FLSmidth v Commission (Judgment of the Court) [2014] EUECJ C-238/12 (30 April 2014)

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(Appeal — Competition — Agreements, decisions and concerted practices — Plastic industrial bags sector — Decision finding an infringement of Article 81 EC — Unlimited jurisdiction of the General Court — Duty to state reasons — Attribution to the parent company of the infringement committed by the subsidiary — Liability of the parent company for payment of the fine imposed on the subsidiary — Proportionality — Proceedings before the General Court — Adjudication within a reasonable time)

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 16 May 2012,

FLSmidth & Co. A/S, established in Valby (Denmark), represented by M. Dittmer, advokat,

European Commission, represented by F. Castillo de la Torre and V. Bottka, acting as Agents, and M. Gray, Barrister, with an address for service in Luxembourg,

composed of A. Tizzano, President of the Chamber, A. Borg Barthet, E. Levits, M. Berger (Rapporteur) and S. Rodin, Judges,

having regard to the written procedure and further to the hearing on 16 January 2014,

1 By its appeal, FLSmidth & Co. A/S (‘FLSmidth’) asks the Court to set aside the judgment of the General Court of the European Union in Case T‑65/06 FLSmidth v Commission EU:T:2012:103 (‘the judgment under appeal’) by which the General Court dismissed in part its action for annulment of Commission Decision C(2005) 4634 final of 30 November 2005 relating to a proceeding pursuant to Article 81 [EC] (Case COMP/F/38.354 — Industrial bags) (‘the decision at issue’) or, in the alternative, for annulment or reduction of the fine which was imposed upon it.

2 FLSmidth is the parent company of a group of companies operating in the engineering, mining and construction sectors. One of those companies is FLS Plast A/S (‘FLS Plast’), which is itself the former parent company of Trioplast Wittenheim SA (formerly Silvallac SA; ‘Trioplast Wittenheim’), a producer of plastic industrial bags, films and hoods in Wittenheim (France).

3 In December 1990, FLS Plast acquired 60% of the share capital in Trioplast Wittenheim. The remaining 40% was acquired by FLS Plast in December 1991. The seller was the French company Cellulose de Pin, a member of the group owned by Compagnie de Saint-Gobain SA.

4 In turn, FLS Plast sold Trioplast Wittenheim, in 1999, to Trioplanex France SA, a French subsidiary of Trioplast Industrier AB (‘Trioplast Industrier’), the parent company of the Trioplast group. That transfer took effect on 1 January 1999.

5 In November 2001, British Polythene Industries informed the Commission of the European Communities of the existence of a cartel, allegedly involving FLS Plast, in the plastic industrial bags sector.

6 After carrying out investigations in 2002 at the premises of, inter alia, Trioplast Wittenheim, in 2002 and 2003 the Commission sent requests for information to the undertakings concerned, one of which was Trioplast Wittenheim. By a letter of 19 December 2002, supplemented by a letter of 16 January 2003, Trioplast Wittenheim indicated that it wished to cooperate with the Commission’s investigation, under the Commission notice on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4; ‘the Leniency Notice’).

7 On 30 November 2005, the Commission adopted the decision at issue, Article 1(1)(h) of which stated that, from 31 December 1990 to 19 January 1999, FLSmidth and FLS Plast had infringed Article 81 EC by participating in a complex of agreements and concerted practices in the plastic industrial bags sector in Belgium, Germany, Spain, France, Luxembourg and the Netherlands, consisting in the fixing of prices and the establishment of common price calculation models, the sharing of markets and the allocation of sales quotas, the assignment of customers, deals and orders, concerted bidding in response to certain invitations to tender, and the exchange of individualised information.

8 In point (f) of the first paragraph of Article 2 of the decision at issue, the Commission imposed on Trioplast Wittenheim a fine of EUR 17.85 million, taking account of a reduction of 30% granted pursuant to the Leniency Notice. Of that amount, FLSmidth and FLS Plast were held jointly and severally liable for the sum of EUR 15.30 million and Trioplast Industrier was held jointly and severally liable for the sum of EUR 7.73 million.

9 By application lodged at the Registry of the Court of First Instance (now ‘the General Court’) on 24 February 2006, FLSmidth brought an action challenging the decision at issue. The action sought the annulment of that decision in so far as it concerned FLSmidth or, in the alternative, a reduction of the amount of the fine for which it was held jointly and severally liable.

