Keywords
Summary

Keywords

1. Procedure - Measures of inquiry - Request for production of a document - Commission's internal documents - Disclosure excluded except in exceptional circumstances - Burden of proof falling on the applicant - Application to the report of the Hearing Officer

(EC Treaty, Art. 85(1) (now Art. 81(1) EC); Rules of Procedure of the Court of First Instance, Arts 65 and 66(1))

2. Competition - Agreements, decisions and concerted practices - Undertaking - Definition - Economic unit - Attribution of the infringements - Effect of the fact that the group of companies constituting the economic unit does not have its own legal personality - Joint and several liability of the companies of which that group consists

(EC Treaty, Art. 85(1) (now Art. 81(1) EC))

3. Competition - Community rules - Infringements - Attribution of responsibility - Legal person responsible for the operation of the undertaking at the material time - Exceptions - Economic successor responsible where the legal person responsible for the infringement has ceased to exist or for the purpose of safeguarding the effectiveness of the rules on competition

(EC Treaty, Art. 85(1) (now Art. 81(1) EC))

4. 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) (now Art. 81(1) EC))

5. Competition - Agreements, decisions and concerted practices - Agreements between undertakings - Definition - Gentlemen's agreement - Whether included - Effect of inapplicability of the penalty of nullity provided for by Article 85(2) of the Treaty (now Article 81(2) EC) - None

(EC Treaty, Art. 85(1) and (2) (now Art. 81(1) and (2) EC))

6. Competition - Agreements, decisions and concerted practices - Concerted practice - Definition - Need for a causal link between the concerted action as between the undertakings and their conduct on the market - Presumption that the link exists

(EC Treaty, Art. 85(1) (now Art. 81(1) EC))

7. Competition - Agreements, decisions and concerted practices - Participation in meetings held by undertakings for an anti-competitive purpose - Sufficient basis for concluding that, if an undertaking has not distanced itself from the decisions taken, it participated in the subsequent arrangements - Participation allegedly under pressure - Not a factor such as to justify failure by an undertaking to notify the competent authorities

(EC Treaty, Art. 85(1) (now Art. 81(1) EC); Council Regulation No 17, Art. 3)

8. Competition - Agreements, decisions and concerted practices - Imputed to an undertaking - Responsibility for the conduct of other undertakings in the context of the same infringement - Whether permissible - Criteria - Breach of the principle that penalties should be personal, of the rules pertaining to proof and of the rights of the defence - None

(EC Treaty, Art. 85(1) (now Art. 81(1) EC))

9. Competition - Administrative procedure - Rules governing languages - Annexes to the statement of objections and annexes to the answers of other undertakings being investigated to the Commission's requests for information - To be available in the original language - Breach of the right to be heard and of the principle of equality of arms - None - Justification

(Council Regulations No 1, Art. 3, and No 17, Art. 19(1); Commission Regulation No 99/63, Arts 2(1) and 4)

10. Competition - Administrative procedure - Business secrets - Qualifications - Limits - Protection of business secrets

(Council Regulation No 17, Arts 19(2), 20(2) and 21)

11. Competition - Administrative procedure - Business secrets - Disclosure of confidential information by Commission officials - Effect on the legality of the decision finding there to be an infringement - None

(EC Treaty, Art. 214 (now Art. 287 EC); Council Regulation No 17, Art. 20(2))

12. Competition - Administrative procedure - Inapplicability of Article 6 of the European Convention on Human Rights - Applicability of the general principles of Community law - Effects on the Commission's rights and obligations as regards the calling of witnesses for and against

(Council Regulation No 17, Art. 19(2); Commission Regulation No 99/63, Arts 3(3) and 7)

13. Competition - Administrative procedure - Hearings - Hearing Officer's obligation to obtain approval of the minutes of the hearing before presenting his report - None

(Commission Regulation No 99/63, Art. 9(4); Commission Decision 94/810, Arts 7(4) and 8)

14. Competition - Administrative procedure - Hearings - Provisional nature of the minutes submitted to the Advisory Committee and to the Commission - Procedural irregularity - None

(Commission Regulation No 99/63)

15. Competition - Fines - Amount - Determination thereof - Maximum amount - Calculation - Turnover to be taken into account - Cumulative turnover of all the companies constituting the economic unit acting as an undertaking

