C-198/99

ENSIDESA v COMMISSION

OPINION OF ADVOCATE GENERAL STIX HACKL delivered on 26 September 2002 1

Table of contents

I — Introduction I-11116

II — Forms of order sought and grounds of appeal I-11117

III — Examination of the case I-11119

1. Interpretation of the term 'concerted practices' and 'normal competition' under Article 65 of the ECSC Treaty (second ground of appeal) I - 11125

2. The alleged defective reasoning in the judgment under appeal in relation to the duration of the price-fixing agreements (third ground of appeal) . . . . I - 11129

3. The alleged defective grounds for the judgment under appeal in relation to the sharing of the French market (fourth ground of appeal) I -11130

1 — Original language: German.

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I — Introduction 3. On 16 February 1994 the Commission adopted against 17 European steel under- takings and one of their trade associations ' C o m m i s s i o n Decision 94/215/ECSC... relating to a proceeding p u r s u a n t to Article 65 of the ECSC Treaty concerning agreements and concerted practices 1. The present case is an appeal brought engaged in by European producers of against the judgment delivered by the Court beams' 5 (hereinafter 'the Decision'). The of First Instance on 11 March 1999 in Case parties to which the Decision was T-157/94 ('the judgment under appeal'). 2 addressed had, in the Commission's view, breached the competition law of the Euro- pean Coal and Steel Community by estab- lishing, in an anti-competitive manner, systems for the exchange of information and engaging in price-fixing and market- sharing. The Commission imposed fines on 14 of the undertakings. In the case of 2. Reference is made to the judgment under Empresa Nacional Siderúrgica SA (En- appeal for the historical background to sidesa) (hereinafter 'the appellant') the relations between the steel industry and the Commission imposed a fine of ECU 4 000 Commission from 1970 to 1990, and in 000. particular the rules adopted to deal with the manifest crisis a n d C o m m i s s i o n Decision N o 2448/88/ECSC of 19 July 1988 introducing a surveillance system for certain products of undertakings in the steel industry ('Decision N o 2448/88'). 3 The surveillance system established pursuant to the said Decision expired on 30 June 1990 and was replaced by an individual and 4. Several of the undertakings concerned, voluntary information scheme. 4 including the appellant, together with the trade association, challenged the Decision before the Court of First Instance. The 2 — Case T-157/94 Ensidesa v Commission [1999] ECR II-707. 3 —OJ 1988 L 212, p. 1. 4 — See paragraph 33 of the judgment in Case T-141/94 Thyssen Stahl v Commission [1999] ECR II-347. 5 — OJ 1994 L 116, p. 1.

(1) set aside the judgment delivered by the 7. According to its statement of appeal, the Court of First Instance in Case appellant invokes the following grounds of T-157/94 in so far as that judgment appeal fixes the fine imposed on the appellant at EUR 3 350 000, dismisses the remainder of the appellant's action and orders the appellant to bear its own costs and to pay three-quarters of the Commission's costs; First ground of appeal:

(i) alternatively, set aside in part the 'Breach of Community law in erring in law judgment delivered by the Court of in its appraisal of the infringement of First Instance for the reasons given essential formal provisions committed in this pleading and reduce the fine when the Commission Decision was imposed on it; adopted.'

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Second ground of appeal: powers of review and infringing Ensidesa's rights of defence.'

'Breach of Community law in erring in law in its appraisal of the appellant's practices Sixth ground of appeal: the subject of complaint in relation to Article 65(1) of the ECSC Treaty.'

— exceeded its jurisdiction to carry out a 9. The examination which follows will review under the first paragraph of base itself around this summary. The Article 33(1) of the ECSC Treaty (fifth grounds of appeal put forward by the ground of appeal); appellant, their component parts and argu- ments and the Commission's contentions will be set out under these individual points.

