Case T‑393/10
(publication by extracts)
Westfälische Drahtindustrie GmbH and Others
v
European Commission
(Competition — Agreements, decisions and concerted practices — European market for prestressing steel — Price fixing, market sharing and the exchange of commercially sensitive information — Complex infringement — Single and continuous infringement — Distancing — Gravity of the infringement — Mitigating circumstances — Equal treatment — Principle that penalties must fit the offence — Appraisal of ability to pay — 2002 Commission Notice on cooperation — 2006 Guidelines on the method of setting fines — Unlimited jurisdiction)
Summary — Judgment of the General Court (Sixth Chamber), 15 July 2015
1. Actions for annulment — Actionable measures — Concept — Measures producing binding legal effects — Letter from a Director-General of the Commission rejecting an application for reduction of a fine imposed on an undertaking for breach of the competition rules — Letter containing an assessment of the undertaking’s ability to pay distinct from the initial decision — Not purely confirmatory in character — Admissibility
(Art. 263 TFEU)
2. Actions for annulment — Natural or legal persons — Interest in bringing proceedings —Commission decision imposing a fine for breach of the competition rules — Unlimited jurisdiction of the EU judicature to review and vary the decision taking account of the legal and factual situation prevailing at the date of its decision — Interest of the penalised undertakings in judicial review of the factual and legal assessments made by the Commission
(Arts 101 TFEU and 263 TFEU)
3. 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 — Existence of an overall plan — Assessment — Transitional period between two chapters of a single infringement — Consequences
(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 25(1))
4. Competition — Administrative procedure — Commission decision finding an infringement — Burden of proving the infringement and its duration on the Commission — Extent of the burden of proof — Degree of precision required of the evidence used by the Commission — Body of evidence — Evidential obligations of undertakings challenging the reality or the duration of the infringement — Public distancing
(Art. 101 TFEU; EEA Agreement, Art. 53)
5. EU law — Principles — Fundamental rights — Presumption of innocence — Procedures in competition matters — Applicability — Scope — Consequences
(Art. 101 TFEU; EEA Agreement, Art. 53)
6. Acts of the institutions — Statement of reasons — Obligation — Scope — Assessment of the duty to state reasons by reference to the circumstances of the case — No need to specify all the relevant factual and legal elements
(Art. 296 TFEU)
7. Competition — Administrative procedure — Observance of the rights of the defence — Hearing of undertakings — Undertaking having participated in a hearing on the objections raised by the Commission — Application for a new hearing on the subject of an application for reduction of the fine based on assessment of the undertaking’s ability to pay — Rejection — No infringement of the right to be heard
(Art. 101 TFEU; EEA Agreement, Art. 53; Charter of Fundamental Rights of the European Union, Art. 41(2)(a); Council Regulation No 1/2003, Art. 27(1))
8. Competition — Fines — Amount — Determination — Method of calculation laid down by the guidelines drawn up by the Commission — Obligation on the Commission to apply the guidelines in compliance with the principles of equal treatment and the protection of legitimate expectations
(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02)
9. Competition — Fines — Amount — Determination — Adjustment of the basic amount — Contributory capacity — No obligation to take account of the deficit situation of the undertaking concerned — Actual capacity of the undertaking to pay in a particular social and economic context — To be taken into consideration — Conditions
(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, point 35)
10. Competition — Fines — Amount — Determination — Discretion of the Commission — Judicial review — Unlimited jurisdiction of the EU judicature — Scope — No infringement of the right to effective judicial protection
(Arts 101 TFEU and 261 TFEU; EEA Agreement, Art. 53; Charter of Fundamental Rights of the European Union, Art. 47; Council Regulation No 1/2003, Art. 31; Commission Notice 2006/C 210/02, point 35)
11. Competition — Fines — Amount — Determination — Adjustment of the basic amount — Contributory capacity — Review by the EU judicature under its unlimited jurisdiction — Errors of assessment by the Commission — Annulment — Exercise by the EU judicature of its unlimited jurisdiction
(Arts 101 TFEU and 261 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Arts 23(2), and 31; Commission Notice 2006/C 210/02, point 35)
1. As regards the admissibility of actions for annulment, measures the legal effects of which are binding on, and capable of affecting the interests of, third parties by bringing about a distinct change in their legal position constitute acts which may be the subject of an action for annulment under Article 263 TFEU. In that context, it is necessary to look to the substance of the measure annulment of which is sought in order to ascertain whether it may be the subject of an action for annulment, the form in which that measure was cast being, in principle, immaterial. Only the act whereby an EU body determines its position unequivocally and definitively, in a form enabling its nature to be identified, constitutes a decision that may form the subject-matter of an action for annulment, on condition, however, that that decision does not constitute confirmation of a prior act. Where the contested act merely confirms a prior act, the action is admissible only on condition that the act which it confirms was challenged within the prescribed period. Thus, where an applicant allows expiry of the time-limit for acting against a decision which unequivocally issued a measure having legal effects that is binding upon him, he cannot start that time-limit running afresh by requesting the institution to go back on its decision and bringing an action against the refusal decision confirming the decision taken earlier.
In that regard, in the context of a decision imposing a fine for breach of the competition rules, the letter in which a Director-General of the Commission, first, appraises the applicants’ ability to pay taking into consideration different elements of fact and of law from those which had been examined in the initial decision and, second, relies on a ground for refusing to reduce the fine which is distinct from the ground on which the initial decision was based cannot be regarded as purely confirmatory of the initial decision.
