JUDGMENT OF THE COURT (Seventh Chamber)

28 November 2019 (*)

(Appeal — Competition — Agreements, decisions and concerted practices — European market for underground and submarine power cables — Market allocation in connection with projects — Fines — Burden of proof — Distortion of the evidence — Public distancing from the cartel)

In Case C‑596/18 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 21 September 2018,

LS Cable & System Ltd, established in Anyang-si (South Korea), represented by S. Spinks and S. Kinsella, Solicitors,

appellant,

the other party to the proceedings being:

European Commission, represented by N. Khan and H. van Vliet, acting as Agents,

defendant at first instance,

THE COURT (Seventh Chamber),

composed of P.G. Xuereb (Rapporteur), President of the Chamber, T. von Danwitz and A. Kumin, Judges,

Advocate General: J. Kokott,

Registrar: A. Calot Escobar,

having regard to the written procedure,

having decided, after hearing the views of the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        By its appeal, LS Cable & System Ltd seeks to have set aside the judgment of the General Court of the European Union of 12 July 2018, LS Cable & System v Commission (T‑439/14, not published, EU:T:2018:451) (‘the judgment under appeal’), by which the General Court dismissed its action seeking, first, the annulment of Commission Decision C(2014) 2139 final of 2 April 2014 relating to proceedings under Article 101 [TFEU] and Article 53 of the [EEA] Agreement (Case AT.39610 — Power cables) (‘the decision at issue’) in so far as it concerns the appellant and, second, a reduction of the fine imposed on it.

 Legal context

2        Article 23(2) and (3) of 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) provides as follows:

‘2.      The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:

(a)      they infringe Article [101] or [102 TFEU] …

…

3.      In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’

 Background to the dispute and the decision at issue

3        The background to the dispute, as set out in paragraphs 1 to 20 of the judgment under appeal, may, for the purposes of the present proceedings, be summarised as follows.

4        LS Cable & System, formerly LG Cable Ltd until March 2005, is a company established in South Korea that is active in the production and supply sector for high voltage underground and submarine power cables. Since July 2008, the appellant has been a wholly owned subsidiary of LS Corp.

5        In Article 1 of the decision at issue, the European Commission found that the appellant and 25 other undertakings had participated in a cartel (‘the cartel’), constituting a single and continuous infringement of Article 101 TFEU and of Article 53 of the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3) in the sector for (extra) high voltage underground and/or submarine power cables (‘the infringement at issue’).

6        According to the decision at issue, the cartel consisted of two main configurations which formed a composite whole, namely:

–        a configuration that included the European undertakings, generally referred to as ‘R members’, the Japanese undertakings, referred to as ‘A members’, and, lastly, the South Korean undertakings, referred to as ‘K members’, which made it possible to achieve the objective of allocating territories and customers among the European, Japanese and South Korean producers (‘the A/R cartel configuration’). That allocation followed an agreement relating to the ‘home territory’ under which the Japanese and South Korean producers would refrain from competing for projects in the ‘home territory’ of the European producers and the European producers undertook to stay out of the Japanese and South Korean markets. In addition, the parties allocated projects in the ‘export territories’, namely the rest of the world with the notable exception of the United States; and

–        a configuration that involved the allocation of territories and customers by the European producers for projects to be carried out within the European ‘home territory’ or allocated to the European producers.

7        According to the decision at issue, the appellant participated in the cartel from 15 November 2002 to 26 August 2005.

8        Under Article 2(t) of the decision at issue, the Commission imposed a fine of EUR 11 349 000 on the appellant.

 The procedure before the General Court and the judgment under appeal

9        By application lodged at the Registry of the General Court on 16 June 2014, the appellant brought the action referred to in paragraph 1 above.

10      In support of its claims for annulment of the decision at issue, the appellant put forward four pleas in law, including the first plea, alleging lack of proof to the requisite legal standard of the appellant’s participation in the infringement at issue.