(Council Regulation No 17, Art. 15(2))

16. Competition - Fines - Amount - Methods of calculation - Conversion into ecu of the undertakings' turnover figure for the reference year on the basis of the average exchange rate over the same year - Whether permissible

(Council Regulation No 17, Art. 15)

17. Competition - Administrative procedure - Request for information - Freedom of undertakings as to whether or not to reply to questions asked under Article 11(1) of Regulation No 17 - Consequence of agreeing to reply - Obligation to provide accurate information

(Council Regulation No 17, Arts 11(1) and 15(1)(b))

18. Competition - Fines - Amount - Determination thereof - Criteria - Gravity of the infringements - Mitigating circumstances - Financial situation of the undertaking concerned - Excluded

(Council Regulation No 17, Art. 15(2))

Summary

1. During the proceedings before the Community Courts internal Commission documents are not to be communicated to the applicants, unless the circumstances of the case are exceptional and the applicants make out a plausible case for the need to do so. That is the case as regards the expert accountant's report, whose purpose, as a purely internal Commission document solely in the nature of an opinion for the Commission, is not to set forth fresh objections or adduce fresh evidence against the undertakings involved in a proceeding under Article 85(1) of the Treaty (now Article 81(1) EC) and which does not constitute a decisive factor which must be taken into account by the Community judicature when exercising its power of review. That restriction on access to internal documents is justified by the need to ensure the proper functioning of the institution concerned when dealing with infringements of the Treaty competition rules. Thus, the application for measures of inquiry concerning production of the expert accountant's report must be rejected, since the applicants have not shown how production of that report might be relevant to the principle of respect for the rights of the defence.

( see para. 40 )

2. In prohibiting undertakings inter alia from entering into agreements or participating in concerted practices which may affect trade between Member States and have as their object or effect the prevention, restriction or distortion of competition within the common market, Article 85(1) of the Treaty (now Article 81(1) EC) is aimed at economic units which consist of a unitary organisation of personal, tangible and intangible elements, which pursue 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.

In that connection, there is no need for the economic entity identified as a group to have legal personality. In competition law, the term undertaking must be understood as designating an economic unit for the purpose of the subject-matter of the agreement in question even if in law that economic unit consists of several persons, natural or legal. In the absence of a person at its head to which, as the person responsible for coordinating the group's activities, responsibility can be imputed for the infringements committed by the various component companies of the group, the Commission is entitled to hold the component companies jointly and severally responsible for all the acts of the group, in order to ensure that the formal separation between those companies, resulting from their separate legal personality, does not prevent a finding that they have acted jointly on the market for the purposes of applying the rules on competition.

( see paras 54, 66 )

3. It falls, in principle, to the natural or legal person managing the undertaking in question when the infringement of the Community rules on competition was committed to answer for that infringement, even if, when the decision finding the infringement was adopted, another person had assumed responsibility for operating the undertaking. The situation would be different only where the legal person or persons responsible for running the undertaking had ceased to exist in law after the infringement has been committed. It is none the less true that in certain circumstances an infringement of the rules on competition may be imputed to the economic successor of the legal person responsible, even where the latter has not ceased to exist on the date of adoption of the decision finding the infringement, so 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 errs in law if it holds jointly and severally liable for the fine imposed on a group of companies an undertaking which did not yet exist at the time when the infringement was committed, whilst the natural and legal persons involved in that infringement continued their commercial activities in full and whilst no evidence has been adduced of strategies adopted for the specific purpose of avoiding the penalty incurred.

( see paras 103-104, 106-108 )

4. 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 the infringement precisely, for each undertaking and for any given moment, as an agreement or a concerted practice, as in any event both those forms of infringement are covered by Article 85 of the Treaty (now Article 81 EC). The Commission is therefore entitled to classify such a single infringement as an agreement and a concerted practice or as an agreement and/or a concerted practice, since the infringement includes elements which are to be classified as an agreement and elements which are to be classified as a concerted practice. It would be artificial to split up continuous conduct, characterised by a single purpose, by treating it as consisting of a number of separate infringements.

In such a situation, the dual characterisation must be understood not as requiring, simultaneously and cumulatively, proof that each of those factual elements presents the constituent elements both of an agreement and of a concerted practice, but rather as referring to a complex whole comprising a number of factual elements some of which were characterised as agreements and others as concerted practices for the purposes of Article 85(1) of the Treaty (now Article 81(1) EC), which lays down no specific category for a complex infringement of this type.