(see paras 98-102, 107)
2. In the matter of an annulment action against a Commission decision imposing a fine for breach of the competition rules, the exercise by the Courts of the European Union of their unlimited jurisdiction does not preclude, but assumes that they will exercise, in so far as they are prompted to do so by the applicant and subject to pleas involving matters of public policy which they are required, in compliance with the inter partes principle, to raise of their own motion, review of the appraisals of law and of fact made by the Commission. Although a Court exercising unlimited jurisdiction must, in principle, take account of the legal and factual situation prevailing on the date on which it makes its determination where it considers that it should exercise its power to vary a decision, that obligation does not have the consequence of depriving the undertakings penalised by the Commission for infringing Article 101 TFEU of any interest in the Court’s review also covering the merits of the factual and legal appraisals made by the Commission, in the light of the legal and factual situation that prevailed on the date of those appraisals.
Accordingly, the mere possibility that, as regards the appraisal of the applicants’ ability to pay, the Court will decide to exercise its unlimited jurisdiction does not in itself have the consequence of rendering a review of the appraisals contained in a letter in which a Director-General of the Commission assessed the contributive capacity of those undertakings by taking into account factual and legal elements different from those which were examined in the initial decision devoid of purpose.
(see para. 109)
3. See the text of the decision.
(see paras 141-147, 152-155, 158, 161, 163, 189-191)
4. See the text of the decision.
(see paras 166-171, 188, 194)
5. See the text of the decision.
(see para. 172)
6. See the text of the decision.
(see para. 272)
7. In the context of administrative procedures in competition matters, where a hearing has been organised before the adoption of a decision imposing fines, the Commission does not have to hold a new hearing a regards the application for reduction brought by an impugned undertaking, based on the assessment of its ability to pay.
The organisation of such a hearing is not provided for in Article 27(1) of Regulation No 1/2003, since all that is recognised in that provision is the right of undertakings to make known their opinion concerning the ‘objections’ on which the Commission envisages basing its decisions. However, the appraisal of the undertakings’ ability to pay is not an objection that could serve as the basis of a decision penalising an infringement of Article 101 TFEU, but it enables the Commission to take into consideration a number of matters put forward in support of a request for a reduction of the fine based on grounds that are independent of the component elements of the infringement.
Nor, moreover, does Article 41(2)(a) of the Charter of Fundamental Rights provide a basis for a right of undertakings to be heard before a decision is taken on their request for a reduction based on the appraisal of their inability to pay in the light of the information supplied by them. Such a decision is indeed an individual measure which would adversely affect the undertakings in question. The fact none the less remains that the right to be heard provided for in Article 41(2)(a) must be considered to have been respected in situations in which the decision taken is based only on matters communicated by the person making the request and in the light of a legal and factual context known to that person.
In that regard, it is true that, by virtue of Article 41(2)(a) of the Charter of Fundamental Rights, the Commission is required to allow an undertaking which has submitted a request for a reduction based on its ability to pay to express its views on the matters of fact or of law which it would take into consideration when refusing that request, where those matters were not communicated to it by that undertaking. On the other hand, the mere fact that the Commission considers that the matters submitted to it are not convincing does not oblige it to communicate that appraisal before determining the request.
(see paras 279-283)
8. See the text of the decision.
(see para. 287)
9. See the text of the decision.
(see paras 288-296)
10. See the text of the decision.
(see paras 297-302)
11. In competition matters, since the application of point 35 of the 2006 Guidelines is the last factor taken into account in determining the amount of the fines, the appraisal of the ability to pay of the undertakings on which penalties have been imposed for breach of Article 101 TFEU falls within the unlimited jurisdiction provided for in Article 261 TFEU and Article 31 of Regulation No 1/2003. Errors made by the Commission when assessing the ability to pay of the impugned undertakings are of such a kind as to entail the annulment of its decision in that it imposes a fine on the said undertakings, and to justify the Court’s exercise of its unlimited jurisdiction.
In that regard, in a situation in which, after receipt of a statement of objections, the companies concerned transferred funds to other companies in the same group, the fact that the inability to pay was caused by discretionary management decisions is not in itself sufficient to justify rejecting any request for a reduction of the fine. The Commission must take account, for the purposes of assessing ability to pay, of the reasons why those transfers were made. Financing granted to other group companies may, for example, meet the need to finance acquisitions made before the sending of the statement of objections.
Moreover, the Commission must, in appropriate cases, take the view that such financial transfers are irrelevant to assessment of the ability to pay of the group of undertakings considered as a whole.
Furthermore, in order to reject a request for a reduction of a fine, the Commission is not entitled to overlook the fact that the undertaking concerned has sufficiently established that it was unable to pay in a single payment the total amount of the fines imposed on it, or to obtain finance or even a bank guarantee for that amount.
In that context, if the EU judicature, having regard to the errors of assessment which vitiate it, annuls the Commission’s decision, in so far as it imposes a fine on the undertaking concerned, there is nothing to prevent the Court from concluding, in the exercise of its unlimited jurisdiction, that no reduction of the fine must be granted by reason of that undertaking’s ability to pay, and from ordering the latter to pay a fine identical in amount to that of the fine imposed in the annulled decision.
(see paras 297, 311, 319, 321, 328, 332, 357, 358)