T-338/94

Commission of the European Communities, represented by Bernd Langeheine and Richard Lyal, of its Legal Service, acting as Agents, assisted by Dirk Schroeder, Rechtsanwalt, Cologne, with an address for service in Luxembourg at the office of C. Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

* Language of the case: German.

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FINNBOARD ν COMMISSION

APPLICATION for annulment of Commission Decision 94/601/EC of 13 July 1994 relating to a proceeding under Article 85 of the EC Treaty (IV/C/33.833 — Cartonboard, OJ 1994 L 243, p. 1),

Facts

1 This case concerns Commission Decision 94/601/EC of 13 July 1994 relating to a proceeding under Article 85 of the EC Treaty (IV/C/33.833 — Cartonboard, OJ 1994 L 243, p. 1), as corrected prior to its publication by a Commission

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JUDGMENT OF 14. 5. 1998 — CASE T-338/94

decision of 26 July 1994 (C(94)2135 final) (hereinafter 'the Decision). The Decision imposed fines on 19 producers supplying cartonboard in the Community on the ground that they had infringed Article 85(1) of the Treaty.

2 The product with which the Decision is concerned is cartonboard. The Decision refers to three types of cartonboard, designated as ' G C ' , ' G D ' and 'SBS' grades.

that the producers of cartonboard supplying the United Kingdom had introduced a series of simultaneous and uniform price increases and it requested the Commis­ sion to investigate whether there had been an infringement of the Community competition rules. In order to ensure that its initiative received publicity, the BPIF issued a press release. The content of that press release was reported in the specia­ lised trade press in December 1990.

7 O n 12 December 1990, the Federation Française du Cartonnage also lodged an informal complaint with the Commission, making allegations relating to the French cartonboard market which were similar to those made in the BPIF com- plaint.

8 O n 23 and 24 April 1991, Commission officials acting pursuant to Article 14(3) of Council Regulation N o 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87, hereinafter 'Regulation N o 17'), carried out simultaneous investigations without prior notice at the premises of a number of undertakings and trade associations operating in the cartonboard sector.

9 Following those investigations, the Commission sent requests for both infor- mation and documents to all the addressees of the Decision pursuant to Article 11 of Regulation N o 17.

10 The evidence obtained from those investigations and requests for information and documents led the Commission to conclude that from mid-1986 until at least (in most cases) April 1991 the undertakings concerned had participated in an infringe- ment of Article 85(1) of the Treaty.

— in the case of Buchmann and Rena from about March 1988 until at least the end of 1990,

— in the case of Enso Española, from at least March 1988 until at least the end of April 1991,

— in the case of Gruber & Weber from at least 1988 until late 1990,

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FINNBOARD ν COMMISSION

— in the other cases, from mid-1986 until at least April 1991,

— exchanged commercial information on deliveries, prices, plant standstills, order backlogs and machine utilisation rates in support of the above measures.

(...) II -1629

JUDGMENT OF 14. 5. 1998 — CASE T-338/94

Article 3

The following fines are hereby imposed on the undertakings named herein in respect of the infringement found in Article 1 :

(...)

FINNBOARD ν COMMISSION

16 The P W G reported to the 'President Conference' (hereinafter 'the P C ) , in which almost all the managing directors of the undertakings in question participated (more or less regularly). The P C met twice each year during the period in ques­ tion.

17 In late 1987 the Joint Marketing Committee (hereinafter 'the JMC') was set up. Its main task was, on the one hand, to determine whether, and if so how, price increases could be put into effect and, on the other, to prescribe the methods of implementation for the price initiatives decided by the PWG, country-by-country and for the major customers, in order to achieve a system of equivalent prices in Europe.

18 Lastly, the Economic Committee discussed, inter alia, price movements in national markets and order backlogs, and reported its findings to the J M C or, until the end of 1987, to the Marketing Committee, the predecessor of the JMC. The Economic Committee was made up of marketing managers of most of the undertakings in question and met several times a year.

19 According to the Decision, the Commission also took the view that the activities of the P G Paperboard were supported by an information exchange organised by Fides, a secretarial company, whose registered office is in Zurich, Switzerland. The Decision states that most of the members of the P G Paperboard sent periodic reports on orders, production, sales and capacity utilisation to Fides. Under the Fides system, those reports were collated and the aggregated data were sent to the participants.

20 The applicant, Finnish Board Mills Association — Finnboard (hereinafter 'Finn- board') is a trade association governed by Finnish law which, in 1991, had six member companies, including cartonboard producers O y Kyrö AB, Metsä-Serla Oy, Tampella Corporation and United Paper Mills. The cartonboard produced by

23 Sixteen of the eighteen other undertakings held to be responsible for the infringe­ ment have also brought actions to contest the Decision (Cases T-295/94, T-301/94, T-304/94, T-308/94, T-309/94, T-310/94, T-311/94, T-317/94, T-319/94, T-327/94, T-334/94, T-337/94, T-347/94, T-348/94, T-352/94 and T-354/94).

24 The applicant in Case T-301/94, Laakmann Karton G m b H , withdrew its action by letter lodged at the Registry of this Court on 10 June 1996 and the case was removed from the Register by order of 18 July 1996 (Case T-301/94 Laakmann Karton GmbH ν Commission, not published in the ECR).

25 The above four Finnish undertakings, members of the applicant, and as such held jointly and severally liable for payment of the fine imposed on it, have also brought actions against the Decision (Joined Cases T-339/94, T-340/94, T-341/94 and T-342/94).

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FINNBOARD ν COMMISSION

26 Lastly, an action was also brought by an association, CEPI-Cartonboard, which was not an addressee of the Decision. However, it withdrew its action by letter lodged at the Registry of the Court on 8 January 1997 and the case was removed from the Register of the Court by order of 6 March 1997 (Case T-312/94 CEPI- Cartonboard ν Commission, not published in the ECR).

31 The parties in the cases referred to in paragraph 27 above presented oral argument and gave replies to the Court's questions at the hearing which took place from 25 June to 8 July 1997.

32 In the present case, the applicant, by letter of 19 July 1995, declared its intention not to lodge a reply. However, in that letter it submitted that the figures used by the Commission to calculate the fine were incorrect.

33 O n 6 October 1995 the Commission submitted its observations on the applicant's letter.

Forms of order sought

34 The applicant claims that the Court should:

— annul the Decision in so far as it concerns it;

— order the applicant to pay the costs.

The application for annulment of the Decision

The plea alleging breach of the rules concerning use of languages

Arguments of the parties

36 This plea is made up of three parts.

37 In the first part the applicant points out that at the time the Decision was adopted it was not subject to the jurisdiction of a Member State. The Decision could there­ fore be authentic as against it for the purposes of Article 16 of the Rules of Pro­ cedure of the Commission of 17 February 1993 (OJ 1993 L 230, p. 15, hereinafter 'Rules of Procedure of the Commission') only in the language of its agent, that is to say, in German. In support of this argument it also refers to Regulation N o 99/63/EEC of the Commission of 25 July 1963 on the hearings provided for in Article 19 (1) and (2) of Council Regulation N o 17 (OJ, English Special Edition 1963-1964, p. 47), Article 2(1) of which provides that the statement of objections is to be addressed to an undertaking or its agent. In a situation such as that in this case, where the agent chosen is subject to the jurisdiction of a Member State, that provision requires the agent's language to be chosen as the language of the pro­ cedure. That language is also the only one in which the Decision is authentic.

42 It adds that, in view both of the size of the statement of objections and its appen- dices and of the fact that many of those documents were in a foreign language, it was allowed insufficient time to reply to them.

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FINNBOARD ν COMMISSION

43 The Commission contends that it did not infringe the rules relating to the use of languages.

44 As regards the first part of the plea, the Commission points out that Regulation N o 1 only concerns correspondence sent to persons subject to the jurisdiction of a Member State, whereas the Decision was adopted before the accession of Finland to the Community. Furthermore, the Decision did not constitute a 'reply' within the meaning of Article 2 of Regulation N o 1.

45 It was therefore entitled to choose the language of the case freely, taking account, however, of any connections between the applicant and the Member States of the Community (see Case 6/72 Europemballage and Continental Can ν Commission [1973] E C R 215, paragraph 12). In this case English was chosen as the language of the procedure in view of the fact that it was the working language of the European Free Trade Association (EFTA) and the language of proceedings in the EFTA Court of Justice; the fact that the applicant used English in its correspondence with its subsidiaries; and, finally, the fact that it has an English name.