— erred in law in assuming that the Decision was substantially valid, even though 10. The grounds of appeal in the present proceedings correspond, in part, to the substance of the grounds of appeal or parts of the grounds of appeal put forward in Case C-194/99 P Thyssen Stahl v Commis- sion. 6 My Opinion in that case is also being — the practices complained of in the delivered today. Where the content of the Decision could not have had a detri- submission is the same I will refer in this mental effect on 'normal competition' Opinion to the appraisal that I have under- within the meaning of Article 65 of the taken in my Opinion on Case C-194/99 P. ECSC Treaty (second ground of appeal);

— the Decision did not contain adequate I I I— Examination of the case substantiation in relation to the dur- ation of the agreements to fix prices (third ground of appeal);

A — The ground of appeal alleging a legally defective assessment of the formal validity of the Decision (first ground of — the sharing of the French market was appeal) based on an error in law (fourth ground of appeal);

11. The first ground of appeal consists of three parts. In the first, the appellant challenges the assumption made by Court — erred in law in its assessment of the fine (sixth ground of appeal). 6 — [2003] ECR I-10821.

1. The quorum when the Decision was adopted by the Commission 14. The Court of Justice had also refused to allow the appellant's application for evi- dence to be examined in the form of the diaries of the Commission Members in Submissions of the parties order to establish which Members actually attended the session when the Decision was adopted. In doing so, the Court of First Instance had infringed the appellant's right under Article 24 of the ECSC Statute of the Court of Justice that it should be convinced 12. In the first part of the first ground of of the validity of the procedure followed appeal the appellant submits that the Court when the Decision was adopted. The Court of First Instance misconstrued the minutes has expressly ruled on such a right. 7 of the session of the College of Members of the Commission on 16 February 1994 at which the Decision was adopted. The Court of First Instance had assumed that the Decision had been adopted by the requisite number of Commission Members on the basis of a patently unsound inter- pretation of the minutes in question, with- out appraising all of the evidence tendered 15. Under Article 24 of the ECSC Statute by the appellant. of the Court of Justice, therefore, the Court should require the Commission to produce the Commission Members' diaries and other relevant documentation.

13. The judgment under appeal states that 7 — Case C-137/92 P Commission v BASF and Others [19941 page 2 of the minutes of the aforemen- ECR I-2555.

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16. The Commission takes the view, firstly, sion members in question were absent that this ground of appeal is inadmissible as when point XXV was discussed. it is for the Court of First Instance alone to appraise the facts and the value to be put on the evidence submitted to it.

20. The first part of the first ground of 18. Even if the Court of Justice should find appeal, challenging the assumption by the the ground of appeal admissible, the Com- Court of First Instance that there was the mission takes the view that it is unfounded. necessary quorum when the Commission The Court of First Instance properly took adopted the Decision, must therefore be into account the list on page 2 of the dismissed on the ground that it is inadmis- minutes of the session, the purpose of sible. 8 which was to record precisely which Com- mission Members were present at or absent from the session in question. It argues that 8 — Since there is no further need to answer the question whether the Court is ohliged to ask the Commission for the appellant is also misconstruing page 40 documents to prove whether no not there was the necessary quorum when the Decision was adopted, it should just he of the minutes. As stated by the Court of established here for the sake of completeness that the First Instance, it does not follow from the provisions correctly cited hy the Commission preclude measures of inquiry being conducted hy the Court in appeal details given there that the three Commis- proceedings.

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2. The question of the substantive cor- 24. Furthermore, the Commission con- respondence between the versions of the tinues, the ground of appeal does not have Decision as notified and as adopted any legal foundation and is based on a misunderstanding of paragraph 135 of the judgment under appeal. The Court of First Instance did not state that the Commission can notify a text to the parties that does not Submissions of the parties correspond to the text adopted, but that considerations such as non-consecutive pagination or different typeface did not adversely affect the formal and intellectual elements of such documentation.

ENSIDĽSA v COMMISSION

notified, must therefore be dismissed as 30. The Commission considers this dual inadmissible. argument to be inadmissible because the appellant is objecting to a finding of fact or appraisal of evidence, both of which are matters which come within the sole pur­ view of the Court of First Instance.

3. The question of the proper adoption of the Decision by the Commission 31. Nor is the ground of appeal substanti­ ated. Paragraphs 145 and 146 of the judg­ ment under appeal should also be taken Submissions of the parties into account; the appellant has not ten­ dered any proof that there was a substan­ tive difference between the versions of the Decision.

28. In the third part of the first ground of appeal the appellant takes issue with para­ graphs 143 to 147 of the judgment under appeal relating to compliance with 32. The Commission indicates in relation Article 16(1) of the Rules of Procedure of to paragraph 147 of the judgment under the Commission of 17 February 1993 1 0 appeal that Article 16(1) of the Rules of then applicable. It argues that, in deeming Procedure of the Commission does not the procedure followed by the Commission provide for authentication of the Decision satisfactory, the Court of First Instance notified to the parties, but just authenti­ misconstrued the significance attributable cation of the version referred to in the to Article 16(1) of the Rules of Procedure minutes of the meeting. of the Commission according to which adopted Decisions are to be attached to the minutes of the meeting at which they are adopted.

