C-286/98

OPINION OF MR MISCHO — CASE C-286/98 P

O P I N I O N OF ADVOCATE GENERAL MISCHO delivered on 18 May 2000 *

1. By application lodged on 27 July 1998 3. In its appeal the appellant claims that the Stora Kopparbergs Bergslags AB ('Stora') Court of Justice should: appealed against the judgment of the Court of First Instance of 14 May 1998 in Stora Kopparbergs Bergslags v Commission 1 ('the contested judgment') seeking to have that judgment set aside. '(1) set aside the judgment of the Court of First Instance of 14 May 1998 in Case T-354/94 Stora Kopparbergs Bergslags AB v Commission in so far as it dismisses the application to annul the Commission decision of 13 July 1994 (IV/C/33.833 — Cartonboard); 2. The contested judgment was delivered following an action brought by the appel- lant contesting Commission Decision 94/601/EC of 13 July 1994 relating to a proceeding under Article 85 of the EC (2) annul the above decision in so far as it Treaty (IV/C/33.833) 2 (hereinafter 'the concerns the appellant; decision') in which the Commission imposed fines on 19 manufacturers supply- ing cartonboard on the Community market on the ground that they had infringed Article 85(1) of the EC Treaty (now Arti- cle 81(1) EC). A fine of ECU 11 250 000 (3) in the alternative, annul or at least had been imposed on Stora. The Court of reduce the amount of the fine imposed First Instance neither annulled nor reduced on the appellant; the fine.

* Original language: French. 1 — Case T-354/94 Stora Kopparbergs Bergslags v Commission [1998] ECR II-2111. 2 — OJ 1994 L 243, p. 1. (4) order the Commission to pay the costs.'

5. In support of its appeal, the appellant — held that the infringements of Arti- submits three pleas alleging: cle 85 of the Treaty committed by its subsidiary Kopparfors AB ('Koppar- fors') had to be imputed to the appel- lant, without having taken into account the Commission's failure to establish whether the appellant had actually exercised any influence on Kopparfors' — infringement of Article 85 of the commercial policy (paragraph 80 of the Treaty, Article 15(2) of Regulation contested judgment); No 17/62 First Regulation implement- ing Articles 85 and 86 of the Treaty, 3 and general principles of Community law;

— held that the infringements committed 3 — OJ, English Special Edition (1959-1962), p. 87. by Feldmühle and Papeteries Béghin-

I - 9929

OPINION OF MR MISCHO — CASE C-286/98 P

Corbehem ('CBC') prior to and after applicant since 1 January 1987, it has their acquisition by the appellant had necessarily followed a policy laid down by to be imputed to it on the ground that the bodies which determine the parent it could not have been unaware of their company's policy under its statutes (see participation in the infringement and AEG v Commission). 4In any event, the had failed to adopt appropriate mea- applicant has not submitted any evidence to sures in order to prevent the continua- support its assertion that Kopparfors car- tion of the infringement (paragraph 83 ried on its business on the cartonboard of the contested judgment). market as an autonomous legal entity which determined its commercial policy largely on its own and had its own board of directors with external representatives.'

8. Stora's challenge in the first part of the plea is directed at paragraph 80 of the 10. As to the first, it puts forward a line of contested judgment, which states as fol- argument which seeks to prove that neither lows: the judgment in AEG v Commission, cited above, on which the Court of First Instance relies, nor the other judgments of the Court of Justice which have dealt with the ques- tion of groups of companies, can be regarded as definitively holding that where 'In the present case, since the applicant has a parent company owns all the shares in a not disputed that it was in a position to subsidiary the parent company must auto- exert a decisive influence on Kopparfors' matically be liable for the subsidiary's commercial policy, it is, according to the conduct. case-law of the Court of Justice, unneces- sary to establish whether it actually exer- cised that power. Since Kopparfors has 4 — Case 107/82 AEG v Commission [1983] ECR 3151, been a wholly-owned subsidiary of the paragraph 50.

