Cases T‑389/10 and T‑419/10

(publication by extracts)

Siderurgica Latina Martin SpA (SLM)
and
Ori Martin SA

v

European Commission

(Competition — Agreements, decisions and concerted practices — European prestressing steel market — Price fixing, market sharing and exchanging of sensitive commercial information — Decision finding an infringement of Article 101 TFEU — Single, complex and continuous infringement — Limitation — 2006 Guidelines on the method of setting fines — Imputation of liability for the infringement to the parent company — Proportionality — Principle that penalties must be specific to the individual and to the offence — Unlimited jurisdiction)

Summary — Judgment of the General Court (Sixth Chamber), 15 July 2015

1.      Competition — Administrative procedure — Time-limit with regard to proceedings — Point from which time starts to run — Continued or repeated infringements — Day on which infringement ceased — Interruption — Request for information — Scope

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 25)

2.      EU law — Principles — Non-retroactivity of penal provisions — Scope — Fines imposed for breach of the competition rules — Included — Whether breach by applying guidelines for the calculation of fines to an infringement prior to their introduction — Foreseeability of changes introduced by the Guidelines — No infringement

(Art. 101 TFEU; EEA Agreement, Art. 53; Charter of Fundamental Rights of the European Union, Art. 49(1); Council Regulation No 1/2003, Art. 23(2); Commission Notices 98/C 9/03 and 2006/C 210/02)

3.      Competition — Fines — Amount — Determination — Determination of the basic amount — Determination of the value of sales — Calculation by reference to the value of sales without deduction of transport costs and commissions

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, point 13)

4.      Competition — Fines — Amount — Determination — Method of calculation laid down by the guidelines drawn up by the Commission — Penalty made to fit the particular infringement at various stages of the determination of the amount

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, points 22, 27, 29, 36 and 37)

5.      Competition — Fines — Amount — Determination — Determination of the basic amount — Gravity of the infringement — Admission fee — Factors to be taken into consideration — Requirement for individualisation at the initial stage of determining the basic amount — None

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, points 19 to 23 and 25)

6.      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 — Judicial review — Scope — Decision leaving a doubt in the mind of the court — Compliance with the principle of the presumption of innocence

(Art 101 TFEU; EEA Agreement, Art. 53; Charter of Fundamental Rights of the European Union, Art. 48(1); Council Regulation No 1/2003, Art. 2)

7.      Competition — Fines — Amount — Determination — Adjustment of the basic amount — Mitigating circumstances — Indicative character of circumstances figuring in the Guidelines

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, point 29)

8.      Competition — Fines — Amount — Determination — Adjustment of the basic amount — Mitigating circumstances — Limited period of participation of an undertaking in the infringement — Account taken — Limits

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, point 29)

9.      Competition — Fines — Amount — Determination — Adjustment of the basic amount — Mitigating circumstances — Conduct deviating from that agreed within the cartel — Limited involvement — Conditions

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2) and (3); Commission Notice 2006/C 210/02, point 29, third para.)

10.    Competition — Fines — Amount — Determination — Compliance with the principles of proportionality and that the penalty must be specific — Requirement that fines be set individually in relation to the specific participation of each undertaking concerned — Not sufficiently specific — Consequences

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2))

11.    Competition — Administrative procedure — Obligations of the Commission — Duty to act within a reasonable time — Infringement — Consequences — Annulment of the decision finding an infringement by reason of excessive duration of the procedure — Condition — Harm to the rights of defence of the undertakings concerned

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2))

12.    Competition — Union rules — Infringements — Attribution — Parent company and subsidiaries — Economic unit — Criteria for assessment — Presumption that a parent company exerts a decisive influence over its wholly-owned subsidiaries — Rebuttable — Taking it into account when complying with the principle that fines are personal

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2))

13.    Competition — Union rules — Infringements — Attribution — Parent company and subsidiaries — Economic unit — Criteria for assessment — Presumption that a parent company exerts a decisive influence over its wholly-owned subsidiaries — Rebuttable — Infringement of the principle of limited liability of companies within the European Union — None

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2))

