C-250/99

LIMBURGSE VINYL MAATSCHAPPIJ AND OTHERS v COMMISSION

OPINION OF ADVOCATE GENERAL MISCHO delivered on 25 October 2001 1

I — Introduction objections as provided for in Article 2(1) of Commission Regulation No 99/63/EEC of 25 July 1963 on the hearings provided for in Article 19(1) and (2) of Regulation No 17. 3All the undertakings concerned submitted observations in June 1988. Except for Shell International Chemical A — Background to the dispute Company Ltd, which had not requested a hearing, they were heard in September 1988.

1. Following investigations conducted in the polypropylene sector on 13 and 14 Oc- tober 1983 pursuant to Article 14 of Council Regulation No 17 of 6 February 1962, first regulation implementing 3. On 1 December 1988 the Advisory Articles 85 and 86 of the Treaty, 2the Committee on Restrictive Practices and Commission of the European Communities Dominant Positions (hereinafter 'the Advis- commenced an inquiry on polyvinyl- ory Committee') delivered an opinion on chloride (hereinafter 'PVC'). It sub- the Commission's draft decision. sequently undertook various investigations at the premises of the undertakings con- cerned and sent them requests for infor- mation.

4. At the end of the proceeding, the Com- mission adopted Decision 89/190/EEC of 21 December 1988 relating to a proceeding 2. On 24 March 1988 it instituted on its pursuant to Article 85 of the EEC Treaty own initiative a proceeding under (IV/31.865, PVC) 4(hereinafter 'the PVC I Article 3(1) of Regulation No 17 against decision'). By that decision, the Commis- 14 PVC producers. On 5 April 1988 it sent sion penalised the following PVC producers each of those undertakings a statement of for infringement of Article 85(1) of the

'Article 1 8. By judgment of 27 February 1992 in BASF and Others v Commission, 6 the Court of First Instance declared the PVC I decision non-existent. BASF AG, DSM NV, Elf Atochem SA, Enichem SpA, Hoechst AG, Hüls AG, Imperial Chemical Industries plc, Lim- 5 — Case T-106/89, not published in the European Court burgse Vinyl Maatschappij NV, Mon- Reports. 6 — Joined Cases T-79/89, T-84/89, T-85/89, T-86/89, T-89/89, T-91/89, T-92/89, T-94/89, T-96/89, T-98/89, T-102/89 and T-104/89 BASF and Others v Commission [1992] 7 — Case C-137/92 P Commission v BASF and Others (1994) ECR II-315. ECR 1-2555.

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(iv) Enichem SpA: a fine of ECU (xi) Shell International Chemical Company 2 500 000; Ltd: a fine of ECU 850 000;

(v) Hoechst AG: a fine of ECU 1 500 000; (xii) Wacker-Chemie GmbH: a fine of ECU 1 500 000.'

(vi) Hüls AG: a fine of ECU 2 200 000;

B — Procedure before the Court of First Instance

damages on account of costs incurred in — dismissed the remainder of the action; putting together a guarantee and any other expenses arising from the PVC II decision.

— ruled on the costs.

C — The judgment of the Court of First Instance

14. By judgment of 20 April 1999 in Lim- D — Procedure before the Court of justice burgse Vinyl Maatschappij and Others v Commission 8 (hereinafter 'the contested judgment'), the Court of First Instance:

15. By application lodged at the Court Registry on 3 July 1999, Degussa AG, formerly Degussa-Hüls AG (hereinafter — joined the cases for the purposes of the 'Degussa'), brought an appeal pursuant to judgment; Article 49 of the EC Statute of the Court of Justice.

— annulled Article 1 of the PVC II decision in so far as it found that Société Artésienne de Vinyle SA had 16. It claimed that the Court should: participated in the infringement com- plained of after the first half of 1981;

— order the Commission to pay the costs tude was infringed as a result of the overall of the proceedings at first instance and duration of the administrative and judicial on appeal. proceedings. It points out that, according to the case-law of the European Court of Human Rights relating to Article 6(1) of the European Convention for the Protec- tion of Human Rights and Fundamental Freedoms of 4 November 1950, the reason- 17. The Commission contends that the ableness of the duration of proceedings Court should: must be assessed according to the whole of the proceedings, administrative and judi- cial, and not only according to its different stages (see the judgment of the European Court of Human Rights in König [1978], Series A No 27, paragraph 98 et seq.). In — dismiss the appeal; the appellant's submission, this case-law is applicable in connection with the general principle of Community law of reasonable promptitude in proceedings.