Submissions of the parties

35. The appellant takes issue with para- 38. The appellant considers that the word- graph 332 et seq. of the judgment under ing of the Commission's Decision has been appeal in which the Court of First Instance altered in the judgment under appeal and considered the separateness under compe- its substance therefore changed as a result tition law of the information exchange of the Decision being ascribed an inference system within the Poutrelles Committee. that it did not contain. By proceeding in this manner the Court of First Instance failed in its duty to check the validity of a legal measure to which penalties were attached, contrary to its own ruling in the judgment on the flat-glass decision. 1 2 It 36. The appellant relies on the fact that, in should have annulled the fine that had been its reply to a written question put by the Court of First Instance, the Commission stated that the information exchange sys- 11 — Case C-7/95 P lohn Deere v Commission [1998] ECR tem the subject of the complaint against the I-3111. 12 — Case T-68/89 SIV and Others v Commission [1992] ECR undertakings did not constitute a separate II-1403, amongst other authorities.

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wrongly imposed for a separate infringe- 42. The fifth ground of appeal, alleging ment that, by the Commission's own that the Court of First Instance exceeded its admission, had not taken place. jurisdiction under Article 33(1) of the ECSC Treaty, must therefore be dismissed as being unfounded.

39. The Commission considers this ground of appeal to be inadmissible because it is made for the first time before the Court and differs from the grounds claimed at first C — The grounds of appeal alleging that instance. the assessment of the substantive legality of the Decision was defective in law

44. 'Normal competition' under the ECSC infringements in view of the more favour- Treaty, the appellant continues, does not able economy and the latitude afforded to correspond to that competition protected the undertakings for general discussions on under the EC Treaty; it is imperfect com- price forecasts with other undertakings and petition on an oligopolistic market. DG III.'

45. Article 60 of the ECSC Treaty intro- 48. The appellant also takes issue with duces an element of coordination between paragraph 40.4 et seq. of the judgment undertakings in giving rise to virtually under appeal. In paragraph 416 of the automatic adaptation to published prices. judgment under appeal the Court of First The Court of First Instance therefore erred Instance, after examining various items of in appraising the appellant's practices evidence, came to the conclusion that the under Article 65(1) of the ECSC Treaty officials at D G III '[could] not establish without taking Article 60 into consider- that... the information on prices was based ation. on agreements between the undertakings'.

54. According to the appellant's arguments in relation to the interpretation by the Court of First Instance of the terms 'agree- ments... and... concerted practices' and 'normal competition' contained in Article 65(1) of the ECSC Treaty, the 52. As regards the effect on competition, second ground of appeal consists of two the Commission considers that, as parts made up of the following complaints: Article 65 of the ECSC Treaty prohibits agreements and practices 'tending... to prevent, restrict or distort normal compe- tition...', the Court of First Instance cor- rectly found that it was not necessary to demonstrate that the cartel the subject of the complaint had had adverse effects on competition. — The Court of First Instance failed to take any, or any proper, account of the lawful disruptions which form part of 'normal competition'.

53. The ground of appeal is also inadmis- sible in any event in so far as it takes issue with the question of DG Ill's knowledge of — The Court of First Instance failed to conduct the subject of a later complaint. take cognisance of the fact that 'agree- This is, in fact, purely a criticism of the ments' and 'concerted practices' could appraisal of evidence and not an argument only be in breach of competition law for distortion of evidence. The appellant under the ECSC Treaty if market does not specify the alleged distortion of effects arc proven; however, it did not evidence although it is for the appellant to examine this point.

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57. In the second part of the second ground of appeal the appellant claims that 'agree- m e n t s ' a n d ' c o n c e r t e d p r a c t i c e s ' in 60. Since the arguments put forward essen- Article 65(1) of the ECSC Treaty — unlike tially correspond to those presented by the the parallel terms ('agreements' and 'con- appellant Thyssen Stahl AG in Case certed practices') in Article 85 of the EC C-194/99 P, I refer, in relation to the Treaty (now Article 81 EC) — still require grounds on which the second part of the the existence of evidence of adverse effects second ground of appeal should be dis- on the market even where the objective of the agreements and concerted practices the subject of complaint was to influence the 13 — Case 56/65 Société Technique Miniere v Maschinenbau Ulm [1966] ECR 235; Case C-49/92 P Commission v Anic market in an anti-competitive manner. Partecipazioni [1999] ECR I-4125.

