Case T-59/02 Archer Daniels Midland Co. v Commission of the European Communities

15 Pages·2010·0.77 MB·English

Case T-59/02
Archer Daniels Midland Co.
v
Commission of the European Communities
(Competition — Cartels — Citric acid — Article 81 EC — Fine — Article 15(2) of
Regulation No 17 — Guidelines on the method of setting fines — Leniency Notice
— Principles of legal certainty and non-retroactivity — Principle of proportionality
— Equal treatment — Duty to state reasons — Rights of the defence)
Judgment of the Courtof First Instance (Third Chamber), 27 September2006 II-3642
Summary of the Judgment
1. Communitylaw—Generalprinciplesoflaw—Non-retroactivityofpenalprovisions
(CouncilRegulationNo17,Art.15;CommissionNotices96/C207/04and98/C9/03)
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SUMMARY—CASET-59/02
2. Competition—Fines—Guidelinesonthemethodofsettingfines
(CouncilRegulationNo17,Art.15(2);CommissionNotice98/C9/03)
3. Competition—Fines—CommunitypenaltiesandpenaltiesimposedinaMemberStateor
anon-memberStateforinfringementofnationalcompetitionlaw
(CouncilRegulationNo17,Art.15)
4. Competition—Fines—Amount—Determination
(Arts 81(1) EC and 82 EC; EEA Agreement, Art. 53(1); Council Regulation No 17,
Art.15(2))
5. Competition — Fines — Amount — Determination — Criteria — Gravity of the
iinnffrriinnggeemmeenntt
(CouncilRegulationNo17,Art.15(2))
66.. CCoommppeettiittiioonn—<FFiinneess—<AAmmoouunntt—< DDeetteerrmmiinnaattiioonn—Deterrenteffectofthefine
(Art.81EC;CouncilRegulationNo17,Art.15)
7. Competition—Fines—Amount—Determination—Criteria—Actualimpactonthe
mmaarrkkeett
(CouncilRegulationNo17,Art.15(2);CommissionNotice98/C9/03,Section1A,first
para.)
8. Competition — Fines — Amount — Determination — Criteria — Gravity of the
infringement
(CouncilRegulationNo17,Art.15(2))
9. Competition — Fines — Amount — Determination — Criteria — Gravity of the
infringement—Attenuatingcircumstances
(CouncilRegulationNo17,Art.15)
10.Competition—Administrativeprocedure—Observanceoftherightsofthedefence
(Arts81ECand82EC;CouncilRegulationNo17,Art.11)
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ARCHERDANIELSMIDLANDvCOMMISSION
11.Competition — Fines — Amount — Determination — Criteria — Gravity of the
infringement—Aggravatingcircumstances
(CouncilRegulationNo17,Art.15;CommissionNotice98/C9/03,Section2)
12.Competition—Fines—Amount—Determination
(CouncilRegulationNo17,Art.15(2))
13.Competition—Communityrules—Infringements—Fines—Amount—Determination
(Art.81EC;CouncilRegulationNo17)
14.Competition — Fines — Amount — Determination — Criteria — Gravity of the
iinnffrriinnggeemmeenntt——AAtttteennuuaattiinnggcciirrccuummssttaanncceess
(Art.81(1)EC; CouncilRegulation No17,Art.15(2);CommissionNotice98/C9/03,
Section3,thirdindent)
15.Competition — Fines — Amount — Determination — Criteria — Gravity of the
infringement—Attenuatingcircumstances
(Art.81(1)EC;CouncilRegulationNo17,Art.15)
16.Competition—Fines—Amount—Determination
(CouncilRegulationNo17,Art.15;CommissionNotice96/C207/04,SectionsB,CandD)
17.Competition—Administrativeprocedure—Statementofobjections—Necessarycontent
(CouncilRegulationNo17,Art.19(1))
18.Competition—Administrativeprocedure—Statementofobjections—Necessarycontent
(CouncilRegulationNo17,Art.19(1))
19.Competition—Fines—Amount—DiscretionoftheCommission—Judicialreview
(Art.229EC)
1. The principle of non-retroactivity of tutes a general principle of Community
criminal laws, enshrined in Article 7 of law which must be observed when fines
the European Convention on Human are imposed for infringement of the
Rights as a fundamental right, consti- competition rules. That principle
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SUMMARY—CASET-59/02
requires that the penalties imposed by the courts of a rule establishing an
correspond with those fixed at the time offence, in conformity with the case-law
when the infringement was committed. oftheEuropean CourtofHumanRights
on Article 7(1) of the European Con
vention on Human Rights which holds
that that provision precludes the retro
activeapplicationofanewinterpretation
ofaruleestablishinganoffence.Accord
ing to that case-law, that is the case in
particular where there is an interpreta
The adoption of guidelines capable of tion by the courts which produces a
modifying the general competition pol resultwhichwasnotreasonablyforesee
icy of the Commission as regards fines able at the time when the offence was
may,inprinciple,fallwithinthescopeof committed,having regardnotably tothe
the principle of non-retroactivity. interpretation of the rule applied in the
case-law at the material time. It follows
however from that same case-law that
