C-294/98

METSA-SERLA AND OTHERS V COMMISSION

OPINION OF ADVOCATE GENERAL MISCHO delivered on 18 May 2000 *

1. By application lodged on 29 July 1998 lants, which is set out in Article 3 of the Metsä-Serla Oyj, formerly Metsä-Serla Oy, Decision as follows: and three other Finnish companies manu- facturing cartonboard appealed against the judgment of the Court of First Instance of 14 May 1998 in Metsä-Serla and Others v Commission 1 (hereinafter 'the contested judgment'), seeking to have that judgment 'Finnboard — the Finnish Board Mills set aside. Association, a fine of ECU 20 000 000, for which Oy Kyro AB is jointly and severally liable with Finnboard in the sum of ECU 3 000 000, Metsä-Serla Oy in the sum of ECU 7 000 000, Tampella Cor- poration in the sum of ECU 5 000 000 and United Paper Mills Ltd in the sum of ECU 5 000 000.'

2. By Decision 94/601/EC of 13 July 1994 relating to a proceeding under Article 85 of the EC Treaty (IV/C/33.833 — Carton- board) 2 (hereinafter 'the Decision'), the Commission imposed fines on 19 manufac- 4. All the abovementioned companies were turers supplying cartonboard on the Com- addressees of the Decision. munity market on the ground that they had infringed Article 85(1) of the EC Treaty (now Article 81(1) EC).

5. In the contested judgment, the Court of first Instance described the situation of the appellant companies as follows:

3. Among the fines imposed on various undertakings was one relating to the appel- '9. The applicants are Finnish cartonboard producers and were addressees of the Decision. They market their products * Original language: French. in the Community and on other mar- 1 — Joined Cases T-339/94 to T-342/94 Melsä-Serlaami Others v Commission [1998] ECR II-1727. kets through Finnish Board Mills Asso- 2 — OJ 1994 L 243, p. 1. ciation — Finnboard (hereinafter

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and Kyro v Commission of the European Preliminary observation Communities, and give a final ruling:

11. The Commission makes the prelimin- ary point that, except in the case of Kyro (1) annulling the Decision adopted on Oyj Abp, the extracts from the register of 13 July 1994 by the respondent, noti- companies are produced only in transla- fied to the appellants on 8 August 1994 tion, that Kyro Oyj Abp's power of attor- and published in the Official Journal of ney bears, amongst other signatures, that of the European Communities on 19 Sep- a person who was not empowered to sign tember 1994 and relating to a proceed- by the extract from the register of compa- ing under Article 85 of the Treaty (IV/ nies submitted, and that the other signatory C/33.833 — Cartonboard) in so far as of that power of attorney was not author- it concerns the appellants, and ised to represent the company on his own.

(2) ordering the respondents to pay the costs.' 12. The appellants state that, if the Court considers it necessary, they are prepared to supply the documents allegedly lacking. However, they do not see the need to do so, since Article 112 of the Rules of Procedure 10. The Commission contends that the of the Court of Justice not only does not Court should: provide for the resubmission of the afore- mentioned documents in the event of an appeal, but precludes it (See Article 112(3) from which it is apparent that Article 38(5) of the Rules of Procedure does not apply to appeals). '— dismiss the appeal;

— order the appellants to pay the costs of 13. In this connection it should be pointed the appeal.' out that, according to Article 112(1) of the Rules of Procedure of the Court of Justice, Article 38(2) and (3) apply to appeals. The provision does not, therefore, render applicable Article 38(5) which provides, under (b), that an application made by a It also maintains the submissions it made at legal person governed by private law must first instance. be accompanied by 'proof that the author-

18. Indeed, according to that provision, the 15. The Commission also maintains that Commission can impose fines on under- the appeal only repeats to a large extent the takings or groups of undertakings only if factual and legal arguments put forward at they have intentionally or negligently first instance, which are summarised in infringed Article 85(1) of the Treaty. Yet paragraphs 21 to 30 of the contested neither the Commission nor the Court of judgment, and that, in so far as concerns First Instance had established that the the criterion of economic unity, it is not appellants had committed such an infringe- based on an infringement of Community ment. On the contrary, it is apparent from law, but on a criticism of the findings of the Article 1 of the Decision 4that the appel- Court of First Instance, which is inadmis- lants had not infringed Article 85(1) of the sible. I shall consider these issues of admis- Treaty. sibility in conjunction with the arguments submitted by the appellants.

