Case T‑332/09

Electrabel

v

European Commission

(Competition — Concentrations — Decision imposing a fine for putting into effect a concentration — Obligation to suspend the concentration — Obligation to state reasons — Error of assessment — Limitation period — Amount of the fine)

Summary — Judgment of the General Court (Third Chamber), 12 December 2012

1.      Concentrations between undertakings — Examination by the Commission — Commission decision finding an infringement — Burden of proving the infringement and its duration on the Commission — No dispute as to certain matters of fact or law during the administrative procedure — Limitation of the right to bring an action — None — Judicial review — Scope

(Arts 83 EC and 230, fourth para., EC; Council Regulation No 4064/89, Arts 4(1) and 7(1))

2.      Concentrations between undertakings — Concept — De facto sole control — Exercise by a minority shareholder — Criteria for assessment — Shareholder attendance rates at general meetings in previous years — Judicial review — Scope

(Art. 83 EC; Council Regulation No 4064/89, Art. 3(1) and (3); Commission Notice 98/C 66/02, Sections 9, 14 and 15)

3.      Competition — Administrative procedure — Decision finding an infringement and imposing a fine — Respect for the principle of equal treatment — Obligation of the Commission to adhere to its previous decision-making practice —None — Judicial review

(Arts 81 EC, 82 EC and 83 EC)

4.      Concentrations between undertakings — Concept — De facto sole control — Exercise by a minority shareholder — Criteria for assessment — Structure of voting rights and right to manage the activities of the undertaking at issue— Preferential subscription right — Mere indication that may be considered with others and not an additional condition of such control

(Art. 83 EC; Council Regulation No 4064/89; Commission Notice 98/C 66/02, Section 15)

5.      Acts of the institutions — Statement of reasons — Obligation — Scope

(Art. 253 EC)

6.      Concentrations between undertakings — Examination by the Commission — Obligation to suspend the concentration — Transaction put into effect before being declared compatible with the common market — Commission’s power to request interim measures in respect of transactions falling within the scope of Regulation No 139/2004 and not of those covered by Regulation No 4064/89 — No such request in a case falling under Regulation No 4064/89 — No effect on classification of the infringement

(Art. 83 EC; Council Regulations No 139/2004, Arts 8(5), and 26(2), and No 4064/89, Arts. 4(1), and 7(1))

7.      Competition — Administrative procedure — Time-limit with regard to proceedings — Limitation period — Concentrations between undertakings — Transaction put into effect before being declared compatible with the common market — Assessment

(Art. 83 EC; Council Regulations No 2988/74, Art. 1(1)(a) and (b), and No 4064/89, Art.7(1)

8.      Competition — Administrative procedure — Time-limit with regard to proceedings — Point from which time starts to run — Concentrations between undertakings — Transaction put into effect before being declared compatible with the common market — Continuous infringement — Assessment

(Art. 83 CE; Council Regulation No 2988/74, Art. 1(2), and No 4064/89, Art. 7(1))

9.      Concentrations between undertakings — Fines — Amount — Determination — Judicial review — Unlimited jurisdiction of the European Union judicature — Scope

(Art. 83 EC; Art. 261 TFEU; Council Regulation No 4064/89, Art. 16)

10.    Concentrations between undertakings — Fines — Amount — Determination — Criteria — Gravity of the infringement — Discretion of the Commission — Guidelines on the method of setting fines for infringements of Articles 81 EC and 82 EC — Not applicable — Provisions of Regulation No 4064/89 solely applicable

(Arts 81 EC, 82 EC and 83 EC; Art. 261 TFEU; Council Regulations No 17, Art. 15(2), No 1/2003, Art 23(2), and No 4064/89, Art. 14(3); Commission Notices 98/C 9/03 and 2006/C 210/02)

11.    Concentrations between undertakings — Fines — Amount — Determination — Criteria — Gravity of the infringement — Concept — Transaction put into effect before being declared compatible with the common market — Included — Infringement committed by negligence – No effect

(Arts 3(1)(g) EC, 81 EC, 82 EC and 83 EC; Art. 261 TFEU; Council Regulation No 4064/89, seventeenth recital and Arts 4, 7(1), and 14(2))

12.    Concentrations between undertakings — Fines — Amount — Determination — Criteria — Duration of the infringement

(Art. 83 EC; Council Regulation No 4064/89, Art. 14(2))

