JUDGMENT OF THE COURT (Second Chamber)
15 May 2014 (*)
(Appeal — Competition — Regulation (EC) No 1/2003 — Agreements, decisions and concerted practices — Calculation of the amount of the fine — Total turnover in the preceding business year)
In Case C‑90/13 P,
APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 22 February 2013,
1. garantovaná a.s., established in Bratislava (Slovakia), represented by K. Lasok QC, J. Holmes and B. Hartnett, Barristers, and by O.H. Geiss, Rechtsanwalt,
the other party to the proceedings being:
European Commission, represented by T. Vecchi and N. Khan, acting as Agents, with an address for service in Luxembourg,
defendant at first instance,
THE COURT (Second Chamber),
composed of R. Silva de Lapuerta (Rapporteur), President of the Chamber, J.L. da Cruz Vilaça, G. Arestis, J.-C. Bonichot and A. Arabadjiev, Judges,
Advocate General: N. Wahl,
Registrar: A. Calot Escobar,
having regard to the written procedure,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
1 By its appeal, 1. garantovaná a.s. seeks to have set aside the judgment of the General Court of the European Union in Case T‑392/09 1. garantovaná v Commission EU:T:2012:674 (‘the judgment under appeal’), by which that court dismissed its action for annulment of Commission Decision C(2009) 5791 final of 22 July 2009 relating to a proceeding under Article [101 TFEU] and Article 53 of the EEA Agreement (Case COMP/39.396 − Calcium carbide and magnesium based reagents for the steel and gas industries) (‘the contested decision’).
2 Article 23(2) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 TFEU] and [102 TFEU] (OJ 2003 L 1, p. 1) (‘the regulation’) provides:
‘The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:
(a) they infringe Article [101 TFEU] or Article [102 TFEU]; or
(b) they contravene a decision ordering interim measures under Article 8; or
(c) they fail to comply with a commitment made binding by a decision pursuant to Article 9.
For each undertaking and association of undertakings participating in the infringement, the fine shall not exceed 10% of its total turnover in the preceding business year.
Where the infringement of an association relates to the activities of its members, the fine shall not exceed 10% of the sum of the total turnover of each member active on the market affected by the infringement of the association.’
Background to the dispute
3 In the judgment under appeal, the General Court summarised the factual background to the dispute before it as follows:
‘1 By [the contested decision], the Commission … found that the main suppliers of calcium carbide and magnesium for the steel and gas industries had infringed Article [101(1) TFEU] and Article 53 of the Agreement on the European Economic Area (EEA)[, of 2 May 1992 (OJ 1994 L 1, p. 3),] by participating in a single and continuous infringement from 7 April 2004 until 16 January 2007. That infringement consisted of market-sharing, quota-fixing, customer-allocation, price-fixing and the exchange of sensitive commercial information relating to prices, customers and sales volumes in the EEA, with the exception of Ireland, Spain, Portugal and the United Kingdom.
2 The procedure was initiated following an application for immunity, within the meaning of the Commission notice on immunity from fines and reduction of fines in cartel cases (OJ 2002 C 45, p. 3), submitted by Akzo Nobel NV.
3 Novácke chemické závody, a.s. (“NCHZ”), established in Novaky (Slovakia), produces, inter alia, calcium carbide. During the period of the infringement, more than 70% of NCHZ was owned, directly or indirectly, by [1. garantovaná].
4 In Article 1(e) of the contested decision, the Commission found that NCHZ and [1. garantovaná] had participated in the infringement throughout its duration. Furthermore, in subparagraph (e) of the first paragraph of Article 2 of that decision, the Commission imposed on [1. garantovaná] and NCHZ, jointly and severally, a fine of EUR 19.6 million.
5 For the reasons set out in recitals 221 to 225 to the contested decision, the Commission took the view that, during the period of the infringement, [1. garantovaná] exercised decisive influence over NCHZ’s business policy and that therefore [1. garantovaná] could be held liable for NCHZ’s illegal conduct.
6 In recitals 333 and 334 to the contested decision, the Commission set out the reasons why it had decided to use [1. garantovaná’s] turnover for 2007 instead of that for 2008 in order to determine the ceiling of 10% of turnover provided for in Article 23(2) of [the regulation].
7 Lastly, in recital 376 to the contested decision, the Commission set out the reasons why it had decided to reject [1. garantovaná’s] request for account to be taken of its inability to pay …’
Procedure before the General Court and the judgment under appeal
4 In its action for annulment of the contested decision before the General Court, 1. garantovaná had raised six pleas in law. By the judgment under appeal, the General Court rejected all those pleas in law.