— order the appellant to pay the costs.

20. The appellant points out that, in this case, the Commission began its investi- gations in October 1983, but that the I I — Assessment contested judgment was not delivered until April 1999. It adds that, in view of the likely duration of the appeal, a period of about 20 years will probably have elapsed before the proceedings finally end, thereby 18. The appellant puts forward four pleas, exceeding the absolute limit of a bearable which should be examined in turn. delay in proceedings, owing to the delay of the Commission and the Community judi- cature. The proceedings have already lasted markedly longer than the 11 years con- sidered by the European Court of Human Rights in its judgment in Garyfallou AEBE v Greece [1997], (Report of Judgments and Decisions, 1997-V, p. 1821, paragraph 40. Infringement of the principle that decisions must be adopted within a reasonable time

23. Such an approach would give rise to a series of paradoxical consequences. 27. Furthermore, judicial protection would then become, for undertakings, a kind of gamble which they would win in almost every possible situation. Indeed, by bring- ing an action for annulment against the Commission's decision, they would unleash a process in which only a judgment of the Court of Justice rejecting all their pleas 24. Thus, in a complex case in which, by could prevent them from prevailing by definition, the Commission needs consider- alleging an infringement of the principle able time to establish the matters of law of reasonable promptitude, assuming, of and of fact necessary to provide grounds course, that the judgment was delivered for its decision, the Community judicature sufficiently promptly. would have only a negligible length of time in which to assess the same complex case; otherwise the aggregate period would be too long!

28. In all other situations — annulment of the decision, whether or not followed by 25. There is reason to doubt whether such the adoption of a fresh decision, or even a view is conducive to greater protection annulment of the judgment at first instance for the rights of undertakings. with reference back to the Court of First Instance — the undertakings concerned would merely need to continue, for as long as necessary, to bring actions while keeping an eye, if I may say so, on the calendar so as to be able, when the time came, to bring an end to the proceedings by playing the 26. As the Commission points out, this trump card of the reasonable time require- argument is also inconsistent with the ment.

35. The European Court of Human Rights therefore, in essence, considered the whole of the period following the adoption of the contested measure. It in no way follows 32. The fact that, both before the Com- that periods prior to that adoption should mission and before the Court of First be added to it.

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36. As for the judgment in Garyfallou that undertakings have a specific interest in AEBE v Greece, cited above, it should be that second stage of the procedure being noted that it did not concern the aggre- conducted with particular diligence by the gation of an administrative proceeding and Commission, it limited the scope of the a legal proceeding, but of proceedings general principle of reasonable prompti- brought before various courts. tude to that stage. On the other hand, it had applied to the first stage a very wide criterion which led it to accept that its duration of 52 months was reasonable. Consequently, it infringed the legitimate interest of the undertakings concerned in learning as quickly as possible, at the end of the investigations, whether and to what 37. It is apparent from the above that the extent it was actually alleged that they had applicant is wrong to criticise the Court of infringed competition law, in order to be First Instance for not making such an able to take steps to defend themselves. aggregation.

38. Degussa claims, secondly, that the principle of reasonable promptitude was 40. Like the Court of First Instance, I infringed by reason of the sheer duration of consider that, in order to determine the the administrative proceedings. time to be taken into consideration, a distinction must be drawn between the inquiry stage, in the strict sense, and the adversarial stage of the proceedings.

