C-291/98

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SARRIÓ V COMMISSION

6. In its appeal, Sarrió claims that the regard to the collusion on market Court of Justice should: shares and downtime;

— in so far as the Court of First Instance did not consider it necessary to annul, in whole or in part, the fine imposed on (1) set aside the contested judgment Sarrió on the ground that the statement of reasons was defective, that defect being that the parameters systemati- cally taken into consideration by the Commission for the purpose of calcu- lating the said fine were not indicated in the Decision itself; — in so far as the Court of First Instance held that the Decision did not hold Sarrió responsible for an infringement relating to transaction prices and did not consider it necessary to evaluate — in so far as the Court of First Instance Sarrió's conduct regarding the prices approved the Commission's method of actually applied; calculating the fine, which consisted in converting the turnover for the refer- ence year into ecus at the average exchange rate for that year and, on the basis of that conversion, fixing the amount of the fine directly in ecus, without evaluating the legal conse- quences or assessing the harm caused — in so far as the Court of First Instance to Sarrió by the use of such a method; held that Sarrió's participation in the PG Paperboard meetings is in itself sufficient to implicate it in the collusion on market shares and downtime, or — in the alternative — in so far as the — in so far as the Court of First Instance Court did not take account of the fact granted a reduction of ECU 1 500 000 that Sarrió's failure to implement any in the fine by reason of the short concerted initiatives reduces the gravity duration of Prat Carton's participation of the infringement committed by Sar- in the infringement; rió in comparison to that committed by other undertakings, and did not take into consideration the evidence offered to that end by Sarrió, or — in the further alternative — in so far as its categorisation of the infringement com- (2) refer the case back to the Court of First mitted by Sarrió is incorrect with Instance if the Court of Justice con-

— dismiss the appeal;

— the fourth plea: failure to take into consideration the error in the method — order the appellant to pay the costs; of calculating the fine;

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— the fifth plea: inconsistency between 12. It claims to find confirmation of this the grounds and the operative part of point of view in the Commission's defence the judgment in so far as concerns the before the Court of First Instance, in which reduction in fine which was granted. it states that 'the price cartel operated by the PWG in collaboration with the JMC was not merely a cartel on announced prices, but a cartel that went as far .as agreeing periodic price increases for each type of product in each national currency and planning and applying simultaneous 9. In order to avoid needless repetition, the price rises throughout the Community'. details of those pleas will be set out as necessary as and when I examine them.

13. For Sarrió, the distinction between collusion on announced prices and collu- sion on transaction prices has a particularly relevant legal significance, which was high- lighted by the Court of Justice in its The first plea: interpretation of the Deci- judgment in Ahlström Osakeyhtiö and sion as regards the alleged infringement Others v Commission, the so-called 'wood- pulp case'. 3

17. By interpreting the Decision as not having held those involved in the cartel responsible for colluding on transaction prices, the Court of First Instance rendered those arguments completely irrelevant and deprived the claim for a reduction of the fine of any foundation. — agreed regular price increases for each grade of the product in each national currency,

18. In so far as it alleges that the contested judgment misinterpreted the Decision, the plea is admissible, contrary to the conten- tion of the Commission, which regards it — planned and implemented simulta- only as a dispute on the facts. neous and uniform price increases throughout the Community,

19. To assess the validity of the plea, it is necessary to look into the grounds put forward by the Court of First Instance for — reached an understanding on maintain- not considering that the Decision holds ing the market shares...,

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— increasingly from early 1990, took 23. Indeed, I cannot see why a cartel would concerted measures to control the sup- be interested in reaching agreement on list ply of the product in the Community in prices by which the various sellers would order to ensure the implementation of not feel at all bound in their negotiations the said concerted price rises, with their customers.

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OPINION OF MR MISCHO — CASE C-291/98 P

27. In that, it is clearly distinguishable good faith in the case of an unlawful from the decision which gave rise to the agreement. woodpulp case, which was presented as penalising two different infringements, a collusion on announced prices and an agreement on transaction prices.