49 Regulation N o 1, as amended, on which the applicant relies, lays down rules regarding the use of languages only in the case of relations between the Commu­ nity and a Member State or a person subject to the jurisdiction of one of the Mem­ ber States.

50 In the present case the documents before the Court show that the Commission did not send any official document to the applicant's German agent, since the docu­ ments he received were copies of official documents sent directly to the applicant.

51 Moreover, neither Article 2 of Regulation N o 99/63 nor Article 6 of the E C H R , even assuming that the latter provision could be relied on by an undertaking sub­ ject to an investigation pursuant to competition law, require documents to be sent in the language of the Member State in which the agent lives.

52 The language of the statement of objections and of the Decision had therefore to be chosen in the light of the relationship established by the applicant, within the Community, with a Member State (see, to that effect, Europ emballage and Continental Can ν Commission, cited above, paragraph 12). In that regard, it is, however, common ground that English was the language used by the applicant in

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FINNBOARD ν COMMISSION

56 The applicant submits that, in order to ensure the proof of authenticity of the Decision and the legal protection of its addressees, the Decision should have been authenticated as a single document, the various sheets of paper being bound together if necessary. That is the only way to prevent the deletion or alteration of certain parts of the Decision. In this case, the Decision was not authenticated as a

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single document. Its purport did not become clear until the Decision of 13 July 1994 was read in combination with the amending decision of 26 July 1994. Those two decisions were communicated separately to the applicant, which undermined their probative value.

57 The applicant asks the Court to order the Commission to produce the original of the two decisions at issue in order to verify whether they were bound together as described and whether the initial decision contained any reference to the subse- quent alteration.

61 The Commission states that Article 191(3) of the E C Treaty does not lay down any requirement for formal notification. It is sufficient that the decision reaches the addressee in simple written form and puts him in a position to take cognisance of it (Case 8/56 ALMA ν High Authority [1957] E C R 179, 190, and Case C-195/91 Ρ Bayer ν Commission [1994] E C R 1-5619, paragraphs 7 and 20). As those condi­ tions were met in this case, the applicant's arguments based on irregularities in the notification procedure are without foundation.

62 Moreover, a certified true copy of the Decision is considered to be an authentic version of it (Joined Cases 97 to 99/87 Dow Chemical Ibèrica and Others ν Com­ mission [1989] E C R 3165, paragraph 59, Case T-43/92 Dunlop Slazenger ν Com­ mission [1994] E C R 11-441, paragraphs 24 and 25, and Case T-34/92 Fiatagri and New Holland Ford ν Commission [1994] E C R 11-905, paragraph 27).

63 In this case the Decision was authenticated in accordance with Article 16 of the Commission's Rules of Procedure. Moreover, the applicant has not adduced any evidence of irregularities in the procedure for the adoption of the Decision. The Commission submits that the Decision of 26 July 1994 did not alter the Decision in any respect in regard to the applicant and that, in any event, the fact that the decision of 26 July 1994 refers to the Decision constitutes a sufficient link between them.

64 In those circumstances the Commission should not be ordered to produce the original of the Decision (see Bayer ν Commission, Fiatagri and New Holland Ford ν Commission and Dunlop Slazenger ν Commission, cited above).

68 As regards the validity of the notification, there is no provision of Community law which precludes the notification of a decision in the form of a certified true copy or the separate notification of an amending decision.

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FINNBOARD ν COMMISSION

69 In the present case the copy of the Decision sent to the applicant bears the name of the Commissioner responsible for competition policy and the words 'certified copy'. It is also signed by the Secretary-General of the Commission. Such a copy is lawful. It has the same legal force as the original instrument adopted by the col­ lege of Commissioners and authenticated in accordance with the procedures laid down by the Commission's Rules of Procedure.

70 As to the procedures for notification, it is settled case-law that a decision is prop­ erly notified within the meaning of the Treaty, if it reaches the addressee and he is in a position to take cognisance of it (Europemballage and Continental Can ν Commission, cited above, paragraph 10). In this case, as is clear from the very terms of the application, the applicant was in a position to take full cognisance of the Decision and to assert all its rights before the Court.

71 The plea must therefore be rejected as unfounded.

74 The statement of objections was sent to it in the form of an unsigned document attached to a letter from the Director-General for Competition. Without a signa­ ture that document could not be considered to be an 'act' of the Commission. Accordingly, it could not serve as a basis for the Decision.

75 Moreover, even if the document in question, together with its covering letter, could be regarded as a 'statement of objections' for the purposes of Regulation N o 99/63, it was not communicated to it by the Commission. Article 19(1) of Regu­ lation N o 17 accords the Commission exclusive authority in that respect, which its Rules of Procedure do not allow to be delegated. In any event, under the Rules of Procedure, neither the decision on the contents of the statement of objections nor its notification to its addressees could be delegated to a third party (Geigy ν Com­ mission, cited above, and Case 8/72 Cementbandelaren ν Commission [1972] E C R 977). Similarly, the authority to fix the deadline for replying to the statement of objections could not be delegated to a third party.

76 In the second part of the plea the applicant submits that, in not binding the appen­ dices to the statement of objections, the Commission infringed the requirement under Article 2(1) of Regulation N o 99/63 that the statement of objections be in writing, which is intended to provide the same guarantees as are provided by the requirement for authentication of final decisions. The statement of objections could not therefore serve as a basis for the Decision.

Findings of the Court

81 As regards the first part of the plea, the documents before the Court show that the statement of objections sent to the applicant was accompanied by a letter signed by the Director-General of the Directorate-General for Competition (DG IV) of the Commission.

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JUDGMENT OF 14. 5. 1998 — CASE T-338/94

82 In signing that letter the Director-General did not act pursuant to a delegation of powers but to a simple delegation of authority to sign which he had received from the Commissioner responsible (Geigy ν Commission, cited above, paragraph 5). Such delegation is the normal method by which the Commission exercises its pow­ ers (VBVB and VBBB ν Commission, cited above, paragraph 14).

83 As the applicant has not supplied any evidence to suggest that in this case the Community administration failed to observe the applicable rules (VBVB and VBBB ν Commission, cited above, paragraph 14), this submission must be dis­ missed.

88 In any event, the objections raised against the applicant were communicated in writing in such a way that the various documents on which the Commission based its objections could be clearly identified.

89 In the light of the above, the plea must be rejected.

The plea grounded upon infringement of Article 190 of the Treaty

Arguments of the parties

90 The applicant sets out in detail the objectives of the obligation to state reasons laid down in Article 190 of the Treaty, first submitting that, for each action deemed to constitute an infringement, the Commission should have indicated the provision infringed and specified whether the infringement took the form of an agreement or a concerted practice. That information was vital in order to ascertain whether each of the actions in question met the conditions for classification as an illegal act, namely the existence of the relevant factual elements, illegality and fault. Accord­ ingly, the statement that the infringement consisted in participation in an agree­ ment or a concerted practice was not sufficient, as a single action could not be deemed both an agreement and a concerted practice.

91 While several actions can be described as a continuous infringement, that does not mean that the Commission need not indicate, for each individual action, the aspects which constitute an illegal act. Only if each individual action constitutes an illegal act may all the actions taken together be described as a continuous infringe­ ment.

94 The Commission considers that the Decision contains a sufficient description of the facts to justify the imposition of the fine. Given the complex and long-term nature of the agreement, individual actions formed part of an overall system intended to distort free competition on the market, so that it was not necessary to classify each individual action as an agreement or a concerted practice (Case T-7/89 Hercules Chemicals ν Commission [1991] E C R 11-1711, paragraphs 262 to 264). In any event, the Commission made clear, in points 131 and 132 of the Decision, that from the end of 1987 the conduct of the undertakings presented all the character­ istics of a full agreement in the sense of Article 85(1) of the Treaty, and that, until then, their conduct had constituted a concerted practice. Moreover, it could char­ acterise an action primarily as an agreement and, in the alternative, as a concerted practice (Case T-13/89 ICI ν Commission [1992] E C R II-1021, paragraphs 251 and 252).

95 In the case of a single infringement, the Commission was not obliged to prove that each individual act of the cartel met the criteria laid down in Article 85 (ibid, para­ graphs 259 and 260).

96 N o r was it necessary to prove that every undertaking participated in each aspect of the cartel. As argued in points 116 and 117 of the Decision, it was sufficient for the

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FINNBOARD ν COMMISSION

Commission to demonstrate the existence of the overall cartel and the participation of each undertaking in certain acts forming part of the overall joint enterprise (see ICI ν Commission, cited above, paragraphs 256 to 261 and 305, and Hercules Chemicals ν Commission, paragraph 272).