11      By the judgment under appeal, the General Court dismissed that action.

12      The General Court found, in essence, that the Commission had proved that the appellant had participated in the infringement at issue since the date of the meeting that took place in Tokyo (Japan) on 15 November 2002 (‘the Tokyo meeting’) and that the appellant had failed to establish that its participation was without any anticompetitive intention, since it did not demonstrate that it had indicated to its competitors that it was participating in those meetings in a spirit that was different from theirs. As regards the appellant’s argument concerning its efforts to enter the European Economic Area (‘EEA’) market, in particular, the General Court found, in paragraph 107 of the judgment under appeal, that it was apparent from the evidence provided by the appellant that the number of bids it submitted for EEA projects during the period of its participation in the infringement at issue was significantly lower than that outside the period of infringement and that it therefore cannot be ruled out that the European calls for tenders in which the appellant participated during the years 2002 to 2005 constitute, in actual fact, isolated infringements of the cartel agreements.

 Forms of order sought by the parties before the Court of Justice

13      The appellant claims that the Court should:

–        set aside the judgment under appeal;

–        give final judgment, in accordance with Article 61 of the Statute of the Court of Justice and, on that basis, (i) annul the decision at issue in so far as it finds that the appellant participated in the infringement at issue from 15 November 2002 to the second half of October 2003, and (ii) in the exercise of its unlimited jurisdiction, reduce the fine imposed on the appellant;

–        in the event that the Court does not give final judgment on the present case, reserve the costs and refer the case back to the General Court for re-examination in accordance with the judgment of the Court; and

–        order the Commission to pay the costs of the proceedings before the General Court and the Court of Justice.

14      The Commission contends that the Court should:

–        dismiss the appeal as manifestly inadmissible or, in the alternative, as unfounded; and

–        order the appellant to pay the costs.

 The appeal

15      In support of its appeal, the appellant relies on three grounds. It is appropriate to examine the second and third grounds of appeal before the first.

 The second ground of appeal

 Arguments of the parties

16      By its second ground of appeal, which relates to paragraphs 49, 94 and 96 of the judgment under appeal, the appellant claims that that judgment contains an error of law in so far as the General Court found that, on account of its participation in the Tokyo meeting, the appellant had agreed to adhere to the ‘home territory’ agreement and that, therefore, the public distancing case-law applied to it.

17      The appellant relies on three arguments in support of this ground. First, the observations recorded by its representatives during the Tokyo meeting, according to which the appellant was ready to cooperate on a ‘project by project’ basis and would participate in the A/R cartel configuration ‘in the long term’, demonstrate that it did not agree to adhere to the ‘home territory’ agreement during that meeting. Second, the fact that, in an email of 24 February 2003, the appellant was referred to as an ‘outsider’ by a participant in the cartel confirms that it was not regarded as having joined the cartel at the Tokyo meeting. Third, it claims that it is apparent from a document dated 16 September 2003 stating that the South Korean territory was ‘pending’ and that the participation of South Korean undertakings was ‘under discussion’ that the appellant was not considered to be a participant in the cartel.

18      According to the Commission, the second ground of appeal is ineffective and, in any event, inadmissible. In the alternative, it is unfounded.

 Findings of the Court

19      It is apparent from the arguments submitted by the appellant in support of the second ground of appeal that the appellant relies on the premiss that, in order to find it liable for having participated in the infringement at issue, the Commission had to prove that it joined the cartel at the Tokyo meeting.

20      That premiss is incorrect.

21      According to the case-law of the Court that an undertaking’s participation in a meeting having an anticompetitive object creates a presumption of the illegality of its participation, which that undertaking must rebut through evidence of public distancing, which must be perceived as such by the other parties to the cartel (judgment of 20 January 2016, Toshiba Corporation v Commission, C‑373/14 P, EU:C:2016:26, paragraph 71 and the case-law cited).

22      It should be noted, first, that the appellant does not deny participating in the Tokyo meeting. Second, in its appeal the appellant confirmed the General Court’s finding, in paragraph 50 of the judgment under appeal, that the ‘home territory’ principle, which was the basis for the A/R cartel configuration, was revealed to the appellant during that meeting. Third, as the Commission correctly observed, the appellant acknowledged in its application initiating proceedings that at the Tokyo meeting the European and Japanese producers had attempted to persuade it to subscribe to their cartel. It follows, contrary to what the appellant claimed in its reply, that the Tokyo meeting was an anticompetitive meeting. As the General Court stated, in essence, in paragraph 51 of the judgment under appeal, which is not challenged by the appellant, the appellant did not establish that it had distanced itself publicly from the cartel during that meeting.

23      As the Commission correctly observed, the second ground of appeal must therefore be considered to be ineffective, since the fact that the appellant participated in an anticompetitive meeting without distancing itself publicly from the cartel is sufficient to establish that it had begun to participate in the infringement at issue from the date of the Tokyo meeting.