31. The Commission was indeed interested in the transaction prices and in the discus- sions to which a price gave rise if it differed too much from the list prices, but this was 28. The fact that, when an undertaking to establish that the aim was the imple- deviated in its commercial dealings from mentation of standard transaction prices the list prices agreed at the periodic meet- and to assess the true extent of the commit- ings of the members of the cartel, the others ments made by the members of the cartel. 4 complained and drew its attention to posted prices, cannot be regarded as evi- dence that the transaction prices had also been fixed by common accord.

The second plea: the inferences properly anti-competitive purpose does not in itself drawn from the finding that the appellant constitute conduct which can be fined, and took part in the meetings of the members of it was for the Commission to adduce the cartel evidence that the undertaking implemented the decisions adopted during such a meet- ing. To require the undertaking to prove that it did indeed distance itself from those decisions, that is to say, that it neither 34. In its second plea the appellant's main approved nor implemented them, was to complaint is that the contested judgment place it under an impossible burden of rejected its argument that its participation proof. in the meetings of the various bodies of the PG Paperboard, a professional association whose aims are essentially lawful, is not sufficient to establish its participation in a cartel to maintain market shares and to arrange planned production stoppages to control supply. 37. I shall begin by stating, as does the Commission, that the conclusion reached by the Court of First Instance, namely that Sarrió was correctly fined for having parti- cipated in a collusion to stabilise market shares and control supply, is not based only 35. The appellant considers that the Court on paragraph 118 of the contested judg- of First Instance erred in law in stating, in ment, cited above. This argument is paragraph 118 of the contested judgment, described as taking 'third place', the Court that 'the fact that an undertaking does not having previously established that it was abide by the outcome of meetings which the collusion which the Commission con- have a manifestly anti-competitive purpose sidered an infringement, not its implemen- is not such as to relieve it of full responsi- tation, and that Sarrió had definitely parti- bility for the fact that it participated in the cipated fully in that collusion. cartel, if it has not publicly distanced itself from what was agreed in the meetings (see, for e x a m p l e , the judgment in Case T-141/89 Tréfileurope v Commission [1995] ECR II-791, paragraph 85). Even assuming that the applicant's conduct on the market was not in conformity with the 38. That participation clearly raises issues conduct agreed, that in no way affects its of fact on which the Court of Justice is not liability for an infringement of Arti- to give a ruling on appeal. However, I cle 85(1) of the Treaty.' would point out that, apart from the fact that the Court of First Instance carefully considered the probative value of the evidence adduced by the Commission to establish both that there had been collusion and that the appellant had participated in 36. From the appellant's point of view, it, Sarrió's denials seem to me singularly participation in a meeting which has an lacking in credibility.

44. All these factors preclude the finding that the Court of First Instance infringed Community law by rejecting Sarrió's argu- ment that it did not participate in a 41. I am not sure that this explanation collusion arranged during the meetings it regarding the concerns which motivated it, attended. when it participated in the meetings held by the members of the cartel, serves the appellant's cause. Quite the contrary, since it thus appears that Sarrió had, from its own point of view, an obvious interest in participating in a cartel which, by eliminat- 45. Nevertheless, I do not intend to evade ing price wars, by sanctioning the distribu- the issue of the validity of paragraph 118 of tion of market shares and by regulating the contested judgment, namely the attri- supply, could mitigate the effects of the bution of liability to an undertaking merely weakness of its competitive position. because it has participated in meetings which clearly have an anti-competitive purpose, if it has not publicly distanced itself from them. Actually I am convinced that an undertaking's participation in such meetings must be taken to mean that it 42. In any event, the possibility that con- intends to participate in the decisions duct which objectively constitutes an made, and that it would be impossible to infringement of the competition rules may prevent infringements of competition law be penalised is completely unconnected committed by cartels if it were to be with the 'aggressive' or 'defensive' motives accepted that an undertaking may attend of the participants; however, the second of such meetings with impunity. A meeting these is in practice by far the more frequent between directors of undertakings trying to because only those who fear the effects of agree on prices or market shares is quite