98 It is settled law that the purpose of the obligation to give reasons for an individual decision is to enable the Community judicature to review the legality of the decision and to provide the party concerned with an adequate indication as to whether the decision is well founded or whether it may be vitiated by some defect enabling its validity to be challenged; the scope of that obligation depends on the nature of the act in question and on the context in which it was adopted (see, inter alia, Case T-49/95 Van Megen Sports ν Commission [1996] E C R II-1799, para­ graph 51). Although pursuant to Article 190 of the Treaty the Commission is bound to state the reasons on which its decisions are based, mentioning the facts, law and considerations which have led it to adopt them, it is not required to dis­ cuss all the issues of fact and law which have been raised during the administrative procedure (see, inter alia, Joined Cases 209/78 to 215/78 and 218/78 Van Landewyck and Others ν Commission [1980] E C R 3125, paragraph 66).

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JUDGMENT OF 14. 5. 1998 — CASE T-338/94

99 In this case, the Decision sets out in detail the reasons why the Commission con- sidered that the infringement on the part of the undertakings named in Article 1 of the Decision should be characterised as an agreement and a concerted practice (points 129 to 132 of the Decision). In particular, according to the first paragraph of point 131 'from the end of 1987, with the concrétisation of the progressive col- lusion of the producers in the so-called "price before tonnage" scheme, the infringement has presented all the characteristics of a full "agreement" in the sense of Article 85'. In addition it is explained that 'the working out of the plan via the twice-yearly price initiatives is not to be treated as involving a series of separate agreements or concerted practices but as part of one and the same continuing agreement' (second paragraph of the same point).

103 Finally, as acts by a natural person are imputable to an undertaking within the meaning of Article 85 of the Treaty where that person is authorised to act on behalf of the undertaking (by analogy, Musique Diffusion française and Others ν Commission, cited above, paragraph 97), it follows that the Commission gave suf­ ficient reasons for the Decision in referring to the applicant's name.

104 In any event, the individual particulars annexed to the statement of objections reveal the identity of the applicant's representatives which the Commission believes to have participated in the meetings of the bodies of the P G Paperboard.

105 As none of the submissions of the applicant have been upheld, the plea must be rejected.

The plea grounded on infringement of Article 85(1) of the Treaty in that the Com­ mission did not prove that the applicant participated in any agreement

106 This plea is in three parts. Each part will be considered separately.

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1 1 0 The applicant, stating that, even according to the Decision, its alleged representa­ tives participated in only a few meetings of the PWG and the JMC, submits that the Decision contains no evidence to prove it participated in any sort of collusion. Even if there was collusion at certain meetings and it was represented in the bodies

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FINNBOARD ν COMMISSION

concerned, it is not proven that the collusion took place at the meetings which its alleged representatives attended.

1 1 1 The applicant disputes that the outcome of PWG meetings was reported to the undertakings which were not members of the P W G (point 38 of the Decision). In particular, the statement that 'the Scandinavian producers (all members of the NPI) were usually told of the outcome by Finnboard' (fourth paragraph of point 38 of the Decision) is not supported by any evidence.

112 The allegation that the undertakings which were not members of the P W G were informed of the outcome of meetings of that body at meetings of the P C (point 38 of the Decision) is pure conjecture.

117 The applicant's argument that it took no part in the meetings of the P W G is, in any event invalid: even if the managers of Finnboard acted as representatives of the N P I , that would merely mean that they represented the interests of almost all the Scandinavian producers. They would inevitably have taken the applicant's interests into consideration, in view of their role in that undertaking.

1 1 8 The applicant was also represented at the meetings of the J M C and the Economic Committee. Several producers of cartonboard named it as one of the members of the JMC.

119 For the rest, the Commission bases its arguments on the description in the Decision of the main roles of those bodies.

— Findings of the Court

120 According to the Decision, the applicant and the other undertakings named in Article 1 thereof infringed Article 85(1) of the Treaty by participating in an agree­ ment and concerted practice. The Commission considered that the applicant par­ ticipated in that infringement from mid-1986 until at least April 1991.

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JUDGMENT OF 14. 5. 1998 — CASE T-338/94

126 Mr Sommar was elected vice-chairman of the PG Paperboard at the general meet- ing in 1987 and, on that occasion, was expressly described, when put forward for the post, as 'the new Chairman of the Finnboard Executive Committee' (appendix 97 to the statement of objections).

127 Moreover, it is common ground that the chairmanship of the PG Paperboard was held by Mr Köhler from May 1988 until autumn 1990. O n that point, it is stated in the minutes of the meeting of the Ρ W G of 6 April 1990 (attached to the defence):

'Mr Köhler reminds us that he will take over other duties in the forest industry in Finnland in the coming autumn. Therefore he will leave Finnboard and will have to resign as president of the PG Paperboard.'

128 According to Stora's statements, the applicant participated in meetings of the PWG [appendices 35 (p. 14), 37 (p. 2) and 43 (p. 3) to the statement of objections].

133 Inasmuch as the applicant seeks in this part of the plea to contest the merits of the Commission's allegations regarding the anti-competitive object of the meetings in question, the relevant arguments must be examined in conjunction with the other two parts of the plea.

134 In the light of the above, the first part of the plea cannot be upheld.

The second part of the plea: lack of evidence of the applicant's participation in price initiatives

— Arguments of the parties

135 The applicant submits that the Decision contains no specific evidence proving its participation in price initiatives. The general grounds of the Decision do not estab­ lish any link between the various price initiatives implemented and the conduct of individual undertakings. In particular, the grounds of the Decision do not rule out

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FINNBOARD ν COMMISSION

means 'to increase'). Moreover, the price lists obtained from Rena contain data relating to Ireland but Finland is not mentioned. The reverse is true of the Finn- board list.

1 4 0 The note obtained from Rena, which, the Decision alleges, concerns the J M C meeting of 6 September 1989 (appendix 117 to the statement of objections), states merely: '[...] 10.5% difference between G C I and G C on the lowest prices from Finnboard [...]'. That comment does not prove that the applicant participated in any collusion; the author of the note was merely noting a price differential between two products. Moreover, according to the covering letter from Rena (appendix 116 to the statement of objections), the information given in the note was based on individual conversations held on the fringe of the meeting of the JMC, conversations in which the applicant's employees took no part.

1 4 1 The note obtained from Rena, which, the Decision alleges, concerns the J M C meeting of 6 September 1990 (appendix 118 to the statement of objections), does not even concern a meeting of the J M C (see the covering letter from Rena, appen­ dix 116 to the statement of objections), but merely relates to internal discussions. The mere mention of the applicant's name ('Finnboard a lot down in USSR [...]') does not constitute evidence of any collusion.

142 As regards Stora's statement describing the role of the J M C in the implementation of price initiatives (appendix 35 to the statement of objections, p. 17), the applicant submits that, even if it were considered to have participated, quod non, in the meetings of that body, Stora and it were, according to the Decision, both present at only seven meetings of the J M C . It is thus perfectly possible that any discussions with an anti-competitive object took place during meetings in which the applicant did not take part and that innocuous discussions were held at the seven meetings of the J M C at which Stora and the applicant were both present.

147 The Finnboard list contains information concerning G D grades, which proves that this was not an internal document, as the applicant does not produce those grades. The resemblance between the Finnboard list and the list obtained from Rena also demonstrates that the former concerned price increases on which cartonboard pro­ ducers had reached an agreement. The information contained in the Finnboard list

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FINNBOARD ν COMMISSION

shows that it concerned price increases in the second quarter of 1989 and does not refer to historical data, contrary to the applicant's claims.

148 Finally, the applicant's participation is proved by handwritten notes obtained from FS-Karton and Rena (appendices 113 and 117 to the statement of objections), which name certain producers of cartonboard, including Finnboard.

— Findings of the Court

152 That information comes from Stora's statement (appendix 39 to the statement of objections). Stora states, moreover, that '[t]he PWG met from 1986 to assist in the introduction of discipline to the market'. Those statements are supported by appendix 73 to the statement of objections, a confidential note dated 28 December 1988 sent by the marketing director of the Mayr-Melnhof Group in Germany (Mr Katzner) to the General Manager of Mayr-Melnhof in Austria (Mr Gröller) con- cerning the market situation.