46. It will be seen in that respect that, at this stage in the proceedings, Regulation No 17 imposes on undertakings the obli- gation to cooperate with the Commission. 43. Indeed, the very nature of those meas- The Community legislature therefore also ures and their place in the chronology of considered that, at this stage, the under- the taking of the decision show that, at the taking is not in the position of an accused. time they are adopted, the Commission is not yet in a position to formulate com- plaints against anybody, but is still seeking facts which will result in the possible adoption of a statement of objections, which will not necessarily be addressed to the undertakings which have been the subject of measures of inquiry. 47. It should also be noted that the appli- cation of the principle of reasonable promptitude to this stage of the proceed- ings would have the adverse effect of encouraging undertakings to be as dilatory as possible in fulfilling that obligation because they would know that every delay- ing tactic on their part would increase their chances of obtaining the annulment of a possible decision for failure by the Com- 44. In other words, the mere fact that an mission to observe that principle. undertaking is the subject of measures of inquiry adopted by the Commission does not mean that it is an accused. Indeed, the very fact that such measures are taken indicates that the Commission is seeking evidence which will enable it to decide whether there are grounds for bringing proceedings against an undertaking and, if 48. As for the Commission, it might be so, the identity of that undertaking. It is required to inquire into cases within time- therefore not possible, by definition, to limits which would not allow it properly to accuse anybody. substantiate its final decision.

51. Thirdly, Degussa considers that the Court of First Instance erred in law when 53. In any event, it is clear from the assessing whether the length of the first arguments stated above that the principle stage was reasonable, in paragraphs 127 to of reasonable promptitude does not apply 129 of the contested judgment, by referring before a formal accusation is made, that is to the volume of the file and the complexity to say, in the first stage of the adminis- of the facts to be elucidated by the Com- trative procedure. mission owing to the type of conduct in question and its range across the geographi- cal market concerned, covering the whole area of activity in the common market of the principal PVC producers. In the appel- lant's submission, those circumstances did not justify the length of the procedure, 54. Fourthly, Degussa claims that the being not at all unusual in proceedings Court of First Instance made a further under Article 85 of the Treaty. In other error of law when assessing whether the comparable cases, relating to the girder and length of the second stage was reasonable

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by holding, in paragraph 133 of the possible merely to add together the dur- contested judgment, that it had lasted only ation of the administrative proceedings and 10 months when, in fact, it had lasted the duration of the legal proceedings. almost six years and four months.

61. It points out that, after the applications 57. It should be pointed out, first of all, had been lodged, the Court decided, in that, as we have seen above, it is not April 1995, to suspend the written pro-

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cedure and to limit the oral procedure to an ity of the case and to the constraints examination of the procedural pleas and inherent in proceedings before the Com- that, by order of 14 July 1995, it then munity judicature, associated in particular ordered the resumption of the written with the use of languages. procedure, which ended on 20 February 1996. The appellant adds that a new oral procedure was held from 9 to 12 February 1998 and that the contested judgment was finally delivered on 20 April 1999. It submits that there was no justification at all for dividing the legal proceedings into two separate stages, each comprising a 65. In addition, the Court identified two written procedure and an oral procedure. specific periods, of 32 months and 22 months, which it considered significant from the point of view of the principle of reasonable promptitude, on account of their unjustified length.

62. What should be made of this line of argument?

71. As regards the administrative pro- 68. Therefore, this argument put forward cedure, an excessive duration would inevi- by the appellant is also unfounded. tably infringe the right of the undertakings concerned to a fair hearing, because their opportunity to gather all the evidence of use for their defence would be hindered. Moreover, that infringement could not be regularised during the proceedings before the Court of First Instance (Solvay v Com- 69. Finally, Degussa criticises the Court of mission). 10 First Instance for holding, in paragraph 122 of the contested judgment, that infringe- ment of the general principle of reasonable promptitude does not on its own affect the validity of the decision and that annulment is justified only in so far as an excessive delay in the proceedings has also infringed 72. In the alternative, Degussa requests a the rights of the defence. reduction of the fine imposed, pursuant to the judgment in Baustahlgewebe v Com- mission. n

75. It is not disputed that the rationale of the principle of reasonable promptitude is to protect operators who are the subject of 79. In such circumstances, compensation infringement proceedings under Regulation may reconcile the rights of the undertakings No 17. Therefore, application of that prin- and the general interest which would be ciple must give rise to consequences con- jeopardised if the infringement committed cerning the degree to which the said oper- were not penalised. ators have been affected by the excessive length of the proceedings.

