Case T-29/05
Deltafina SpA
v
European Commission
(Competition – Agreements, decisions and concerted practices – Spanish market for the purchase and first processing of raw tobacco – Decision finding an infringement of Article 81 EC – Price-fixing and market-sharing – Consistency between the statement of objections and the contested decision – Rights of the defence – Definition of the relevant market – Fines – Gravity of the infringement – Aggravating circumstances – Role as leader – Cooperation)
Summary of the Judgment
1. Competition – Agreements, decisions and concerted practices – Imputation to an undertaking – Commission decision establishing the liability of an undertaking which was active on a market immediately downstream of the relevant market and actively and intentionally contributed to the cartel
(Arts 3(1)(g) EC and 81(1) EC)
2. Competition – Administrative procedure – Statement of objections – Necessary content – Observance of the rights of the defence – Scope
(Council Regulations Nos 17 and 1/2003)
3. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Effect on trade between Member States – Criteria for assessment
(Art. 81(1) EC)
4. Acts of the institutions – Guidelines on the method of setting fines imposed for infringement of competition rules
(Council Regulation No 17, Art. 15; Commission Communication 98/C 9/03)
5. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Assessment – Assessment on a case-by-case basis
(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(3); Commission Communication 98/C 9/03)
6. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Assessment – Interdependence between the three criteria expressly referred to in the Guidelines adopted by the Commission – Classification of an infringement as very serious – Major role played by the criterion relating to the nature of the infringement
(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(3); Commission Communication 98/C 9/03)
7. Competition – Fines – Amount – Determination – Criteria – Actual impact on the market
(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(3); Commission Communication 98/C 9/03, Section 1A, first para.)
8. Competition – Fines – Legal context – Determination – Effect of the Commission’s previous decision-making practice – None
(Council Regulations Nos 17 and 1/2003)
9. Acts of the institutions – Statement of reasons – Obligation – Scope
(Art. 253 EC)
10. Competition – Administrative procedure – Statement of objections – Necessary content – Observance of the rights of the defence
(Council Regulations Nos 17 and 1/2003; Commission Communication 98/C 9/03, Section 2)
11. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Aggravating circumstances – Role as leader of the cartel – Concept
(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(3); Commission Communication 98/C 9/03, Section 2)
12. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances – Assessment – Need to take separate account of each of the circumstances – No such need – Global assessment
(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(3); Commission Communication 98/C 9/03, Section 3)
13. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances – Conduct deviating from that agreed within the cartel – Assessment
(Council Regulations Nos 17, Art. 15, and 1/2003, Art. 23; Commission Communication 98/C 9/03, Section 3, second indent)
14. Competition – Fines – Amount – Determination – Criteria – Mitigating circumstances – Termination of the infringement before the Commission's intervention – Excluded
(Council Regulations Nos 17, Art. 15(2), and 1/2003, Art. 23(3); Commission Communication 98/C 9/03, Section 3, third indent)
15. Competition – Fines – Amount – Determination – Criteria – Reduction of the fine for cooperation on the part of the fined undertaking – Conditions
(Council Regulations Nos 17 and 1/2003; Commission Communication 96/C 207/04)
16. Competition – Community rules – Infringements – Fines – Determination – Criteria – Raising of the general level of fines – Lawfulness – Conditions
(Arts 81(1) EC and 82 EC; Council Regulations Nos 17 and 1/2003)
1. The Commission does not exceed the limits of the prohibition laid down in Article 81(1) EC by establishing that an undertaking is liable for an infringement of that provision where, while active on the market immediately downstream from that on which the anti‑competitive practices were implemented, that undertaking participated actively and intentionally in a cartel among producers active on a different market from that on which it itself operated.
An undertaking may infringe the prohibition laid down in Article 81(1) EC where the purpose of its conduct, as coordinated with that of other undertakings, is to restrict competition on a specific relevant market within the common market, and that does not mean that the undertaking has to be active on that relevant market itself.