I - 9930

STORA KOPPARBERGS BERGSLAGS V COMMISSION

17. Let me state straight away that they do not seem to me to be of equal weight. The first argument, that the Court of First Instance misunderstood the sense of the judgment in AEG v Commission, cited 13. It submits, second, that an analysis of above, seems to me to be difficult to accept. the case-law of the Court of Justice and of In paragraphs 49 and 50 of that judgment it the Court of First Instance shows that is stated most precisely that: attribution to the parent company of the subsidiary's conduct has never been pre- sented as following solely from control of share capital, but has always been coupled '49. As the Court has already emphasised, with a finding that there was actual exer- particularly in its judgment of 14 July cise of management power; some judg- 1972 International Chemical Indus- ments even expressly state that a finding to tries, Case 48/69 ([1972] ECR 619) that effect is a condition of such an "The fact that a subsidiary has separate attribution of liability. legal personality is not sufficient to

5 — Case 48/69 ICI v Commission [1972] ECR 619. 6 — Case C-310/93 P BPB Industries and British Gypsum v Commission [1995] ECR I-865. 7 — Case T-11/89 Shell v Commission [1992] ECR II-757. 8 — Case T-102/92 Viho v Commission [1995] ECR II-17. 14. To support its view of the case-law, 9—Joined Cases 32/78, 36/78 to 82/78 BMW and Others v Stora relies on the judgments of the Court Commission [1979] ECR 2435.

I - 9931

OPINION OF MR MISCHO — CASE C-286/98 P

I - 9932

STORA KOPPARBERGS BERGSLAGS V COMMISSION

law must take account of the parent and because 'where the subsidiary does not subsidiary company relationship between enjoy any real autonomy in determining two companies. its course of action on the market, the prohibitions laid down by Article 85(1) may be considered to be inapplicable in the relationship between it and the parent company with which it forms one eco- nomic unit'. 11 24. It first did so in the Dyestuffs cases, in which certain producers established in non- member countries contested the Commis- sion's power to impose fines on them in respect of practices within the common market in which they themselves had not 27. In the case of Imperial Chemical Indus- taken part, only their subsidiaries being tries Ltd (ICI) and its subsidiaries operating present on that market. within the common market, the Court held as follows in attributing to the parent company responsibility for the infringe- ment:

25. In response to that line of argument, the Court of Justice laid down the principle that 'the fact that a subsidiary has separate 'It is well known that at the time the legal personality is not sufficient to exclude applicant held all or at any rate the the possibility of imputing its conduct to majority of the shares in those subsidiaries. the parent company', but stated immedi- ately thereafter that 'such may be the case in particular where the subsidiary, although having separate legal personality, does not decide independently upon its own conduct on the market, but carries out, in all The applicant was able to exercise decisive material respects, instructions given to it influence over the policy of the subsidiaries by the parent company'. 10 as regards selling prices in the Common Market and in fact used this power upon the occasion of the three price increases in question.' 12

Justice, after recalling that 'the circum- 32. That case concerned a company mar- stance that this subsidiary company has its keting office equipment by wholesale, own legal personality does not suffice to import and export. It had requested Parker exclude the possibility that its conduct Pen Ltd ('Parker'), the manufacturer of might be attributed to the parent company. pens and similar articles, to supply it with This is true in those cases particularly its products on conditions equivalent to where the subsidiary company does not those granted to Parker's subsidiaries and determine its market behaviour autono- independent distributors. As it had not mously, but in essentials follows directives been able to obtain satisfaction, Viho of the parent company', pointed to the Europe BV ('Viho') lodged a complaint matters which, in that specific case, with the Commission under Article 3 of allowed it to be concluded that the sub- Regulation No 17. sidiary had acted on the instructions of its parent company.

29. It is also that criterion of the extent of 33. The Commission stated that 'it could real independence enjoyed by the subsidi- not see in what respects the distribution ary, used to assess whether or not there is system practised by Parker exceeded the an economic unit, to which the Court refers limits of what can normally be regarded as in its judgments in Centrafarm v Sterling a necessary distribution of tasks within a Drug, 14 Bodson 15and Ahmed Saeed Flu- group of companies'. greisen and Silver Line Reisebüro. 16

