annulment of a decision of direct and individual concern to that party, the validity of previous acts of the institutions which form the legal basis of the decision under challenge, if that party was not entitled under Article 173 of the Treaty to bring a direct action challenging those acts, by which it was thus affected without having been in a position to seek to have them declared void.

Article 184 of the Treaty must therefore be given a wide interpretation in order to ensure effective review of the legality of the acts of the institutions. Its scope must extend to acts of the institutions which, although not in the form of a regulation, produce similar effects. In particular, it must extend to internal rules of an institution which, although they do not constitute the legal basis of the contested decision, determine the essential procedural requirements for adopting that decision and thus ensure legal certainty for those to whom it is addressed.

Consequently, in the context of an action for annulment of a Commission decision on a competition matter, those of the Commission's Rules of Procedure which are designed to ensure the protection of individuals may be the subject-matter of a plea of illegality. However, there must be a direct legal connection between the contested individual decision and the rules of procedure alleged to be unlawful.

11 The rules governing authentication of Commission measures, which are laid down in the first paragraph of Article 16 of its 1993 Rules of Procedure, constitute in themselves a sufficient guarantee for determining, in case of dispute, whether texts notified or published correspond perfectly with the text adopted by the college and thus with the intention of their author. Since that text is annexed to the minutes, and the first page of the minutes is signed by the President and the Secretary-General, there is a link between those minutes and the documents which they cover which allows certainty as to the exact content and form of the college's decision.

12 There is no general principle of Community law requiring continuity in the composition of an administrative body handling a procedure which may lead to a fine.

13 The annexes to the statement of objections not emanating from the Commission should be regarded not as `documents' within the meaning of Article 3 of Council Regulation No 1 but as supporting evidence on which the Commission relies. They are therefore to be brought to the attention of the addressee as they are. The Commission thus commits no infringement of Article 3 of Council Regulation No 1 by communicating those annexes in their original language versions.

14 The rights of the defence do not require that undertakings involved in a proceeding under Article 85(1) of the Treaty be able to comment on the report of the hearing officer. Observance of the rights of the defence is sufficiently assured where the various authorities which contribute to the final decision are correctly informed of the arguments of the undertakings in reply to the objections communicated to them by the Commission and the evidence submitted by the Commission in support thereof. The report of the hearing officer is a purely internal Commission document, which contains only advice, and whose purpose is not to supplement or correct the arguments of the undertakings, or to formulate new objections or to supply new evidence against them.

15 Decisions to investigate under Article 14(3) of Regulation No 17 are in themselves measures which may be the subject-matter of an action for annulment on the basis of Article 173 of the Treaty.

Accordingly, in an action for annulment of a final decision adopted by the Commission pursuant to Article 85(1) of the Treaty, an undertaking cannot plead the illegality of an investigation decision addressed to it, and which it has not challenged within the time-limits. It may, on the other hand, in the context of such an action and in so far as documents obtained by the Commission are used against it, challenge the legality of investigation decisions addressed to other undertakings, whose actions to challenge the legality of those decisions directly, if brought, may or may not have been admissible. Likewise, in an action contesting the Commission's final decision, the undertaking may challenge the manner in which the investigation procedures were conducted.

16 It is apparent from Article 14(2) of Regulation No 17 that investigations carried out on a simple authorisation are based on the voluntary cooperation of the undertakings. Where an undertaking has in fact cooperated in an investigation carried out on authorisation, a plea alleging undue interference by the public authority is unfounded, in the absence of any evidence that the Commission went beyond the cooperation offered by the undertaking.

17 Observance of the rights of the defence is a fundamental principle which must be respected, not only in administrative proceedings which may lead to the imposition of penalties, but also in preliminary inquiry procedures, such as requests for information pursuant to Article 11 of Regulation No 17, which may be decisive in providing evidence of the unlawful nature of conduct engaged in by undertakings.

In order to ensure the effectiveness of Article 11(2) and (5) of Regulation No 17, the Commission is entitled to compel an undertaking to provide all necessary information concerning such facts as may be known to it and to disclose to the Commission, if necessary, such documents relating thereto as are in its possession, even if the latter may be used to establish, against it or another undertaking, the existence of anti-competitive conduct. Nevertheless, the Commission may not, by a decision to request information, undermine the undertaking's defence rights. Thus it may not compel an undertaking to provide it with answers which might involve an admission on its part of the existence of an infringement which it is incumbent upon the Commission to prove.