14.    Actions for annulment — Admissibility — Natural or legal persons — Undertaking to which statement of objections addressed not challenging the factual or legal content thereof during the administrative procedure — Limitation of the exercise of a remedy — None

(Arts 6(1) TFEU, 101 TFEU and 263, fourth para., TFEU; Charter of Fundamental Rights of the European Union, Art. 47)

15.    Competition — Union rules — Infringements — Attribution — Parent company and subsidiaries — Economic unit — Criteria for assessment — Presumption that a parent company exerts a decisive influence over its wholly-owned subsidiaries — Evidential obligations of the company seeking to rebut that presumption — Factors insufficient to rebut the presumption

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2))

16.    Competition — Union rules — Infringements — Fines — Infringement committed intentionally or negligently — Imputability to an undertaking of the conduct of its organs — Conditions

(Art. 101 TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23)

17.    Actions for annulment — Actionable measures — Definition — Measure producing binding legal effects — No position adopted by the Commission on a request for payment of interest on the excess amount of a fine already paid following an initial decision before its reimbursement as a result of a modifying decision — Lack of jurisdiction

(Arts 261 TFEU and 263 TFEU; Council Regulation No 1/2003)

18.    Competition — Fines — Amount — Discretion of the Commission — Judicial review — Unlimited jurisdiction of the EU judicature — Scope — Reduction of the amount of a fine imposed in breach of the principle of proportionality — Account taken of the principle that the penalty must fit the offender

(Art. 261 TFEU; Council Regulation No 1/2003, Arts 23(2) and (3), and 31)

1.      See the text of the decision.

(see paras 76-81)

2.      See the text of the decision.

(see paras 92-107, 109)

3.      When determining the amount of the fines for an infringement of the competition rules where there has been a single infringement, in the sense of a complex infringement combining a number of agreements and concerted practices on separate markets on which the offending undertakings are not all present or may have only partial knowledge of the overall plan, the penalties must be made to fit the individual conduct and specific characteristics of the undertakings concerned.

Thus, first, in order to determine the amount of the fine on the basis of the gravity and duration of the infringement committed by an undertaking, account cannot be taken, in relation to the entire duration of its participation in the cartel, of the value of sales made in a Member State which was not the subject of discussions in its presence.

Secondly, in fixing the amount of the fine in view of the gravity and duration of the infringement committed by an undertaking, when the markets of certain Member States were discussed in its presence, account cannot be taken, in relation to the entire duration of its participation in the cartel, of the value of sales made in States where that undertaking was not initially present because it was not authorised to sell its products there.

Therefore, where an undertaking participated only belatedly and progressively in a single infringement by restricting itself, in essence, initially, to arrangements concluded in respect of a Member State, the Commission must take into consideration, when calculating the amount of the fine, that there were no authorisations allowing that undertaking to sell in certain other Member States before a certain date and no evidence to support the view that it could be involved in the cartel even before it participated in the meetings.

(see paras 140, 174, 178, 327)

4.      In that context of a single infringement of the competition rules, the principle of proportionality requires that the fine must be fixed by the Commission proportionately to the factors to be taken into account both in assessing the objective gravity of the infringement, as such, and in assessing the relative gravity of the participation in the infringement of the undertaking on which the penalty is to be imposed.

The Commission must ensure that it fits the penalties to the infringement, taking account of the particular situation of each offender. In practice, the penalty may be made to fit the particular infringement at various stages of the determination of the amount of the fine.

First, the Commission may recognise the particularity of an undertaking’s participation in the infringement at the stage of assessing the objective gravity of the single infringement, under point 22 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003.

Secondly, the Commission may recognise the particularity of an undertaking’s participation in the infringement at the stage of assessing the mitigating circumstances referred to in point 29 of the Guidelines in the context of an overall assessment of all the relevant circumstances (see point 27 of the Guidelines).

Thirdly, the Commission may recognise the particularity of an undertaking’s participation in the infringement at a later stage than that of the assessment of the objective gravity of the infringement or the mitigating circumstances put forward by the undertakings concerned. Point 36 of the Guidelines thus states that the Commission may, in certain cases, impose a symbolic fine and, as indicated in point 37 of those Guidelines, it may also depart from the general methodology laid down for the setting of fines, in the light, inter alia, of the particularities of a given situation.