Accordingly, an undertaking may participate in the implementation of a restriction of competition even if it does not restrict its own freedom of action on the market on which it is primarily active. Any other interpretation might restrict the scope of the prohibition laid down in Article 81(1) EC to an extent incompatible with its useful effect and its main objective, as read in the light of Article 3(1)(g) EC, which is to ensure that competition in the internal market is not distorted, since proceedings against an undertaking for actively contributing to a restriction of competition could be blocked simply on the ground that that contribution does not come from an economic activity forming part of the relevant market on which that restriction materialises or on which it is intended to materialise.
A reading of the term ‘agreements between undertakings’ in the light of the objectives pursued by Article 81(1) EC and by Article 3(1)(g) EC tends to confirm that the notions of a cartel and of an undertaking which is the perpetrator of an infringement are conceptually independent of any distinction based on the sector or the market on which the undertakings concerned are active.
The attribution of the infringement as a whole to an undertaking which has participated in a cartel is consistent with the requirements of the principle of individual liability where two conditions are met, the first being of an objective and the second a subjective nature.
The first condition is met, as regards the relationship between competitors on the same relevant market and the relationship between such competitors and their clients, where the participating undertaking has contributed to the implementation of the cartel, even in a subsidiary, accessory or passive role, for example by tacitly approving the cartel and by failing to report it to the administrative authorities.
As regards the second condition, the attribution of the infringement as a whole to the participating undertaking also depends on the manifestation of its own intention, which shows that it is in agreement, albeit only tacitly, with the objectives of the cartel.
(see paras 48-49, 51, 57-58, 62)
2. In all proceedings in which sanctions, especially fines or penalty payments, may be imposed, observance of the rights of the defence requires, in particular, that the statement of objections which the Commission sends to an undertaking on which it envisages imposing a penalty for an infringement of the competition rules should contain the essential elements used against it, such as the facts, the characterisation of those facts and the evidence on which the Commission relies, so that the undertaking may submit its arguments effectively in the administrative procedure brought against it.
An infringement of the rights of the defence during the administrative procedure must be examined in the light of the objections established by the Commission in the statement of objections and in the decision concluding the procedure. In those circumstances, the finding of an infringement of the rights of the defence presupposes that the objection – which the undertaking maintains was not raised against it in the statement of objections – has been included by the Commission in its final decision. A mere difference in presentation of the facts, where the intention is to give a more precise account of the facts in the final decision, cannot constitute a substantive alteration of the objections.
(see paras 113-115, 120)
3. For an agreement, decision or practice to be capable of affecting trade between Member States, it must be possible to foresee with a sufficient degree of probability, on the basis of a set of objective factors of law or of fact, that it may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States in such a way as to cause concern that it might hinder the attainment of a single market between Member States. Moreover, that effect must not be insignificant. Thus, an effect on intra-Community trade is normally the result of a combination of several factors which, taken separately, are not necessarily decisive.
Article 81(1) EC does not require that the arrangements referred to in that provision have actually appreciably affected trade between Member States, but requires that it be established that those arrangements are capable of having that effect.
(see paras 167-169)
4. Although 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 may not be regarded as rules of law which the administration is always bound to observe, they nevertheless form rules of practice from which the administration may not depart in an individual case without giving reasons that are compatible with the principle of equal treatment.
(see para. 230)
5. The fact that, 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, the Commission set out its approach to assessment of the gravity of an infringement does not prevent it from assessing that criterion as a whole by reference to all the relevant circumstances of the case, including factors that are not expressly mentioned in the Guidelines.
(see para. 230)
6. According to 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, the three factors to be taken into account in assessing the gravity of an infringement of Community competition rules are the nature of the infringement, its actual impact on the market, where that can be measured, and the size of the relevant geographic market. Those three factors do not have the same weight in the context of the overall assessment. The nature of the infringement plays a primary role, in particular in classifying infringements as ‘very serious’.
In that regard, it follows from the description of very serious infringements in the Guidelines that agreements or concerted practices involving in particular price fixing or market sharing may be classified as ‘very serious’ on the basis of their nature alone, without it being necessary for such conduct to have a particular impact or cover a particular geographic area. That conclusion is corroborated by the fact that, while the indicative description of serious infringements expressly mentions the market impact and the effects on extensive areas of the common market, that of very serious infringements does not mention any requirement as to the actual market impact or the effects produced in a particular geographic area.