10 FLSmidth relied upon two pleas in law in support of its action. The first, and main, plea alleged infringement of Article 23(2) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [81 EC] and [82 EC] (OJ 2003 L 1, p. 1) as a result of liability for the infringement committed by Trioplast Wittenheim being attributed to FLSmidth. The second plea was advanced in support of the claim put forward by FLSmidth in the alternative. FLSmidth submitted that the Commission had erred in law by rendering it liable for the fine imposed of an amount that was excessive, disproportionate, arbitrary and discriminatory.

11 By the judgment under appeal, the General Court annulled the decision at issue in so far as it held FLSmidth liable for the infringement during the period from 31 December 1990 to 31 December 1991. Consequently, it reduced the amount for payment of which FLSmidth had been held jointly and severally liable under Article 2(f) of the decision at issue to EUR 14.45 million. It dismissed the action as to the remainder.

– annul the decision at issue in so far as it concerns FLSmidth or, in the alternative, reduce the amount for which it is held liable in the decision;

– in the alternative, dismiss the action for annulment of the decision at issue;

14 In support of the form of order sought by it, FLSmidth raises six pleas in law, the third to sixth of which are raised in support of the claim put forward in the alternative.

15 FLSmidth requests the Court to adjudicate itself, after annulment of the judgment under appeal, on the pleas put forward against the decision at issue.

The first plea, alleging that the General Court applied the wrong legal test relating to liability of a parent company and did not draw the correct legal conclusions from the evidence submitted

16 In FLSmidth’s submission, the General Court erred in accepting, in paragraphs 20 to 40 of the judgment under appeal, the legal test applied by the Commission and concluding that FLSmidth had not rebutted the presumption of liability for the infringement at issue which resulted from the 100% stake that it held indirectly in Trioplast Wittenheim.

17 FLSmidth contends, in this regard, that the presumption of liability applied by the General Court is contrary to the rule of presumption of innocence. The General Court’s application of that presumption of liability renders it essentially irrebuttable. The judgment under appeal thus infringes Article 6(2) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), and Article 48(1) of the Charter of Fundamental Rights of the European Union (‘the Charter’). In any event, FLSmidth in fact adduced evidence capable of rebutting the presumption.

18 The Commission objects that this plea is inadmissible, on the ground that it was not raised before the General Court. Furthermore, the plea is purely abstract in nature. FLSmidth does not identify the paragraphs of the judgment under appeal in which the General Court is alleged to have erred. In the alternative, the Commission contends that the presumption in question is compatible with the ECHR and the Charter. Moreover, the Commission adds that it was able to rely on other indicia in order to show that FLSmidth exercised decisive influence over Trioplast Wittenheim.

19 In its reply, FLSmidth submits that its plea is not new, but constitutes a development of its line of argument at first instance. It adds that it indicated precisely, in paragraphs 18 to 24 of the appeal, the element of the judgment under appeal that it criticises and the line of argument that it is advancing.

21 So far as concerns the admissibility of the first plea, it should be noted, first, that FLSmidth did not submit in its application at first instance that the Commission infringed Article 48 of the Charter and Article 6(2) of the ECHR in attributing to it liability for the infringement committed by Trioplast Wittenheim.

22 However, in paragraph 81 of that application FLSmidth did plead, in addition to a number of other arguments intended to demonstrate that the Commission should not have attributed liability for that infringement to it, that ‘[a]ny other conclusion would imply that a presumption of accountability deriving from a 100% shareholding in a sub-subsidiary would constitute a de facto irrebuttable presumption’. In so doing, FLSmidth contested, even if only very succinctly, the legality of the tests applied by the Commission in attributing liability to it for the infringement at issue. Accordingly, the explanation provided by FLSmidth in its appeal to the Court stating that those tests are unlawful, in particular in that they infringe Article 48 of the Charter and Article 6(2) of the ECHR, constitutes a development of its line of argument before the General Court, which is, therefore, admissible on appeal.

23 As regards, second, the assertion that the first plea is abstract and that FLSmidth does not indicate the paragraphs of the judgment under appeal that are vitiated by an error, suffice it to state that FLSmidth’s complaint against the General Court was made clear, with sufficient precision, in paragraphs 17 to 24 of the appeal and that, in paragraph 18 thereof, it expressly criticised paragraphs 20 to 40 of the judgment under appeal.