19. Nevertheless, the Court of First Instance took the view, in paragraph 43 of the contested judgment, that an under- Lack of legal basis taking could be declared jointly and sever- ally liable with another undertaking for payment of a fine imposed on the latter undertaking, which has committed an 16. The appellants claim out that the infringement, 'provided that the Commis- Decision provides no legal basis on which sion demonstrates, in the same decision, the Commission may hold them jointly and that the infringement could also have been severally liable for payment of the fine. found to have been committed by the undertaking held jointly and severally liable.'

22. The principle of legality is a funda- mental right enshrined in Article 7 of the European Convention on Human Rights and Fundamental Freedoms, from which follows a prohibition of reasoning by 26. This observation is correct. Neverthe- analogy. less, we have just seen that the appellants also refer to a specific passage in the contested judgment, namely paragraph 43, which, they maintain, contains an error of law. We should therefore examine the substance of the first part of the plea.

23. The interpretation of the Court of First Instance effectively allows the Commission to impose penalties under Article 15(2) of Regulation No 17 against undertakings without having either to bear the burden 27. In this regard, I agree with the Com- of proving an infringement of Article 85(1) mission that the appellants are wrong to of the Treaty or to take into account the criticise the interpretation of Article 15(2) individual situation of each undertaking (particularly mitigating circumstances) 5 — See Case 374/87 Orkem v Commission [1989] ECR 3283, when assessing the gravity or duration of paragraphs 30 to 35.

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29. It is true that this is the converse situation of the one which we have to consider in the appeal brought by the undertaking Stora Kopparbergs Bergslags AB (C-286/98 P). 33. In my view, however, this does not call in question the fundamental reasoning mentioned above with regard to the possi- bility of liability being attributed or the reasoning of the Court of First Instance. In paragraphs 44 to 46 the Court stated that: 30. In that case, a fine was imposed on a parent company — which did not partici- pate as such in the organs of the cartel — in respect of the participation of its sub- sidiaries in those organs, when the subsidi- '44. In the present case, whilst Finnboard aries were not addressees of the Decision. is the undertaking held specifically and formally liable for the infringe- 6 — See, particularly, the judgments in Case 48/69 ICI v Commission [1972] ECR 619, paragraphs 132 et seq. and Case 52/69 Geigy v Commission [1972] ECR 787, para- 7 — See point 173 of the Decision. graphs 44 et seq., and the judgment in Case 107/82 AEG v Commission [1983] ECR 3151, paragraphs 49 et seq. 8 — See point 174 of the Decision.

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ment of Article 85(1) of the Treaty cle 85(1) of the Treaty if the conduct of (Article 1 of the Decision), and whilst another undertaking may be attributed to the fine provided for by Article 3(v) of it, the Court of First Instance was fully the Decision is therefore imposed on entitled to consider that Finnboard's con- it, each of the applicants is nonetheless duct could be attributed to the four appel- declared jointly and severally liable lant undertakings in so far as they were in with Finnboard for payment of part of fact liable for that company's conduct. that fine, because the Commission took the view that Finnboard had acted as their "alter ego" and in their interest (point 174, second paragraph, of the Decision).

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found to have been committed by them, principles established by the Court of which involves taking into account their Justice in order to determine fines to be particular circumstances. That had hap- imposed on undertakings which form an pened in this case, each of the appellants economic unit. They maintain that, in any being liable in a different amount for the event, the Court of Justice did not infer fine imposed on Finnboard. Furthermore, from those principles liability for a fine the appellants do not plead the existence of imposed on another. individual circumstances which the Com- mission or Court of First Instance did not take into account.

42. Moreover, they take the view that the criteria for economic unity are not satisfied in this case. 39. Finally, the Commission states that the principle of the presumption of innocence was not violated. The findings of the Commission and the Court of First Instance justified the imposition of fines directly on the appellants, who received the statement 43. I shall consider these two arguments in of objections and were therefore able to turn. defend themselves against it without restriction.

