Case T-301/04
Clearstream Banking AG and
Clearstream International SA
v
Commission of the European Communities
(Competition – Abuse of a dominant position – Financial services – Decision finding an infringement of Article 82 EC – Refusal to provide cross-border clearing and settlement services – Discriminatory pricing – Relevant market – Imputability of the infringement)
Summary of the Judgment
1. Competition – Dominant position – Relevant market – Delimitation – Complex evaluation of economic matters – Discretion of the Commission – Judicial review – Limits
(Art. 82 EC)
2. Competition – Dominant position – Relevant market – Delimitation – Criteria
(Art. 82 EC)
3. Competition – Dominant position – Relevant market – Delimitation – Criteria – Substitutability of the products or services on the supply side or the demand side
(Art. 82 EC; Commission Notice 97/C 372/03)
4. Competition – Dominant position – Relevant market – Delimitation – Effect of Commission’s previous decision-making practice – None
(Art. 82 EC)
5. Competition – Dominant position – Relevant market – Delimitation – Criteria – Complete absence of competition from other partially interchangeable services – Unnecessary condition
(Art. 82 EC)
6. Competition – Administrative procedure – Commission decision finding an infringement – Decision requiring a complex economic or technical assessment – Judicial review – Limits
(Arts 81 EC and 82 EC)
7. Competition – Dominant position – Abuse – Obligations on the dominant undertaking – Possibility for the undertaking in a dominant position to protect its commercial interests, on condition that it does not strengthen its dominant position and thereby abuse it
(Art. 82 EC)
8. Competition – Dominant position – Abuse – Concept – Absence of any fault – Effect of the purpose of the abusive conduct
(Art. 82 EC)
9. Competition – Dominant position – Abuse – Concept – Conduct having the effect or purpose of preventing competition from being maintained or developed
(Art. 82 EC)
10. Competition – Dominant position – Abuse – Discriminatory refusal of access to primary clearing and settlement services for securities issued under German law
(Art. 82 EC)
11. Competition – Dominant position – Abuse – Application of discriminatory prices
(Art. 82 EC)
12. Competition – Dominant position – Abuse – Application of unequal conditions to equivalent services – Need to prove that competition is actually being distorted – None
(Arts 3(1)(g) EC and 82, second para.,(c), EC)
13. Competition – Community rules – Infringement committed by a subsidiary – Imputation to the parent company – Conditions
14. Competition – Administrative procedure – Commission decision – Identification of the offences subject to sanction
(Arts 81 EC and 82 EC)
15. Procedure – Measures of inquiry – Hearing of witnesses – Discretion of the Court of First Instance
(Rules of Procedure of the Court of First Instance, Art. 68(1))
1. Because the definition of the relevant market for the purposes of Community competition law involves complex economic assessments on the part of the Commission, it is subject to only limited review by the Community judicature. However, this does not prevent the Community judicature from examining the Commission’s assessment of economic data. It is required to decide whether the Commission based its assessment on accurate, reliable and coherent evidence which contains all the relevant data that must be taken into consideration in appraising a complex situation and is capable of substantiating the conclusions drawn from it.
(see para. 47)
2. For the purposes of investigating the possibly dominant position of an undertaking on a given product market, the possibilities of competition must be judged in the context of the market comprising the totality of the products or services which, with respect to their characteristics, are particularly suitable for satisfying constant needs and are only to a limited extent interchangeable with other products or services.
Moreover, since the determination of the relevant market is useful in assessing whether the undertaking concerned is in a position to prevent effective competition from being maintained and to behave to an appreciable extent independently of its competitors and its customers, an examination to that end cannot be limited solely to the objective characteristics of the relevant products or services, but the competitive conditions and the structure of supply and demand on the market must also be taken into consideration.
The concept of the relevant market implies that there can be effective competition between the products or services which form part of it and this presupposes that there is a sufficient degree of interchangeability between all the products or services forming part of the same market in so far as a specific use of such products or services is concerned.
(see paras 48-49)
3. As is apparent from the Commission Notice on the definition of the relevant market for the purposes of Community competition law, ‘[a] relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer, by reason of the products’ characteristics, their prices and their intended use’. Supply-side substitutability may also be taken into account when defining the relevant market in those situations where that substitutability has effects equivalent to those of demand substitution in terms of effectiveness and immediacy. This means that suppliers are able to switch production to the relevant products and market them in the short term without incurring significant additional costs or risks in response to small and permanent changes in relative prices.