24      In any event, in so far as the appellant claims, by that ground of appeal, that the General Court erred in law in finding that the Commission had proved that it had participated in the infraction in question during the period from 15 November 2002, the date of the Tokyo meeting, until the second half of October 2003, it must be borne in mind that, under the second subparagraph of Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union, an appeal is limited to questions of law. The General Court has exclusive jurisdiction to find and appraise the relevant facts and to assess the evidence. The appraisal of those facts and the assessment of that evidence does not, therefore, save where they have been distorted, constitute a point of law which is subject, as such, to review by the Court of Justice on appeal (judgment of 26 September 2018, Philips and Philips France v Commission, C‑98/17 P, not published, EU:C:2018:774, paragraph 40 and the case-law cited).

25      In that regard, it must, first, be stated that the appellant has not established that the General Court distorted the notes from the Tokyo meeting by considering that the observations recorded by its representatives during that meeting confirmed, in the light of the perception of the other participants present at that meeting, that the appellant had joined the cartel at that meeting. It is apparent from the Court’s case-law that the review carried out by it in order to assess a ground of appeal alleging a distortion of evidence is restricted to ascertaining whether or not, in relying on that evidence to find that an undertaking participated in a cartel, the General Court manifestly exceeded the limits of a reasonable assessment of that evidence. The task of the Court of Justice is not, therefore, to assess independently whether the Commission has established such participation to the requisite legal standard and thus discharged the burden of proof necessary to show that the rules of competition law were infringed, but to determine whether, in finding that that was actually so, the General Court misconstrued the evidence in a manner manifestly at odds with its wording (judgment of 19 December 2013, Siemens and Others v Commission, C‑239/11 P, C‑489/11 P and C‑498/11 P, not published, EU:C:2013:866, paragraph 44 and the case-law cited). However, that is not the case here, since the terms used by those representatives during the Tokyo meeting do not preclude the General Court’s interpretation.

26      Second, it must be noted that, in paragraphs 92 to 101 of the judgment under appeal, the General Court examined the appellant’s claim that it had been considered an outsider by the other participants in the infringement at issue. In that regard, even if, in paragraphs 94 and 96 of that judgment, the General Court had distorted the evidence in question, namely the email of 24 February 2003 and the document of 16 September 2003, it must be noted that, in rejecting that claim, the General Court did not rely only on its findings in those two paragraphs of the judgment under appeal. The General Court also found, in particular, in paragraph 95 of that judgment, referring to its findings in paragraph 83 of the same judgment, that on 4 March 2003, a few days after the email of 24 February was sent, the appellant participated in a cartel meeting in Seoul (South Korea) in order to discuss the allocation of other projects in the ‘export territories’. That finding, which is not disputed by the appellant, was the basis on which the General Court found that the appellant could not be considered to be an outsider in relation to the infringement at issue. Accordingly, the appellant’s argument based on distortion of the evidence examined in paragraphs 94 and 96 of the judgment under appeal, even if it were established, would, in any event, be ineffective.

27      The second ground of appeal must, therefore, be rejected.

 The third ground of appeal

 Arguments of the parties

28      By its third ground of appeal, which relates, in essence, to paragraph 106 of the judgment under appeal, the appellant claims that the General Court erred in law in finding that the presumption of its adherence to the ‘home territory’ agreement, and, therefore, to the infringement at issue, as a result of its participation in the Tokyo meeting, could have been reversed only by a public distancing from the infringement at issue during that meeting.

29      According to the Commission, this ground of appeal is ineffective or inadmissible and, in any event, unfounded.

 Findings of the Court

30      In that regard, it must be noted that the appellant did not argue before the General Court that public distancing was not the only way to avoid liability arising from participation in an unlawful meeting. It has consistently been held that a plea raised for the first time in an appeal before the Court of Justice must be rejected as inadmissible (judgment of 10 July 2014, Telefónica and Telefónica de España v Commission, C‑295/12 P, EU:C:2014:2062, paragraph 99 and the case-law cited).