49. Sarrió points out that its sales volume has been falling, its market shares have been cut back and it has never arranged production stoppages other than those 46. Nor do I find anything unlawful in the ordered for technical reasons. Court's requirement that an undertaking, if its participation in the meeting is not to be considered as participation in an infringe- ment, should publicly distance itself from it. Although Sarrió argues that it may prove difficult to distance oneself in the circum- stances, the answer to that is that an 50. With regard to the infringement for undertaking which attends a meeting which it has been penalised, this evidence is whose purpose is completely unambiguous of no consequence. As the contested judg- takes a deliberate risk and is therefore in no ment states, 'the probative value of the position to claim that it found it difficult to proof adduced by the Commission is such prevent the implementation of that pur- that information as to the applicant's actual pose. Moreover, in view of the skill with conduct on the market cannot affect the which the members of the cartonboard Commission's conclusions concerning the cartel concealed their anti-competitive fact of the existence of collusion on the two practices, I have no doubt that an under- aspects of the policy at issue' (paragraph taking which has become involved in a 116). meeting to whose aims it does not subscribe can adduce evidence that it has distanced itself from an infringement.

51. In any event, even supposing that this evidence reflects Sarrió's actual conduct, it could not contradict the Commission's conclusions, as the Court points out in paragraph 117 of the contested judgment. It has never been claimed that the collusion 47. The main allegation contained in the regarding market shares led to a complete appellant's second plea should therefore be freeze of these shares and it has always rejected as unfounded. been acknowledged that, prior to 1990, the

53. All the arguments expounded by the appellant concerning the distinction which The third plea: the inadequate statement of must be drawn, with respect both to the reasons in the Decision as regards the fixing gravity of the infringement and to the fine of the fine imposed in respect of it, between a mere exchange of information and a cartel are irrelevant since it has been established that, in this case, it did not merely participate in 56. The appellant claims that the Court of an exchange of information but was First Instance could not, without being actively involved in a collusion on market inconsistent, hold that the statement of shares and volume of production, so that reasons in the Decision was insufficient in

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SARRIÓ V COMMISSION

so far as the fine imposed on the appellant during 1990 of the national currencies of was concerned and, at the same time, refuse the various members of the cartel. to annul it on this point.

60. Sarrió's first complaint against the 57. As this criticism is the same as that contested judgment is that the statement made by the appellant Mo och Domsjö AB of grounds is defective, in that at no time in Case C-283/98 P, I refer, as regards the did the Court of First Instance expressly reasons which justify the rejection of this determine the issue, raised by the appellant, plea, to the Opinion which I am delivering of the discrimination suffered by those today in that case. undertakings whose national currency had depreciated between 1990, the Commis- sion's year of reference for fixing the amount of the fines, and 1994, the year in which the Decision imposing those fines was adopted.

66. In fact, the appellant is careful not to 63. It is true that Sarrió is entitled to state that, by using the turnovers of two consider that the Court's arguments are different years, the Commission infringed not convincing, but it cannot seriously Article 15(2) of Regulation No 17, but argue that the question of possible discri- seeks to establish that the choice of the mination was passed over in the contested turnover for the last year of the cartel's judgment. activity, far from ensuring that the fine will reflect the gravity of the infringement and the economic power of the penalised under- takings, risks producing the opposite result.