18 Having regard to Articles 14 and 20(1) of Regulation No 17, information obtained during investigations must not be used for purposes other than those indicated in the authorisation or decision under which the investigation is carried out. That requirement is intended to protect both professional secrecy and the defence rights of undertakings.

On the other hand, it cannot be concluded that the Commission is barred from initiating an inquiry in order to verify or supplement information which it happened to obtain during a previous investigation if that information indicates the existence of conduct contrary to the competition rules in the Treaty. Moreover, the Commission, having obtained documents in one matter and used them as evidence to open another proceeding, is entitled, on the basis of authorisations or decisions concerning that second proceeding, to request fresh copies of those documents and to use them as evidence in the second matter.

The contrary approach would go beyond what is required to safeguard professional secrecy and the rights of the defence, and would thus constitute an unjustified hindrance to the Commission in the accomplishment of its task of ensuring compliance with the competition rules in the common market.

19 The refusal to reply to requests for information made by the Commission pursuant to Article 11 of Regulation No 17, or the impossibility of replying to them, cannot in itself constitute proof of an undertaking's participation in an agreement.

20 There is no provision which prevents the Commission, after it has communicated the statement of objections, from sending the parties to a competition proceeding fresh documents which, in its view, support its argument, subject to giving the undertakings the necessary time to submit their views on the subject. Accordingly, the fact that a document was neither mentioned in the statement of objections nor annexed thereto cannot itself affect the legality of the decision.

21 In the context of a complex infringement which involves many producers seeking over a number of years to regulate the market between them, the Commission cannot be expected to classify that infringement precisely, for each undertaking and for any given moment, as either an agreement or a concerted practice, since, in any event, both those forms of infringement are covered by Article 85 of the Treaty.

The Commission is therefore entitled to classify that type of complex infringement as an agreement `and/or' concerted practice, inasmuch as the infringement includes elements which are to be classified as an `agreement' and elements which are to be classifed as a `concerted practice'. In such a situation, the dual classification must be understood not as requiring simultaneous and cumulative proof that every one of those factual elements reveals the factors constituting an agreement and a concerted practice, but rather as designating a complex whole that includes factual elements of which some have been classified as an agreement and others as a concerted practice within the meaning on Article 85(1) of the Treaty, which does not provide for any specific classification in respect of that type of complex infringement.

22 Although Article 85 of the Treaty distinguishes between `concerted practices', `agreements between undertakings' and `decisions by associations of undertakings', the object is to bring within the prohibitions laid down in that provision a form of coordination between undertakings which, without having reached the stage where an agreement properly so-called has been concluded, knowingly substitutes practical cooperation between them for the risks of competition. The criteria of coordination and cooperation, far from requiring the elaboration of an actual `plan', must be understood in the light of the concept inherent in the Treaty provisions relating to competition, according to which each economic operator must determine independently the policy which he intends to adopt on the common market. Although that requirement of independence does not deprive economic operators of the right to adapt themselves intelligently to the existing and anticipated conduct of their competitors, it strictly precludes any direct or indirect contact between such operators with the object or effect either to influence the conduct on the market of an actual or potential competitor or to disclose to such a competitor the course of conduct which they themselves have decided to adopt or which they contemplate adopting on the market.

23 Where the reasoning which has led the Commission to find that the competition rules have been infringed is based on the supposition that the facts established cannot be explained otherwise than by concerted action between undertakings, it is sufficient for the applicants to prove circumstances which cast the facts established by the Commission in a different light and thus allow another explanation of the facts to be substituted for the one adopted by the Commission.

On the other hand, where the evidence of concerted action is based not on a mere finding of parallel market conduct but on documents which show that the practices were the result of concerted action, the burden is on the undertakings concerned not merely to submit an alleged alternative explanation for the facts found by the Commission but to challenge the existence of those facts established on the basis of the documents produced by the Commission.

24 An undertaking may be held responsible for an overall cartel - consisting, for instance, in the regular organisation over the years of meetings of rival producers, the aim of which was to establish illicit practices intended to organise artificially the functioning of a market - even though it is shown to have participated directly only in one or some of its constituent elements if it knew (or it is established that it must have known) that the collusion in which it participated was part of an overall plan intended to distort competition and that the overall plan included all the constituent elements of a cartel.

25 Where an infringement of Article 85(1) of the Treaty is found to have been committed, it is necessary to identify the natural or legal person who was responsible for the operation of the undertaking at the time, so that it can be made answerable for it.