(see paras 141-146, 314)

5.      In the context of determining the basic amount of fines imposed for breach of the competition rules, the factors taken into consideration in order to assess the degree of gravity of the infringement, like those which lead the Commission to include a specific amount in the fine, irrespective of the duration of the infringement, in order to deter undertakings from even entering into unlawful practices, relate to the infringement in general. In view of the general methodology set out in the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003, it is only at a later stage that the Commission adjusts the basic amount of the fine in order to take account of any mitigating circumstances, such as the limited role of each undertaking. Thus, when the Commission takes into consideration the four factors mentioned as examples in point 22 of the Guidelines, it cannot be criticised when it deems it appropriate to include a specific amount, irrespective of the duration of the infringement, in the basic amount of the fine. In that regard, inasmuch as the considerations relating to the examination of the statement of reasons for the proportion used to determine the value of sales intended to assess the gravity of the infringement are equally valid as regards the assessment of the statement of reasons to justify the proportion used to determine the additional amount applied as a deterrent, the mere reference to the analysis of the factors used to assess the gravity suffices, as a statement of reasons concerning the proportion of the value of sales used for the additional amount.

(see paras 186, 193, 261-264)

6.      See the text of the decision.

(see paras 215-219, 223-227, 233, 240-249, 251)

7.      Point 29 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 merely contains an indicative and non-exhaustive list of certain mitigating circumstances which may be taken into account, as is apparent from the expression ‘such as’ which is used.

(see para. 271)

8.      When determining the fines for an infringement of Article 101 TFEU, the limited duration of an undertaking’s participation in the infringement is a factor already taken into account when determining the basic amount of the fine, which takes into account the duration of the participation of each undertaking in the infringement.

Thus, while it cannot be excluded that, in certain situations, a significant difference in the length of participation of the various undertakings concerned can be taken into consideration in respect of mitigating circumstances, that is not the case where the length of an undertaking’s participation is sufficiently significant.

(see paras 283, 285)

9.      See the text of the decision.

(see paras 287, 288, 297-300)

10.    See the text of the decision.

(see paras 314-320, 323, 324, 326-328)

11.    As regards the administrative procedure in competition matters, whether the time taken for the procedure is reasonable must be assessed in relation to the individual circumstances of each case, and in particular its context, the conduct of the parties during the procedure, what is at stake for the various undertakings concerned and its complexity and also, where relevant, to information or justification which the Commission may provide concerning the measures of investigation carried out during the administrative procedure.

A number of factors may explain the length of the administrative procedure. It may be the duration of the cartel, its particularly wide geographic scope, the organisation of the cartel at geographic level and over time, the number of meetings held, the number of undertakings involved, the number of leniency applications and the particularly large volume of documents, supplied in connection with the leniency applications or obtained in the course of the inspections and in various languages, which had to be examined by the Commission, the various requests for further information that had to be addressed by the Commission to the various companies involved, as understanding of the cartel developed, the number of addressees of the statement of objections, the number of languages of the case and also the various applications relating to ability to pay.

Where the length of the administrative procedure constitutes a failure to comply with the reasonable time requirement, that breach may have two types of consequences. First, where the failure to comply with the reasonable time requirement has affected the outcome of the proceedings, such a breach may entail annulment of the contested decision. For the purposes of the application of the competition rules, a failure to act within a reasonable time can constitute a ground for annulment only in the case of a decision finding infringements and where it has been proved that the breach of that principle has adversely affected the rights of defence of the undertakings concerned. Except in that specific circumstance, failure to comply with the obligation to adopt a decision within a reasonable time cannot affect the validity of the administrative procedure under Regulation No 1/2003. However, as respect for the rights of the defence is of crucial importance in administrative procedures in competition matters, it is essential to prevent those rights from being irremediably compromised on account of the excessive duration of the investigation phase and to ensure that the duration of that phase does not impede the establishment of evidence designed to refute the existence of conduct susceptible of rendering the undertakings concerned liable. For that reason, examination of any interference with the exercise of the rights of the defence must not be confined to the actual phase in which those rights are fully effective, that is to say, the second phase of the administrative procedure. The assessment of the source of any undermining of the effectiveness of the rights of the defence must extend to the entire procedure and be carried out by reference to its total duration.