68. I would say, in the first place, that this of its perpetrators, gave a wholly convin- argument is not at all convincing. cing explanation of why the method is not unlawful. In other words, the dualism criticised by the appellant is justified and, even if it were innovative, was adequately justified by the Court of First Instance. 69. Indeed, as well as the fact that it ascribes very dark designs to the Commis- sion and makes light of the judicial review to which the institution is subject, it completely and wrongly disregards the fact that it only needs the turnover of one member of the cartel to slump, or at least stagnate or fall off, for the Commission, 73. The appellant's third and last com- having regard to its obligation to observe plaint relates to the Court's refusal to the principle of equal treatment and the acknowledge the validity of its argument limit fixed by Regulation No 17, to be that the fixing of the fine in ecus on the prevented from using such tactics, even if it basis of the turnover of the last complete were tempted to do so. year during which the cartel operated, converted into ecus by applying the average rate of exchange during that year, led to discrimination each time the exchange rates subsequently altered: undertakings whose national currencies appreciated saw the 70. However, I should point out above all burden of the fine they had to pay lessen that it is not a question of determining in real terms, while those whose currency whether the method used by the Commis- depreciated saw the burden increase, some- sion is the only one which is admissible or times, and particularly in the present case, the best, but of ascertaining whether it is considerably. admissible, that is to say, whether or not it is rendered inadmissible by Regulation No 17 or the general principles laid down by the case-law of the Court of Justice.

76. It is therefore pointless for Sarrio to put forward alternatives, more favourable to its own interests, to the method used to fine it, when the issue is not to determine which is the best possible method but to ascertain whether the one which has been implemen- 79. On a constant turnover, its profit ted is lawful. margin may have fallen drastically; it may have borrowed so heavily from banks that it is refused further credit; or, as a conse- quence of a deterioration in the economic situation, its turnover may have fallen, bringing a drop in income, if its profit 77. On this point, Sarrio does not adduce margin has remained constant. convincing evidence. It is true that it criticises the fixing of the fine in ecus, but Regulation No 17 nowhere prohibits the use of the ecu for fixing the amount of the fine, and the reasons which led the Court of Justice, in its judgment in Genérale Sucrière and Bégbin-Say v Commission and 80. However, this uncertainty may also Others, 6to refuse to allow the fine to be bring pleasant surprises. The undertaking fixed in the unit of account no longer apply, may have come though a difficult phase and be enjoying a prosperity which it could not even have envisaged a few years 6 —Joined Cases 41/73, 43/73 and 44/73 [1977] ECR 445. previously.

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81. All this cannot alter the gravity of the life, by fixing the fines in national currency infringement which the undertaking com- or using, only for undertakings whose mitted at a certain time, and it is that currency has depreciated, a rate of conver- gravity which determines the extent of the sion between the ecu and the national penalty it must pay. currency other than that of the last year in which the cartel operated, which was chosen in order to assess the gravity of the infringement, would risk introducing other distortions, without promoting equality 82. The currency uncertainty itself will not between the members of the same cartel necessarily be to the disadvantage of an with regard to the method chosen by the undertaking whose national currency has Commission. depreciated.

84. Conversely, undertakings whose national currency has been revalued will have had to make sacrifices as regards profit margin in order to keep their export markets; accordingly, the revaluation of 87. Furthermore, I agree with the Commis- their national currency against the ecu, and sion that the point made by the Court of the resulting decrease in the fine expressed First Instance in paragraph 399 of the in national currency, will only offset the contested judgment, concerning the appel- increased burden of the fine in the light of lant's presence in several markets, is also the fall in profits. significant. The appellant thus, simulta- neously, enjoyed the advantages and suf- fered the disadvantages of the exchange rate criterion which is in dispute. More- over, as a result of selling its products it has 85. To attempt to remove these uncertain- received several European currencies, not ties, which form an integral part of business only pesetas.

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OPINION OF MR MISCHO — CASE C-291/98 P

88. Finally, I should point out that the both to the duration of that subsidiary's uncertainty connected with the fall of a involvement, which the Commission had national currency can, in any event, have determined to be 60 months out of 60 and only limited consequences, since Arti- the Court reduced to 9 months, and to the cle 15(2) of Regulation No 17 precludes anti-competitive practices in which it had the amount which the undertaking has to taken part. The Court of First Instance held pay from exceeding, at the time the fine is that Prat Carton could be held responsible imposed, 10% of the turnover of its last for only a participation in the collusion on financial year. prices and in the collusion on supply control, whereas the Commission had con- sidered that it was also actively involved in the collusion on freezing market shares.