Forms of order sought by the parties before the Court of Justice
5 1. garantovaná claims that the Court should:
– set aside the judgment under appeal in so far as it rejects the second plea in law relied on by 1. garantovaná in the action brought before the General Court;
– declare that plea well founded;
– reduce the amount of the fine to EUR 2.1 million, representing 10% of 1. garantovaná’s turnover in 2008, as stated in paragraph 84 of the judgment under appeal, and
– order the Commission to pay the costs.
6 The Commission contends that the Court should:
– dismiss the appeal, and
– order 1. garantovaná to pay the costs.
Arguments of the parties
7 1. garantovaná argues that if the Commission has the data establishing total turnover in the business year preceding the contested decision, the Commission may not depart from the rule set out in the second subparagraph of Article 23(2) of the regulation, which is of a mandatory nature.
8 1. garantovaná observes that the Commission used 2007 turnover instead of that in 2008. It maintains that the considerations set out by the General Court in this connection, in paragraphs 96 to 99 and in paragraphs 105 to 107 of the judgment under appeal, are vitiated by errors and defects in reasoning.
9 In this connection, 1. garantovaná submits that the finding, in paragraph 96 of the judgment under appeal, that an investment company is not a ‘pure financial investor’ and that it forms part of the same economic unit as another entity is irrelevant to the question whether or not a sale of assets is part of the normal economic activities of an investment company.
10 1. garantovaná also raises the point that the General Court, in paragraph 97 of the judgment under appeal, was wrong to hold that it was ‘difficult to understand’ why a special mandate was given to the board of directors by the general meeting. It submits that nothing in the judgment under appeal makes it possible to identify the reasons why the General Court came to that conclusion. In that respect, therefore, 1. garantovaná argues that the judgment under appeal is vitiated by a failure to state reasons.
11 1. garantovaná submits in addition that the General Court was not entitled to hold, in paragraph 98 of the judgment under appeal, that it was not apparent from 1. garantovaná’s assertions or from the documents in the case that 1. garantovaná had acquired any shares in another company in 2008.
12 Finally, 1. garantovaná takes the view that paragraphs 99 and 100 of the judgment under appeal are confusing and that the General Court, particularly in paragraphs 105 to 107 of the judgment under appeal, misinterpreted the purport of certain decisions relating to the organisation of the company, thereby erring in its reasoning.
13 The Commission contends that none of the arguments put forward by 1. garantovaná in support of its ground of appeal can be accepted.
Findings of the Court
14 First of all, it must be pointed out that, under Article 23(2) of the regulation, for each undertaking and association of undertakings participating in the infringement, the fine must not exceed 10% of its total turnover in the preceding business year.
15 In determining the preceding business year, the Commission must assess, in each specific case and in the light of both its context and the objectives pursued by the scheme of penalties created by the regulation, the intended impact on the undertaking in question, taking into account in particular a turnover which reflects the undertaking’s real economic situation during the period in which the infringement was committed (see Case C‑76/06 P Britannia Alloys & Chemicals v Commission EU:C:2007:326, paragraph 25).
16 The Court has observed in relation to the concept of the preceding business year, in paragraph 29 of Britannia Alloys & Chemicals v Commission (EU:C:2007:326), that, in certain situations, the turnover in question does not provide any useful indication as to the actual economic situation of the undertaking concerned and the appropriate level of fine to impose on that undertaking.
17 In such a situation, and as the Court made clear in paragraph 30 of Britannia Alloys & Chemicals v Commission (EU:C:2007:326), the Commission is entitled to refer to another business year in order to be able to make a correct assessment of the financial resources of that undertaking and to ensure that the fine has a sufficient and proportionate deterrent effect.
18 1. garantovaná’s argument as to the ‘mandatory nature’ of Article 23(2) of the regulation must be dismissed at the outset, since the Court has by no means treated that provision as having such a nature. The argument that the Commission may not ‘derogate’ from that provision must likewise be dismissed. The issue is not that of a power to derogate, but the determination of the relevant business year in the light of the factual circumstances of the case (see, to that effect, Britannia Alloys & Chemicals v Commission EU:C:2007:326, paragraphs 25, 29 and 30).
19 So far as concerns paragraph 96 of the judgment under appeal, first, the General Court could, without erring, take the view that the type of activity pursued by a company is relevant for the purposes of assessing whether specific conduct falls within that company’s normal commercial activity.
