Case T‑380/17
(publication by extracts)
HeidelbergCement AG
and
Schwenk Zement KG
v
European Commission
Judgment of the General Court (Eighth Chamber), 5 October 2020
(Competition – Concentrations – Market for grey cement in Croatia – Decision declaring the concentration incompatible with the internal market and the EEA Agreement – Undertakings concerned – Relevant market – Substantial part of the internal market – Assessment of the effects of the transaction on competition – Commitments – Rights of the defence – Partial referral to the national authorities)
1. Concentrations between undertakings – Concentration having a Community dimension – Criteria for assessment – Turnover of undertakings concerned – Undertaking concerned – Meaning – Acquisition of control of a company through a joint venture – Regarding parent companies as undertakings concerned – Conditions – Parent companies being the real players behind a concentration – Infringement of the principle of legal certainty – No such infringement
(Council Regulation No 139/2004, Art. 1(2); Commission Notice 2004/C 95/01, paras 145 to 147)
(see paragraphs 98, 99, 105-126, 130-136, 149-151)
2. European Union law – Principles – Legal certainty – EU rules – Requirements of clarity and foreseeability – Use of abstract legal notions requiring interpretation and application by the administration – Admissibility
(Council Regulation No 139/2004, Art. 1(2); Commission Notice 2004/C 95/01, paras 145 to 147)
(see paragraphs 130-136)
3. Concentrations between undertakings – Concentration having a Community dimension – Criteria for assessment – Turnover of undertakings concerned – Undertaking concerned – Meaning – Acquisition of control of a company by a joint venture – Regarding parent companies as undertakings concerned – Conditions – Parent companies being the real players behind a concentration – Evidence – Margin of discretion of the Commission – Limits – Taking into account of the Commission Consolidated Jurisdictional Notice
(Council Regulation No 139/2004, Art. 1(2); Commission Notice 2008/C 95/01, paras 145 to 147)
(see paragraphs 153-160, 167-174, 180, 198, 202-206, 234, 253, 255-258, 260-270, 279-281)
4. Concentrations between undertakings – Examination by the Commission – Definition of the market in question – Geographical delineation
(Council Regulation No 139/2004; Commission Notice 97/C 372/03)
(see paragraphs 293-343)
5. Concentrations between undertakings – Assessment of compatibility with the internal market – Creation or strengthening of a dominant position significantly impeding effective competition in the internal market – Impediment to competition in a substantial part of the internal market – Criteria
(Council Regulation No 139/2004, Art. 2(3))
(see paragraphs 347-358)
6. Concentrations between undertakings – Assessment of compatibility with the internal market – Creation or strengthening of a dominant position significantly impeding effective competition in the internal market – Assessment of the anticompetitive effects of the transaction – Criteria
(Council Regulation No 139/2004, Art. 2(3))
(see paragraphs 366, 405, 431, 450, 499, 524, 528, 568, 569)
7. Concentrations between undertakings – Examination by the Commission – Commitments of the undertakings concerned liable to render the notified transaction compatible with the internal market – Commitments granting access to infrastructure and networks
(Council Regulation No 139/2004; Commission Communication 2008/C 267/01, paragraph 63)
(see paragraphs 580-586)
8. Concentrations between undertakings – Administrative procedure – Observance of the rights of the defence – Right of companies to be heard – Scope
(Council Regulation No 139/2004)
(see paragraphs 633-635; 665-668, 693)
9. Concentrations between undertakings – Administrative procedure – Statement of objections – Documents available when adopting the statement of objections but not included therein – Admissibility as evidence – Conditions
(Council Regulation No 139/2004, Art. 18(1))
(see paragraph 636)
10. Concentrations between undertakings – Administrative procedure – Observance of the rights of the defence – Accessing the file – Rules on languages – Minutes of the Commission’s telephone calls with customers and competitors of the undertakings concerned – Accessing the minutes in their original language – Admissibility
(Council Regulation No 139/2004)
(see paragraphs 650-664)
11. Concentrations between undertakings – Examination by the Commission – Decision to refer examination of a concentration to the competent authorities of a Member State – Partial referral limited to assessing the effects of the concentration on the markets in question in a Member State – Consequences
(Council Regulation No 139/2004, Art. 4(4))
(see paragraphs 684-689)
Résumé
On 5 September 2016, HeidelbergCement AG and Schwenk Zement KG (together, ‘the applicants’) notified the European Commission of a proposed concentration consisting of the acquisition, through their joint venture Duna-Dráva Cement Kft. (‘DDC’), of control of the companies Cemex Hungária Építőanyagok Kft. and Cemex Hrvatska d.d. (together, ‘the target companies’). All of those companies operate in the building materials sector.