80. On the other hand, if it is established 76. It follows that if that did not affect the that the rights of the defence have been undertakings' exercise of their rights of infringed, it is undeniable that the decision defence and did not, therefore, have an must be annulled in its entirety. influence on the outcome of the proceed- ings, the application of the principle must result in lesser consequences than in the converse situation.

81. However, the appellant seeks to show that the excessive duration of proceedings affects per se the opportunity for the undertakings to defend themselves because, 77. In particular, I cannot see why a as time goes by, it is more and more Commission decision, the content of which difficult for them to adduce the necessary would have been the same even if its evidence. adoption procedure had not been excess- ively long, should be annulled even so.

82. It may be wondered whether the Com- 78. That would be not only to display an mission did not come up against the same excessive regard for formalities, but such a problem.

86. It follows from the above that the plea alleging infringement of the principle of reasonable promptitude is unfounded in all respects and should therefore be rejected. 84. The decision reached by the Court of First Instance in respect of the effect of the duration of the proceedings on the validity of the Commission's decision is, moreover, in accordance mutatis mutandis with that of the Court of Justice in respect of the setting-aside of a judgment of the Court of Lack of a proper preparatory adminis- First Instance. In fact, it unquestionably trative procedure held, in paragraph 49 of the judgment in Baustahlgewebe v Commission, that, 'in the absence of any indication that the length of the proceedings affected their 87. The appellant maintains that the Court outcome in any way' there is no need to of First Instance erred in law by not annul the contested judgment. establishing that there had been an infringe- ment of procedural rights and rights of the defence owing to the lack of a proper preparatory procedure. It divides its plea into two limbs.

85. That approach, moreover, is only the The first limb, alleging invalidity of the application to the present case of the measures taken preparatory to the PVC I general principle that a defect leads to decision nullity only if it is sufficiently serious. That is apparent from settled case-law 12 relating to annulment for infringement of an essen- tial procedural requirement and also 88. Degussa criticises the Court of First Instance for having concluded, in 12 — Case 30/78 Distillers v Commission [1980] ECR 2229, paragraph 26; Joined Cases 209/78 to 215/78 and 218/78 paragraphs 189 and 193 of the contested Van Landewyck and Others v Commission [1980] ECR 3125; and Case 259/85 France v Commission [1987] judgment, that the validity of the prepara- ECR 4393. tory measures taken prior to the adoption

92. That statement, which, moreover, only reflects the application to this case of the general principle of res judicata, is con- 89. According to Degussa, in the light of firmed by the case-law cited by the Court of the judgment in Spain v Commission, only First Instance and the case-law cited by the preparatory measures which are valid in appellant itself. accordance with the grounds of the judg- ment in Commission v BASF and Others or which have not been called into question may be retained. Since the Court of Justice did not examine the pleas going beyond those alleging an infringement of essential 93. The Court of First Instance was there- procedural requirements, it had not fore right to hold that it was necessary to expressly annulled the procedural measures determine, in the light of the operative part taken preparatory to the adoption of the and of the grounds of the judgment of the PVC I decision, but nor had it held that Court of Justice in respect of the PVC I they were valid. Only in the latter case decision, the effect of the annulment of that could it have been accepted that the decision on the preparatory acts. preparatory measures retained their valid- ity.

94. That annulment arose from the mere fact that the Commission had infringed the 90. Degussa considers, furthermore, that procedural rules governing only the the Court of First Instance was wrong to

14 —Joined Cases T-10/92, T-11/92 T-12/92 and T-15/92 13 — Case C-415/96 Spam v Commiission [1998]ECR I-6993, Cimenteries CBR and Others v Commission [1992) paragraph 31. ECR II-2667, paragraph 47.