25 As regards, first of all, the alleged unlawfulness of the presumption, applied in European Union competition law, that a company holding directly or indirectly all or almost all of the capital of another company does in fact exercise decisive influence over the latter company, it should be pointed out that that presumption results from settled case-law (see, inter alia, Case C‑179/12 P Dow Chemical v Commission EU:C:2013:605, paragraph 56 and the case-law cited) and that it does not in any way infringe the rights conferred by Article 48 of the Charter and Article 6(2) of the ECHR.

26 Contrary to FLSmidth’s assertions, the General Court therefore did not err in law when, in paragraph 22 et seq. of the judgment under appeal, it recalled the principles resulting from the Court of Justice’s case law that relate to the circumstances in which a parent company of a group of companies, such as FLSmidth, may be held jointly and severally liable for anti-competitive actions attributed to a company belonging to the same group, namely, in this instance, Trioplast Wittenheim.

27 Thus, the General Court was also correct in considering, in paragraph 23 of the judgment under appeal, that, on the basis of that case-law, the Commission could presume that FLSmidth had exercised, even if only indirectly, decisive influence over the conduct of Trioplast Wittenheim between 31 December 1991 and 19 January 1999, given the 100% stake that FLSmidth had held in FLS Plast and the stake, also of 100%, that FLS Plast had held in Trioplast Wittenheim.

28 So far as concerns, next, the argument that the specific application of that presumption by the Commission, and confirmed by the General Court, rendered the presumption irrebuttable, it need merely be recalled that the fact that it is difficult to prove the opposite in order to rebut a presumption does not in itself mean that it is in fact irrebuttable (see, in particular, Case C‑508/11 P ENI v Commission EU:C:2013:289, paragraph 68 and the case-law cited).

29 Finally, so far as concerns the assertion that FLSmidth in fact adduced evidence capable of rebutting the presumption in question, the General Court held in this regard, in paragraph 31 of the judgment under appeal, that FLSmidth had advanced no specific argument serving to rebut that presumption. More specifically, in response to a submission by FLSmidth relating to the decentralised form of organisation of the group concerned, the General Court held that such a form of organisation does not necessarily preclude the parent company from exercising an influence on the commercial policy of its subsidiary, for example by keeping itself informed of the development of its subsidiary’s business by means of regular reporting.

30 Furthermore, with regard to the fact that Mr T., a member of FLSmidth’s board of directors, held concurrently, between 1994 and 1999, positions of responsibility on the boards of directors of the two companies concerned, the General Court held in paragraph 32 of the judgment under appeal, without committing an error, that that fact showed that management at those two companies overlapped and Trioplast Wittenheim was not able to act autonomously in relation to its parent company. In addition, as the General Court also pointed out, the position of member of the board of directors of a company entails, by its very nature, legal responsibility for the activities of the company as a whole, including its conduct on the market, and FLSmidth’s proposition — that the position is purely formal — would amount to negating its legal substance.

31 In those circumstances, it must therefore be found that, in submitting that it in fact adduced evidence capable of rebutting the presumption that it exercised decisive influence over Trioplast Wittenheim, FLSmidth is, in reality, simply asking the Court to conduct a fresh appraisal of the facts and the evidence provided, without asserting, however, that the General Court distorted them. Such an appraisal does not constitute a point of law which is subject, as such, to review by the Court of Justice (see, to that effect, inter alia, Case C‑551/03 P General Motors v Commission EU:C:2006:229, paragraphs 51 and 52, and Case C‑352/09 P ThyssenKrupp Nirosta v Commission EU:C:2011:191, paragraphs 179 and 180). This argument is therefore inadmissible.

32 In the light of all the foregoing considerations, the first plea must be dismissed as in part unfounded and in part inadmissible.

The second plea, alleging a failure to review the Commission’s duty to state reasons

33 FLSmidth submits that it relied before the General Court on a lack of reasoning in the decision at issue as regards the exercise by it of decisive influence over Trioplast Wittenheim and on the fact that the Commission had failed to address a number of arguments that were put forward in its reply to the statement of objections and in the application at first instance. It states that its line of argument was elaborated on further at the hearing.