92. Sarrió infers from this — and I think 94. However, I take the view, as does we have to agree with it on this p o i n t - Sarrió, that the contested judgment is that the whole of the reduction it has inconsistent or, to be more specific, con- received in the fine is linked to the errors of tains an inadequate statement of grounds. assessment made by the Commission in Admittedly, it is indisputable that the Court respect of its subsidiary. To demonstrate of First Instance exercised its unlimited that the reduction is inadequate, it takes the jurisdiction and it is also indisputable that turnovers of the parent company and of the amount of a fine cannot be fixed by Prat Carton, ECU 224 200 000 and ECU applying a mathematical formula. 33 800 000 respectively, and calculates, by breaking down the total amount of the fine imposed by the Commission, ECU 15 500 000, the proportion payable by the parent company, which it assesses at ECU 13 500 000, and the proportion payable by Prat Carton, which it assesses 95. However, the exercise of unlimited at ECU 2 000 000. Comparing the amount jurisdiction does not relieve the Court of of ECU 2 000 000 with the amount of the its obligation to state grounds. In this case, reduction, it then argues that, in view of the if the Court thought that the reduction in significance of the correction made by the the fine should not exceed ECU 1 500 000, Court of First Instance in respect of the part on the supposition that the amount was played by Prat Carton in the infringement, based on the gravity of the infringement the reduction in the fine should have been committed by Sarrió, it should have given much greater. an explanation for this, because the reduc- tion received by Sarrió does not seem prima facie — in the light of the way in which the fines were calculated by the Commis- sion, with which the Court of First Instance agreed in that respect — to be appropriate to the findings made concerning the extent 93. The Commission rebuts this argument of Prat Carton's involvement in the cartel. by saying that the Court of First Instance exercised its unlimited jurisdiction, that the Court of Justice sitting in an appellate capacity cannot interfere in the exercise of that jurisdiction and that all Sarrió's calcu- lations are without probative value, since the Commission, with which the Court of 96. I therefore consider that Sarrió's fifth First Instance agrees on this point, had plea is well founded and that the contested imposed an overall fine on Sarrio, not a fine judgment should be set aside in so far as it which could be broken down into different fixed at ECU 14 000 000 the amount of the amounts corresponding to the conduct of fine imposed on Sarrió.

100. It is clear that the annulment of the contested judgment, even if only on one point, should be reflected in the costs. 98. I, for my part, do not think so. The fine imposed on Sarrio was calculated by the Commission on the basis of its turnover for 1990 including, of course, that of Prat Carton. Now, the Court of First Instance found that Prat Carton participated in the 101. In the contested judgment, the Court collusion on prices and on supply control of First Instance ordered the appellant to only from June 1990. It therefore has to be pay its own costs and also half of the costs acknowledged that, as regards the subsidi- incurred by the Commission, and ordered ary, the reference turnover, which in the the Commission to pay half of its own Commission's calculation was based on costs. Sarrió's overall turnover, relates to a period during which the undertaking participated in the collusion for only seven months, from June to December, which most cer- tainly raises a problem of consistency. 102. I propose that this distribution should be amended and that the appellant should pay its own costs and only two fifths of the costs incurred by the Commission. With regard to the costs relating to the appeal 99. I therefore consider that, in view of the proceedings, I consider it appropriate for connection between Sarrió's overall turn- the appellant to pay its own costs and two over and Prat Carton's turnover, the fact thirds of the costs incurred by the Commis- that Prat Carton did not participate in one sion, given that, in my view, most of its of the elements of the infringement, and the pleas should be rejected.

(3) Order the appellant to bear, in respect of the proceedings before the Court of First Instance, its own costs and pay two fifths of the costs incurred by the Commission of the European Communities and, in respect of the proceedings before the Court of Justice, bear its own costs and pay two thirds of the costs incurred by the Commission of the European Communities;

(4) Order the Commission of the European Communities to bear, in respect of the proceedings before the Court of First Instance, three fifths of its own costs and, in respect of the proceedings before the Court of Justice, one third of its own costs;

(5) Dismiss the remainder of the appeal.

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