Case T-122/04

Outokumpu Oyj and Luvata Oy

v

Commission of the European Communities

(Competition – Agreements, decisions and concerted practices – Market for copper industrial tubes – Decision finding an infringement of Article 81 EC – Price-fixing and market-sharing – Fines – Size of the market concerned – Aggravating circumstances – Repeat infringement)

Summary of the Judgment

1.      Competition – Fines – Amount – Determination – Legal context – Guidelines adopted by the Commission

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

2.      Procedure – Application initiating proceedings –Plea based on infringement of a provision not expressly referred to in the application

(Statute of the Court of Justice, Art. 21; Rules of Procedure of the Court of First Instance, Art. 44)

3.      Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Aggravating circumstances – Repeat infringement

(Art. 65 CS; Art. 81 EC; Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 2)

4.      Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Aggravating circumstances – Repeat infringement

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

5.      Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Size of the market for the products in question – To be taken into consideration

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

1.      When reviewing the legality of fines imposed for infringement of the Community competition rules, it is for the Court of First Instance to verify whether the Commission exercised its discretion in accordance with the method set out in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty and, should it be found to have departed from that method, to verify whether that departure is justified and supported by sufficient legal reasoning.

The self-limitation on the Commission’s discretion arising from the adoption of the Guidelines is not incompatible with the Commission’s maintaining a substantial margin of discretion. The Guidelines display flexibility in a number of ways, enabling the Commission to exercise its discretion in accordance with the provisions of Regulation No 17, as interpreted by the Court of Justice.

Moreover, in areas such as determination of the amount of a fine, where the Commission has a discretion, for example, as regards the amount of increase for repeat infringement, review of the legality of those assessments is limited to determining the absence of manifest error of assessment.

In principle, the discretion enjoyed by the Commission and the limits which it has imposed in that regard do not prejudge the exercise by the Community judicature of its unlimited jurisdiction, which empowers it to annul, increase or reduce the fine imposed by the Commission.

(see paras 33-36)

2.      It is clear from the case-law and from Article 21 of the Statute of the Court of Justice and Article 44 of the Rules of Procedure of the Court of First Instance that an applicant is not obliged to cite the articles of the Treaty or the general principles of law which it relies on. It is sufficient for the facts, the pleas in law, and the forms of order sought by the applicant to appear in the application, so that the defendant can effectively defend its interests and the court can exercise its power of review.

In an action for the annulment or reduction of a fine imposed on an undertaking by the Commission for breach of the Community competition rules, a plea which claims for the first time at the reply stage that the principle of equal treatment was infringed having regard to the Commission’s decision-making practice must be held admissible where the application shows that the applicant is criticising the increase in the amount of the fine, particularly having regard to the rates of increase applied by the Commission in its earlier decisions.

(see para. 53)

3.      The Commission may take into account, in order to establish repeat infringement under Article 81 EC, infringements found under the ECSC Treaty. the founding treaties established a single legal order in which the EAEC Treaty constitutes, and the ECSC Treaty constituted until 23 July 2002, a lex specialis in derogation from the lex generalis represented by the EC Treaty. In addition, the prohibition of cartels is laid down by two similar provisions, namely Article 81 EC and Article 65 CS, which, although appearing in two separate treaties, are inspired by identical legal concepts. Moreover, there is nothing in the Guidelines to indicate that the expression ‘infringement of the same type’ must be understood as meaning that the Commission may not take into account, in order to establish repeat infringement under Article 81 EC, infringements found under the ECSC Treaty.

(see paras 55, 57)

4.      The concept of repeat infringement implies only a previous finding of infringement of Community competition law. The existence of special circumstances which justified the non-imposition of a fine in an earlier decision does not therefore prevent the Commission from making a finding of repeat infringement. Moreover, such special circumstances are necessarily proper to the earlier decision and have no connection with the propensity of the undertaking concerned to ignore the competition rules. They cannot therefore be taken into account for the purposes of determining the amount of increase of the fine for repeat infringement.

(see paras 58, 64)

5.      When assessing the seriousness of an infringement of the competition rules for the purposes of determining the starting amount of the fine to be imposed on an undertaking, the Commission may have regard to the size of the market affected but is not obliged to do so. For that purpose, it may take account of the turnover of the market concerned. There is no valid reason to require that the turnover of a relevant market be calculated excluding certain production costs. There are in all industries costs inherent in the final product which the manufacturer cannot control but which nevertheless constitute an essential element of its business as a whole and which, therefore, cannot be excluded from its turnover when fixing the starting amount of the fine. The fact that the price of a raw material constitutes an important part of the final price of the finished product or that the risk of fluctuations in the price of one raw material is higher than for other raw materials does not invalidate that conclusion.

(see paras 76, 78, 82)