153 According to that document, closer cooperation within the 'Presidents' grouping' ('Präsidentenkreis'), decided on in 1987, had produced two significant results:

— PRO-Carton

— Price discipline.

In both areas there is something positive and something negative to report:

[...]

157 According to the Decision, the main purpose of the J M C was, from the outset:

' — to determine whether, and if so how, price increases could be put into effect and to report its conclusions to the PWG,

— to work out the details of the price initiatives decided by the P W G on a country-by-country basis and for the major customers with the aim of achiev­ ing an equivalent (i. e. uniform) price system in Europe ...' (point 44, last para­ graph, of the Decision).

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JUDGMENT OF 14. 5. 1998 — CASE T-338/94

158 More specifically, the Commission maintains in the first and second paragraphs of point 45 of the Decision, that:

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FINNBOARD ν COMMISSION

161 In that regard, it suffices to refer by way of example to the note obtained from Rena regarding the J M C meeting of 6 September 1990 (appendix 118 to the state­ ment of objections), in which it is stated, inter alia:

'Price increase will be announced next week in September.

F FF 40 NL 14 N L G D D M 12 I LIT 80 B BF 2.50 CH SF 9 GB £40 IRL £ 45

AU grades should be increased equally G D , U D , GT, G C etc.

164 Even though the documents on which the Commission relies concern only a small number of the JMC's meetings held during the period covered by the Decision, all the available documentary evidence corroborates Stora's statement indicating that the main object of the JMC was to determine and plan the implementation of con- certed price increases. The almost total absence of minutes, whether official or internal, of the meetings of the JMC must be regarded as sufficient proof of the Commission's assertion that the undertakings which participated in the meetings attempted to hide the true nature of the discussions in that body (see, in particular, point 45 of the Decision). In those circumstances, the burden of proof has been reversed and it is for the addressees of the Decision which participated in the meet- ings of that body to prove that it had a lawful object. Since such proof was not adduced by those undertakings, the Commission was entitled to consider that the discussions which the undertakings held in the meetings of that body had a prin- cipally anti-competitive object.

165 As regards the position of the applicant, this Court considers that its participation in the meetings of the PWG and the JMC constitutes sufficient evidence of its par- ticipation in collusion on prices.

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166 It must first be pointed out that the applicant's managers held executive offices in the P G Paperboard from mid-1986 until autumn 1990 (see above, paragraphs 122 to 127). Furthermore, appendix 118 to the statement of objections describes dis­ cussions held at a meeting of the J M C in which it is common ground that an employee of the applicant took part.

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unfounded. 'Höjs' can, in that form, indicate either a present ('is increased') or future ('will be increased') event.

170 Finally, as regards that list, the Commission rightly pointed out in the Decision (fourth paragraph of point 79):

'Finnboard does not produce U D or G D grades, so the list cannot have been purely internal or relating to Finnboard's own business alone.'

171 In the light of the above and without the need to consider the applicant's submis- sions concerning other documents (appendices 44, 130 and 131 to the statement of objections), it must be concluded that the Commission has established that the applicant participated in collusion on prices.

174 The Decision's reasoning in regard to orders in hand and machine downtime is purely theoretical. It does not even refer to any agreement to that end, as it alleges that only a loose system of encouragement existed.

175 Finally, as regards the agreement allegedly concluded within the Ρ W G on freezing the market shares of the main producers, the applicant repeats that it did not par­ ticipate in such meetings. Moreover, neither Stora's statement (appendix 43 to the statement of objections) nor the note from Rena concerning a meeting of the N P I (appendix 102 to the statement of objections, see point 58 of the Decision) contain any information from which it could be inferred that the applicant participated in collusion. In particular, Stora's statement shows that the discussions concerning market shares were extremely vague and did not concern individual undertakings.

176 The Commission contends that the existence of collusion on volume control has been proved (points 51 to 71 of the Decision).

177 The price before tonnage policy was described in detail by Stora (appendix 39 to the statement of objections). The implementation of that policy required produc­ tion volumes to be monitored and tailored to demand. For that reason producers exchanged information on the state of order backlogs, order inflow and capacity utilisation. Moreover, they kept each other informed of the amount of planned or actual downtime in order to plan downtime in the sector as a whole.

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period by the participants in the P W G meetings. It is apparent from the third paragraph of point 37 of the Decision that the true purpose of the PWG, as described by Stora, 'included "discussions and concertation on markets, market shares, prices, price increases and capacity"'.

183 As to the PWG's role in relation to the collusion on market shares, the Decision (point 37, fifth paragraph) states as follows: 'In connection with the moves to increase prices, the P W G held detailed discussions on the market shares in western Europe of the national groupings and of individual producer groups. As a result, certain "understandings" were reached between the participants as to their respec­ tive market shares, the object being to ensure that the concerted price initiatives were not jeopardised by excess of supply over demand. The large producer groups in effect agreed to maintain their market shares at the levels disclosed for each year by the annual production and sales figures and available in definitive form through Fides in March of the following year. Market share developments were analysed in each meeting of the P W G on the basis of the monthly Fides returns and if signifi­ cant fluctuations emerged, explanations would be sought from the undertaking presumed responsible.'

184 According to point 52 of the Decision: 'The agreement reached in the PWG during 1987 included the "freezing" of the west European market shares of the major pro­ ducers at existing levels, with no attempts to be made to win new customers or extend existing business through aggressive pricing'.

188 In appendix 39 to the statement of objections, Stora states: 'The P W G met from 1986 to assist in the introduction of discipline in the market. ... Among other (legitimate) activities, its purpose included discussion and concertation on markets, market shares, prices, price increases, demand and capacity. Its role included assessing and explaining to the President Conference the precise state of supply and demand on the market and the measures to be taken to attempt to bring order to the market.'

189 As regards more specifically the collusion on market shares, Stora indicates that 'the shares taken by national groups of EC, EFTA and other countries supplied by members of the PG Paperboard were considered in the P W G ' and that the P W G 'discussed the possibility of holding market shares at the previous year's level' (appendix 39 to the statement of objections, point 19). It also states (same docu- ment, point 6) that '[d]iscussions about producers' European market shares also took place during this period, the first reference period being 1987 levels'.

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190 In a reply to a request by the Commission of 23 December 1991, sent on 14 Feb­ ruary 1992 (appendix 43 to the statement of objections), Stora also states: 'The understandings on market share levels reached by the PWG members related to Europe as a whole. The understandings were based on the previous total year fig­ ures, usually definitively available by the following March' (point 1.1).

191 That assertion is confirmed in the same document as follows: '(...) the discussions led to understandings usually in March of each year between members of the PWG to maintain their market shares at the previous year's level' (point 1.4). Stora reveals that 'no measures were taken to ensure respect for the understandings' and that the participants in the meetings of the PWG 'were aware that if they took exceptional positions in certain markets supplied by others, those others could retaliate in other markets' (ibidem).

(3) Market shares had to be "frozen" at 1987 levels, existing contacts maintained and no new activities or grades obtained via pricing (the result will be appar- ent in January 1989 — if all are honest)'.

195 Those sentences must be read in the more general context of the note.

196 In that regard, it should be noted (see paragraph 155 above) that the reference to the 'Presidents' grouping' was interpreted by Mayr-Melnhof as a general reference to both the PWG and the PC, that is to say, without reference to a specific event or meeting (appendix 75 to the statement of objections, point 2. a).

197 The author goes on to indicate that this cooperation had led to 'price discipline' which had produced 'winners' and 'losers'.

198 It is necessary, therefore, to understand the phrase relating to the market shares which were to be frozen at 1987 levels against the background of that discipline decided upon by the 'Presidents' grouping'.

199 Moreover, the reference to 1987 as reference year is consistent with Stora's second statement (appendix 39 to the statement of objections; see paragraph 188 above).

203 The documents it produces support its analysis.

204 In its second statement (appendix 39 to the statement of objections, point 24), Stora gives the following explanation: 'With adoption by the P W G of the policy of price before tonnage and the gradual implementation of an equivalent price system from 1988, members of the P W G recognised that downtime would have to be taken to maintain those prices in the face of a reduced growth in demand. Without taking downtime the producers would have been unable to maintain agreed price levels in the face of an increasing excess of capacity'.

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205 In the following point of its statement, it adds: 'In 1988 and 1989 the industry was able to run at near full capacity. Downtime in addition to normal closure for repairs and holidays became necessary from 1990. ... Ultimately downtime had to be taken when the order flow ceased in order to maintain the price before tonnage policy. The amount of downtime required to be taken by producers (to maintain the balance between production and consumption) could be calculated from the capacity reports. N o formal allocation of downtime was made by the PWG, although a loose system of encouragement existed ...'.