In that regard the Commission does not commit a manifest error of assessment when holding that there is a distinct market in the provision of primary clearing and settlement services in respect of securities issued under German law, separate from the market in secondary services, given that, because an undertaking holds a de facto monopoly on that market and is therefore an indispensable commercial partner for those primary services, there is neither demand-side nor supply-side substitutability for those services.
A sub-market which has specific characteristics from the point of view of demand and supply and which offers products or services which occupy an essential and non-interchangeable place in the more general market of which it forms part must be considered to be a distinct product or services market. In that context, it is sufficient if a potential or even a hypothetical market could be identified, which is the case where the products or services are indispensable to the conduct of a particular business activity and where there is an actual demand for them on the part of undertakings which seek to carry on that business activity. It is therefore decisive that two different stages of production can be identified and that they are interconnected in that the upstream product is indispensable for supply of the downstream product.
(see paras 50-51, 57, 62, 64-68, 73)
4. In the context of its decision-making powers in competition matters, the Commission is required to carry out an individual appraisal of the circumstances of each case, without being bound by previous decisions. It follows that the parties referred to by a Commission decision applying Article 82 EC are not entitled to call the Commission’s findings into question on the ground that they differ from those made previously in a different case, even where the markets at issue in the two cases are similar, or even identical.
(see para. 55)
5. Although the existence of a competitive relationship between two services does not presuppose complete interchangeability for a specific purpose, it is not a precondition for a finding that a dominant position exists in the case of a given service that there should be a complete absence of competition from other partially interchangeable services as long as such competition does not affect the undertaking’s ability to influence appreciably the conditions in which that competition may be exerted or at any rate to conduct itself to a large extent without having to take account of that competition and without suffering any adverse effects as a result of its attitude.
(see para. 64)
6. Although, as a general rule, the Community judicature undertakes a comprehensive review of the question as to whether or not the conditions for the application of the competition rules are met, the review of complex economic appraisals made by the Commission is necessarily limited to checking whether the relevant rules on procedure and on stating reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of assessment or a misuse of powers.
Likewise, in so far as a Commission decision is the result of complex technical appraisals, those appraisals are in principle subject to only limited review by the Court, which means that the Court cannot substitute its own assessment of matters of fact for the Commission’s.
However, while the Community judicature recognises that the Commission has a margin of appreciation in economic or technical matters, that does not mean that it must decline to review the Commission’s interpretation of economic or technical data. The Community judicature must not only establish whether the evidence put forward is factually accurate, reliable and consistent but must also determine whether that evidence contains all the relevant data that must be taken into consideration in appraising a complex situation and whether it is capable of substantiating the conclusions drawn from it.
(see paras 93-95)
7. Whilst the finding that a dominant position exists does not in itself imply any reproach to the undertaking concerned, it has a special responsibility, irrespective of the causes of that position, not to allow its conduct to impair genuine undistorted competition on the common market. Similarly, whilst the fact that an undertaking is in a dominant position cannot deprive it of its entitlement to protect its own commercial interests when they are attacked, and whilst such an undertaking must be allowed the right to take such reasonable steps as it deems appropriate to protect those interests, such behaviour cannot be allowed if its purpose is to strengthen that dominant position and thereby abuse it.
It therefore follows from the nature of the obligations imposed by Article 82 EC that, in specific circumstances, undertakings in a dominant position may be deprived of the right to adopt a course of conduct or take measures which are not in themselves abuses and which would even be unobjectionable if adopted or taken by non-dominant undertakings.
In that regard, there is abusive conduct by an undertaking in a dominant position on the market for primary clearing and settlement services for securities issued under German law where it delays granting direct access by another undertaking to the computer system necessary for those services.
(see paras 132-133, 136)
8. The concept of abuse is an objective concept relating to the behaviour of an undertaking in a dominant position which is such as to influence the structure of a market where, as a result of the very presence of the undertaking in question, the degree of competition is weakened and which, through recourse to methods different from those which condition normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing on the market or the growth of that competition. Thus, the conduct of an undertaking in a dominant position may be regarded as an abuse within the meaning of Article 82 EC even in the absence of any fault. Consequently, the fact that an undertaking in a dominant position did not pursue an anti-competitive objective is irrelevant to the legal characterisation of the facts. In that context, proving the objective of the contested actions of that undertaking in a dominant position may reinforce the conclusion that there is an abuse of a dominant position but is not a condition for such a finding.
(see paras 140-142)
9. For the purposes of establishing an infringement of Article 82 EC, it is sufficient to show that the abusive conduct of the undertaking in a dominant position tends to restrict competition or, in other words, that the conduct is capable of having that effect.