99. Moreover, having regard to the prin- ciple of economy of pleas, the Court had no need to examine the other pleas, since it had already declared the nullity of the contested decision on the basis of one of 96. However, the appellant reaches a con- them. clusion which is diametrically opposed. It considers that, since the Court of Justice did not expressly confirm the validity of the preparatory measures, although their valid- ity was contested, it could be inferred that they were invalidated by the Court's judg- 100. The appellant's argument is also ment. incompatible with the presumption of validity attaching to the acts of the institu- tions. According to that, such a measure must be regarded as valid until its invalidity is expressly established by the Court of Justice, which is the exact opposite of the argument expounded by the appellant. 97. This reasoning is based on a misinter- pretation of the case-law of the Court of Justice.15 As the Commission points out,

15 — See Joined Cases 97/86, 193/86, 99/86 and 215/86 Asteris 101. The appellant relies, in particular, on and Others and Greece v Commission [1988] ECR 2181, paragraphs 26 and 27. the judgment of the Court of First Instance

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in Cimenteries CBR and Others v Com- paratory to the PVC I decision were not mission, in which the Court held that, as a sufficient to allow the Commission to consequence of the annulment of the Com- adopt the PVC II decision. In the appel- mission's decision, the whole procedure lant's submission, the Commission should was unlawful. have opened an additional procedure including a hearing of the appellant, and the intervention of the Advisory Committee and of the Hearing Officer.

104. Degussa argues that, irrespective of 108. It must be stated that no such obli- their validity, the measures adopted pre- gation arises under Regulation No 17 or

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Regulation No 99/63. In fact, the clear 112. However, Degussa claims, secondly, inference of those provisions is that the that, even if the PVC II decision does not Commission must give the undertakings contain, in the strict sense of the term, any mentioned in the statement of objections new objections, it is set against a factual the opportunity of being heard on the and legal background which is sufficiently matters to which the Commission has taken different from that of the adoption of the objection. PVC I decision to render it necessary to regard these altered circumstances as new objections.

109. It is also provided that the Commis- sion is to deal, in its decisions, only with those objections in respect of which the 113. In that regard, it stresses the develop- undertakings have been afforded the ment of the case-law, the legal con- opportunity of stating their views. sequences of the lapse of time and the changes which have affected the factual situation and, accordingly, the level of the fines.

110. It follows that, if the Commission's decision does not contain new objections in relation to those which formed the subject- matter of the hearing of the undertakings, the regulations do not require another 114. It has been stated above that the hearing to be held. relevant regulations require only that undertakings be given the opportunity to express their views regarding the objections made against them. They do not, on the other hand, imply that they should be heard regarding every new circumstance.

118. The fact that there have been factual 122. According to the appellant, the 1988 and legal developments since 1988 has no consultation could not in any sense replace relevance to the requirements of the regu- a new hearing before the adoption of the lations, which were satisfied by the hearing 1994 decision, owing to the complete concerning the objections contained in the change in the factual and legal circum- contested decision. stances between those two dates. The Advisory Committee should have been consulted, in particular, on the very prin- ciple of adopting the PVC II decision without a preliminary procedure, following the annulment of the PVC I decision, since such a situation was without precedent. 119. The possibility that, as a consequence of the lapse of time, there may have been developments in the case-law does not affect the above conclusions. Indeed, such developments may occur at any time in the 123. This argument, like the argument proceedings, and the Commission cannot concerning the hearing of undertakings, is be required to arrange a new hearing on not convincing.

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124. Let us remember that measures taken connection, namely the principle itself of preparatory to the PVC I decision were not adopting a new decision in such circum- affected by the annulment of the decision. stances, is not as unprecedented as it Therefore, the Advisory Committee was suggests since the Commission had already properly consulted before the adoption of stated, in the Fourth Report on Compe- the PVC II decision. Was it necessary to tition Policy,16 that Article 3 of the regu- consult it for a second time? lation concerning limitation periods 17 should allow it to adopt a new decision imposing a fine in the event of annulment of such a decision on the ground of procedural defect.

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new hearing of the undertakings concerned, 134. The appellant maintains that that it could not be in breach of its decision of conclusion is incorrect, because it is based 23 November 1990 on the hearings in on an assessment criterion which is itself proceedings relating to Articles 85 and 86 incorrect, the Court's disputed method of the EEC Treaty and Articles 65 and 66 consisting — according to paragraph 1039 of the ECSC Treaty'. of the contested judgment — in examining whether documents not disclosed to the applicants at the time of the administrative procedure might, had they been communi- cated, have affected the Commission's con- clusions. It considers that the Court is not able to make such an assessment. 132. The appellant's argument is therefore unfounded.