206 As to appendix 73 to the statement of objections, the reasons adduced by the author of the note in order to explain why he considered Mayr-Melnhof to be a 'loser' at the time when the note was written are significant evidence of the exist- ence of collusion on downtime between the participants in the meetings of the PWG.

208 Mayr-Melnhof states (appendix 75 to the statement of objections) that the passage reproduced above refers to its own internal situation. However, when considered in the light of the more general background to the note, that passage reflects the implementation, at the level of sales personnel, of a rigorous policy adopted within the 'Presidents' grouping'. The document must therefore be construed as meaning that the participants in the 1987 agreement, that is to say, the participants in the meetings of the PWG at least, undoubtedly weighed up the consequences the agreed policy would have if it were to be applied rigorously.

209 The fact that discussions relating to consideration of downtime took place between the manufacturers when they prepared price increases is corroborated, in particu­ lar, by a Rena note dated 6 September 1990 (appendix 118 to the statement of objections), which refers to the amounts of price increases in several countries, the dates for the future announcements of those increases and the state of the order backlogs expressed in working days for several manufacturers.

210 The author of the document notes that certain manufacturers were providing for downtime, which he illustrates as follows:

'Kyro 36 days 1 week Simpele 28 days 1 week September Ta 27 days Ineerois 24 days 23/September stop [...] Kopparfors 5-15 days 5/9 will stop for five days'.

211 It should be pointed out that the applicant participated in the meeting of the J M C referred to in that note (Table 4 annexed to the Decision). In that regard, it is com­ mon ground that the names mentioned above, 'Kyro', 'Simpele', 'Ta' for Tako, and 'Ingerois' refer to the cartonboard manufacturing sites of the member companies of Finnboard, that is to say, O y Kyro AB, United Paper Mills Ltd, Metsä-Serla O y and Tampella Corporation.

216 Since none of the parts of the plea has been upheld, the plea must be rejected in its entirety.

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The plea of infringement of Article 85(1) of the Treaty in that the Commission did not take due account of the competitive conditions and the market situation

Arguments of the parties

217 There are two parts to this plea.

221 Given the market conditions and the competitive situation of the applicant at the time, it thus had no interest in participating in an agreement to restrict compe- tition. As the Commission failed to take account of those particular circumstances, its analysis of the market conditions is incomplete and erroneous.

222 In the second part of the plea the applicant submits that the Decision is based on an inadequate analysis of the market conditions in that it contains no finding as to the existence of effective competition during the period in question. The Commis- sion should have taken account, at least in calculating the fines, of the fact that any collusion had in any event had no impact on actual competition.

223 As regards the first part of the plea, the Commission contends that, since the par- ticipation of the applicant in the agreement has been proved, there is no need to consider whether it had any interest in participating in it. In any event, the appli- cant obviously had an interest in keeping prices artificially high. Even if its sub- missions concerning the favourable competitive position of G C cartonboard pro- ducers are well-founded, the maintenance of high prices would have conferred on it an even greater advantage over producers of G D cartonboard.

224 Finally, the average operating margin was in fact 20% (point 16 of the Decision).

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were well-founded, they would not be such as to call into question the Commis- sion's finding of an infringement of Article 85(1) of the Treaty.

230 This plea cannot therefore be upheld.

Application for annulment of Article 2 of the Decision

Arguments of the parties

234 The Commission disputes that the prohibition contained in Article 2 of the Decision is too abstract or imprecise. The operative part of the Decision must be read in the light of the statement of reasons set out therein and such a reading allows its addressees to understand the exact scope of the prohibition (Joined Cases 40 to 48/73, 50/73, 54 to 56/73, 111/73, 113/73 and 114/73 Suiker Unie and Others ν Commission [1975] E C R 1663, paragraphs 122 to 124). In the present case, the statement of reasons sets out in detail the facts on which the prohibition is based.

235 The directions in the first and fourth paragraphs of Article 2 order the cessation, and prohibit the resumption, of the infringement described in the statement of rea­ sons for the Decision. Moreover, the second and third paragraphs of Article 2 of the Decision only describe the way in which a legal exchange of information might be organised, a description which is intended to assist manufacturers in organising their future conduct. This is clear from the positive statements used in these para­ graphs.

236 The Commission contends that the prohibition of the exchange of information in aggregated form on order inflow and backlog is justified on the cartonboard mar­ ket by the high degree of concentration in the industry and the homogeneity of the products. Referring to points 68 to 70 of the Decision, it argues that the regular exchange of such information makes for transparency of market conditions which allows both downtime to be planned so as to prevent a fall in prices and the pos­ sibility of price increases to be assessed throughout the sector. Moreover, the car­ tonboard producers already used the information exchanged to facilitate a com­ mon commercial policy.

'The undertakings named in Article 1 shall forthwith bring the said infringement to an end, if they have not already done so. They shall henceforth refrain in rela- tion to their cartonboard activities from any agreement or concerted practice which may have the same or a similar object or effect, including any exchange of commercial information:

(a) by which the participants are directly or indirectly informed of the production, sales, order backlog, machine utilisation rates, selling prices, costs or marketing plans of other individual producers; or

(b) by which, even if no individual information is disclosed, a common industry response to economic conditions as regards price or the control of production is promoted, facilitated or encouraged;

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or

JUDGMENT OF 14. 5. 1998 — CASE T-338/94

240 As is apparent from point 165 of the Decision, Article 2 was adopted in accord­ ance with Article 3(1) of Regulation N o 17. By virtue of that provision, where the Commission finds that there is an infringement, inter alia, of Article 85 of the Treaty, it may require the undertakings concerned to bring the infringement to an end.

241 It is settled law that Article 3(1) of Regulation N o 17 may be applied so as to include an order directed at bringing an end to certain acts, practices or situations which have been found to be unlawful (Joined Cases 6/73 and 7/73 Istituto Che­ mioterapico Italiano and Commercial Solvents ν Commission [1974] E C R 223, paragraph 45, Case C-241/91 Ρ and C-242/91 Ρ RTE and ITP ν Commission [1995] E C R 1-743, paragraph 90), and also at prohibiting the adoption of similar conduct in the future (Case T-83/91 Tetra Pak ν Commission [1994] ECRII-755, paragraph 220).

242 Moreover, since Article 3(1) of Regulation N o 17 is to be applied according to the nature of the infringement found, the Commission has the power to specify the extent of the obligations on the undertakings concerned in order to bring an infringement to an end. Such obligations on the part of the undertakings may not, however, exceed what is appropriate and necessary to attain the objective sought, namely to restore compliance with the rules infringed (judgment in RTE and ITP ν Commission, cited above, paragraph 93; to the same effect, see Case T-7/93 Langnese-Iglo ν Commission [1995] E C R 11-1533, paragraph 209, and Case T-9/93 Schöller ν Commission [1995] E C R 11-1611, paragraph 163).

246 The provisions of subparagraphs (a), (b) and (c) of the first paragraph of Article 2 are directed more specifically at prohibiting future exchange of commercial infor­ mation.

247 The direction in subparagraph (a) of the first paragraph of Article 2, which pro­ hibits any future exchange of commercial information by which the participants directly or indirectly obtain individual information on competitors, presupposes a finding by the Commission in the Decision that an information exchange of such a nature is unlawful under Article 85(1) of the Treaty.

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248 It should be noted that Article 1 of the Decision does not state that the exchange of individual commercial information in itself constitutes an infringement of Article 85(1) of the Treaty.

249 It states more generally that the undertakings infringed that article of the Treaty by participating in an agreement and concerted practice whereby the undertakings, inter alia, 'exchanged commercial information on deliveries, prices, plant stand­ stills, order backlogs and machine utilisation rates in support of the above mea­ sures'.

must be considered in the light of the second, third and fourth paragraphs of that article, which support what is expressed in those subparagraphs. It is in this con­ text that it is necessary to determine whether, and if so to what extent, the Com­ mission considered the exchanges in question to be illegal, since the extent of the obligations on the undertakings must be restricted to that which is necessary in order to bring their conduct into line with what is lawful under Article 85(1) of the Treaty.

253 The Decision must be interpreted as meaning that the Commission considered the Fides system to be contrary to Article 85(1) of the Treaty in that it underpinned the cartel (point 134, third paragraph, of the Decision). Such an interpretation is borne out by the wording of Article 1 of the Decision, from which it is apparent that the commercial information was exchanged between the undertakings 'in sup­ port of the ... measures' considered to be contrary to Article 85(1) of the Treaty.

