Case T-410/03
Hoechst GmbH
v
Commission of the European Communities
(Competition – Agreements, decisions and concerted practices – Market in sorbates – Decision finding an infringement of Article 81 EC – Calculation of the amount of the fines – Obligation to state the reasons on which the decision is based – Gravity and duration of the infringement – Aggravating circumstances – Principle non bis in idem – Cooperation during the administrative procedure – Access to the file – Duration of the procedure)
Summary of the Judgment
1. Competition – Administrative procedure – Breach resulting from the obligation placed on the Commission – Respect for the principles of sound administration and equal treatment
(Council Regulation No 17, Arts 15(2) and 17; Commission Notice 96/C 207/04)
2. Competition – Administrative procedure – Respect for the rights of the defence – Access to the file
(Art. 81(1) EC; Council Regulation No 17, Arts 19(1) and 20)
3. Competition – Administrative procedure – Bringing infringements to an end – Commission’s powers – Injunctions addressed to undertakings
(Council Regulation No 17, Art. 3(1))
4. Competition – Administrative procedure – Limitation period for fines – Exclusive application of Regulation No 2988/74
(Council Regulation No 2988/74, Art. 2(1) and (3))
5. Competition – Fines – Decision imposing fines – Obligation to state the reasons on which the decision is based – Scope
(Art. 253 EC; Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)
6. Competition – Fines – Amount – Determination – Criteria – Discretion of the Commission
(Council Regulation No 17, Art. 15(2))
7. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, point 1A)
8. Competition – Fines – Amount – Determination – Criteria – Division of undertakings concerned into categories having the same starting point
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, point 1A)
9. Competition – Fines – Amount – Determination – Criteria – Deterrent effect of the fine
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, point 1A, fourth and fifth paras)
10. Competition – Fines – Amount – Determination – Criteria – Duration of the infringement
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, point 1B, first and third paras)
11. Competition – Fines – Amount – Determination – Criteria – Gravity and duration of the infringement
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, point 1A and B)
12. Competition – Administrative procedure – Statement of objections – Necessary content – Respect for the rights of the defence
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, point 2)
13. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Aggravating circumstances – Repeated infringement
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)
14. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned with the Commission
(Council Regulation No 17, Art. 15(2); Commission Notices 96/C 207/04 and 2002/C 45/03)
15. Competition – Fines – Amount – Determination – Criteria – Taking into account of the cooperation of the undertaking concerned with the Commission
(Council Regulation No 17, Art. 15(2); Commission Notice 96/C 207/04, title B)
16. Competition – Fines – Community sanctions and sanctions imposed in a non-member State for breach of national competition law
(Art. 3(1)(g) EC; Council Regulation No 17, Art. 15)
1. Within the framework of the application of the Notice on the non-imposition or reduction of fines in cartel cases, the Commission fails to have regard to the principles of sound administration and equal treatment when it provides one of the cooperating undertakings with an assurance that it will be warned if other undertakings attempt to overtake it in relation to cooperation, even if that assurance is not in fact subsequently implemented.
Where that procedural irregularity cannot lead to the annulment of the Commission’s final decision, the importance of the observance of those principles by the Commission may justify, in favour of an undertaking which has been the victim of that irregularity, a reduction in the fine by the Community judicature, in the exercise of its unlimited jurisdiction.
(see paras 136-137, 581-582)
2. The right of access to the file, which is a corollary of the principle of respect for the rights of the defence, means in competition cases that the Commission provides the undertaking concerned with the opportunity to examine all the documents in the investigation file that might be relevant for its defence. Those documents comprise both inculpatory and exculpatory evidence, with the exception of business secrets of other undertakings, internal documents of the Commission and other confidential information.
The Commission cannot, however, make a general reference to confidentiality to justify a total refusal to disclose documents in its file. The right of undertakings and associations of undertakings to protect their business secrets must be balanced against the safeguarding of the right to have access to the whole of the file.
In that regard, the fact that access is given to the non-confidential version of a document forming part of the Commission’s file, virtually all of the pages of which are blank and marked ‘Business secrets’, without a more comprehensible non-confidential version, or even a summary of the content of those documents, being provided, may bear a close relationship to failure to disclose that document.