Where, however, between the infringement and the time when the undertaking in question must answer for it, the person responsible for the operation of that undertaking has ceased in law to exist, it is necessary, first, to establish the combination of physical and human elements which contributed to the infringement and then to identify the person who has become responsible for their operation, so as to avoid the result that because of the disappearance of the person responsible for its operation when the infringement was committed the undertaking may evade liability for it.

26 The fact that a subsidiary has separate legal personality is not sufficient to exclude the imputation of its conduct to the parent company, especially where the subsidiary does not determine its market conduct independently but in all material respects carries out the instructions given to it by the parent company.

27 In competition cases, the purpose of providing access to the file is to enable the addressees of statements of objections to examine evidence in the Commission's file so that they are in a position effectively to express their views on the conclusions reached by the Commission in its statement of objections on the basis of that evidence.

Access to the file is one of the procedural safeguards intended to protect the rights of the defence, observance of which is a fundamental principle which requires that the undertaking concerned be afforded the opportunity during the administrative procedure to make known its views on the truth and relevance of the facts, charges and circumstances relied on by the Commission.

In the adversarial proceedings for which Regulation No 17 provides, it cannot be for the Commission alone to decide which documents are of use for the defence. Having regard to the general principle of equality of arms, the Commission cannot be permitted to decide on its own whether or not to use documents against the undertakings concerned, where the latter had no access to them and were therefore unable to take the relevant decision whether or not to use them in their defence.

However, access to the file cannot extend to internal documents of the institution, the business secrets of other undertakings and other confidential information.

28 In the context of an administrative proceeding in a competition case, breach of an undertaking's rights of defence as regards access to the Commission's administrative file does not warrant annulment of a decision finding that there has been an infringement unless the ability of that undertaking to defend itself has been affected by the conditions in which it had access to the Commission's administrative file. In that respect, it is sufficient for a finding of infringement of defence rights for it to be established that non-disclosure of the documents in question might have influenced the course of the procedure and the content of the decision to the applicant's detriment.

Any infringement of the rights of the defence occurring during the administrative procedure cannot be remedied in the proceedings before the Court of First Instance, whose review is restricted to the pleas raised and cannot therefore be a substitute for a thorough investigation of the case in the form of an administrative proceeding.

29 The specific purpose of Article 3 of Regulation No 2988/74 concerning limitation periods in proceedings and the enforcement of sanctions under the rules relating to transport and competition is to enable the limitation period to be suspended where the Commission is prevented from acting for an objective reason not attributable to it and connected precisely with the fact that an action is pending. A Commission decision imposing a fine cannot be regarded as final so long as the statutory period for bringing an action against it continues to run or, in appropriate cases, an action is pending.

30 The statement of reasons required by Article 190 of the Treaty must be appropriate to the measure at issue and disclose clearly and unequivocally the reasoning followed by the institution which adopted it in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to exercise its power of review.

In the case of a decision imposing fines on several undertakings for an infringement of Community competition rules, the scope of the duty to state reasons must be assessed inter alia in the light of the fact that the gravity of the infringement depends on a large number of factors, such as the particular circumstances of the case, its context and the dissuasive effect of fines, and no binding or exhaustive list of the criteria to be applied has been drawn up. The Commission has a discretion when fixing the amount of each fine, and cannot be required to apply a precise mathematical formula for that purpose.

It is certainly desirable, in order to enable undertakings to define their position with full knowledge of the facts, for them to be able to determine in detail, in accordance with such system as the Commission might consider appropriate, the method whereby the fine imposed upon them has been calculated, without their being obliged, in order to do so, to bring court proceedings against the decision.

However, such calculations do not constitute an additional and subsequent ground for the decision, but merely translate into figures the criteria set out in the decision which are capable of being quantified.

31Where an undertaking has acted in breach of Article 85(1) of the Treaty, it cannot escape being penalised altogether on the ground that another trader has not been fined, when that trader's circumstances are not even the subject of proceedings before the Court of First Instance.

32 The application of Article 3(1) of Regulation No 17 may comprise both a prohibition on continuing certain activities, practices or situations which have been found to be unlawful and a prohibition on adopting similar conduct in the future. Since Article 3(1) must be applied with reference to the infringement found, the Commission has the power to specify the extent of the obligations of the undertakings concerned in order to terminate it. Such obligations must not, however, exceed what is appropriate and necessary to attain the objective sought, namely restoration of compliance with the rules infringed.