the scope of the notion of foreseeability
dependsto a considerabledegree on the
content of the text in issue, the field it
covers and the number and status of
those to whom it is addressed. Thus, a
First, the Guidelines are capable of law may still satisfy the requirement of
producing legal effects. Those effects foreseeability even if the person con
stem not from any attribute of the cerned has to take appropriate legal
Guidelines asrulesoflawinthemselves, advice to assess, to a degree that is
but from their adoption and publication reasonable in the circumstances, the
by the Commission. By adopting and consequences which a given action may
publishing the Guidelines, and indeed entail. More specifically, this is true
the Leniency Notice, the Commission particularly in relation to persons carry
imposes a limit on its own discretion; it ing on a professional activity, who are
cannot depart from those rules under used to having to proceed with a high
pain of being found, where appropriate, degree of caution when pursuing their
to be in breachof the general principles occupation.Theycanonthisaccountbe
of law, such as equal treatment or the expectedtotakespecialcareinassessing
protection of legitimate expectations the risks that such an activity entails.
and legal certainty.
Second,asaninstrumentofcompetition
policy, the Guidelines fall within the In order to ensure that the principle of
scope of the principle of non-retro- non-retroactivityisobserved,itisneces
activity, just like a new interpretation sary to ascertain whether the modifica-
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ARCHERDANIELSMIDLANDvCOMMISSION
tion, which consisted in the adoption of legitimateexpectationthattheCommis
the Guidelines on the method of setting sion will not exceed the level of fines
fines imposed pursuant to Article 15(2) previously imposed or in a method of
ofRegulationNo17 andArticle65(5)of calculating the fines.
the ECSC Treaty, was reasonably fore
seeable at the time when the infringe
ments at issue were committed. In that
regard, the main innovation in the
Guidelines consisted in taking as a
starting point for the calculation a basic
amount, determined on the basis of
brackets laid down for that purpose by
Consequently, those undertakings must
theGuidelines;thosebracketsreflectthe
take account of the possibility that the
various degrees of gravity of infringe
Commission may decide at any time to
ments but, as such, bear no relation to
raisethelevelofthefinesbyreferenceto
the relevant turnover. The essential
thatappliedin the past.That is true not
feature of that method is thus that fines
only where the Commission raises the
are determined on a tariff basis, albeit
level of the amount of fines in imposing
one that is relative and flexible.
fines in individual decisions but also if
thatincrease takes effect by the applica
tion, in particular cases, of rules of
conduct of general application, such as
the Guidelines.
Next, the fact that the Commission, in
the past, imposedfines of a certain level
for certain types of infringement does
notmeanthatitisestoppedfromraising
that level within the limits indicated in
(see paras 41-49, 409)
Regulation No 17 if that is necessary to
ensure the implementation of Commu
nitycompetitionpolicy:onthecontrary,
the proper application of the Commu
nity competition rules requires that the
Commission may at any time adjust the
level of fines to the needs of that policy.
2. The application by the Commission of
themethod setout 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 in calculating the fine imposed
It follows that undertakings involved in on an undertaking does not constitute
an administrative procedure in which discriminatorytreatmentby comparison
fines may be imposed cannot acquire a with undertakings which infringed the
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SUMMARY—CASET-59/02
Community competition rules at the where the procedures conducted and
same time but, for reasons pertaining penalties imposed by the Commission
to the time when the infringement was on the one hand and the authorities of
discovered or to the conduct of the non-member States on the other clearly
administrative procedure initiated pursue different ends. The aim of the
against them, were sanctioned before first is to preserve undistorted competi
the adoption and publication of the tionwithin theEuropean Unionandthe
Guidelines. European Economic Area, whereas the
aim of the second is to protect the
markets of non-member States. The
condition of the unity of the legal
interest protected, which is necessary
for the principle of ne bis inidem to
(see para. 53)
apply, is in that case not fulfilled.
