Case T-116/04
Wieland-Werke AG
v
Commission of the European Communities
(Competition – Agreements, decisions and concerted practices – Market for copper industrial tubes – Decision finding an infringement of Article 81 EC – Price-fixing and market-sharing – Fines – Principle that penalties must have a sound legal basis – Size of the market concerned – Deterrent effect – Duration of the infringement – Cooperation)
Summary of the Judgment
1. Competition – Fines – Amount – Determination – Legal context – Guidelines adopted by the Commission
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)
2. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Size of the market for the products in question
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1 A)
3. 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)
4. Competition – Fines – Amount – Determination – No need to take account of the turnovers of the undertakings concerned and to ensure that fines are proportional to those turnovers
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)
5. Competition – Fines – Amount – Determination – Deterrent effect – Account taken of the size and global resources of the fined undertaking
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1 A)
6. Competition – Fines – Amount – Determination – Criteria – Duration of the infringement – Infringements of long duration – 10% increase of the starting amount per year
(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 1 B)
7. Competition – Fines – Amount – Determination – Criteria – Assessment of the degree of cooperation provided by each of the undertakings during the administrative procedure
(Council Regulation No 17, Art. 15; Commission Notice 96/C 207/04, Title D)
8. Competition – Fines – Amount – Determination – Non-imposition or reduction of the fine for cooperation of the undertaking concerned
(Council Regulation No 17, Art. 15(2); Commission Notices 96/C 207/04 and 2002/C 45/03)
1. When reviewing the legality of fines imposed for infringement of the Community competition rules, it is for the Court of First Instance to verify whether the Commission exercised its discretion in accordance with the method set out 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 and, should it be found to have departed from that method, to verify whether that departure is justified and supported by sufficient legal reasoning.
The self-limitation on the Commission’s discretion arising from the adoption of the Guidelines is not incompatible with the Commission’s maintaining a substantial margin of discretion. The Guidelines display flexibility in a number of ways, enabling the Commission to exercise its discretion in accordance with the provisions of Regulation No 17, as interpreted by the Court of Justice.
Moreover, in areas such as determination of the amount of a fine imposed pursuant to Article 15(2) of Regulation No 17, where the Commission has a discretion, for example, as regards the amount of increase for the purposes of deterrence, review of the legality of those assessments is limited to determining the absence of manifest error of assessment.
In principle, the discretion enjoyed by the Commission and the limits which it has imposed in that regard do not prejudge the exercise by the Community judicature of its unlimited jurisdiction, which empowers it to annul, increase or reduce the fine imposed by the Commission.
(see paras 29-33)
2. When assessing the seriousness of an infringement of the competition rules for the purposes of determining the starting amount of the fine to be imposed on an undertaking, the Commission may have regard to the size of the market affected but is not obliged to do so. For that purpose, it may take account of the turnover of the market concerned. There is no valid reason to require that the turnover of a relevant market be calculated excluding certain production costs. There are in all industries costs inherent in the final product which the manufacturer cannot control but which nevertheless constitute an essential element of its business as a whole and which, therefore, cannot be excluded from its turnover when fixing the starting amount of the fine. The fact that the price of a raw material constitutes an important part of the final price of the finished product or that the risk of fluctuations in the price of one raw material is higher than for other raw materials does not invalidate that conclusion.
(see paras 63, 66, 69)
3. In the case of a Commission decision imposing a fine for infringement of the competition rules, the duty to state reasons is fulfilled where the Commission indicates in its decision the assessment factors which enabled it to measure the seriousness and duration of the infringement. Article 253 EC cannot be interpreted as requiring the Commission to explain in its decisions why, as regards calculation of the amount of the fine, it did not adopt hypothetical alternative approaches to that actually adopted in its final decision.
(see paras 78, 82)
4. The fact that the method of calculation set out 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 is not based on the overall turnover figures of the undertakings concerned and therefore allows disparities to appear between the undertakings as regards the relationship between their turnover figures and the amount of the fines imposed on them is irrelevant to an assessment of whether the Commission infringed the principles of proportionality and equal treatment and that penalties should fit the individual offender. The Commission is not required, when assessing fines in accordance with the gravity and duration of the infringement in question, to ensure, where fines are imposed on a number of undertakings involved in the same infringement, that the final amounts of the fines resulting from its calculations for the undertakings concerned reflect any distinction between them in terms of their overall turnover or their relevant turnover. It follows that the Commission cannot be required, at any stage in the application of the Guidelines, to ensure that the intermediate amounts of the fines adopted reflect all existing differences between the overall turnover figures of the undertakings concerned.
(see paras 86-87)
5. An increase in the starting amount of the fine imposed on an undertaking which participated in an infringement of the Community competition rules to take its size and overall resources into account for deterrence purposes does not imply that the Commission must reduce the starting amount of the fine imposed on another, smaller, undertaking with fewer resources which participated in the same infringement. It is lawful for the Commission, in its discretion, to adjust the amount of the fines by a flat-rate method provided they do not appear unreasonable having regard to the circumstances of the case.
Moreover, in choosing the amount of uplift for larger undertakings, the Commission is limited by the fact that the starting amount cannot, in any event, exceed an amount proportional to the seriousness of the infringement. Therefore, even in situations where the turnover of the largest undertaking is clearly higher than that of the other undertakings concerned, it is possible, in relation to the seriousness of the undertaking in question, that the Commission may be able to increase the starting amount of the fine on the largest undertaking only marginally.
(see paras 92-93, 95)
6. It is clear from 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 that the Commission has not established any overlap or interdependence between assessment of the gravity and that of the duration of the infringement. It is thus not required to take account of the seriousness of the infringement in choosing the uplift applied for the duration of the infringement. The mere fact that the Commission reserved for itself the possibility of increasing the fine per year of infringement, going in the case of long-lasting infringements up to 10% of the amount adopted for the seriousness of the infringement, does not in any way oblige it to fix that uplift by reference to the intensity of the activities of the cartel or its effects, or of the seriousness of the infringement. It is for the Commission to choose, in the context of its discretion, the uplift which it intends to apply in respect of the duration of the infringement.
Moreover, the Commission may use the same aggravating circumstance, namely that the infringement in question lasted more than five years, both to support the application of an uplift and to determine the maximum uplift of 10%, the fact that the duration of an infringement gives rise not only to the increase in the basic amount as such, but also, where appropriate, to the final amount of the uplift being not unlawful.
(see paras 107, 109-110)
7. In assessing the degrees of cooperation provided by undertakings during an administrative proceeding commenced for a prohibited cartel, the chronological element cannot be taken into account in situations where the information sent by the parties concerned was sent within a fairly brief period and at an essentially identical stage of the administrative procedure. Therefore, the mere fact that one undertaking was before another in cooperating with the Commission does not in itself imply that the Commission is required, in accordance with the equal treatment principle, to grant the latter a reduction in the amount of its fine greater than, or at least identical with, that granted to the other undertaking.
(see paras 124, 127-128)
8. Application by analogy of the 2002 notice on immunity from fines and reduction of fines in cartel cases is possible only for the purposes of filling a gap in the rules and not in a situation where the cooperation of the undertakings in question is governed by the 1996 notice on the non-imposition or reduction of fines in cartel cases.
Moreover, it is only in the absence of transitional provisions that new rules apply immediately to the future effects of a situation which arose under the old rules. Paragraph 28 of the 2002 Leniency Notice clearly provides that that notice was to apply from 14 February 2002 to all cases in which no undertaking had availed itself of the 1996 Leniency Notice.
(see paras 129-130)