254 The scope of the future prohibitions set out in subparagraphs (b) and (c) of the first paragraph of Article 2 of the Decision must be assessed in the light of that interpretation by the Commission of the compatibility, in the present case, of the Fides system with Article 85 of the Treaty.

255 In that regard, first, the prohibitions in question are not restricted to exchanges of individual commercial information, but relate also to certain aggregated statistical data (Article 2, first paragraph, (b), and second paragraph, of the Decision). Sec­ ond, subparagraphs (b) and (c) of the first paragraph of Article 2 prohibit the exchange of certain statistical information in order to prevent the establishment of a possible support for future anti-competitive conduct.

(a) by which the participants are directly or indirectly informed of the production, sales, order backlog, machine utilisation rates, selling prices, costs or marketing plans of other individual producers.

Any scheme for the exchange of general information to which they subscribe, such as the Fides system or its successor, shall be so conducted as to exclude any infor- mation from which the behaviour of individual producers can be identified.'

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The claim for annulment or reduction of the amount of the fine

The plea that the fine was calculated on the basis of irrelevant turnover figures

260 It submits that, when it effects sales on behalf of its member companies, it does not acquire any title to the goods, title passing directly from the member company to the customer. N o r is it a creditor of the end customer, as the debts are payable directly to the member companies. Customers always want the goods to be sup- plied by a particular cartonboard mill. The applicant conducts negotiations with customers on the basis of contracts which have already been concluded and can only act in accordance with the conditions of sale already established in those con- tracts. In the case of new customers, sales staff were obliged to approach the local Finnboard sales director, who would, in turn, inform the cartonboard mill requested by the customer so that conditions of sale could be drawn up. Finally, when a customer's order was accepted by the cartonboard mill in question, the invoice was dispatched by the applicant on behalf of that cartonboard mill.

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261 In negotiations regarding transport and financing its role is, again, that of interme- diary.

262 It submits that, according to the Decision, Finnboard and its member companies should not be considered to be a single undertaking within the meaning of Article 85 of the Treaty. This confirms that the relevant turnover for the calculation of the fine consists solely of the commission which the applicant receives.

263 In the second part of the plea, set out in the letter to the Court of First Instance of 19 July 1995, the applicant argues that it is clear from the defence that the Com- mission calculated the fine on the basis of an incorrect turnover figure: it calculated the fine on the basis that the applicant marketed 250 000 tonnes of cartonboard in 1990, whereas the quantity actually marketed was only 219 364 tonnes. The dis- crepancy is attributable to the fact that Metsä-Serla's production of wallpaper was mistakenly included. Setting out its own calculation of its turnover in 1990, the applicant submits that its turnover was overestimated by 17%.

267 However, in response to the arguments in question, it concedes that it was mis­ taken in stating in the defence that the fine was calculated on the basis that 250 000 tonnes were marketed in 1990. In fact, using the marketing figures notified by the applicant, it based its calculation of turnover on the assumption that 221 000 tonnes were marketed. The discrepancy with the applicant's calculation of its turn­ over is explained by the fact that the Commission took the view that the price per tonne used by the applicant was too low: the applicant took the average sale price as E C U 833 per tonne, whereas it emerged from confidential minutes found at the premises of its British subsidiary that even prices to major customers in 1990 were on average well above E C U 1 000 per tonne. Moreover, despite the Commission's requests for clarification, the applicant never explained the figures used to calculate the turnover of its member companies.

Findings of the Court

268 As regards the first part of the plea, it follows from the Court's examination of the pleas relied on by the applicant in support of its application for annulment of the Decision that the Commission has proved that the applicant participated in meet­ ings of the bodies of the P G Paperboard and in the collusion with an anti­ competitive object which took place at those meetings. The applicant has not dis­ puted that, if that were proved, it could be held liable for the infringement found

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in Article 1 of the Decision and, on that basis, be fined under Article 15(2) of Regulation N o 17.

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271 In this case, although the applicant was classified as an 'undertaking' (point 173 of the Decision), the fine imposed on it was not fixed on the basis of the turnover appearing in its annual reports and published accounts, which corresponds to the amount of commission received by it on sales of cartonboard effected on behalf of its member companies: the turnover used to calculate the fine is made up of the total invoiced value of the sales which the applicant made on behalf of its members (see point 173, third paragraph, and point 174, first paragraph, of the Decision).

272 To assess whether the Commission was entitled to take account of that turnover, the principal information, as contained in the documents before the Court, must be examined and, in particular, the applicant's reply to the written questions of the Court regarding its organisation and its legal and factual relations with its member companies.

273 According to its statutes of 1 January 1987, the applicant is an association which markets the cartonboard produced by some members and paper goods produced by other members.

274 Under paragraphs 10 and 11 of those statutes, each of the members is to have one representative on the Board of Directors, responsible, inter alia, for the adoption of guidelines for the operations of the association; confirmation of the budget, the financing plan and principles regarding the division of expenses among the mem­ ber companies; and the appointment of the 'Managing Director.'

277 The applicant also explains that, in the case of individual sales, customers placed their orders with it and generally indicated which mill they preferred. Such prefer- ences are attributable, inter alia, to differences in quality between the products of the applicant's member companies. Where no preference was expressed, orders were divided amongst its members, pursuant to paragraph 15 of its statutes, under which:

'The orders received are to be divided justly and equally for manufacture by the members, in consideration of the production capacity of each member as well as the principles of distribution laid down by the Board of Directors.'

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278 The applicant was authorised to negotiate conditions of sale, including prices, with each potential customer, its member companies having drawn up general guidelines for such individual negotiations. Each order had none the less to be submitted to the member company concerned, which decided whether or not to accept it.

279 The procedures for individual sales and the accounting principles applied for such sales are described in a statement of 4 June 1997 by the applicant's accountants:

4. At the moment of delivery to the customer, Finnboard issues a customer invoice on behalf of the mill. The invoice is recorded as a sale in the Principals' Account and as a receivable in Finnboard's sales ledger.

5. Customer payments are recorded in the Principals' Accounts and the possible differences between estimated and actual prices and costs (ref. point 3) are cleared through the Principals' Account.'

280 It is thus clear, first, that, although the applicant was bound to submit each indi- vidual order to the member company concerned for its final approval, contracts for sale concluded by it on behalf of its member companies could bind them, as those companies were liable for undertakings given by the applicant under para- graph 20 of its statutes.

281 Second, the commission received by the applicant, which appears as its turnover in its annual reports, covers only expenses connected with the sales it effected on behalf of its member companies, such as transport or financing costs. It follows that the applicant had no economic interest of its own in taking part in collusion on prices, since the price increases announced and implemented by the undertak- ings meeting in the bodies of the PG Paperboard could not generate any profit for it. O n the other hand, its cartonboard-producing member companies had a direct economic interest in the applicant's participation in such collusion.

282 Accordingly, the applicant's turnover for accounting purposes discloses neither its size nor its economic power. It cannot therefore, constitute the basis for calcula- tion of the upper limit provided by Article 15(2) of Regulation N o 17 for a fine exceeding E C U 1 000 000. The Commission was therefore entitled to base its calculation of that upper limit on the total value of cartonboard sales invoiced to customers, which the applicant made in its own name on behalf of its member

286 Accordingly, the second part of the plea cannot be accepted.

287 In the light of the foregoing, the plea must be rejected in its entirety.

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Procedural and substantive pleas relating to the determination of the amount of fines

Arguments of the parties

292 N o r should the Commission have taken into account the fact that the undertakings took steps to conceal the cartel. As the agreements on price fixing and market shares were typical kinds of agreements prohibited by Article 85 of the Treaty, it goes without saying that the undertakings did not disclose their participation in such agreements.

293 The applicant argues that, contrary to what the Commission alleges, there is noth­ ing to show that the cartel achieved anything. O n the contrary, the LE report showed that if there were any cartel, it had no effect on prices. Moreover, the Commission was wrong to rely on the finding that the undertakings earned an average operating profit margin of 20% during the period of the cartel (point 16 of the Decision).

294 The Commission should have taken account of the fact that the cartel did not cover certain regions of the Community, in which the applicant achieved a signifi­ cant proportion of its turnover, that is to say, Spain, Portugal, Greece, Ireland and Denmark.