(see paras 145, 152-153)
3. The application of Article 3(1) of Regulation No 17 may include a prohibition on pursuing certain activities or practices or on allowing situations which have been found to be unlawful to continue, but also a prohibition on adopting similar future conduct. Such obligations on undertakings must not however exceed the limits of what is appropriate and necessary to achieve the aim pursued. Furthermore, the Commission’s power to issue injunctions is to be applied according to the nature of the infringement found.
The fact that an undertaking which took part in anti-competitive practices is no longer involved in the market concerned on the date of adoption of the Commission decision imposing sanctions in regard to those practices, or that those practices ceased before the adoption of the decision, does not mean that the Commission exceeds the powers conferred on it by Article 3(1) of Regulation No 17 by enjoining that undertaking to refrain from any anti-competitive act or conduct, as such an injunction is by nature preventive and does not depend on the situation of the undertaking concerned at the time of adoption of the decision.
(see paras 198-200)
4. While the fact that a reasonable period is exceeded may, in certain circumstances, justify annulment of a decision finding an infringement of the competition rules, that does not apply where what is being disputed is the amount of the fines imposed by that decision, since the Commission’s power to impose fines is governed by Regulation No 2988/74 concerning limitation periods in proceedings and the enforcement of sanctions under the rules relating to competition, which established a limitation period for that purpose. That regulation established a complete system of rules covering in detail the periods within which the Commission is entitled, without undermining the fundamental requirement of legal certainty, to impose fines on undertakings which are the subject of procedures under the Community competition rules. Article 2(3) of that regulation provides that, subject to any suspension, the limitation period expires in any event after 10 years where it is interrupted pursuant to Article 2(1) of that regulation, so that the Commission cannot put off a decision about fines indefinitely without incurring the risk of the limitation period expiring. In the light of those rules, there is no room for consideration of the Commission’s duty to exercise its power to impose fines within a reasonable period.
(see paras 220, 223-224)
5. A Commission decision imposing fines on a number of undertakings for an infringement of the Community competition rules contains, with respect to the classification of the undertakings concerned in different categories for the purposes of determining the starting amount of the fine, a sufficient statement of reasons when the Commission states that it took as a basis the worldwide market shares obtained on the basis of the worldwide turnover for the relevant product, even if, on grounds of confidentiality, it does not specify those turnovers but merely indicates brackets of market shares, as those factors are sufficiently comprehensible.
(see paras 258-259, 261, 263-265)
6. When determining the amount of a fine imposed for infringement of the Community competition rules, the Commission has a discretion. Under Article 15(2) of Regulation No 17, the amount of the fine is to be determined on the basis of the gravity of the infringement and its duration. In addition, that amount is the result of a series of arithmetical calculations performed by the Commission in accordance with the Guidelines. That amount is set, inter alia, on the basis of various factors linked to the individual conduct of the undertaking in question, such as the existence of aggravating or attenuating circumstances.
It cannot be inferred from that legal framework that the Commission must ensure a proportion between the amount of the fine, as thus calculated, and the overall volume of the relevant product market in the European Economic Area, for a given year of the infringement.
(see para. 342)
7. The three aspects to be taken into consideration in the assessment of the gravity of the infringement, which, 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, are the very nature of the infringement, its actual impact on the market, where this can be measured, and the size of the relevant geographic market, do not have the same weight in the context of the global examination. The nature of the infringement plays a preponderant role, in particular, in characterising ‘very serious’ infringements. In that regard, it follows from the description of very serious infringements in those guidelines that agreements or concerted practices aimed, in particular, at setting prices or the allocation of sales quotas may entail, solely on the basis of their very nature, the characterisation as ‘very serious’, without there being any need to characterise such conduct by a particular impact.
(see paras 343, 345)
8. Although a Commission decision imposing sanctions which is addressed to different undertakings which have participated in an unlawful cartel is drafted in the form of a single decision, it must be analysed as a bundle of individual decisions finding in respect of each of the undertakings to which it is addressed the infringement or infringements alleged and imposing fines on them. The Commission may therefore examine separately the situation of the different undertakings concerned and divide them into categories in order to determine the individual contribution of each undertaking to the success of the cartel even where, within the cartel, a set of undertakings has always engaged in concerted conduct.
(see paras 308, 360, 365)
9. When determining the amount of a fine to be imposed for infringement of the competition rules in accordance with 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 may apply an increase to the starting amount to take account of the undertaking’s size and global resources.