subsidiaries and that the subsidiaries did ish Gypsum v Commission, cited above, it not enjoy any real autonomy in determin- was possible to find that the parent com- ing their course of action on the market but pany had in fact issued instructions to its applied the instructions given to them by subsidiary. The Court of Justice obviously the parent company which controlled them had to refer to that important fact in (paragraph 16 of the judgment in Viho v founding its line of reasoning. Moreover, Commission, cited above). as Advocate General Léger stated in his Opinion in the BPB Industries and British Gypsum case (which the Court of Justice simply adopted in its judgment), in a case of that kind 'it is irrelevant to examine 36. However, they were findings of fact of whether a parent company's power to such a nature as to show that there could be influence its wholly-owned subsidiary must no question of an agreement or concerted be presumed', so that the passage in the practice between Parker and its subsidi- Court of First Instance's judgment, in aries. which the attribution to the parent com- pany is justified by applying the judgment in AEG v Commission (paragraph 29), must be regarded as 'superfluous'.

42. After he had noted that the Court of 45. Although the facts are not the same in Justice had held in the judgment in BMW the case before us, there is still a two-stage Belgium and Others v Commission, cited reasoning. The Court of First Instance did above, that the bond of economic depen- not confine itself to stating that a wholly- dency existing between a parent company owned subsidiary necessarily follows its and a subsidiary company did not preclude parent company's policy. It adds 'in any a divergence in conduct or even a diver- event, Stora has not submitted any evidence gence in interests between the two compa- to support its assertion that its subsidiary nies, Advocate General Darmon continued carried on its business on the cartonboard as follows: 'This, it seems to me, clearly market as an autonomous legal entity indicates that the legal status of a wholly which determined its commercial policy owned subsidiary does not of itself justify a largely on its own and had its own board of presumption of unity of conduct in a directors with external representatives'. market or disregard of the legal identity of each undertaking from the procedural standpoint. In principle it is only when the Commission has established such unity of conduct that it can take account of it' (paragraph 19).

46. Did the Court of First Instance thereby wish to state that the burden of proving its 43. But, he also added straightaway: subsidiary's independent conduct was on Stora? The applicant interprets that passage in this sense, and if that were the case, I could not agree with the Court of First Instance.

49. When a parent company owns all the shares in another company, it can be assumed that it is much more probable 52. As to the additional indicia that are that it will exercise tight control over the necessary, due weight must be given to the subsidiary in regard to strategic decisions findings made by the Court of First on pricing, salaries and major investments Instance regarding the attitude adopted by than that the parent company is not Stora during the administrative procedure interested in such matters and that the and after service of the statement of subsidiary enjoys complete autonomy. objections, and the conclusions which it drew from those findings.

'Although an undertaking's express or implicit acknowledgement of matters of fact or of law during the administrative 56. In my opinion, the Court of First procedure before the Commission may Instance was therefore entitled to conclude constitute evidence for this Court when in paragraph 85 of its judgment that 'the determining whether an action brought applicant's conduct during the administra- before it is well founded, such an acknowl- tive procedure, in which it presented itself edgement cannot restrict the actual exercise as being, as regards companies in the Stora of the right to bring proceedings under the Group, the Commission's sole interlocutor fourth paragraph of Article 173 of the concerning the infringement in question Treaty. In the absence of a specific legal (see, by analogy, Case 374/87 Orkem v basis, such a restriction would be contrary Commission)' supported the other argu- to the fundamental principles of the rule of ments from which it was clear, in its view, law and of respect for the rights of the that the Commission had been entitled to defence. impute to Stora the conduct of its subsidi- aries.

In the present case, Stora's conduct in the administrative procedure before the Com- mission and, in particular, the content of the statements addressed to the Commis- sion are evidence which the Court will take 57. Lastly, it should be pointed out that one into account when considering the merits of assertion made by Stora in order to excul- the application.' pate itself may also be interpreted against it. This is set out in paragraph 72 of the contested judgment:

62. The Court of First Instance therefore rightly concluded that the appellant was responsible for Kopparfors' conduct in respect of the period after its acquisition of that undertaking. 59. In my opinion, all those indicia consti- tute the minimum proof to which I have referred above, which must be required in order to hold a parent company responsible for the conduct of its wholly-owned sub- sidiary.

The imputation to Stora of the conduct of Feldmühle and CBC in respect of the period after their acquisition

60. Even if the Court of First Instance wrongly held that in the case of a wholly- 63. The same considerations apply as owned subsidiary there was no need to regards the imputation to Stora of the ascertain whether the parent company had conduct of its subsidiaries Feldmühle and in fact exercised the power, the existence of CBC from the time when it obtained which Stora did not dispute, to exercise control over them. decisive influence over the subsidiary's

21 — Case C-30/91 P Ustelie v Commission [1992] ECR 20 — Emphasis added. I-3755, paragraph 28.

I - 9939

OPINION OF MR MISCHO — CASE C-286/98 P

68. I must still examine whether the Court 65. I am convinced by that finding of the of First Instance was correct in concluding Court of First Instance. Through Koppar- that Stora should also be regarded as fors, Stora knew how price increases oper- responsible for the conduct of its three ated in the cartonboard sector. When subsidiaries in respect of the period prior to acquiring FeNo and through it, Feldmühle their acquisition. and CBC, Stora knew for a fact that those companies had been participating in the same cartel. It must also have known that a director of Feldmühle had, for a number of years, been the kingpin of the cartel. As the Court of First Instance points out (para- 69. It is apparent from table 8 in the graph 84 of the contested judgment), the decision that: appellant 'has not even argued that it attempted to bring the infringement in question to an end, by for example simply making a request to that effect to the Feldmühle management board'. — Kopparfors was acquired by Stora with effect from 1 January 1987;

66. Furthermore, one is entitled to assume that, after having acquired several compa- nies that were active in the same field, Stora — FeNo, including CBC, was acquired by pursued through them a group strategy Stora between April and December which encompassed questions of pricing. 1990.

I - 9940

STORA KOPPARBERGS BERGSLAGS V COMMISSION

76. Consequently, the only argument which could justify imputing to Stora the 72. It remains to be established whether infringements committed by Feldmühle and Stora may also be held responsible for the CBC is the fact that Stora could not have conduct of its three subsidiaries during the been unaware that they were taking part in period prior to their acquisition. the cartel, because it had itself been parti- cipating in it from January 1987, through its Kopparfors subsidiary, and that it must be deemed to have endorsed those anti- competitive acts in so far as, being 73. I have already stated above that if a undoubtedly aware of them, it did nothing parent company is to bear responsibility for to force its new subsidiaries to put an end the conduct of a subsidiary, it must have to them. been possible for it to have exercised decisive influence over the subsidiary's commercial policy and that, except where that subsidiary is wholly-owned, there must be sufficiently cogent evidence that it in fact exercised that power. 77. That is the argument on which the Commission relies and which the Court of First Instance implicitly endorsed, since it does not expressly state why it holds Stora responsible for the actions of Feldmühle 74. Obviously that cannot be so in the case and CBC over the period prior to their of a period during which the future parent acquisition by it.

I - 9941

OPINION OF MR MISCHO — CASE C-286/98 P

78. The line of reasoning is simple: Stora Commission took the view that, having knew what it was acquiring and in taking regard to the participation of Feldmühle no action to put an end to the infringement, and CBC in the meetings of the 'Presidents despite being aware of it, Stora placed itself Working Group' (PWG), Stora was one of in a situation in which it had itself to the 'ringleaders' of the cartel and as such answer for the infringement committed by had to bear special responsibility (see its new subsidiaries. point 170 of the decision and paragraph 19 of the contested judgment).

85. In my Opinion in Case C-283/98 P Mo och Domsjö AB v Commission, I have 82. We are, however, faced with an addi- explained why this plea, submitted by tional problem owing to the fact that the several applicants, must be rejected.

I - 9942

STORA KOPPARBERGS BERGSLAGS V COMMISSION

The third plea: error of law as to the effect Costs on the gravity of the infringement of the lack of evidence of the alleged effects of the price collusion 87. Under Article 121 of the Rules of Procedure of the Court of First Instance, 86. This plea has also been examined in my that Court is to decide on the costs relating opinion in Mo och Domsjö AB, in which I to the proceedings instituted before it and have proposed that the Court should reject to the proceedings on the appeal before the it. Court of Justice.

Conclusion

88. In the light of the foregoing arguments, I propose that the Court of Justice should:

— orders the appellant to pay the costs;

(2) dismiss the remainder of the appeal;

(3) refer the case back to the Court of First Instance.

I - 9944