31      It is true that, in the present proceedings the appellant claimed, in its reply, that the third ground of appeal, properly construed, sought not to contest that public distancing was the only means of rebutting the presumption at issue, but to submit that the notion of public distancing included in its scope not only the expression of opposition to the cartel at the meeting itself but also the conduct of the undertaking after that meeting. However, that argument must be rejected since the interpretation suggested by the appellant in its reply is contradicted by the clear wording of that ground in its application for appeal.

32      Accordingly, the third ground of appeal must be considered inadmissible.

33      In any event, even if that ground of appeal were admissible, it would have to be rejected as unfounded. It is true that, with regard to participation in an infringement that took place over several years rather than in individual anticompetitive meetings, it can be concluded from the case-law of the Court that the absence of public distancing forms only one factor amongst others to take into consideration with a view to establishing whether an undertaking has actually continued to participate in an infringement or has, on the contrary, ceased to do so (judgment of 17 September 2015, Total Marketing Services v Commission, C‑634/13 P, EU:C:2015:614, paragraph 23; also see, to that effect, judgment of 21 January 2016, Eturas and Others, C‑74/14, EU:C:2016:42, paragraph 46). However, that case-law is not relevant in the present case given that the infringement for which the appellant was held liable concerned participation in anticompetitive meetings. It is true that, in a case where, over the course of a significant period of time, several collusive meetings have taken place without the participation of the representatives of the undertaking at issue, the Commission may not merely establish the absence of public distancing, but must also base its findings on other evidence (judgment of 17 September 2015, Total Marketing Services v Commission, C‑634/13 P, EU:C:2015:614, paragraph 28). However, the appellant neither claimed nor established that over the course of a significant period of time several collusive meetings of the cartel took place in its absence. In that regard, the appellant merely claimed that the sales which it made in the EEA demonstrated that it had distanced itself from the infringement at issue.

34      Therefore, the third ground of appeal must be rejected.

 The first ground of appeal

 Arguments of the parties

35      By its first ground of appeal, the appellant claims that the judgment under appeal is vitiated by an error of law in so far as, in paragraph 107 thereof, the General Court distorted the clear sense of the evidence regarding the bids the appellant submitted for EEA projects, leading the General Court to draw from that evidence manifestly incorrect conclusions.

36      According to the Commission, this ground of appeal is ineffective and, in any event, inadmissible. In the alternative, it should be considered unfounded.

 Findings of the Court

37      It should be noted that paragraph 107 of the judgment under appeal comes within paragraphs 105 to 109 of that judgment, in which the General Court considered and rejected the appellant’s claim that it made efforts to enter the EEA market. As the Commission correctly noted in its response, paragraph 107 of the judgment under appeal contains merely an additional consideration on which the General Court relied in this context, as is demonstrated by the fact that it begins with the word ‘moreover’. It is apparent, however, from the examination of the third ground of appeal that the appellant failed to demonstrate that the main consideration on which the General Court relied in that regard, namely the finding, in paragraph 106 of the judgment under appeal, that the appellant had not demonstrated that it had publicly distanced itself from the infringement at issue, is vitiated by an error of law. Accordingly, the first ground of appeal must be considered ineffective.

38      In any event, in actual fact, by this ground of appeal the appellant seeks a re-examination of the General Court’s assessment of the evidence in question, without establishing any distortion of that evidence by the General Court. The appellant expressly acknowledged that, as the General Court found in paragraph 107 of the judgment under appeal, the number of bids it submitted for EEA projects during the period it participated in the cartel, namely 15 November 2002 to 26 August 2005, was significantly lower than that outside the period of infringement. In addition, the appellant did not demonstrate that, in interpreting that evidence, the General Court exceeded the limits of a reasonable assessment thereof. Indeed, the appellant claims that the General Court erred by holding, in paragraph 107 of the judgment under appeal, that the data concerning those EEA bids were not supported by concrete evidence. However, given that the General Court nevertheless assessed the potential relevance of those bids, such an error, if it were established, would not affect the conclusion reached by the General Court as regards the importance of the bids in question.

39      It follows that the first ground of appeal must be rejected and, therefore, the appeal must be dismissed in its entirety.

 Costs

40      Under Article 138(1) of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

41      Since the appellant has been unsuccessful, it must be ordered to pay the costs, as applied for by the Commission.

On those grounds, the Court (Seventh Chamber) hereby:

1.      Dismisses the appeal;

2.      Orders LS Cable & System Ltd to pay the costs.

Delivered in open court in Luxembourg on 28 November 2019.

*      Language of the case: English.