295 Finally, the unusual reduction in the fine imposed on Stora gives rise to doubts as to whether the general level of the fines was justified. The alleged cartel was not of a particularly serious nature and the general level of fines should thus have been set at an amount well below 5% of the turnover of each undertaking.

296 The Commission takes the view that the criteria listed in points 168 and 169 of the Decision are relevant and sufficient to determine the amount of the fines. The cri­ teria have to be assessed in the light of the statement of reasons for the Decision, which sets out in detail the individual considerations taken into account in deter­ mining the amount of the fine imposed on the applicant.

— The statement of reasons concerning the amount of the fines

300 It is settled law that the purpose of the obligation to give reasons for an individual decision is to enable the Community judicature to review the legality of the decision and to provide the party concerned with an adequate indication as to whether the decision is well founded or whether it may be vitiated by some defect enabling its validity to be challenged; the scope of that obligation depends on the

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nature of the act in question and on the context in which it was adopted (see, inter alia, Van Megen Sports ν Commission, cited above, paragraph 51).

301 As regards a decision which, as in this case, imposes fines on several undertakings for infringement of the Community competition rules, the scope of the obligation to state reasons must be assessed in the light of the fact that the gravity of infringe­ ments falls to be determined by reference to numerous factors including, in par­ ticular, the specific circumstances and context of the case and the deterrent char­ acter of the fines; moreover, no binding or exhaustive list of criteria to be applied has been drawn up (order in Case C-137/95 Ρ SPO and Others ν Commission [1996] E C R 1-1611, paragraph 54).

305 Moreover, it is apparent from a table produced by the Commission containing information as to the fixing of the amount of each individual fine that, although those fines were not determined by applying the abovementioned figures alone in a strictly mathematical way, those figures were, nevertheless, systematically taken into account for the purposes of calculating the fines.

306 However, the Decision does not state that the fines were calculated on the basis of the turnover of each undertaking on the Community cartonboard market in 1990. Furthermore, the basic rates of 9 and 7.5% applied to calculate the fines imposed on the undertakings considered to be 'ringleaders' and those considered to be 'ordinary members' do not appear in the Decision. N o r does it set out the rates of reduction granted to Rena and Stora, on the one hand, and to eight other under­ takings, on the other.

307 In the present case, first, points 169 to 172 of the Decision, interpreted in the light of the detailed statement in the Decision of the allegations of fact against each of its addressees, contain a relevant and sufficient statement of the criteria taken into account in order to determine the gravity and duration of the infringement com­ mitted by each of the undertakings in question (see, to the same effect, Case T-2/89 Petrofina ν Commission [1991] E C R II -1087, point 264). Similarly, point 168 of the

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Decision, which must be read in the light of the general criteria relating to the fines in point 167, contains a sufficient statement of the criteria taken into account in order to determine the general level of the fines.

310 Despite those findings, the reasons explaining the setting of the amount of fines stated in points 167 to 172 of the Decision are at least as detailed as those provided in the Commission's previous decisions on similar infringements. Although a plea

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alleging insufficient reasons concerns a matter of public interest, there had been no criticism by the Community judicature, at the moment when the decision was adopted, as regards the Commission's practice concerning the statement of reasons for fines imposed. It was only in the judgment in Tréfilunion ν Commission, cited above, paragraph 142, and in two other judgments given on the same day (T-147/89 Société Métallurgique de Normandie ν Commission [1995] E C R II-1057, summary publication, and T-151/89 Société des Treillis et Panneaux Soudés ν Com­ mission [1995] E C R II-1191, summary publication), that this Court stressed for the first time that it is desirable for undertakings to be able to ascertain in detail the method used for calculating the fine imposed without having to bring court pro­ ceedings against the Commission's decision in order to do so.

311 It follows that, when it finds in a decision that there has been an infringement of the competition rules and imposes fines on the undertakings participating in it, the Commission must, if it systematically took into account certain basic factors in order to fix the amount of fines, set out those factors in the body of the decision in order to enable the addressees of the decision to verify that the level of the fine is correct and to assess whether there has been any discrimination.

314 In order to review the Commission's appraisal of the effects of the infringement, the Court considers that it suffices to consider the appraisal of the effects of the collusion on prices. Consideration of the effects of the collusion on prices, the only effects disputed by the applicant, makes it possible to assess, in general, whether the cartel was successful, because the purpose of the collusion on down­ time and on market shares was to ensure the success of the concerted price initia­ tives.

318 The second type of effect consisted in the fact that changes in transaction prices followed those in announced prices. The Commission states that 'the producers not only announced the agreed price increases but also with few exceptions took firm steps to ensure that they were imposed on the customers' (point 101, first paragraph, of the Decision). It accepts that customers sometimes obtained conces- sions in regard to the date of entry into force of the increases or rebates or indi- vidual reductions, particularly on large orders, and that 'the average net increase achieved after all discounts, rebates and other concessions would always be less than the full amount of the announced increase' (point 102, last paragraph, of the Decision). However, referring to graphs in the LE report, an economic study pro- duced on behalf of several addressee undertakings of the Decision for the purposes of the procedure before the Commission, the Commission claims that during the period covered by the Decision there was 'a close linear relationship' between changes in announced prices and those in transaction prices expressed in national currencies or converted to ecus. It concludes from this that: 'the net price increases achieved closely tracked the price announcements albeit with some time lag. The author of the report himself acknowledged during the oral hearing that this was the case for 1988 and 1989' (point 115, second paragraph, of the Decision).

319 When appraising this second type of effect the Commission could properly take the view that the existence of a linear relationship between changes in announced prices and changes in transaction prices was proof of an effect by the price initia- tives on transaction prices in accordance with the objective pursued by the produc- ers. There is, in fact, no dispute that on the relevant market the practice of holding individual negotiations with customers means that, in general, transaction prices are not identical to announced prices. It cannot therefore be expected that increases in transaction prices will be identical to announced price increases.

323 At the hearing the Commission stated that it had also taken into account a third type of effect of the price collusion, namely the fact that the level of transaction prices was higher than that which would have been achieved in the absence of any collusion. Pointing out that the dates and order of the price increase announce­ ments had been planned by the PWG, the Commission takes the view in the Decision that 'it is inconceivable in such circumstances that the concerted price announcements had no effect upon actual price levels' (point 136, third paragraph, of the Decision). However, the LE report (section 3) drew up a model which enabled a forecast to be made of the price level resulting from objective market conditions. According to that report, the level of prices determined by objective

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economic factors in the period 1975 to 1991 would have evolved, with minor variations, in an identical manner to the level of transaction prices applied, includ- ing those during the period covered by the Decision.

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sion's reference to the statements of the producers themselves is insufficient for a conclusion that the cartel was largely successful in achieving its objectives.

327 Having regard to the foregoing considerations, the effects of the infringement described by the Commission are only partially proved. The Court will consider the implications of that conclusion as part of the exercise of its unlimited powers in regard to fines, when it assesses the general level of the fines imposed in the present case (see paragraph 342 below).

— The alleged unlawfulness of some of the criteria taken into account to deter­ mine the amount of the fines

328 First, the Court rejects the applicant's argument that the fact that the amount of the fines was determined on the basis of the turnover of each undertaking means that the Commission was not entitled to take account of the territory within which the infringement took place (point 168, second indent, of the Decision), the overall value of the economic sector in question (point 168, third indent, of the Decision) and the respective importance of each undertaking in the sector (point 169, first paragraph, third indent, of the Decision).

332 It should be borne in mind, in that connection, that according to the third para- graph of point 167 of the Decision, 'a particularly grave aspect of the infringement is that in an attempt to disguise the existence of the cartel the undertakings went so far as to orchestrate in advance the date and sequence of the announcement of each major producer of the new price increases'. The Decision also states as follows: 'the producers could as a result of this elaborate scheme of deception have attrib- uted the series of uniform, regular and industry-wide price increases in the carton- board sector to the phenomenon of "oligopoly behaviour"' (point 73, third para- graph). Finally, according to the sixth indent of point 168, the Commission, in determining the general level of fines, took into account the fact that 'elaborate steps were taken to conceal the true nature and extent of the collusion (absence of any official minutes or documentation for the PWG and JMC; discouraging the taking of notes; stage-managing the timing and order in which price increases were announced so as to be able to claim they were "following", etc.)'.

333 The applicant does not contest the Commission's assertion that the undertakings planned the dates and order of dispatch of letters announcing the price increases in order to disguise the existence of price collusion.