3. The principleofnebisinidemprohibits
the same person from being sanctioned
more than once for the same unlawful (see paras 61-63)
conduct in order to protect one and the
same legal interest. The application of
that principle is subject to three cumu
lative conditions: the identity of the
facts,theunity ofoffenderandtheunity
of legal interest protected.
4. The Commission's power to impose
fines on undertakings which intention
ally or negligently commit an infringe
ment of Article 81(1) EC or Article 82
ECisoneofthemeansconferredonthe
Therefore, an undertaking maybe made
Commission in order to enable it to
the defendant to two parallel sets of
carry out the task of supervision
proceedings concerningthesameinfrin
entrusted to itby Community law. That
gement and, thus, incur concurrent
task encompasses the duty to pursue a
sanctions, one imposed by the compe
general policy to apply, in competition
tent authority of the Member State in
matters, the principles laid down by the
question, the other a Community sanc
Treaty and to guide the conduct of
tion, to the extent that the two sets of
undertakings in the light of those
proceedings pursue different ends and
principles.
that the legal rules infringed are not the
same.
It follows that the principle of nebisin It follows that the Commission has the
idemcannot, a fortiori, apply in a case power to decide the level of fines in
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ARCHERDANIELSMIDLANDvCOMMISSION
order to reinforce their deterrent effect Furthermore, the criteria for assessing
when infringements of a particular type, the gravity of an infringement may
althoughestablishedasbeingunlawfulat include the volume and value of the
the outset of Community competition goods in respect of which the infringe
policy, are still relatively frequent on ment was committed and the size and
account of the profit that certain of the economicpoweroftheundertakingand,
undertakings concerned are able to consequently,theinfluence whichitwas
derive from them. able to exert on the relevant market. It
follows that, on the one hand, it is
permissible, for the purpose of fixing a
fine, to have regard both to the total
turnoveroftheundertaking,whichgives
an indication, albeit approximate and
imperfect,of the sizeof theundertaking
and of its economic power, and to the
The objective of deterrence pursued by
market share of the undertakings con
the Commission relates to the conduct
cerned on the relevant market, which
of undertakings within the Community
gives an indication of the scale of the
or the European Economic Area (EEA).
infringement. On the other hand, it
Consequently, the deterrent effect of a
followsthatitisimportantnottoconfer
fine imposed on an undertaking for
on one or other of those figures an
infringement of theCommunitycompe
importancewhich is disproportionate in
tition rules cannot be assessed by
relationtootherfactorsandthefixingof
reference solely to the particular situa
an appropriate fine cannot therefore be
tion of that undertaking or by reference
the result of a simple calculation based
to whether it has complied with the
on total turnover.
competitionrulesinnon-memberStates
outside the EEA.
(see paras 70-72)
(see paras 98, 99)
5. The gravity of infringements of the
competition rules has to be determined
by reference to numerous factors, such 6. Deterrenceisoneofthemainconsidera
as the particular circumstances of the tionswhichmustguidetheCommission
case and its context; moreover, there is when setting fines imposed for an
no binding or exhaustive list of the infringementof theCommunitycompe
criteria which must be applied. tition rules.
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SUMMARY—CASET-59/02
If the fine were set at a level which stances, and in particular the overall
merely negated the profits of the cartel, turnover,relatingtotheeconomicpower
it would not be a deterrent.It is reason ofan undertakingwhichhasbeenfound
able to assume that when making guilty of an infringement must be taken
financial calculations and management into account when considering the
decisions, undertakings take account gravity of the infringement.
rationally not only of the level of fines
thattheyriskincurringintheeventofan
infringement but also the likelihood of
the cartel being detected. In addition, if
the purpose of the fine were to be
confined merely to negating the
(see paras 129-131)
expectedprofitoradvantage,insufficient
account would be taken of the fact that
the conduct in question constitutes an
infringement of Article 81(1) EC. To
regard the fine merely as compensating
for the damage incurred would be to
overlook not only the deterrent effect, 7. According to Section 1A, first para
which can relate only to future conduct, graph, of the Guidelines on the method
but also the punitive nature of such a of setting fines imposed pursuant to
measure in relation to the actual infrin Article 15(2) of Regulation No 17 and
gement committed. Article 65(5) of the ECSC Treaty, the
Commission is to take account, inter
alia,ofthe actualimpactoftheinfringe
ment on the market, where this can be
measured, when calculating the fine on
the basis of the gravity of the infringe
ment. That measurable impact of the
cartel must be regarded as having been
sufficiently demonstrated if the Com
mission is able to provide specific and
credible evidence indicating with rea
sonableprobabilitythatthecartelhadan
impact on the market.