34 More specifically, FLSmidth had contended, in particular, that it was a pure holding company and that it was not involved in the day-to-day operations of its sub-subsidiaries, that although Mr T. was formally a member of Trioplast Wittenheim’s board, he did not exercise influence over its market conduct and was unaware of its unlawful conduct, that the group concerned had applied a principle of decentralised management, that there had not been follow-up control by FLSmidth of operational issues but only of financial issues, that Trioplast Wittenheim was not to report to FLSmidth directly, that, Trioplast Wittenheim being of little interest to FLSmidth because it was not profitable, FLSmidth had plans to sell it from early on, and that Trioplast Wittenheim had carried out its unlawful activities before and after its acquisition by FLSmidth, a fact which showed that Trioplast Wittenheim had acted autonomously on the market.

35 However, in FLSmidth’s submission, although the Commission, in recitals 734 to 739 of the decision at issue, deals only with the position of Mr T. and although the issue was brought before the General Court, the judgment under appeal, in particular in paragraphs 31 and 32, contains no appraisal of the question whether the Commission complied with its duty to state reasons.

36 The Commission objects that this plea is inadmissible. FLSmidth did not argue in its application at first instance that the decision at issue lacked reasons. In so far as this plea seeks in reality to contest the General Court’s appraisal of certain facts, it is inadmissible on the ground that FLSmidth has not contended that the General Court distorted the clear sense of the evidence.

37 In the alternative, the Commission submits that it is clear from the judgment under appeal that the General Court examined the reasons set out in the decision at issue when explaining why FLSmidth exercised decisive influence over Trioplast Wittenheim, and that it follows that the General Court held that the reasons stated in the decision at issue were sufficient in this regard, even if the judgment did not say so expressly.

38 In its reply, FLSmidth contends that its plea constitutes a development of a line of argument relied upon at first instance, a contention which the Commission disputes in its rejoinder.

39 By this plea, FLSmidth complains that the General Court erred in law in not analysing the plea alleging that the reasons stated in the decision at issue were insufficient. In order to support its proposition that it had already raised such a plea before the General Court, FLSmidth refers in its appeal to paragraphs 93, 109, 121 and 122 of its application at first instance and asserts that in those paragraphs it pleaded a failure to state reasons in the decision at issue.

40 It need merely be stated, however, that in those paragraphs of the application at first instance FLSmidth confined itself to observing that the Commission had not stated the reasons for which, first, no liability had been attributed to certain other undertakings and, second, it had been found liable for the period from December 1990 to December 1991 and that the Commission also had not addressed the argument, put forward by FLSmidth, that it had had no knowledge of the infringements at issue. On the other hand, it did not submit either in those or in other paragraphs of its application at first instance that the decision at issue was, as a result, vitiated by a defective statement of reasons. On the contrary, the observations made by it sought to contest the assessment of the facts conducted by the Commission, which is indeed expressly made clear, in the case of paragraph 109 of that application, by the application’s very wording.

41 Furthermore, with regard to the line of argument that it ‘elaborated further on’ those arguments at the hearing before the General Court, FLSmidth does not assert that a new plea introduced at that stage would have been admissible despite the first subparagraph of Article 48(2) of the Rules of Procedure of the General Court, by virtue of which no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure. Nor does it assert that it invoked such matters at the hearing.

42 It follows that, by the present plea, FLSmidth puts forward a new argument, which consists in disputing the adequacy of the statement of reasons in the decision at issue, and of the grounds of the judgment under appeal, regarding attribution to FLSmidth of liability for the infringement committed by Trioplast Wittenheim. Therefore, that argument must be considered inadmissible, since in an appeal, the jurisdiction of the Court of Justice is in principle confined to a review of the findings of law on the pleas argued at first instance (see, inter alia, Dow Chemical v Commission EU:C:2013:605, paragraph 82 and the case-law cited).

43 In those circumstances, the second plea in the appeal must be dismissed as inadmissible.

The third plea, alleging breach of the principles of proportionality and legality

44 By its third plea, raised in support of the claim put forward by it in the alternative, FLSmidth submits that the General Court wrongly dismissed the arguments by which it had contested the proportionality and the legality of the amount of the fine imposed upon it. The application by the Commission of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty (OJ 1998 C 9, p. 3; ‘the Guidelines’), which provide for an increase in the amount of the fine of 10% for each year that Trioplast Wittenheim participated in the cartel at issue, resulted in an overall outcome that bore no reasonable relation to the period for which it held that company’s capital. The General Court in essence confined itself, in paragraphs 43 to 46 of the judgment under appeal, to reiterating the method of calculation adopted by the Commission and did not conduct an independent review.