13.    Concentrations between undertakings — Fines — Amount — Determination — Mitigating circumstances — Discretion of the Commission — Non-concealment of the acquisition — Infringement committed by negligence

(Art. 83 EC; Council Regulation No 4064/89, Art. 14(2))

14.    Concentrations between undertakings — Fines — Amount — Determination — Criteria — Observance of the principle of proportionality — Scope

(Art. 83 EC; Council Regulation No 4064/89, Art. 14(2))

15.    Concentrations between undertakings — Fines — Amount — Determination — Criteria — Deterrent effect — Account taken of the size and economic power of the undertaking fined

(Art. 83 EC; Council Regulation No 4064/89, Art. 14(2))

16.    Concentrations between undertakings — Fines — Amount — Determination — Commission’s margin of discretion — Raising of the general level of fines — Lawfulness — Breach of the principle of the protection of legitimate expectation — None

(Art. 83 EC; Council Regulation No 4064/89, Art. 14(2))

17.    Concentrations between undertakings — Fines — Amount — Determination — Leniency policy followed in cartel cases — No effect

(Art. 83 EC; Council Regulation No 4064/89, Art. 14(2))

1.      In the field of competition law, where there is a dispute as to the existence of an infringement, the Commission must prove the infringement found by it and adduce evidence capable of demonstrating to the requisite legal standard the existence of the circumstances constituting an infringement. The Commission must therefore produce in the contested decision sufficiently precise and coherent evidence to establish that there has been an infringement. Proceedings before the General Court are governed by the principle of the free taking of evidence; the only relevant criterion for assessing the evidence produced is its credibility.

(see paras 31, 33, 36, 105-107)

2.      See the text of the decision.

(see paras 40-42, 47, 48, 115, 116, 120, 253)

3.      See the text of the decision.

(see paras 63, 123, 124, 173, 259, 274, 286)

4.      See the text of the decision.

(see para. 175)

5.      See the text of the decision.

(see paras 179-181)

6.      See the text of the decision.

(see paras 192-195)

7.      It follows from Article 7(1) of Regulation No 4064/89 on the control of concentrations between undertakings that there is an infringement of that provision if a concentration having a Community dimension is put into effect before being notified or before having been declared compatible with the common market; notification as such is not decisive for the establishment of the reality of the concentration or sufficient to put an end to it.

In that regard, the distinction which gives rise to two different limitation periods in Regulation No 2988/74 concerning limitation periods in proceedings and the enforcement of sanctions under the rules of the European Economic Community relating to transport and competition also relates to the nature of the infringement, a short period of three years being provided for in Article 1(1)(a) of that regulation for infringements relating to applications or notifications of undertakings or associations of undertakings, requests for information, or the carrying-out of investigations, and a longer period of five years being provided for in Article 1(1)(b) for other infringements. It is clear that the first category of infringements, referred to in Article 1(1)(a), concerns infringements of a formal or procedural nature. However, the implementation of a concentration before it has been notified, in breach of Article 7(1) of Regulation No 4064/89, constitutes an infringement which cannot be characterised as purely formal or procedural, since it is capable of giving rise to substantial changes of the conditions of competition. Even if the issue were one of competence, it would none the less concern an infringement other than those referred to in Article 1(1)(a) of Regulation No 2988/74.

(see paras 205-207)

8.      Article 1(2) of Regulation No 2988/74 concerning limitation periods in proceedings and the enforcement of sanctions under the rules of the European Economic Community relating to transport and competition, which provides that time runs as from the day on which the infringement was committed, other than in the case of continuing or repeated infringements, for which time begins to run on the day on which the infringement ceases, cannot be interpreted as establishing a distinction between continuous permanent infringements accomplished in a single act and successive continuous infringements.

The ability to exercise decisive influence over the activity of the controlled undertaking necessarily exists in the period between the date of acquisition of control and the end of control. As regards the continuous nature of the infringement, the entity which has acquired control of the undertaking continues to exercise such control in breach of the obligation to suspend the concentration arising under Article 7(1) of Regulation No 4064/89 on the control of concentrations between undertakings until it puts an end to the infringement by obtaining the Commission’s authorisation or by giving up control. Accordingly, the infringement lasts for so long as the control acquired in breach of Article 7(1) remains and the concentration has not been authorised by the Commission.