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missed as unfounded, to paragraph 158 et paragraph 263 of the judgment under seq. of the Opinion that I am delivering appeal that the Commission's finding in today in the aforementioned case. Those paragraph 221 of the Decision, that the grounds apply mutatis mutandis. agreements and concerted practices were to be considered continuing collusion, could not be criticised.

61. The second ground of appeal, alleging a legally defective assessment of Article 65(1) of the ECSC Treaty with regard to the terms 'normal competition' and 'agree- 64. According to the case-law of the Court ments... and... concerted practices', must of First Instance, however, the Commission therefore be dismissed in its entirety as is obliged to prove the individual existence unfounded. and duration of every single infringement in its decisions. 14

67. It is apparent that, in its appeal against paragraph 259, the appellant fails to take cognisance of the fact that the paragraphs of the Decision referred to as grounds in paragraph 260 et seq. of the judgment under appeal come to the same conclusion. 3. The alleged defective grounds for the judgment under appeal in relation to the sharing of the French market (fourth ground of appeal)

68. It should not be inferred from the case-law of the Court of First Instance on Submissions of the parties which the appellant relies that there is a duty, in cases of continued anti-competitive practices, to always appraise a Commission Decision to establish whether it contains separate proof of the individual involve- 71. The appellant takes issue with para- ment of every single undertaking con- graph 296 et seq. of the judgment under cerned. 15 appeal.

72. The Court of First Instance did not 69. Snice, in this case, neither the judgment accept its statement that the quantity under appeal nor the appellant's pleadings exported in the fourth quarter of 1989 show what involvement, if any, the appel- had been anything other than exceptional lant was specifically denying, the accu- and had indeed been in line with its normal sation that the reasoning in the judgment exports; it assumed that this did not con- under appeal is defective in this respect stitute proof of non-participation in the cannot be levelled at the Court of First agreement, the objective of which had been Instance. to stabilise the participants' deliveries at their customary levels.

15 — In the Shell case criticism was levelled at the evidence actually taken by the Commission, which raised consider- able doubts about the participation of an undertaking in all of the infringements of competition law commited during a continuing course of conduct; in the Buchmann case the applicant had argued the Commission had immediately concluded from the proven participation in 73. The appellant considers that the judg- price-fixing agreements and arrangements on machine downtime that it had also participated in market-sharing ment under appeal failed to apply the (both judgments cited in footnote 14). principles established by the European I-11130

76. The Court of First Instance addressed 79. The sixth ground of appeal consists of this issue in paragraph 270 of the judgment two parts. In the first part the appellant under appeal and found that the alternative takes issue with the assumption by the

16 —Joined Cases 29/83 and 30/83 [1984] ECR 1679. 17 — Cited in footnote 16.

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Court of First Instance that the conversion 82. In view of the difference in the rate of of the fine in the Decision into ecus was exchange for the peseta and the ecu lawful. In the second part the appellant between the year 1990 and the day before takes issue with the fact that the Court of the Decision was adopted, in 1994, this First Instance calculated the fine on the practice led, the appellant claims, to basis of turnover in the final year of the Ensidesa being unjustifiably fined an extra infringements. ECU 800 000.

83. Relying on the judgment of the Court 1. The conversion of the fine into ecus at of Justice in the Lührs case, 18 according to the rate of exchange in the final year of the which the exchange rate which is the less infringements onerous for the taxpayer concerned should be applied, the appellant considers that the Court of First Instance has committed a violation of the principle of natural justice. Submissions of the parties