There is an interdependence between the three factors in the assessment of gravity in that a high degree of gravity in respect of one of the factors may offset the lesser gravity of the infringement in respect of other factors.
The extent of the geographic market is only one of the three criteria which are relevant for the purpose of the overall assessment of the gravity of the infringement and is not an autonomous criterion in the sense that only infringements affecting most of the Member States would be classifiable as ‘very serious’. Neither the EC Treaty, nor Regulation No 17, nor Regulation No 1/2003, nor the Guidelines, nor the case-law support the conclusion that only geographically very extensive restrictions may be classified as such. Accordingly, the small size of the relevant geographic market does not preclude the infringement established being classified as ‘very serious’. That applies all the more where the relevant product market is small, since the size of the product market is not, in principle, a factor that must necessarily be taken into account but simply one relevant factor among others in assessing the gravity of the infringement and fixing the amount of the fine.
It is clear that the infringement of which tobacco processors and an undertaking in question, whose activities include the marketing of processed tobacco, are accused, which consists in fixing the prices of various varieties of raw tobacco in a Member State and sharing out quantities of raw tobacco to be purchased from producers, constitutes by its nature a very serious infringement. Infringements of that kind are classified as ‘particularly serious’, since they involve direct interference with the essential parameters of competition on the market in question or clear infringements of the Community competition rules.
(see paras 231, 233-234, 238, 240-242)
7. In the assessment of the gravity of the infringement of Community competition rules for the purpose of setting the amount of the fine, the fact that the Commission has failed to prove to the requisite legal standard that the cartel had an actual impact on the market is irrelevant to the classification of the infringement as ‘very serious’.
The lack of adequate proof as to any actual impact on the market cannot call into question the starting amount of the fine determined by the Commission by reference to the gravity of the infringement.
(see paras 250-251)
8. The Commission’s previous practice does not itself serve as a legal framework for fines imposed in competition matters.
(see paras 292, 426)
9. The statement of reasons for an individual decision must disclose, clearly and unequivocally, the reasoning of the institution which adopted the measure, in such a way as to allow those concerned to know the grounds of the measure adopted and the competent court to exercise its power of review. The requirement to state reasons must be assessed by reference to the circumstances of the case. The reasoning is not required to go into all the relevant facts and points of law, since the question whether it meets the requirements of Article 253 EC must be assessed by reference not only to the wording of the measure in question but also to the context in which it was adopted and to all the legal rules governing the matter in question.
(see para. 319)
10. Provided that the Commission indicates expressly in the statement of objections that it will consider whether it is appropriate to impose fines on the undertakings concerned and that it sets out the principal elements of fact and of law that may give rise to a fine, such as the gravity and the duration of the alleged infringement and the fact that it has been committed ‘intentionally or negligently’, it fulfils its obligation to respect the right of the undertakings concerned to be heard. In doing so, it provides them with the necessary elements to defend themselves not only against a finding of infringement but also against the fact of being fined. However, to oblige the Commission to give to undertakings under investigation specific indications of the level of the contemplated fines at the stage of the statement of objections would in effect require it inappropriately to anticipate its final decision.
The characterisation of an undertaking as the leader of a cartel has important consequences as to the amount of the fine to be imposed on the undertaking. Thus, in accordance with Section 2 of 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, it is an aggravating circumstance which results in a significant increase in the amount of the fine. Similarly, in accordance with Section B(e) of the Leniency Notice, such characterisation automatically rules out the benefit of a very significant reduction of the fine, even if the undertaking classified as leader meets all the conditions laid down for obtaining such a reduction. It is therefore for the Commission to set out in the statement of objections the evidence which it considers relevant for the purpose of enabling the undertaking which may be characterised as the leader of the cartel to reply to such a claim. However, in the light of the fact that that statement is but a step in the adoption of the final decision and does not therefore constitute the Commission’s definitive position, the Commission cannot be required, already at that stage, to carry out a legal classification of the evidence on which it relies in its final decision in characterising an undertaking as the leader of the cartel.
(see paras 324-325, 327)
11. For the purpose of determining the amount of the fine for infringement of Community competition rules, the undertaking in question must, in order to be characterised as leader, have represented a significant driving force in the cartel and bore individual and specific liability for the operation of the cartel.