(see paras 211, 212)

9.      Under Article 16 of Regulation No 4064/89 on the control of concentrations between undertakings, the Court of Justice has unlimited jurisdiction to review decisions whereby the Commission has fixed a fine or periodic penalty payment; it may cancel, reduce or increase the fine or periodic penalty payment imposed. That jurisdiction empowers the European Union judicature, in addition to carrying out a mere review of the lawfulness of the penalty, to substitute its own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or periodic penalty payment imposed.

However, exercise of unlimited jurisdiction does not amount to a review undertaken at the Court’s own motion, and proceedings before the European Union judicature are inter partes. With the exception of pleas involving matters of public policy which the Court is required to raise of its own motion, such as the failure to state reasons for a contested decision, it is for the applicant to raise pleas in law against that decision and to adduce evidence in support of those pleas.

(see paras 221, 222)

10.    The principles and methods for the calculation of fines set out in the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003, and in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS, apply only in the context of Council Regulation No 17, First Regulation implementing Articles 81 EC and 82 EC and Regulation No 1/2003 on the implementation of the rules on competition laid down in Articles 101 TFEU and 102 TFEU; they therefore do not apply to fines imposed under Regulation No 4064/89 on the control of concentrations between undertakings.

Although parallels may be drawn, the Commission cannot be criticised for not having followed any particular method set out in those guidelines when setting the amount of the fine in the case of a concentration of undertakings. The framework of its analysis must be that set out in Article 14(3) of Regulation No 4064/89, which provides that, in setting the amount of a fine, regard is to be had to the nature and gravity of the infringement, and for which the Commission has not adopted guidelines setting out the method of calculating fines which it must follow.

(see paras 227, 228, 272)

11.    The fact that Regulation No 4064/89 on the control of concentrations between undertakings makes provision for fines of up to 10% of the turnover of the undertakings concerned shows that the legislature wished to protect the system of notification and authorisation prior to the implementation of a concentration of a Community dimension.

The objective of the EU rules on the control of concentrations is the prevention of irreparable and permanent damage to competition. It also follows from Regulation No 4064/89, however, that the system for the control of concentrations which it establishes is designed to allow the Commission to exercise effective control of all concentrations from the point of view of their effect on the structure of competition (seventh recital) and that the effectiveness of that system is ensured by the introduction of ex ante control of the effects of concentrations with a Community dimension. It follows from the 17th recital to and also from Article 4 and Article 7(1) of Regulation No 4064/89 that the effectiveness of that control rests on a duty for undertakings to notify such concentrations in advance and to suspend their implementation until the Commission has adopted a decision declaring them compatible with the common market. Furthermore, the limitations on the possibility of granting a derogation from the obligation to suspend the concentration laid down in Article 7 and the severity of the penalties provided for in Article 14(2)(b) of Regulation No 4064/89 in the event of a breach of that obligation confirm the fundamental importance which the legislature attached to the obligation to suspend the concentration in the context of the control of concentrations, an approach which is justified in so far as the implementation of a concentration affects the structure of the market and may render more difficult the decisions whereby the Commission seeks, where necessary, to restore effective competition.

With regard, in such a context, to the role played by negligence, Article 14(2) of Regulation No 4064/89 makes no distinction according to whether the infringement was committed deliberately or by negligence, but refers to them as alternative conditions for the imposition of a fine. Furthermore, infringements committed by negligence are not, from the point of view of their effects on competition, less serious than those committed deliberately.

(see paras 234-237, 245-246, 253, 273)

12.    The risk of damage to competition increases when an improper situation is prolonged and, in the case of a breach of the obligation to suspend a concentration, the risk has to be assessed initially without consideration of the future effects of the transaction. Where an infringement is defined as the implementation of an unlawful act or activity, it is lawful to take account of the scope of the act or activity in question, and also of the period during which the activity was pursued, even though those circumstances relate to the period after the time when the infringement was committed.

(see para. 267)

13.    See the text of the decision.

(see paras 272, 275-277)

14.    See the text of the decision.

(see para. 279)

15.    See the text of the decision.

(see para. 282)

16.    See the text of the decision.

(see paras 286, 299)

17.    The leniency policy in cartel cases responds to specific problems in detecting cartels, which by nature are secret infringements. The leniency programme and transactions in it are specific instruments linked to that context and any application by analogy in the context of the rules on concentrations of a Community dimension, which are based on a duty to notify and to respect the Commission’s sole power to give prior authorisation, must be rejected.

(see paras 291, 292)