45 The General Court held that the fine imposed was not disproportionate to that period as a result of an ‘individual approach’, but that approach was not applied consistently so far as concerns the starting amount. That amount, according to FLSmidth, should not have been set at the same level as that adopted for Trioplast Wittenheim. The method chosen by the Commission is arbitrary and cannot justify the fact that FLSmidth is liable for over 80% of the fine imposed on Trioplast Wittenheim, although it had constituted an economic entity with that company for only 35% of the infringement period. The result obtained is also excessive, disproportionate and discriminatory. Nor does the General Court state sufficient reasons in this regard in merely finding, in paragraph 45 of the judgment under appeal, that FLSmidth had advanced no argument challenging the method of calculation adopted by the Commission.

46 Furthermore, the General Court wrongly held in paragraph 55 of the judgment under appeal that, in particular, a lack of knowledge of Trioplast Wittenheim’s unlawful conduct cannot amount to a mitigating circumstance given that the basis for liability resided in the fact that FLSmidth and Trioplast Wittenheim formed one economic unit. This reasoning does not correspond to the allegedly individualised approach chosen by the Commission.

47 Moreover, in FLSmidth’s submission, the disproportionate nature of the liability attributed to it has been reinforced by the fact that the General Court reduced the liability of Trioplast Industrier, the only other parent company held liable for Trioplast Wittenheim’s conduct, by decreasing the fine imposed of EUR 7.73 million to EUR 2.73 million in its judgment in Case T‑40/06 Trioplast Industrier v Commission EU:T:2010:388. As Trioplast Wittenheim is in liquidation, the judgment has the effect of placing the actual burden of that reduction on FLSmidth, although it was not a party to the proceedings that gave rise to the judgment.

48 In the Commission’s submission, the argument alleging breach of the principle of legality is entirely unparticularised. Furthermore, that argument, which was not relied upon before the General Court, is inadmissible. Also, according to the Commission, FLSmidth’s arguments in this respect are directed at the decision at issue and have not been presented as directed against the judgment under appeal. They are therefore inadmissible.

49 The General Court’s review of the level of the fine imposed is only a ‘verification’. Furthermore, the General Court gave sufficient reasons, in paragraph 45 of the judgment under appeal, for accepting the method applied by the Commission for calculating that fine. Nor is there any legal principle that the final amount of the fine imposed on an addressee of a decision finding an infringement must be proportionate with the duration of that addressee’s liability for participation in the infringement.

50 In addition, the requirement to take account of possible mitigating circumstances concerns an undertaking taken as a whole, at the time when the infringement was committed, and not its constituent parts.

51 Also, in the Commission’s submission, the fact that the fine imposed on Trioplast Industrier was reduced in proceedings brought by it and to which FLSmidth was not a party can have no bearing on the present appeal.

52 In its reply, FLSmidth explains that its argument alleging breach of the principle of legality is not new. At first instance, it invoked the principle of ‘non-arbitrariness’, and this corresponds to the argument put forward on appeal. In any event that argument constitutes, at most, the development of an argument raised before the General Court.

53 So far as concerns, first, the objection of inadmissibility raised by the Commission against the argument alleging that the fine imposed on FLSmidth is unlawful on the ground that it is a new argument, it must be stated that FLSmidth invoked before the General Court the ‘arbitrary’ nature of the fine that had been imposed upon it, as is clear from paragraph 99 et seq. of the application at first instance. It is apparent from the reasoning in those paragraphs of the application and the line of argument advanced by FLSmidth in support of the third plea in the appeal that the argument alleging breach of the principle of legality, with regard to the fine which was imposed upon it, and the argument concerning the fine’s arbitrary nature are, in essence, identical. Consequently, that argument is not new and is accordingly admissible on appeal.