While the evidence relied on by the Commission may demonstrate that that undertaking played an active and direct role in the cartel, it does not suffice to establish that it represented a significant driving force in the cartel, especially if there is nothing in the file to show that the undertaking concerned took any initiatives to create the cartel or that it was instrumental in securing the participation of any of the other undertakings and there is no evidence to prove that the undertaking concerned assumed responsibility for activities usually associated with acting the part of leader of a cartel, such as chairing meetings or centralising and distributing certain data.
(see paras 332-335)
12. The Commission must, in principle, comply with the terms of its own Guidelines when determining the amount of fines for infringement of Community competition rules. However, 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 do not state that the Commission must always take account separately of each of the mitigating circumstances listed in Section 3 of the Guidelines and it is not obliged to grant an additional reduction on such grounds automatically; the appropriateness of any reduction of the fine in respect of mitigating circumstances must be examined comprehensively on the basis of all the relevant circumstances.
The adoption of the Guidelines has not rendered irrelevant the previous case-law under which the Commission enjoys a discretion as to whether or not to take account of certain matters when setting the amount of the fines it intends imposing, by reference in particular to the circumstances of the case.
Thus, in the absence of any binding indication in the Guidelines regarding the mitigating circumstances that may be taken into account, it must be concluded that the Commission has retained a degree of latitude in making an overall assessment of the extent to which a reduction of fines may be made in respect of mitigating circumstances.
(see paras 347-348)
13. In setting the amount of the fine for infringement of Community competition rules, the Commission is not required to recognise the existence of an attenuating circumstance consisting of non-implementation of a restrictive agreement unless the undertaking relying on that circumstance is able to show that it clearly and substantially opposed the implementation of the agreement, to the point of disrupting the very functioning of it, and that it did not give the appearance of adhering to the agreement and thereby incite other undertakings to implement the agreement in question. It would be too easy for undertakings to reduce the risk of being required to pay a heavy fine if they were able to take advantage of an unlawful agreement and then benefit from a reduction in the fine on the ground that they had played only a limited role in implementing the infringement, when their attitude encouraged other undertakings to act in a way that was more harmful to competition.
(see para. 350)
14. For the purpose of setting the amount of the fine for infringement of Community competition rules, the ‘termination of the infringement as soon as the Commission intervenes’, referred to in the third indent of Section 3 of 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, can, logically, constitute an attenuating circumstance only if there are reasons to suppose that the undertakings concerned were encouraged to cease their anti-competitive conduct by the interventions in question, the situation in which the infringement has already come to an end before the date on which the Commission first intervenes not being covered by that provision in the Guidelines.
(see paras 354-355)
15. The Commission has a wide discretion as regards the method of calculating fines for infringement of Community competition rules and it may, in that regard, take account of numerous factors, including the cooperation provided by the undertakings concerned during the investigation conducted by its departments. It enjoys a wide discretion in assessing the quality and usefulness of the cooperation provided by an undertaking, in particular by reference to the contributions made by other undertakings. In order to justify the reduction of a fine for cooperation, the conduct of an undertaking must facilitate the Commission’s task of finding and bringing to an end such infringements. When assessing the cooperation provided by the undertakings, the Commission cannot ignore the principle of equal treatment, which is infringed where comparable situations are treated differently or different situations are treated in the same way, unless such treatment is objectively justified.
(see paras 389-390, 399)
16. The fact that in the past the Commission has applied fines of a particular level for certain types of infringements does not mean that it is stopped from raising that level within the limits indicated by Regulation No 1/2003 if that is necessary to ensure implementation of Community competition policy.
Economic operators cannot have a legitimate expectation that an existing situation which is capable of being altered by the Commission in the exercise of its discretionary power will be maintained.
Consequently, undertakings involved in an administrative procedure in which fines may be imposed cannot acquire a legitimate expectation that the Commission will not exceed the level of fines previously imposed.
Any undertaking involved in an administrative procedure in which fines may be imposed must take account of the possibility that the Commission may decide at any time to raise the level of the fines by comparison to that applied in the past.
(see paras 426, 435)