45. The principles of economic unity can- 48. I shall therefore make the two follow- not therefore be invoked as grounds for the ing observations as secondary points. appellants' vicarious liability for payment of a fine imposed on Finnboard, when it has not been found that the appellants committed any infringement and no fine has been imposed on them individually. 49. First of all, I agreed above with the Commission that the appellants were rightly held responsible for an infringement which they themselves committed, even if through the intermediary of Finnboard. 46. The appellants add that the Commis- sion's view is not supported by its own administrative practice, it having dealt with only two cases involving joint and several liability. They were fundamentally differ- ent, in law and in fact, from the present 50. Secondly, I would point out that, as the case, in that proceedings were taken against principle of economic unity makes it pos- the undertakings, which had jointly com- sible to hold company A responsible for an mitted an infringement, as joint perpetra- infringement committed by company B, tors and a single fine was imposed [Com- where the two companies in fact constitute mission Decisions 72/457/EEC of one economic unit 12 (company B basically 14 December 1972 relating to a proceeding carrying out the instructions issued to it by under Article 86 of the Treaty establishing company A), it must a fortiori be possible the European Economic Community (IV/ to declare several companies of the kind of 26.911 — Zoja/CSC — ICI), 10 and company A (the appellants) jointly and 80/1283/EEC of 25 November 1980, relat- severally liable for payment of the fine ing to a proceeding under Article 85 of the imposed on a company of the kind of EEC Treaty (IV/29.702: Johnson & John- company B (Finnboard), given that they, son) 11]· together, determined Finnboard's conduct.

55. The appellants also claim, in this connection, that it is impossible for each of the appellants to control or determine 53. Firstly, the case-law regarding the attri- Finnboard's operations in view of the votes bution to the group parent company of the they have on the Board of Directors. conduct of its subsidiary is inapplicable to the relationship between Finnboard and its member undertakings, since the condition that the member undertakings hold shares in Finnboard's capital — an essential con- dition, according to the case-law, for a finding of economic unity between parent 56. The appellants add that, unlike the company and subsidiary — is not ful- situation in Suiker Unie and Others v filled. 13 Commission, 15 to which the Court of First Instance referred, Finnboard assumed var- ious roles and took financial risks which preclude it from being considered as inte- grated with one of the member undertak- ings, like a sales representative, as an 54. Secondly, a finding of economic unity 'auxiliary organ' in its principal's under- presupposes that the undertaking to which taking (see paragraph 54 of the contested the conduct of another undertaking is to be judgment). The appellants submit that the imputed is in a position to exercise a certain Court of First Instance was wrong to take influence over it and to control its conduct the view that Finnboard had no economic and that it has actually exercised that interest of its own in raising prices (para- power of influence and control. 14 How- graph 57 of the contested judgment). Finn- ever, the contested judgment does not board operated on the market as an independent undertaking and acted as an intermediary on behalf of its member 13 — See, particularly, the judgments in ICI v Commission, companies. The appellants state that its revenue came from the commission it paragraphs 132, 135, 136 and 141, and Istituto Chemio- terapico Italiano and Commercial Solvents Corporation v Commission, paragraphs 36 and 57. 14 — See, particularly, the judgments in ICI v Commission, paragraphs 132 to 141, and Istituto Chemioterapico Italiano and Commercial Solvents Corporation v Commis- 15—Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, sion, paragraphs 37 and 41. 111/73, 113/73 and 114/73 [1975] ECR 1663.

57. Finally, the appellants consider that the Commission, in its reply, seeks to distort the facts found by the Court of First Instance. There is no reference to 'share- holders' or 'group of shareholders' in the Court's findings. According to the appel- lants, what needs to be determined in the 60. In the alternative, I consider that the case of membership of an association Court's reasoning is completely convincing incorporated under Finnish law are the and does not contain any error of law. As powers or opportunities to exercise influ- the Commission rightly points out, 'it is ence granted to its various members in an not... true that, for the existence of an organisational structure in which no shares economic unity and the imputability to one are held in the capital and no voting rights undertaking of the conduct of another to be are allocated according to the number of accepted, undertakings have to be linked by shares held, and how, in those circum- shares. Economic unity does not require stances, it is possible to justify attributing one of the undertakings involved to be a liability and fixing a fine according to the company in which the other undertaking gravity of individual participation in the has shares representing a contribution to reprehensible act and the degree of culp- the capital of the first undertaking. What ability of each one. does matter is that the undertakings con- stitute a unit as a result of the power of one of them to issue instructions to the other. This economic unity may also exist between undertakings which are not com- 58. The Commission counters by saying panies with capital, but partnerships or that, by advancing these arguments, the associations. A majority shareholding is appellants are not pleading an infringement likewise not necessary if, owing to other of Community law but criticising the circumstances, one of the undertakings findings of the Court of First Instance in obeys the instructions of the other.' paragraphs 45 to 59 of the contested judgment, which is inadmissible.

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

(1) dismiss the appeal;

(2) order the appellants to pay the costs of both proceedings.

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