Case T‑91/11

InnoLux Corp.

v

European Commission

(Competition — Agreements, decisions and concerted practices — Worldwide market for liquid crystal display (LCD) panels — Agreements and concerted practices concerning prices and production capacity — Territorial jurisdiction — Internal sales — Sales of finished products incorporating cartelised products — Single and continuous infringement — Fines — Rounding method — Unlimited jurisdiction)

Summary — Judgment of the General Court (Sixth Chamber), 27 February 2014

1.      Competition — Fines — Amount — Determination — Method of calculation laid down by the guidelines drawn up by the Commission — Calculation of the basic amount of the fine — Determination of the value of sales — Criteria — Account taken of sales not significantly affected by the infringing practices — Lawfulness — Account taken of the value of cartelised products integrated into finished products sold to third parties by subsidiaries — Lawfulness

(Art. 101(1) TFEU; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, point 13)

2.      Competition — Union rules — Territorial scope — Cartel between undertakings established outside the Union but implemented and producing its effects in the internal market — Competence of the Commission to apply EU competition rules — Conformity with public international law — Intervention of subsidiaries, agents or branches established outside the Union — No effect

(Art. 101 TFEU)

3.      Competition — Fines — Guidelines on the method of setting fines — Method of calculation displaying flexibility in a number of ways — Discretion of the Commission — Compliance with the principle of equal treatment

(Art. 101(1) TFEU; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02)

4.      Competition — Fines — Discretion of the Commission — Assessment by reference to the individual conduct of the undertaking — Irrelevant that another economic operator not penalised — Claim of the benefit of an illegality which profited another economic operator — Not permissible

(Art. 101(1) TFEU)

5.      Competition — Administrative procedure — Statement of objections — Provisional nature — No obligation on the Commission to explain in the final decision the differences between the latter and its provisional assessments

(Art. 101(1) TFEU; Council Regulation No 1/2003, Art. 27(1))

6.      Agreements, decisions and concerted practices — Prohibition — Infringements — Agreements and concerted practices constituting a single infringement — Attribution of liability for the entire infringement to a single undertaking — Conditions

(Art. 101(1) TFEU)

7.      Agreements, decisions and concerted practices — Definition of the market — Purpose — Assessment of the impact of the cartel on the operation of competition and trade between Member States — Consequences as regards the objections raised against the definition of the market

(Art. 101(1) TFEU)

8.      Competition — Administrative procedure — Commission decision finding an infringement — Single and continuous infringement — No obligation on the Commission to proceed against conduct falling within a single and continuous infringement by a single procedure —  Discretion of the Commission as to the scope of procedures — Limits — Observance of the ne bis in idem principle

(Art. 101(1) TFEU)

9.      Competition — Administrative procedure — Decision establishing an infringement — Obligation to state reasons — Scope

(Arts 101(1) TFEU, 102 TFEU and 296 TFEU)

10.    Competition — Fines — Amount — Determination — Discretion of the Commission — Limits — Compliance with the principle of equal treatment — No obligation on the Commission to adhere to its previous decision-making practice

(Art. 101(1) TFEU)

11.    Competition — Fines — Amount — Determination — Method of calculation laid down by the guidelines drawn up by the Commission — Calculation of the basic amount of the fine — Account taken of the characteristics of the infringement as a whole

(Art. 101(1) TFEU; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, points 19 to 25)

12.    Competition — Fines — Amount — Determination — Discretion of the Commission — Judicial review — Unlimited jurisdiction of the EU judicature — Scope — Account taken of lack of cooperation by the undertaking during the administrative procedure — Increase in the fine — Condition

(Arts 101 TFEU, 102 TFEU and 261 TFEU; Council Regulation No 1/2003, Arts 18(2) and (3), 23(1), and 31)

1.      See the text of the decision.

(see paras 36-48, 53)

2.      In competition matters, when undertakings established outside the EEA, but which produce goods that are sold within the EEA to third parties, concert on the prices they charge to their customers in the EEA and put that concertation into effect by selling at prices which are actually coordinated, they are taking part in concertation which has the object and effect of restricting competition within the internal market within the meaning of Article 101 TFEU and which the Commission has territorial jurisdiction to proceed against. An infringement of Article 101 TFEU consists of conduct made up of two elements, the formation of the agreement, decision or concerted practice and the implementation thereof. If the applicability of prohibitions laid down under competition law were made to depend on the place where the agreement, decision or concerted practice was formed, the result would obviously be to give undertakings an easy means of evading those prohibitions. What counts is therefore the place where it is implemented.

Moreover, in determining whether that place is in the EEA, it is immaterial whether or not the participants in the cartel had recourse to subsidiaries, agents, sub-agents, or branches within the EEA in order to make their contacts with purchasers established there. Where the condition relating to implementation is satisfied, the Commission’s jurisdiction to apply the EU competition rules to such conduct is covered by the territoriality principle as universally recognised in public international law.

When a worldwide cartel has an anti-competitive object, it is implemented in the internal market merely because the cartelised products are sold on that market. The fact that a cartel is implemented does not necessarily mean that it has an actual impact. In reality, the question whether the cartel has had an actual impact on the prices charged by the participants is relevant only in the context of determining the gravity of the cartel, for the purpose of calculating the fine, provided that the Commission decides to use that criterion. The notion of implementation is based in essence on the concept of an undertaking in competition law; the latter concept has to be regarded as having a decisive role in establishing the limits of the Commission’s territorial jurisdiction to apply competition law. In particular, if an undertaking takes part in a cartel conceived outside the EEA, the Commission must be able to take proceedings in respect of the repercussions which that undertaking’s conduct has had on competition within the internal market and to impose a fine on it that is proportionate to the harm which the cartel represents for competition in that market.