( see paras 186-187 )

5. In order for there to be an agreement within the meaning of Article 85(1) of the Treaty (now Article 81(1) EC), it is sufficient that the undertakings in question should have expressed their joint intention to conduct themselves on the market in a specific way. That is the case where there is a gentlemen's agreement between a number of undertakings representing the faithful expression of such a joint intention concerning a restriction of competition. In those circumstances, the question whether the undertakings in question considered themselves bound - in law, in fact or morally - to adopt the agreed conduct is therefore irrelevant.

In that regard, the opposite conclusion cannot be inferred from the provision in Article 85(2) of the Treaty (now Article 81(2) EC) that any agreement referred to in Article 85(1) is automatically void, which is intended for cases where a legal obligation is actually in issue. The fact that only binding agreements can, by their nature, be rendered void does not mean that non-binding agreements must escape the prohibition laid down in Article 85(1) of the Treaty.

( see paras 199-201 )

6. It follows from the actual terms of Article 85(1) of the Treaty (now Article 81(1) EC), that a concerted practice implies, besides undertakings concerting with each other, conduct on the market pursuant to those collusive practices, and a relationship of cause and effect between the two. In that regard, subject to proof to the contrary, which the economic operators concerned must adduce, the presumption must be that the undertakings taking part in the concerted arrangements and remaining active on the market take account of the information exchanged with their competitors when determining their conduct on that market.

( see paras 213, 216 )

7. Where an undertaking participates, even if not actively, in meetings between undertakings with an anti-competitive object and does not publicly distance itself from what was discussed at them, thus giving the impression to the other participants that it subscribes to the outcome of the meetings and will act in conformity with it, it may be concluded that it is participating in the cartel resulting from those meetings. It is irrelevant, in that regard, whether the undertaking in question attends meetings with undertakings having a dominant position or, at least, an economically superior position on the market. An undertaking which participates in meetings with an anti-competitive object, even under constraint from other participants with greater economic power, can always report the anti-competitive activities in question to the Commission rather than continue to participate in the meetings.

( see paras 223-224, 226 )

8. An undertaking which has participated in a single complex infringement of the rules on competition by its own conduct, which amounts to an agreement or a concerted practice with an anti-competitive object within the meaning of Article 85(1) of the Treaty (now Article 81(1) EC) and which was intended to play a part in bringing about the infringement as a whole, may also be responsible for the conduct of other undertakings followed in the context of the same infringement throughout the period of its participation in the infringement, where it is proved that the undertaking in question is aware of the unlawful conduct of the other participants, or can reasonably foresee such conduct, and is prepared to accept the risk. Such a conclusion is not at odds with the principle that responsibility for such infringements is personal in nature, nor does it neglect individual analysis of the evidence adduced, in disregard of the applicable rules of evidence, or infringe the rights of defence of the undertakings involved.

( see para. 231 )

9. In the context of proceedings instigated pursuant to the Community rules on competition, the annexes to the statement of objections which do not emanate from the Commission are not documents for the purposes of Article 3 of Regulation No 1 determining the languages to be used by the European Economic Community, but must be regarded as supporting documentation on which the Commission relies and must therefore be brought to the attention of the addressee of the decision as they are, so that the addressee can apprise himself of the interpretation of them which the Commission has adopted and on which it has based both its statement of objections and its decision. It follows that the Commission, in communicating those annexes in their original language, does not infringe the right to be heard of the undertakings concerned.

The same considerations apply to the documents annexed by other undertakings to their replies to the Commission's requests for information without there being any grounds for complaining that the principle of equality of arms has been infringed, since the original of the documents constitutes the only relevant evidence.

( see paras 327, 329-330 )

10. The obligation of professional secrecy laid down in Article 20(2) of Regulation No 17 for the purposes of proceedings implementing the competition rules is mitigated in regard to third parties on whom Article 19(2) of that regulation confers the right to be heard, that is to say in regard, in particular, to a third party who has made a complaint. The Commission may communicate to such a party certain information covered by the obligation of professional secrecy in so far as it is necessary to do so for the proper conduct of the investigation. However, that power does not apply to all documents of the kind covered by the obligation of professional secrecy. Article 21 of the regulation, which provides for the publication of certain decisions, requires the Commission to have regard to the legitimate interest of undertakings in the protection of their business secrets. Although they deal with particular situations, those provisions must be regarded as the expression of a general principle which applies during the course of the administrative procedure.