Furthermore, where the breach of the reasonable time requirement does not affect the outcome of the procedure, such a breach may lead the Court, in the exercise of its unlimited jurisdiction, to provide an appropriate remedy for the breach resulting from failure to observe the reasonable time requirement by reducing, where appropriate, the amount of the fine imposed.

(see paras 336, 338-342, 354, 355)

12.    See the text of the decision.

(see paras 372-384, 386, 387)

13.    In competition matters, when imputing liability for an infringement to a parent company, the Commission is entitled to rely on the presumption of actual exercise of decisive influence in view of the fact that the parent company has a 100% or virtually 100% shareholding of the subsidiary which committed the infringement, without any need for it to rely on any other evidence in that regard.

The Commission, by considering the parent company to be jointly and severally liable, does not infringe the principle of limited liability arising under company law in the EU. Limited liability in respect of companies essentially seeks to establish a ceiling for their financial liability and not to prevent a company that has infringed competition law from being penalised through the legal entities that compose it, and, more particularly, through the company which committed the infringement and its parent company, in particular if the parent company has a 100% or virtually 100% shareholding in its subsidiary and if it cannot rebut the presumption of actual exercise of decisive influence on that subsidiary.

(see paras 385, 388)

14.    See the text of the decision.

(see paras 391-393)

15.    See the text of the decision.

(see paras 394-400, 407-409)

16.    In matters of infringement of the competition rules, in order for an infringement of Article 101 TFEU to be imputed to an undertaking, it is not necessary for there to have been action by, or even knowledge on the part of, the partners or principal managers of the undertaking concerned; action by a person who is authorised to act on behalf of the undertaking is sufficient.

Thus, where the representatives of a subsidiary in the cartel have been validly authorised by the subsidiary to bind the undertaking, the fact that those persons played no role in the parent company is irrelevant, since they were authorised to bind the subsidiary which participated in the infringement. Therefore the fact that those persons acted independently is not capable of releasing the subsidiary, and as a consequence the parent company, from its liability.

(see paras 410, 411)

17.    In the absence of any adoption of a position by the Commission on an undertaking’s request seeking payment of interest on the excess part of the fine paid following an initial decision, before being reimbursed as a result of an amending decision, the Court does not have jurisdiction to adjudicate on the claim for directions submitted by that undertaking in that regard in its observations on the amending decision, since such jurisdiction does not arise, in particular, from Article 263 TFEU or Article 261 TFEU, read in conjunction with Article 31 of Regulation No 1/2003.

That is the case in particular where an amending decision which reduced the amount of the fine imposed on an undertaking does not address the issue of reimbursement of the overpayment with interest if requested by the party concerned, where the undertaking has not made a request to the Commission to that effect, and where the Commission has not adopted a position in an act capable of adversely affecting that undertaking.

(see paras 428-430)

18.    The unlimited jurisdiction conferred on the Court, in application of Article 261 TFEU, by Article 31 of Regulation No 1/2003 empowers it, in addition to carrying out a mere review of the lawfulness of the penalty — which enables it only to dismiss the action for annulment or to annul the contested measure — to substitute its own appraisal for the Commission’s and, consequently, to vary the contested measure, even without annulling it, taking into account all of the factual circumstances, by amending, in particular, the fine imposed where the question of the amount of the fine is before it.

By its nature, the fixing of a fine by the Court is not an arithmetically precise exercise. Furthermore, the Court is not bound by the Commission’s calculations or by its Guidelines when it adjudicates in the exercise of its unlimited jurisdiction, but must make its own appraisal, taking account of all the circumstances of the case. In order to determine the amount of the fine intended to penalise participation in a single infringement, it follows from Article 23(3) of Regulation No 1/2003 that regard is to be had both to the gravity and to the duration of the infringement, and it follows from the principle that penalties must be specific to the offender that the penalty must take account of the situation of each offender with respect to the infringement. That is particularly so in the case of a complex infringement of long duration of the type defined by the Commission in the contested decision, which is characterised by the heterogeneity of the participants.

(see paras 432, 436, 437)