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334 The absence of official minutes and the almost total absence of internal notes relat­ ing to the meetings of the PWG and of the J M C constitute, having regard to the number of such meetings, to the length of time for which they continued and to the nature of the discussions in question, sufficient proof of the Commission's alle­ gation that the participants were discouraged from taking notes.

'— collusion on pricing and market sharing are by their very nature serious restrictions on competition,

— the cartel covered virtually the whole territory of the Community,

— the Community market for cartonboard is an important industrial sector worth some E C U 2 500 million each year,

— the undertakings participating in the infringement account for virtually the whole of the market,

— the cartel was operated in the form of a system of regular institutionalised meetings which set out to regulate in explicit detail the market for cartonboard in the Community,

— elaborate steps were taken to conceal the true nature and extent of the collusion (absence of any official minutes or documentation for the PWG and JMC; dis- couraging the taking of notes; stage-managing the timing and order in which price increases were announced so as to be able to claim they were "following", etc.),

340 Second, the Commission rightly argues that, on account of the specific circum­ stances of the present case, no direct comparison could be made between the gen­ eral level of fines adopted in the present decision and those adopted in the Com­ mission's previous decisions, in particular in Commission Decision 86/398/EEC of 23 April 1986 relating to a proceeding under Article 85 of the EEC Treaty (IV/31.149-Polypropylene) (OJ 1986 L 230, p. 1, hereinafter 'the Polypropylene decision'), which the Commission itself considered to be the most similar to the decision in the present case. Unlike in the Polypropylene case, no general mitigat­ ing circumstance was taken into account in the present case when determining the general level of fines. Moreover, as the Court has already held, the intricate steps taken by the undertakings to conceal the existence of the infringement constitute a particularly serious aspect of it which differentiates it from the infringements pre­ viously found by the Commission.

341 Third, the Court notes the lengthy duration and obviousness of the infringement of Article 85(1) of the Treaty which was committed despite the warning which the Commission's previous decisions, in particular the Polypropylene decision, should have provided.

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345 The applicant was subjected to constant pressure from the other producers, as sev­ eral appendices to the statement of objections show (see point 76 of the Decision).

346 Finally, the agreement was rooted in the desire of Community producers to pro­ tect their market from exports, inter alia, by producers from the EFTA countries. It was only following the acquisition by the latter producers of production facili­ ties in the Community that it became a matter of maintaining a balance between the major groups of European producers so as not to jeopardise the price initia­ tives (point 56 of the Decision). As it had not acquired any production facilities in the Community, the applicant could not be considered to be one of the 'ringlead­ ers' of the agreement.

347 The Commission takes the view that it was fully entitled to consider the applicant to be one of the ringleaders of the agreement. It points out, in particular, that for two years the applicant presided over the PWG, the central decision-making body of the cartel, and the President Conference. Furthermore, the applicant partici­ pated in all the price increases and even led three of those increases itself.

348 The minutes of a meeting held by Iggesund Board Sales Ltd on 28 and 29 January 1988 (appendix 72 to the statement of objections, quoted at point 76 of the Decision) confirmed the central role played by the applicant, since they make it clear that the other producers waited for the applicant to act before implementing their own price increases.

349 The applicant's comments concerning the objective pursued by the participants in the cartel merely serve to confirm the anti-competitive nature of that objective.

353 The applicant's assertion that it was subject to constant pressure from the other producers cannot alter that finding. In the first place, the applicant has not adduced any evidence to prove that it was forced to participate in the infringe- ment. Furthermore, the applicant's reference to point 76 of the Decision does not call into question its role as a 'ringleader' of the agreement.

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354 The document cited in that point (appendix 72 to the statement of objections) states:

'Pressure has been put on the Finns from all over Europe to increase prices. Finn- board have been told we will not move on prices until they have published an increase price (sic)'.

355 That passage merely indicates that the other undertakings were waiting for the applicant to announce an increase in its prices before proceeding to increase their own prices. Accordingly, it only serves to confirm the role played by the applicant as 'ringleader' of the cartel, in that the other undertakings attached particular importance to its participation in the concerted price increases.

358 The applicant submits that it should have had its fine reduced, as it did not dispute the main factual allegations on which the Commission based the complaints against it. In its reply to the statement of objections, it confined itself to pointing out breaches of procedural rules and arguing that the facts adduced by the Com- mission had no probative value.

359 Moreover, it argues that the reduction of Stora's fine was unjustified and led to distortions of competition because of the high level of fines. Without Stora's state- ments, the Commission would not have had sufficient evidence to prove any agree- ment. There are indications that Stora's revelations were intended to weaken its main rivals. For that reason, the applicant requests the Court to ask the Commis- sion whether any discussions were held with Stora on the subject of the level of the fine and/or possible reductions of fines.

360 The Commission considers that the applicant has no right to any reduction of the fine. The application clearly shows that it disputes the principal factual allegations put forward by the Commission.

361 Furthermore, the breach, if any, of the principle of proportionality when the amount of Stora's fine was fixed in no way affects the legality of the fine imposed on the applicant.

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364 Insofar as the applicant argues that the reduction of Stora's fine is excessive, the Court points out that Stora supplied the Commission with statements containing a highly detailed description of the nature and object of the infringement, the opera­ tion of the various bodies of the P G Paperboard, and the participation of the vari­ ous producers in the infringement. Through those statements, Stora supplied infor­ mation well in excess of that which the Commission may require to be supplied under Article 11 of Regulation N o 17. Although the Commission states in the Decision that it obtained evidence corroborating the information contained in Sto­ ra's statements (points 112 and 113 of the Decision), it is clear that Stora's state­ ments constituted the principal evidence of the existence of the infringement. Without those statements, it would therefore have been, at the very least, much more difficult for the Commission to establish or put an end to the infringement with which the Decision is concerned.

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JUDGMENT OF 14. 5. 1998 — CASE T-338/94

365 In those circumstances, the Commission, by reducing by two-thirds the fine imposed on Stora, did not overstep the limits of its discretion when determining the amount of fines. The applicant cannot therefore validly claim that the fine imposed on it is excessive in relation to that imposed on Stora.

366 There is thus no need to ask the Commission to indicate whether discussions were held with Stora on the subject of the level of the fine and/or possible reductions in fines.

367 That plea must, therefore, also be rejected.

THE COURT OF FIRST INSTANCE (Third Chamber, Extended Composition)

hereby:

1) Annuls, as regards the applicant, the first to fourth paragraphs of Article 2 of Commission Decision 94/601/EC of 13 July 1994 relating to a proceeding under Article 85 of the EC Treaty (IV/C/33.833 — Cartonboard) save and except the following passages:

'The undertakings named in Article 1 shall forthwith bring the said infringement to an end, if they have not already done so. They shall hence­ forth refrain in relation to their cartonboard activities from any agreement or concerted practice which may have the same or a similar object or effect, including any exchange of commercial information:

(a) by which the participants are directly or indirectly informed of the pro­ duction, sales, order backlog, machine utilisation rates, selling prices, costs or marketing plans of other individual producers.

Any scheme for the exchange of general information to which they sub­ scribe, such as the Fides system or its successor, shall be so conducted as to exclude any information from which the behaviour of individual producers can be identified.';

Delivered in open court in Luxembourg on 14 May 1998.

H. Jung B. Vesterdorf

Registrar President

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Summary

Findings of the Court II - 1638

The plea alleging irregularities in the procedure for the adoption, authentication and noti­ fication of Commission decisions II - 1639

Arguments of the parties II - 1639

Findings of the Court II - 1642

The plea grounded upon infringement of the rights of the defence and infringement of the procedural rules relating to the statement of objections II - 1643

Arguments of the parties II - 1643

— Arguments of the parties II - 1652

— Findings of the Court II - 1654

The second part of the plea: lack of evidence of the applicant's participation in price initiatives II - 1657

— Arguments of the parties II - 1657

— Findings of the Court II - 1661

The third part of the plea: lack of evidence of the applicant's participation in volume control II - 1668

Arguments of the parties II - 1679

Findings of the Court II - 1681

Application for annulment of Article 2 of the Decision II - 1682

Arguments of the parties II - 1682

Findings of the Court II - 1684

The claim for annulment or reduction of the amount of the fine II - 1691

— The statement of reasons concerning the amount of the fines II - 1702

— The effects of the infringement II - 1706

— The alleged unlawfulness of some of the criteria taken into account to deter- mine the amount of the fines II - 1711

— The general level of fines II - 1713

The plea alleging misassessment of the role played by the applicant 11-1716

Arguments of the parties II - 1716