(see para. 144)
10. In order to find the existence of an abuse within the meaning of Article 82 EC where there has been a refusal to provide a service, that refusal must be likely to eliminate all competition on the market on the part of the person requesting the service, it must not be capable of being objectively justified, and the service must in itself be indispensable to carrying on that person’s business. A product or service is considered necessary or essential if there is no real or potential substitute. In addition, the condition of elimination of all competition does not require the Commission to demonstrate that all competition on the market would be eliminated; it is sufficient to establish that all effective competition on the market is likely to be eliminated.
In that regard, there is an abuse of a dominant position within the meaning of Article 82 EC where an undertaking with a dominant position on the market for the provision of primary clearing and settlement services in respect of securities issued under German law, which holds a de facto monopoly on that market and which is therefore an indispensable trading partner in the provision of those services, refuses in a discriminatory manner to grant access to those services, where such access is indispensable in order to be able to provide cross-border secondary clearing and settlement services relating to securities, thus also harming innovation and competition in the provision of those services and ultimately consumers within the single market.
(cf. points145-150)
11. Discriminatory pricing by an undertaking in a dominant position is prohibited by subparagraph (c) of the second paragraph of Article 82 EC. An undertaking may not therefore apply artificial price differences such as to place its customers at a disadvantage and to distort competition.
(see paras 169-170)
12. The specific prohibition of discrimination in subparagraph (c) of the second paragraph of Article 82 EC forms part of the system for ensuring, in accordance with Article 3(1)(g) EC, that competition is not distorted in the internal market. The commercial behaviour of the undertaking in a dominant position may not distort competition on an upstream or a downstream market, in other words, between suppliers or customers of that undertaking. Co-contractors of that undertaking must not be favoured or disfavoured in the area of the competition which they practise amongst themselves. Therefore, in order for the conditions for applying subparagraph (c) of the second paragraph of Article 82 EC to be met, there must be a finding not only that the behaviour of an undertaking in a dominant market position is discriminatory, but also that it tends to distort that competitive relationship, in other words, to hinder the competitive position of some of the business partners of that undertaking in relation to the others.
In that regard, there is nothing to prevent discrimination between business partners who are in a relationship of competition from being regarded as abusive as soon as the behaviour of the undertaking in a dominant position tends, having regard to the whole of the circumstances of the case, to lead to a distortion of competition between those business partners. In such a situation, it cannot be required in addition that proof be adduced of an actual quantifiable deterioration in the competitive position of the business partners taken individually.
(see paras 192-193)
13. Anti-competitive conduct of an undertaking can be attributed to another undertaking where it has not decided independently upon its own conduct on the market, but carried out, in all material respects, the instructions given to it by that other undertaking, having regard in particular to the economic and legal links between them. Thus, the conduct of a subsidiary may be attributed to the parent company where the subsidiary does not decide independently upon its own conduct on the market but carries out, in all material respects, the instructions given to it by the parent company.
In the specific case of a parent company holding 100% of the capital of a subsidiary which has committed an infringement, there is a rebuttable presumption that the parent company exercises decisive influence over the conduct of its subsidiary and that they therefore constitute a single undertaking for the purposes of competition law. It is thus for a parent company which disputes before the Community judicature a Commission decision fining it for the conduct of its subsidiary to rebut that presumption by adducing evidence to establish that its subsidiary was independent.
(see paras 198-199)
14. The Commission indicates in the operative part of a decision the nature and extent of the infringements of the competition rules which it sanctions or determines. In principle, as regards in particular the scope and nature of the infringements, it is the operative part, rather than the statement of reasons, that is important. Only where there is a lack of clarity in the terms used in the operative part should reference be made, for the purposes of interpreting it, to the statement of reasons contained in the contested decision. There is no ambiguity at all about the wording of the operative part of a decision which specifies the nature and duration of the behaviour which infringes the competition rules and the persons who committed the infringement, and which calls upon those persons to refrain in future from repeating that behaviour.
(see paras 210-212)
15. The Court of First Instance is the sole judge of whether the information available concerning the cases before it needs to be supplemented. Even where a request for the examination of witnesses, made in the application, refers precisely to the facts on which and the reasons why a witness or witnesses should be examined, it falls to the Court of First Instance to assess the relevance of the application to the subject-matter of the dispute and the need to examine the witnesses named. Thus, if the Court of First Instance considers that it is able to rule on the basis of the pleas in law and the arguments presented in the course of both the written and oral procedure, it may reject the request for the examination of a witness.
(see paras 216-218)