After having initiated the in-depth investigation procedure, the Commission declared the concentration transaction to be incompatible with the internal market. (1) In its decision, the Commission set out considerations relating, inter alia, to the Community dimension of the concentration, the relevant market, the effects of the concentration in terms of competition and the commitments of the merging parties. In asserting, more specifically, the Community dimension of the concentration, the Commission took into account the turnover of the applicants, which exceeded EUR 250 million in the European Union, on the ground that they were the real players behind the concentration.
In support of their action for annulment brought against that decision, the applicants contested, inter alia, the assessment of the Community dimension of the notified concentration. In that regard, Article 1(2) of the EC Merger Regulation (2) requires that at least two undertakings concerned have, individually, a turnover in the European Union of more than EUR 250 million. In referring to the turnover of the applicants to assert the Community dimension of the concentration transaction led by their joint venture DDC, the Commission misinterpreted the scope of that provision.
That action is dismissed by the Court which provides, in that connection, clarification on the concept of ‘undertaking concerned’ the turnover of which may be taken into account for the purpose of establishing the Community dimension of a concentration transaction.
Findings of the Court
The Court recalls that, while the EC Merger Regulation does not define the notion of ‘undertaking concerned’ within the meaning of Article 1(2), the interpretation of that notion is dealt with in paragraphs 145 to 147 of the Commission’s Consolidated Jurisdictional Notice. (3) Contrary to what the applicants claim, neither those paragraphs, the principle of legal certainty nor the EC Merger Regulation preclude, for the purposes of appraising the Community dimension of a concentration implemented by a joint venture, the Commission from classifying the parent companies as the undertakings concerned when they are the real players behind the transaction.
In that regard, the Court notes, in the first place, that, in order to ensure the effectiveness of merger control, it is necessary to take into account the economic reality of the real players behind a concentration in accordance with the circumstances of fact and law specific to each case. Therefore, the identification of the undertakings concerned is necessarily connected to the way in which the acquisition process was initiated, organised and financed in each individual case.
As regards the interpretation of paragraph 147 of the Consolidated Jurisdictional Notice, the Court states, moreover, that it refers to two situations in which parent companies can be classified as undertakings concerned for the purposes of appraising the Community dimension of a concentration implemented by their joint venture. In the first situation, the joint venture is used as a mere vehicle. In the second, the parent companies are the real players behind the transaction. In the case at hand, the Commission had found that the transaction came within the second scenario.
In the second place, the Court rules that neither the Consolidated Jurisdictional Notice itself nor its implementation by the Commission in the case at hand resulted in ambiguity that was contrary to the principle of legal certainty. According to the Court, paragraphs 145 to 147 of the Consolidated Jurisdictional Notice do not send out conflicting signals regarding the approach used by the Commission to determine the undertakings concerned by a concentration transaction. In addition, the parties to a concentration, as diligent economic actors, may also, if required, take expert advice or contact the Commission services in order to obtain informal guidance on the undertakings concerned by a transaction.
In the third place, the Court states that, for the purposes of appraising the Community dimension of a concentration transaction, it is not necessary that the undertakings concerned whose turnover exceeds the thresholds provided stand on different sides of the transaction. After all, Article 1(2) of the EC Merger Regulation requires that at least two undertakings concerned have, individually, a turnover in the European Union of more than EUR 250 million, and not that there be the acquirer and the target company.