Similarly, in the case of an undertaking
which is active on a large number of
markets and has a particularly large
financial capacity, to take into account
turnover on the relevant market cannot
suffice to ensure that the fine has
deterrent effect. The larger an under Consideration of the impact of a cartel
taking is and the more overall resources on the market necessarily involves
it has at its disposal which enable it to recoursetoassumptions.Inthisrespect,
act independently on the market, the the Commission must in particular
moreitmustbeawareoftheimportance consider what the price of the relevant
of its role as regards the smooth productwouldhave been intheabsence
functioning of competition on the mar of a cartel. When examining the causes
ket. Consequently, the factual circum- of actual price developments, it is
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ARCHERDANIELSMIDLANDvCOMMISSION
hazardous to speculate on the part It follows, first, that in the case of price
played by each of those causes. Account agreements the Commission must find
must be taken of the objective fact that, — with a reasonable degree of prob
because of the price cartel, the parties ability — that the agreements have in
specifically waived their freedom to fact enabled the parties concerned to
compete with one another on prices. achieve a higher level of price than that
Thus, theassessment of theinfluence of which would have prevailed had there
factors other than that voluntary deci beennocartel.Second,itfollowsthat,in
sion of the parties to the cartel not to making its assessment, the Commission
compete with one another is necessarily must take into account all the objective
basedonreasonableprobability,whichis conditions in the relevant market and
not precisely quantifiable. have regard to the economic context
and, if appropriate, also the legislative
background.Accountshouldbetakenof
theexistence of any ‘objective economic
factors’ which indicate that, had there
been a ‘free play of competition', prices
Therefore,unlessthecriterionofSection would not have developed in the same
1A, first paragraph, is to be deprived of way as the prices which were actually
itseffectiveness,theCommissioncannot charged.
be criticised for referring to the actual
impact on the market of a cartel having
an anti-competitive object, such as a
price or sales quota cartel, even though
it does not quantify that impact or
provide anyassessmentin figuresinthis
respect.
(see paras 181, 182)
(see paras 157-161)
8. When determining the gravity of an
infringement of competition law, parti
cular account should be taken of the 9. The fact that the parties to a cartel did
legislative background and economic notcomplywiththeiragreementanddid
context of the conduct complained of. notentirelyimplementtheagreedprices
In this respect, in order to assess the does not mean that, in so doing, they
actual effect of an infringement on the applied the prices that they would have
market the Commission must take as a charged in the absence of a cartel and
reference the competition that would does not therefore constitute a factor
normally exist ifthere were no infringe which should be taken into account as
ment. an attenuating circumstance. An under-
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SUMMARY—CASET-59/02
taking which despite colluding with its Where the Commission, when freely
competitors follows a more or less assessing the evidence in its possession,
independent policy on the market may relies on a statement made in a context
simply be trying to exploit the cartel for different from that of the procedure
its own benefit. initiated before it, and where that state
ment potentially contains information
that the undertaking concerned would
havebeenentitledtorefusetoprovideto
it if the Commission had put questions
tothatundertakingonthesamesubject,
itis required to guaranteeto the under
(see para. 189) taking concerned procedural rights
equivalent to those conferred on the
undertaking to which it puts questions.
10. There is no provision that prevents the
Commission from relying, as evidence
that could beusedto findthatthere has
been a breach of Articles 81 EC and 82
EC and to set a fine, on a document
whichwasestablishedinthecontextofa
procedure which was not conducted by
the Commission itself.
Compliance with those procedural safe
guards entails, in such a context, the
needfortheCommissiontocarryoutan
However, itis acknowledged that one of examination automatically if, prima
the general principles of Community facie, there is serious doubt as to
law, of which fundamental rights are an whether the procedural rights of the
integralpartandinthelightofwhichall partiesconcernedwerecompliedwithin
Community laws mustbe interpreted, is the procedure during which they pro
the right of undertakings not to be vided such statements. If there is no
compelled by the Commission, under suchseriousdoubt,theproceduralrights
Article11 ofRegulationNo17, toadmit of the parties concerned must be
their participation in an infringement. deemed to have been adequately safe
The protection of that right means that, guarded if, in the statement of objec
in the event of a dispute as to the scope tions, the Commission clearly indicates,
of a question, it must be determined if necessary by annexing the relevant
whetherananswerfromtheundertaking documentstoit,thatitintendstorelyon
to which the question is addressed the statements in question. In this way,
would in fact be equivalent to the the Commission makes it possible for
admission of an infringement, such as the parties concerned to comment not
to undermine the rights of the defence. onlyon thecontentofthosestatements,
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