86. Application of the rate of exchange and not calling in question in the Commission's turnover for the final year in which the method of calculation based on the turn- infringement took place, the Commission over in the last full year of the infringe- continues, ensures uniform procedure for ment, infringed Regulation No 17 or gen- all the accused and is an option that best eral principles of law. reflects the profits made by the offenders. No other solution would enable the prac- tices the subject of complaint to be reason- ably avenged in relation to the period in which they took place and the con- sequences resulting from them. First, Regulation No 17 does not prohibit the use of the ecu in order to fix the fines. Next,... the Commission used one and the same method of calculating the fines imposed on undertakings for having par- Appraisal ticipated in the same infringement and that method enabled it to assess the size and economic power of each undertaking and the scope of the infringement committed, in light of the economic reality as it appeared at the time the infringement was com- mitted. 87. In paragraph 87 et seq. of its judgment in the Sarrio 19 case, concerning the prob- lem of conversion of a fine into ecus at the rate of exchange in the final year of the infringements (although based on infringe- ments of competition rules within the scope of the EC Treaty, that is to say in relation Lastly, as regards, in particular, monetary to Council Regulation No 17 of 6 February fluctuations, they are an element of chance 1962 20) the Court ruled: which may produce advantages and dis- advantages which the undertakings have to deal with regularly in the course of their business activities and whose very existence is not such as to render inappropriate the amount of a fine lawfully fixed by reference to the gravity of the infringement and the 'In the present case, the appellant has not turnover achieved during the last year of shown how the Court of First Instance, in the period over which it was committed. In any event, the maximum amount of the fine, determined by virtue of Article 15(2) 19 — Case C-291/98 P Samti v Commission |2000] ECU I-9991. of Regulation No 17 by reference to turn- The judgment relates to the Commission Decision of 13 July 1994 relating to a proceeding under Article 85 or over in the business year preceding the the EC Treaty (1V/C/33.833 — Cartonboard) (OJ 1994 adoption of the Decision, limits the pos- L 243, p. 1). 20 — First Regulation implementing Articles 85 and 86 of the sible harmful consequences of monetary Treaty (OJ, English Special Edition 1959-1962, p. 87). fluctuations.'

92. The appellant again relies in its reason- ing on the judgment in the Liihrs case, 22 which ruled that in the event of uncertainty the basis of calculation more favourable to 90. The first part of the sixth ground of the taxpayer concerned should be selected, appeal, taking issue with the alleged defec- which in the appellant's case would have tive assessment in law of the imposition of signified an obligation to base the calcu- the fine in ecus, must therefore be dismissed lation of the fine on the last turnover figure as unfounded. available before adoption of the Decision.

21 — Cited in footnote 18, paragraph 13. 22 — Cited in footnote 18.

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93. Nor would the judgment of the Court time of the infringement, it should be in the Sarrio 23 case be inconsistent with pointed out, first, that the ceiling set by that principle as the problem of legal Article 15(2) of Regulation No 17 in uncertainty was not dealt with there in respect of fines amounting to more than that way. one million units of account and which corresponds to "10% of the turnover in the preceding business year" relates... to the business year preceding the date of the decision. It is, moreover, logical to refer to that business year when determining the 94. The Commission has combined its maximum amount of the fine which can be comments on both parts of this ground of imposed on an undertaking that has appeal. I therefore refer to paragraph 84 et infringed the competition rules. seq. of this Opinion.

Appraisal

97. N o r is this inconsistent with the aspect permits of an interpretation whereby what of legal uncertainty claimed by the appel- is meant here is the business year preceding lant in connection with the principle of the adoption of the Decision. However, this equal treatment. is to be distinguished from the turnover on which the original amount of the fine is calculated. For the reasons of comparabil- ity given by the Court in the Sarrio case, that must be calculated on the turnover in the final year of the period of infringement. 98. The judgment in the Lührs 25 case cited by the appellant cannot also be taken as grounds for this case because that was not a case concerning the calculation of a fine for breach of the prohibition on cartels within the Communities but a case that related to the calculation of a tax on exports, which 100. All in all, therefore, it cannot be covers a different area of interest. In the assumed that, when determining the year Lührs judgment the Court referred to legal of reference for the turnover that is to form uncertainty from the tax legitimacy aspect. the basis of calculation of a fine, the In instances of infringements of the law on Commission is always obliged to select cartels within the Communities it is neces- the year of reference that, in terms of the sary — as the Court ruled in the Sarrio size of the fine, favours the individual case — a n d p a r t i c u l a r l y in o r d e r to undertakings involved in an infringement achieve comparability, to take as the year of competition. of reference for the purposes of calculating the fine the last year of the period of infringement.

— order the appellant to bear the costs of the proceedings.

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