20 Secondly, it must be pointed out that in that paragraph, and contrary to what 1. garantovaná claims, the General Court made a finding of fact.
21 Such assessments, based on facts, cannot be called in question in an appeal. The argument put forward by 1. garantovaná must, therefore, be rejected as being inadmissible.
22 As regards paragraph 97 of the judgment under appeal, it must be pointed out that, by its argument, 1. garantovaná merely calls in question the expression used by the General Court that it was ‘difficult to understand’ why a special mandate was given to the board of directors by the general meeting for the sale of assets, if such a sale was part of its ordinary commercial activity.
23 As 1. garantovaná infers from that observation a failure to state reasons, it should be pointed out that, by that statement, the General Court was seeking to draw attention to the fact that if the sale of assets by 1. garantovaná was part of its ordinary commercial activity, the grant of a special mandate to that effect to the board of directors would not have been necessary.
24 In so doing, the General Court came to an appropriate conclusion that is in no way vitiated by a failure to state reasons, and accordingly, the argument made must be rejected as being unfounded.
25 As regards paragraph 98 of the judgment under appeal, it must be pointed out that the General Court made a finding based on the applicant’s own statements and the documents in the case concerning the activities carried on by 1. garantovaná in 2008.
26 Clearly, by its argument on that paragraph, 1. garantovaná is seeking to call in question findings of fact made by the General Court. Such an argument must be rejected as being inadmissible.
27 So far as concerns paragraphs 99 and 100 of the judgment under appeal, the argument made by 1. garantovaná calls in question the General Court’s finding, in paragraph 99 of the judgment, that the distribution of the funds obtained as a consequence of the sale of assets was an option that was ‘seriously contemplated’.
28 However, it has not been established in what way that observation by the General Court can be called ‘confusing’. In particular, there is no contradiction between that finding and that in paragraph 100 of the judgment under appeal that the fate of 1. garantovaná was not going to be decided until the end of April 2009. That argument must therefore be rejected as being unfounded.
29 As regards paragraph 105 of the judgment under appeal, it must be pointed out that the argument submitted derives from an incorrect reading of that paragraph. Contrary to what 1. garantovaná maintains, the General Court by no means held that 1. garantovaná’s conduct was not part of normal economic activities merely because of the significant drop in its turnover.
30 On the contrary, referring to the considerations set out in paragraphs 95 to 101 of the judgment under appeal, the General Court placed the sale of 1. garantovaná’s assets and the ‘very significant drop’ in its turnover in the context of its strategy and its commercial decisions.
31 It should be added in that regard that, as can be seen from paragraphs 77 and 78 of the judgment under appeal, it was 1. garantovaná itself which indicated, in the course of the administrative procedure, that it was contemplating terminating its activities, in the form of a disposal of ‘all its assets’.
32 It is stated in paragraph 105 of the judgment under appeal that, pursuant to the decision taken at its general meeting on 20 June 2007, 1. garantovaná sold assets in 2008 and converted their value into cash. The General Court observed, in this connection, that that transaction enabled 1. garantovaná to give consideration to its dissolution and the distribution of its remaining assets to its shareholders, concluding that such conduct, which prompted a very significant drop in 1. garantovaná’s turnover between the year 2007 and the year 2008, did not form part of the normal economic activities of a commercial company.
33 1. garantovaná’s argument concerning paragraph 105 of the judgment under appeal cannot, therefore, be accepted.
34 Lastly, 1. garantovaná raises the allegedly contradictory nature of paragraphs 106 and 107 of the judgment under appeal, the General Court having assessed incorrectly the conduct of a company ‘in the process of terminating its activities’.
35 That argument is in fact directed at the General Court’s factual assessments, which cannot be called in question in an appeal. In any event, none of the considerations set out in those paragraphs supports the proposition that there was any contradiction in reasoning.
36 It follows that that last argument must be dismissed.
37 None of the arguments put forward by 1. garantovaná is capable, therefore, of supporting the ground of appeal raised.
38 It follows from all the foregoing considerations that the appeal must be dismissed as being in part inadmissible and in part unfounded.
39 Under Article 184(2) of its Rules of Procedure, where an appeal is unfounded, the Court is to make a decision as to the costs. Under Article 138(1) of those rules, which apply to the procedure on appeal by virtue of Article 184(1) of those rules, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since 1. garantovaná has been unsuccessful and the Commission has applied for costs, 1. garantovaná must be ordered to pay the costs.
On those grounds, the Court (Second Chamber) hereby:
1. Dismisses the appeal;
2. Orders 1. garantovaná a.s. to pay the costs.