(see paras 58-60, 66, 67, 69, 70, 75)

3.      See the text of the decision.

(see paras 78-80, 88)

4.      See the text of the decision.

(see paras 93, 142)

5.      See the text of the decision.

(see paras 95, 96)

6.      See the text of the decision.

(see paras101-103, 126, 128)

7.      See the text of the decision.

(see paras 129-134)

8.      In competition matters, whilst the concept of a single and continuous infringement permits the Commission to proceed, by means of a single set of proceedings and a single decision, against several instances of conduct which could have been proceeded against individually, that does not mean that the Commission is obliged to act in that way. The Commission has a discretion as to the scope of the proceedings which it initiates. In that regard, it cannot be obliged to find and penalise all anti-competitive conduct, nor could the Courts of the European Union hold — if only for the purposes of reducing the fine — that the Commission, in the light of the evidence available to it, should have established the existence of an infringement during a given period and against a given undertaking.

The exercise of that discretion is subject to review by the Courts. However, only if it could be demonstrated that the Commission, without an objective reason, made a single factual situation the subject of two separate sets of proceedings could its choice be regarded as a misuse of powers. Where the Commission does not have — or does not yet have — sufficient evidence against certain undertakings suspected of participating in the same single infringement, that situation constitutes an objective reason which justifies the Commission’s choice to proceed against different operators by different proceedings, the Commission being obliged, in particular, to observe where appropriate the ne bis in idem principle.

(see paras 136-139)

9.      See the text of the decision.

(see para. 141)

10.    See the text of the decision.

(see para. 144)

11.    See the text of the decision.

(see paras 150, 151)

12.    In competition matters, the review of lawfulness of decisions adopted by the Commission is supplemented by the unlimited jurisdiction conferred on the Courts of the Union by Article 31 of Regulation No 1/2003, in accordance with Article 261 TFEU. That jurisdiction empowers the Courts, in addition to carrying out a mere review of the lawfulness of the penalty, to substitute their own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or penalty payment imposed. It is therefore for the General Court, in the exercise of its unlimited jurisdiction, to assess, on the date on which the Court adopts its decision, whether the applicants received a fine whose amount properly reflects the gravity of the infringement in question. Whilst it is for the Court to assess for itself the circumstances of the case in order to determine the amount of the fine, the exercise of unlimited jurisdiction cannot result, when the amount of the fines to be imposed is determined, in discrimination between undertakings which have participated in an agreement or concerted practice, contrary to Article 101(1) TFEU.

However, in order to ensure the effectiveness of Article 18(2) and (3) of Regulation No 1/2003, the Commission is entitled to compel undertakings to provide all necessary information concerning such facts as may be known to them and to disclose to the Commission, if necessary, such documents relating thereto as are in their possession, on condition only that an undertaking is not compelled to provide the Commission with answers which might involve an admission on its part of the existence of an infringement which it is incumbent on the Commission to prove. An undertaking to which the Commission addresses a request for information pursuant to Article 18 of Regulation No 1/2003 is therefore bound by an obligation to cooperate actively and may be punished by a specific fine, as laid down in Article 23(1) of that regulation, which may represent up to 1% of total turnover if it provides, intentionally or negligently, incorrect or misleading information. It follows that, in the exercise of its unlimited jurisdiction, the Court may take account, where relevant, of an undertaking’s lack of cooperation and consequently increase the fine imposed on it for infringement of Articles 101 TFEU or 102 TFEU, on condition that that undertaking has not been punished in respect of that same conduct by a specific fine based on Article 23(1) of Regulation No 1/2003.

That could for example be the case where, in reply to a request to that effect from the Commission, an undertaking has failed to submit, intentionally or negligently, during the administrative procedure, decisive evidence for the setting of the amount of the fine and which was or might have been in its possession at the time of adoption of the contested decision. Although, in the exercise of its unlimited jurisdiction, the Court is not prevented from taking such evidence into consideration, the fact remains that an undertaking which relies on such evidence only at the judicial stage of the proceedings, thus prejudicing the purpose and the proper conduct of the administrative procedure, exposes itself to the risk that that factor will be taken into consideration when the Court determines the appropriate amount of the fine.

The fact that an undertaking has made errors when supplying the Commission with the necessary data for calculating the value of the relevant sales, in that it included sales relating to products other those covered by the cartel, does not give grounds for holding that that undertaking has breached its obligation to cooperate under Article 18 of Regulation No 1/2003 to such an extent that account must be taken of it in setting the fine. The undertaking concerned has not sought to mislead the Commission; nor has it supplied it with raw data on the basis of which the Commission would have had to calculate the value of relevant sales, without providing it at the same time with the explanations necessary to extract the net figures. It has appointed external specialist consultants in order to be in a position to provide the Commission with the necessary data but was negligent in failing to explain to those consultants the differences between certain types of the products in question. In that regard, it clearly had no interest in the Commission receiving incorrect data that included sales of products other than the cartelised products, since those inaccuracies could only be detrimental to it in that the amount of the fine which the Commission would impose on it would be increased.

(see paras 156, 157, 165, 167-172)