First, the need to ensure that the fine has a sufficient deterrent effect requires that the amount of the fine be adjusted in order to take account of the desired impact on the undertaking on which it is imposed, so that the fine is not rendered negligible, or on the other hand excessive, notably by reference to the financial capacity of the undertaking in question, in accordance with the requirements resulting from, first, the need to ensure that the fine is effective and, second, respect for the principle of proportionality. The Commission may take account of the fact that, owing to its worldwide turnover by comparison with that of the other members of the cartel, the undertaking concerned would find it easier to find the funds necessary to pay its fine, which, in order to ensure that the fine is sufficiently deterrent, justifies the application of a multiplier. In that context, the financial resources of the undertaking must be assessed, in order to achieve properly the objective of deterrence, while observing the principle of proportionality, on the date on which the fine is imposed. In that regard, for the same reasons, it must be noted that, in the context of Article 15(2) of Regulation No 17, the upper limit of the fine, fixed at 10% of the turnover of the undertaking concerned, is determined by reference to the turnover achieved during the business year preceding the decision.
Second, the Commission may take into account the legal and economic infrastructures which place undertakings in a better position to recognise that their conduct constitutes an infringement. That factor is intended to impose a more severe penalty on large undertakings, which are presumed to have knowledge and sufficient structural means to be aware that their conduct constitutes an infringement and to evaluate the advantages to be gained from it. In that hypothesis, the turnover on the basis of which the Commission determines the size of the undertakings concerned, and therefore their ability to determine the nature and the consequences of their conduct, must relate to their situation at the time of the infringement.
An increase of 100% of the starting amount of the fine to take account of the size and overall resources of the undertakings concerned does not exceed the limits laid down in Article 15(2) of Regulation No 17 and in the Guidelines.
(see paras 374, 379, 382, 387)
10. Whilst it is true that the third paragraph of Section 1 B 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 speaks, with respect to long-term infringements of the competition rules, of a ‘significant increase’ in the starting amount of the fine, the use of those words does not, however, permit the conclusion that an increase in excess of 100% for an infringement lasting more than 10 years would be contrary to the calculation method provided for in those guidelines or would exceed the limits fixed by those guidelines or by Article 15(2) of Regulation No 17. Even though the third indent of the first paragraph of Section 1 B of the Guidelines does not provide for an automatic increase of 10% per year for long-term infringements, it leaves a margin of discretion in that regard to the Commission, which may fix such an increase without breaching the principle of proportionality.
(see paras 395-396)
11. Even on the assumption that certain kinds of cartels, such as cartels on prices and sales volumes, are intrinsically conceived in order to last, a distinction must always be drawn, in application of Article 15(2) of Regulation No 17, between the duration of their actual functioning and their gravity as resulting from their actual nature. The increase for the duration of the infringement therefore does not take account of the gravity of the infringement for a second time.
(see paras 397-398)
12. In the context of an administrative procedure in competition matters, the Commission fails to respect an undertaking’s rights of defence when it establishes an aggravating circumstance as against that undertaking on the basis of elements of fact which, although mentioned at various points in its statement of objections, were, taken as a whole, insufficiently precise as to their scope and characterisation, so that it is only at the decision stage that those elements were brought together into a single part and the objection became clearly apparent.
(see paras 424, 431, 433)
13. 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 refer to an ‘infringement of the same type’ by the same undertaking. In those circumstances, once an undertaking commits an infringement of the same type, even though the economic sector concerned is a different one, the Commission may find that there is an aggravating circumstance.
In that regard, the Commission cannot find that an undertaking has committed a repeated infringement by referring to a previous decision imposing a penalty on that undertaking for an infringement of the same type where that decision was annulled by the Community judicature before the decision making a finding of repeated infringement was adopted. Article 231 EC provides that where an action for annulment is well founded, the Court is to declare the contested act void.
On the other hand, the Commission may rely on a previous decision imposing a penalty on that undertaking for an infringement of the same type but which was the subject of an action for annulment pending before the Community judicature when a stay of execution was not even sought. Such a decision, in accordance with the first paragraph of Article 256 EC, is enforceable, provided that it imposes a pecuniary burden on persons other than the States, notwithstanding the initiation of an action for annulment, since under Article 242 EC an action before the Community judicature does not have suspensory effect.
If, in order to make a finding of repeated infringement, the Commission relied on a number of previous decisions imposing sanctions on the undertaking concerned, one of which was annulled before the adoption of the decision finding a repeated infringement, the error on the Commission’s part does not call in question either the characterisation of repeated infringement, which is sufficiently supported by the other previous decisions, or the rate of increase applied, at least where there is nothing to indicate that the Commission’s finding that the repeated infringement followed a number of previous infringements gave rise to a greater increase in the fine for an aggravating circumstance than would have been determined if only a single previous infringement had been identified.
(see paras 465-466, 468-470, 474)
14. Where the undertakings concerned by a cartel procedure began to cooperate with the Commission before the adoption of the 2002 Notice on immunity from fines and reduction of fines in cartel cases and where those undertakings relied on the previous 1996 Notice on the non-imposition or reduction of fines in cartel cases, the latter provision is the only one applicable, even though the Commission definitively ruled only after the adoption of the 2002 Leniency Notice and, in particular, on the question of which undertaking, if any, could benefit from immunity from a fine. While it is true that, in such a hypothesis, the effects of the acts of cooperation were produced after the adoption of the 2002 Leniency Notice, the future rule applies immediately to the future effects of the situation which arose under the former rule only in the absence of transitional provisions. However, Section 28 of the 2002 Leniency Notice clearly provides that that notice is to apply from 14 February 2002 for all cases for which no undertaking has relied on the 1996 Leniency Notice.
Nor can that conclusion be called in question by reliance on the ‘most favourable provision’ principle. Without there being any need to determine whether such a principle might apply to the Commission’s Lenience Notices, it is not possible to characterise the 2002 Leniency Notice as being more favourable overall than the 1996 Leniency Notice, which is amended on several points, as regards both the substantial rules and the procedural rules, some amendments being more favourable to the undertakings concerned, while others are not.
Last, any application by analogy of the 2002 Leniency Notice must be rejected, since this situation may be distinguished from cases in which the 1996 Leniency Notice was applied by analogy to procedures which had commenced before the adoption of that notice but which were not subject to any other legal rule.
(see paras 507-511)
15. The grant of total immunity or a reduction in the amount of the fine under Section B of the 1996 Notice on the non-imposition or reduction of fines in cartel cases requires, in particular, that the undertaking concerned has been the first to adduce decisive evidence of the cartel’s existence. In that regard, while such evidence need not necessarily be sufficient in itself to establish the existence of the cartel, it must none the less be decisive for that purpose. It must therefore not be simply an indication as to the direction which the Commission’s investigation should take but must be material which may be used directly as the principal evidence supporting a decision finding an infringement. That evidence may also be adduced orally.
The Commission has a certain discretion in determining whether, for the performance of its task of finding the existence of an infringement and putting an end to it, the cooperation in question was decisive and it is only where it manifestly exceeds that discretion that it may be criticised by the Community judicature.
The Commission does not make a manifest error of assessment where it considers that an undertaking which provided it at a meeting with a detailed oral description of the activities and functioning of a cartel, supported by relevant documentary evidence to prove its existence, was the first to cooperate within the meaning of Section B of the 1996 Leniency Notice, when another undertaking had, at an earlier meeting, provided a less detailed account of the cartel which did not accurately reflect the object and the functioning of the cartel and which was not supported by any documentary evidence.
(see paras 552-555, 568-569)
16. The application of the principle non bis in idem is subject to a threefold condition of identity of the facts, unity of the offender and unity of the protected legal interest. That principle therefore precludes a penalty being imposed on the same person more than once for the same unlawful conduct for the purpose of protecting the same legal asset.
With respect to penalties for infringement of the competition rules, that principle does not apply to situations in which the legal orders and the competition authorities of non-member States intervened in the exercise of their own powers.
In the case of a worldwide cartel, for which penalties are imposed both by the competition authorities of a non-member State and by the Commission, that principle cannot therefore apply, even though the facts at issue before the former and the latter have their origin in the same set of agreements, because the legal interests protected are different. The Commission’s action seeks to protect free competition within the common market, which, under Article 3(1)(g) EC, constitutes a fundamental objective of the Community, whereas, if the procedure initiated by the authorities of a non-member State relates to the application of the cartel or its effects other than on the territory of that State, and in particular in the European Economic Area, that would manifestly encroach on the territorial jurisdiction of the Commission.
For the same reasons, considerations relating to fairness, and aimed at securing the deduction from the fine imposed of the penalty imposed by the authorities of the non-member State, cannot be upheld.
(see paras 600-605)