( see para. 364 )

11. On the assumption that Commission officials are responsible, in breach of the provisions governing the obligation of professional secrecy, for leaks of confidential information used in the course of the administrative proceedings instigated for infringement of the Community competition rules, that would in any event not affect the legality of the decision, since it has not been proved that the decision would not in fact have been adopted or would have been different had the disputed statements not been made.

( see para. 370 )

12. Even though the Commission is not a tribunal within the meaning of Article 6 of the European Convention on Human Rights, and even though the fines imposed by the Commission are not of a criminal law nature, the Commission must nevertheless observe the general principles of Community law during the administrative procedure.

In that regard, the fact that the provisions of Community competition law do not place the Commission under an obligation to call witnesses whom the undertaking concerned wishes to give evidence on its behalf but allows the Commission a reasonable margin of discretion to decide how expedient it may be to hear such persons is not contrary to those principles. Although the Commission may hear natural or legal persons where it deems it necessary to do so, it is not entitled to call witnesses to testify against the undertaking concerned without their agreement.

( see paras 383, 391-392 )

13. Neither Regulation No 99/63 nor Decision 94/810 on the terms of reference of Hearing Officers in competition procedures before the Commission precludes the Hearing Officer from submitting to the Director-General for competition the report provided for in Article 8 of Decision 94/810 before the minutes of the hearing have been approved, pursuant to Article 9(4) of Regulation No 99/63 and Article 7(4) of Decision 94/810, by each person heard. The purpose of Article 9(4) of Regulation No 99/63 is to assure the persons heard that the minutes contain a true record of the substance of what they have said. The minutes are therefore submitted to the parties for their approval in order to enable them to check what they said at the hearing, not for the purpose of adducing fresh evidence which the Hearing Officer would be obliged to take into account.

( see paras 407-408 )

14. The provisional nature of the minutes of the hearing submitted to the Advisory Committee on agreements and dominant positions and to the Commission could only amount to a defect in the administrative procedure capable of vitiating the decision which results therefrom if the document in question was drawn up in such a way as to be misleading in a material respect.

( see para. 410 )

15. The fact that several companies are held jointly and severally liable for a fine does not mean, as regards the application of the maximum amount of 10% of turnover laid down by Article 15(2) of Regulation No 17, that the amount of the fine is limited, for the companies held jointly and severally responsible, to 10% of the turnover achieved by each of those companies during the last financial year. The maximum amount of 10% of turnover within the meaning of that provision must be calculated on the basis of the total turnover of all the companies constituting the economic entity acting as an undertaking for the purposes of Article 85 of the Treaty (now Article 81 EC). Thus, in the case of an undertaking constituted by a group of companies acting as a single economic unit, only the total turnover of the component companies can constitute an indication of the size and economic power of the undertaking in question. Within the limit laid down by Article 15(2) of Regulation No 17, the Commission may thus choose which turnover to take in terms of territory and products in order to determine the fine.

( see paras 528-529, 541 )

16. In calculating a fine for infringement of the Community rules on competition on the basis of turnover in a given reference year, expressed in national currency, the Commission is correct to convert that turnover into ecu on the basis of the average exchange rate for that reference year, and not on the basis of the exchange rate in force on the date of adoption of the decision.

( see para. 543 )

17. Regulation No 17 places the undertaking being investigated under a duty of active cooperation, which means that it must be prepared to make any information relating to the object of the inquiry available to the Commission. Even though the undertakings are free to reply or not to reply to questions put to them under Article 11(1) of Regulation No 17, it follows from the penalty provided for in the first part of the sentence in Article 15(1)(b) of that regulation that, having agreed to reply, the undertakings are required to provide accurate information.

( see para. 561 )

18. The Commission is not required, when determining the amount of the fine to be imposed for an infringement of the Community rules on competition, to take into account the poor financial situation of an undertaking concerned, by way of a mitigating circumstance, since recognition of such an obligation would be tantamount to giving an unjustified competitive advantage to undertakings least well adapted to market conditions.

( see paras 596-597 )