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Instance examined the effect of the undis- 141. As regards whether, by so doing, the closed documents but also the principle Court of First Instance followed an incor- behind that examination. rect assessment criterion, the following should be pointed out.

138. On that point, it should be noted that the case-law of the Court of Justice 18 indisputably shows that, if the undertaking 142. We have seen that the appellant refers fails to establish that the documents in to paragraph 1039 of the contested judg- question contained evidence of use for its ment, in which the Court states that the defence and, consequently, that the fact purpose of the measure of organisation of that it was unable to take cognisance of procedure decided upon by the Court was their content before the decision was 'to examine whether documents not dis- adopted infringed its defence rights, there closed to the applicants at the time of the is no need to annul the Commission's administrative procedure might, had they decision. been communicated, have affected the Commission's conclusions'.

139. The Court of First Instance, which, furthermore, cited its own case-law 19 in 143. However, it must be pointed out that, support of its finding, was therefore right to to analyse the documents, it also used the hold that a mere irregularity in the access to terms 'affected the applicants' defence' the file did not justify the annulment of the (paragraph 1035 of the contested judg- decision, and that annulment was necessary ment), 'in what way their defence rights only if it was established that non-disclos- have been affected' (paragraph 1036), 'af- ure could have had a negative effect on the fected the undertakings' defence' (para- appellant's defence rights. graph 1041), and 'contain anything rel- evant to the applicants' defence' (paragraph 1073).

expression 'course of the procedure' itself 149. The appellant argues that the undis- refers, implicitly, to the undertakings' closed documents mentioning the existence opportunities to defend themselves during of 'keen competition' between PVC pro- the procedure. ducers could have been used by the under- takings to show, at least, the failure to implement the prohibited agreement, a consideration which the Commission would be likely to take into account when 145. Furthermore, reading the expla- fixing the amount of the fine. The non- nations given by the Court in respect of disclosure of those documents had there- that examination unquestionably shows fore affected the undertakings' ability to that it examined whether the documents defend themselves, even though it was not in question would have been of any use at established that the content of the decision all to the appellant. It did not therefore would have been different if the document confine its appraisal to whether the failure had been communicated to the appellant at to disclose the disputed documents had had the appropriate time. an impact on the content of the final decision.

153. The fact remains, however, that, in this case, the Court did not merely consider whether the Commission's decision would Infringement of Article 190 of the EC have had a different content if the docu- Treaty (now Article 253 EC) ments had been disclosed. It expressly stated, in paragraph 1063 of the contested judgment, that the undertakings had been able to argue the circumstances mentioned in those documents, and that they had 157. Degussa criticises the Court of First indeed done so. Instance for having rejected its plea alleging that the Commission had not provided details of the method used to calculate the fine. The Court had thus failed to comply with the obligation to state reasons and had infringed Article 190 of the Treaty.

154. The Court mentions, in that regard, that the undertakings had a plentiful docu- mentary basis on which to do so, after the documents were sent by the Commission to 158. In the appellant's submission, that the parties in May 1988. It is therefore provision requires that the reasons for a pointless for the appellant to claim that the decision should be stated therein. The fact that the undertakings did not have all Court therefore wrongly held that particu- the documents referring to competition lars of the calculation of the fine do not between the producers prevented them form part of the statement of reasons which from making a sound decision as to which must be provided in the decision and that it documents would be of use for their is sufficient if they are communicated defence. during the court proceedings.

162. Since the similarity between the two decisions in that respect is not disputed, the Court's finding that, in the circumstances, 166. Consequently, this plea should also be the PVC II decision was sufficiently rea- rejected. soned cannot be disputed.

21—Case C-279/98 P Cascades v Commission [2000] 20 — See, for example. Case C-278/95 P Siemens v Commission ECR 1-9693, paragraph 43. [1997] ECR 1-2507, paragraph 17. 22 — Paragraphs 1175to 1178 of the contested judgment.

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III— Conclusion

167. In the light of the foregoing considerations, I propose that the Court should: