Case T-110/07
Siemens AG
v
European Commission
(Competition – Agreements, decisions and concerted practices – Market in gas insulated switchgear projects – Decision finding an infringement of Article 81 EC and Article 53 of the EEA Agreement – Market sharing – Effects within the common market – Concept of continuous infringement – Duration of the infringement – Limitation period – Fines – Proportionality – Aggravating circumstances – Role of leader – Mitigating circumstances – Cooperation)
Summary of the Judgment
1. Competition – Agreements, decisions and concerted practices – Concerted practice – Adverse effect on competition – Criteria for assessment – Anti-competitive purpose – Sufficient
(Art. 81(1) EC; EEA Agreement, Art. 53(1))
2. Community law – Principles – Fundamental rights – Presumption of innocence – Procedures in competition matters – Applicability
(Art. 81(1) EC; Art. 6(2) EU)
3. Competition – Administrative procedure – Commission decision finding an infringement – Means of proof – Reliance on a body of evidence
(Art. 81(1) EC)
4. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Evidence of the infringement – Production by the Commission of statements of other incriminated undertakings – Lawfulness
(Art. 81(1) EC; EEA Agreement, Art. 53)
5. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Evidence of the infringement – Evaluation of the probative value of a document – Criteria
(Art. 81(1) EC)
6. Competition – Administrative procedure – Commission decision finding an infringement – Burden of proving the infringement and its duration on the Commission
(Art. 81(1) EC; Commission Communication 2002/C 45/03)
7. Competition – Administrative procedure – Observance of the rights of the defence – Statement of objections – Production of further evidence after sending the statement of objections – Lawfulness – Conditions
(Art. 81(1) EC; Council Regulation No 1/2003, Art. 25)
8. Competition – Administrative procedure – Commission decision finding an infringement – Burden of proving the infringement and its duration on the Commission – Scope of the burden of proof
(Art. 81(1) EC; Council Regulation No 1/2003, Art. 25)
9. Competition – Administrative procedure – Observance of the rights of the defence – Scope of the principle – Limits – Right of the undertaking to cross-examine the witnesses – Not included
(Art. 81(1) EC)
10. Competition – Agreements, decisions and concerted practices – Participation of an undertaking in a cartel
(Art. 81(1) EC)
11. Competition – Agreements, decisions and concerted practices – Infringement – Single infringement – Criteria for assessment
(Art. 81(1) EC; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 25(2))
12. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement
(Council Regulation No 1/2003, Art. 23(2); Commission Communication 98/C 9/03, Section 1A, fourth and sixth paras)
13. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – No binding or exhaustive list of criteria
(Council Regulation No 1/2003, Art. 23(2))
14. Competition – Fines – Amount – Determination – Criteria – Commission’s margin of discretion – Raising of the general level of fines
(Council Regulation No 1/2003, Art. 23(2))
15. Competition – Fines – Decision imposing fines – Duty to state reasons – Scope
(Art. 253 EC; Council Regulation No 1/2003, Art. 23(2))
16. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Aggravating circumstances – Role of leader or instigator of an infringement
(Council Regulation No 1/2003, Art. 23(2); Commission Communication 98/C 9/03, Section 2, third indent)
17. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Aggravating circumstances – Role of leader of the infringement
(Art. 81(1) EC)
18. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned
(Art. 81(1) EC; Council Regulation No 1/2003, Art. 23(2); Commission Communication 2002/C 45/03, Sections 22 and 29)
1. In deciding whether a concerted practice is prohibited by Article 81(1) EC, there is no need to take account of its actual effects once it is apparent that its object is to prevent, restrict or distort competition within the common market. That case‑law is applicable, by analogy, to Article 53(1) of the EEA Agreement.
(see para. 40)
2. The principle of the presumption of innocence, as it results in particular from Article 6(2) of the Convention for the Protection of Human Rights and Fundamental Freedoms, is one of the fundamental rights which, according to the settled case-law of the Court of Justice, also reaffirmed in Article 6(2) EU, constitute general principles of Community law.
Given the nature of the infringements in question and the nature and degree of severity of the ensuing penalties, the principle of the presumption of innocence applies to the procedures relating to infringement of competition rules applicable to undertakings that may result in the imposition of fines or periodic penalty payments. In that context, any doubt in the mind of the Court must operate to the advantage of the undertaking to which the decision finding an infringement was addressed. The Court cannot therefore conclude that the Commission has established the infringement at issue to the requisite legal standard if it still entertains any doubts on that point, in particular in proceedings for annulment of a decision imposing a fine.
(see paras 44-45)
3. In competition matters, the Commission must show precise and consistent evidence in order to establish the existence of the infringement and to support the firm conviction that the alleged infringements constitute appreciable restrictions of competition within the meaning of Article 81(1) EC. However, it is not necessary for every item of evidence produced by the Commission to satisfy those criteria in relation to every aspect of the infringement. It is sufficient if the set of indicia relied on by the institution, viewed as a whole, meets that requirement. The existence of an anti-competitive practice or agreement may therefore be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules.
Where the Commission relies solely on the conduct of the undertakings in question on the market in finding that an infringement has been committed it suffices for those undertakings to show the existence of circumstances which cast the facts established by the Commission in a different light and thus allow another, plausible explanation of those facts to be substituted for the one adopted by the Commission in concluding that the Community competition rules had been infringed. Therefore, the existence of an alternative explanation for the facts is relevant only where the Commission relies solely on the conduct of the undertakings on the relevant market. Thus, such an explanation is irrelevant from the moment when the existence of the infringement is not merely presumed, but is established by proof. In addition, pursuant to the principle of the unfettered evaluation of evidence, referred to in the previous paragraph, all types of evidence are admissible for proving an infringement, with the result that the existence of an alternative explanation is irrelevant where an infringement is proved to the requisite legal standard by evidence other than documentary evidence.
(see paras 46-49, 51)
4. As regards the type of evidence which can be relied on to establish an infringement of Article 81 EC and Article 53 of the Agreement on the European Economic Area (EEA), the prevailing principle of Community law is the unfettered evaluation of evidence. In particular, no provision or any general principle of Community law prohibits the Commission from relying, as against an undertaking, on statements made by other incriminated undertakings. If that were not the case, the burden of proving conduct contrary to Article 81 EC and Article 82 EC, which is borne by the Commission, would be unsustainable and incompatible with the task of supervising the proper application of those provisions which is entrusted to it by the Treaty.
(see para. 50)
5. In competition matters, the sole criterion relevant for evaluating freely adduced evidence is the reliability of that evidence. According to the generally applicable rules on evidence, the reliability and, therefore, the probative value of a document depends on its origin, the circumstances in which it was drawn up, the person to whom it is addressed and the reputed and reliable nature of its content. In particular, great importance must be attached to the fact that a document has been drawn up in close connection with the events or by a direct witness of those events. Furthermore, statements which run counter to the interests of the declarant must in principle be regarded as particularly reliable evidence.
Therefore, the testimony of a person who, for almost the entire duration of the cartel, was one of the representatives of one of the main players in the cartel in that context and was therefore a direct witness of the circumstances he set out in his testimony, must in principle be classified as evidence with a high probative value.
(see paras 54, 75)
6. In competition matters, the fact of seeking to benefit from the application of the Leniency Notice in order to obtain a reduction in the fine in competition matters does not necessarily create an incentive to submit distorted evidence. Indeed, any attempt to mislead the Commission could call into question the sincerity and the completeness of cooperation of the person seeking to benefit, and thereby jeopardise his chances of benefiting fully under the Leniency Notice.
None the less, in so far as the statements of an undertaking are disputed by other undertakings which are also alleged to have agreed upon the common understanding, they must be supported by other evidence in order to constitute adequate proof of the existence and the scope of that common understanding.
(see paras 65-66)
7. The statement of objections must allow those concerned to have effective knowledge of the conduct in respect of which they are accused by the Commission, that requirement being met when the final decision does not find that the undertakings concerned have committed infringements different from those referred to in the statement of objections and upholds only facts on which the persons concerned have had the opportunity to give an explanation. While it is therefore true that infringements of which an undertaking is accused in a decision cannot be different than those in the statement of objections, the same does not go for the facts upheld, since it is sufficient, in respect of those facts, that the undertakings concerned were able to make their views known in relation to facts held against them. As has been held, there is no provision which prevents the Commission from sending to the parties after the statement of objections fresh documents which it considers support its argument, subject to giving the undertakings the necessary time to submit their views on the subject.
(see paras 86-87)
8. It is for the party or the authority alleging an infringement of the competition rules to prove its existence by establishing, to the requisite legal standard, the facts constituting an infringement. Furthermore, it is for the undertaking invoking the benefit of a defence against a finding of an infringement to demonstrate that the conditions for that defence are satisfied, so that the authority will then have to resort to other evidence.
The general principle that the Commission is required to prove every constituent element of the infringement, including its duration, that is likely to have an effect on its definitive findings as regards the gravity of the infringement is not called into question by the fact that the undertaking concerned raised a defence of limitation, in respect of which the burden of proof rests, in general, with the latter.
Reliance on such a defence plea necessarily requires that the duration of the infringement and the date on which it came to an end be established. Those circumstances cannot alone provide justification for transferring the burden of proof in this regard to the applicant. First, the duration of the infringement, which requires that the date on which it ended be known, is one of the essential elements of the infringement, which must be proved by the Commission, irrespective of the fact that the disputing of those elements also forms part of the defence of limitation. Second, that conclusion is also justified in light of the fact that the non-limitation of a Commission proceeding under Article 25 of Regulation No 1/2003 constitutes an objective legal criterion, pursuant to the principle of legal certainty, and, thus, is a condition for the validity of any decision imposing a penalty. The Commission is required to comply with this condition even if the undertaking concerned has raised no defence in this regard.
However, that apportionment of the burden of proof is likely to vary, inasmuch as the evidence on which a party relies may be of such a kind as to require the other party to provide an explanation or justification, failing which it is permissible to conclude that the burden of proof has been discharged. In particular, where the Commission has adduced evidence of the existence of an agreement, it is for an undertaking which has taken part in that agreement to adduce evidence that it distanced itself from that agreement, evidence which must demonstrate a clear intention, brought to the notice of the other participating undertakings, to withdraw from that agreement.
(see paras 173-176)
9. The fundamental principle of observance of the rights of the defence requires that the undertakings and associations of undertakings concerned by the Commission’s investigation be afforded the opportunity, from the stage of the administrative procedure, to make known their views on the truth and relevance of the facts, objections and circumstances put forward by the Commission. Thus, an undertaking’s reply to the Commission’s statement of objections cannot be relied on against another undertaking concerned by the investigation where the latter has not had access to the reply prior to the adoption of the decision by the Commission.
However, that principle does not require that that undertaking is given the opportunity to question, during the administrative procedure, the witnesses heard by the Commission.
(see paras 189, 199)
10. The fact that an undertaking does not publicly distance itself from an infringement in which it participated or does not report it to the administrative authorities, effectively encourages the continuation of the infringement and compromises its discovery, with the result that such tacit acceptance can constitute complicity or a passive mode of participation in the infringement.
(see para. 222)
11. A number of criteria are relevant for assessing the single nature of an infringement of Article 81 EC and Article 53 of the Agreement on the European Economic Area (‘EEA’), namely the fact that the objectives of the practices at issue were identical or different, the identical nature of the relevant goods or services, the fact that the undertakings which took part were identical, and the identical nature of the means of implementing the cartel. The fact that the physical persons involved on behalf of the undertakings are identical and that the geographical scope of the practices at issue is identical are other relevant criteria.
As regards, in particular, the concept of ‘common objective’ of anticompetitive practices, the issue whether a complex of the agreements and practices contrary to Article 81 EC constitutes a single and continuous infringement is an issue which depends solely on objective factors, including the common objective of those agreements and practices. That latter criterion is one which must be assessed in the light only of the content of those agreements and practices, which must not be confused with the subjective intention of the various undertakings to participate in a single and continuous infringement. By contrast, that subjective intention can and must be taken into account only in the context of assessing individual participation of an undertaking in a single and continuous infringement. In that regard, it is sufficient that, when the undertaking concerned recommences after withdrawing participation in the cartel, it is aware that it is participating in the same cartel as before. It even suffices that that undertaking is aware of the essential criteria, which justify finding a single infringement, even if it did not itself infer its existence from them.
(see paras 241, 246, 253)
12. The fourth and sixth paragraphs of Section 1A of the Guidelines on the method of setting fines provide that the effective economic capacity of offenders to cause significant damage to other operators must be taken into account, as must the specific weight of the offending conduct of each undertaking on competition, particularly where there is considerable disparity between the sizes of the undertakings committing infringements of the same type. On the other hand, the Guidelines do not provide that the effective economic capacity of undertakings or the specific weight of their conduct must be assessed in the light of a particular criterion, such as their market share as regards the product in question within the European Economic Area (EEA) or the common market. Therefore, the Commission is free to apply, in that regard, a criterion which is suitable in the light of the circumstances of each particular case.
(see para. 279)
13. The gravity of the infringements of Community competition rules must be assessed in the light of numerous factors, such as the particular circumstances of the case, its context and the dissuasive effect of fines, even though no binding or exhaustive list of the criteria to be applied has been drawn up. The factors capable of affecting the assessment of the gravity of the infringements include the conduct of each of the undertakings, the role played by each of them in the establishment of the concerted practices, the profit which they were able to derive from those practices, their size, the value of the goods concerned and the threat that infringements of that type pose to the objectives of the Community.
It follows that, on the one hand, it is permissible, for the purpose of fixing the fine, to have regard both to the total turnover of the undertaking, which gives an indication, albeit approximate and imperfect, of the size of the undertaking and of its economic power, and to the proportion of that turnover accounted for by the goods in respect of which the infringement was committed, which gives an indication of the scale of the infringement. On the other hand, it follows that it is important not to confer on one or the other of those figures an importance disproportionate in relation to the other factors and, consequently, that the fixing of an appropriate fine cannot be the result of a simple calculation based on the total turnover. That is particularly the case where the goods concerned account for only a small part of that figure.
The list of factors which are likely to be involved in the assessment of the gravity of an infringement, is neither binding nor exhaustive. Therefore, the Commission is free to take other factors into account, or to attach less weight to one of the factors, or even not take account of it at all, if that seems appropriate to it in the light of the circumstances of a particular case.
Furthermore, the notion of ‘value of the goods concerned’, must be understood as a measure indicating the share of the worldwide turnover of the undertakings in question which comes from the goods which are the subject‑matter of the cartel and not as referring to the size of the market for those goods within the European Economic Area (EEA).
(see paras 286-288)
14. The Commission’s earlier decision‑making practice does not serve as a legal framework for fines in competition matters. In the context of Regulation No 1/2003, the Commission possesses a wide margin of discretion when setting fines, in order that it may direct the conduct of undertakings towards compliance with the competition rules. Therefore, the fact that the Commission may have applied fines of a certain level in the past to certain types of infringement does not mean that it is stopped from raising that level, within the limits set out in Regulation No 1/2003, if that is necessary in order to ensure the implementation of Community competition policy. The proper application of Community competition rules requires that the Commission may at any time adjust the level of fines to the needs of that policy.
It follows that undertakings involved in an administrative procedure in which fines may be imposed cannot acquire a legitimate expectation from the fact that the Commission will not exceed the level of fines previously imposed. Consequently, those undertakings must take account of the possibility that the Commission may decide at any time to raise the level of the fines in relation to that applied in the past.
(see paras 290-291)
15. As regards the calculation of the amount of fines imposed by the Commission for the infringement of Community competition law, the essential procedural requirement to state reasons is satisfied where the Commission sets out in its decision the factors which enabled it to measure the gravity and duration of the infringement and it is not required to set out a more detailed account or the figures relating to the method of calculating the fine.
In particular, the indication of the figures which influenced the exercise of the Commission’s discretion when setting the fines, especially in regard to the desired deterrent effect is an option which is desirable for the Commission to use, but which goes beyond the requirements deriving from the obligation to state reasons.
(see paras 311-312)
16. In order to be classified as a ‘leader’ in a cartel, an undertaking must have been a significant driving force for the cartel and have borne individual and specific liability for the operation of the cartel. That factor must be assessed in the light of the overall context of the case. The classification as ‘leader’ has been established when the undertaking carried out the duties of coordinator within the cartel and, in particular, organised and staffed the secretariat responsible for the actual implementation of the cartel, or when that undertaking played a central role in the actual operation of the cartel, for example by organising numerous meetings, by collecting and distributing information within the cartel, by taking responsibility to represent certain members within the cartel or most often formulating proposals relating to the operation of the cartel. Moreover, it is entirely possible that two or more undertakings be attributed the role of leader, in particular in the context of a cartel implicating a high number of participants.
Furthermore, as is clear from the wording of the third indent of Section 2 of the Guidelines on the method of setting fines, it is necessary to distinguish between the concept of leader in and that of instigator of an infringement. Whereas instigation is concerned with the establishment or enlargement of a cartel, leadership is concerned with its operation. Therefore, the leader in the infringement and the instigator of that infringement are not in comparable situations, with the result that, the fact that a company classified as an instigator of the cartel from the leader is treated differently does not constitute a breach of the principle of equal treatment.
(see paras 337, 345, 348)
17. Even if the Commission mistakenly did not classify an undertaking as leader of the cartel, despite the significant role which it played in the cartel, such an unlawful act, in favour of a third party, would not justify upholding a plea for annulment. Respect for the principle of equal treatment or non‑discrimination must be reconciled with the principle of legality, according to which a person may not rely, in support of his claim, on an unlawful act committed in favour of a third party.
(see para. 358)
18. The reduction in the amount of fines in the event of cooperation from undertakings which have participated in infringements of Community competition law is based on the consideration that such cooperation facilitates the Commission’s task of establishing an infringement and, where relevant, of bringing it to an end.
As mentioned in Point 29 of the Leniency Notice, that notice has created legitimate expectations on which undertakings may rely when disclosing the existence of a cartel to the Commission. In view of the legitimate expectation which undertakings intending to cooperate with the Commission are able to derive from the notice, the Commission must therefore adhere to the notice when, for the purpose of determining a fine to be imposed on an undertaking, it assesses that undertaking’s cooperation.
Within the limits laid down by the Leniency Notice, the Commission has however a wide discretion in assessing whether or not the evidence provided by an undertaking brings added value within the meaning of Point 22 of the Leniency Notice and whether a reduction should be granted to that undertaking under that notice.
(see paras 374-376)