54 Second, in the case of the Commission’s line of argument that FLSmidth’s arguments are directed at the decision at issue, have not been presented as directed against the judgment under appeal and are therefore inadmissible, it should be stated that the General Court, so far as concerns calculation of the fine imposed upon FLSmidth and to the extent that that calculation is covered by the appeal, ratified the method applied by the Commission in the context in question. Consequently, while FLSmidth does not always draw a clear distinction in its appeal between arguments designed to contest the decision at issue and those designed to criticise the judgment under appeal, that lack of clarity cannot, however, render the plea founded on those arguments inadmissible, inasmuch as they can easily be understood as relating to the judgment under appeal. Those arguments therefore permit the Court to review that judgment in the light of the plea alleging breach of the principles of proportionality and legality.

56 So far as concerns, in the first place, the argument to the effect that the General Court did not carry out an ‘independent’ review of the fine imposed on FLSmidth, it should be borne in mind that, in accordance with Article 261 TFEU and Article 31 of Regulation No 1/2003, the General Court has unlimited jurisdiction with regard to the fines imposed by the Commission. The General Court is therefore empowered, in addition to carrying out a mere review of the lawfulness of those fines, to substitute its own appraisal for that of the Commission and, consequently, to cancel, reduce or increase the fine or penalty payment imposed (see Case C‑89/11 P E.ON Energie v Commission EU:C:2012:738, paragraphs 123 and 124 and the case-law cited).

57 However, with regard to the question whether in the judgment under appeal the General Court failed to exercise its unlimited jurisdiction and did not conduct an independent review of the fine imposed, it should be noted that, first, the General Court referred, in paragraph 44 of the judgment under appeal, to the calculation carried out by the Commission in order to set the fines imposed on, amongst others, FLSmidth and Trioplast Industrier. The General Court pointed out in particular in that regard that FLSmidth and Trioplast Industrier were ascribed the same starting amount as the subsidiary with which they had formed an economic entity, namely Trioplast Wittenheim, and that those amounts had been increased, under the third indent of point 1.B of the Guidelines, by 10% per year, on the basis of the period during which the parent company in question had controlled its subsidiary. Second, the General Court found that, on that basis, each addressee of the decision at issue was given a penalty individual to it, the amount of which did not necessarily correspond to the amount of the subsidiary’s fine adjusted pro rata to the period of control.

58 Furthermore, in paragraph 45 of the judgment under appeal, the General Court added, in this regard, that FLSmidth ‘[had] advanced no argument which would enable the Court to find that the method of calculation, as such, was fundamentally flawed or inconsistent with the principles established by the case-law’, in order to conclude, in paragraph 46 of the judgment, that it was necessary to reject the argument put forward by FLSmidth that the fine imposed on it had to reflect in strict proportion the fact that it had owned Trioplast Wittenheim for only 8 out of the 20 years of the infringement.

59 Whilst those considerations, taken in isolation, may be interpreted as simply reiterating the Commission’s reasoning and the method of calculation followed by it, in paragraphs 43 to 46 of the judgment under appeal the General Court merely ratified, in essence, the Commission’s appraisal of one specific element of the calculation of that fine, namely the effect that the duration of the period for which FLSmidth had controlled Trioplast Wittenheim had on the amount of the fine. However, contrary to what FLSmidth suggests, the considerations set out in those paragraphs do not constitute the only passages of that judgment devoted to review of the fine imposed upon FLSmidth.

60 In the judgment under appeal the General Court examined in detail several other factors of relevance for determining the amount of the fine imposed. In particular, the General Court also examined, in paragraph 53 et seq. of the judgment, the relevance of possible mitigating circumstances and, in paragraph 69 et seq., the level of the starting amount for calculating that fine. It is thus apparent from those paragraphs as a whole that the General Court conducted an independent and complete analysis of the fine imposed upon FLSmidth, although it ratified, in certain respects, the appraisal carried out by the Commission and the result that it had reached.

61 Consequently, this argument must be rejected, as must the argument to the effect that the General Court did not, in this context, state reasons for its decision to the requisite legal standard, given that paragraphs 43 to 46 of the judgment under appeal, and in particular paragraph 45, constitute, contrary to FLSmidth’s contentions, only a small part of the General Court’s reasoning, which must, however, be assessed as a whole.

62 As regards, in the second place, the argument to the effect that the fine imposed is disproportionate, FLSmidth does not succeed in showing by its line of argument that this is so.

63 It is true that the General Court is required to ensure that the calculation of the amount of a fine imposed on an undertaking for its involvement in an infringement of the European Union competitions rules takes due account of the duration of the infringement and of that undertaking’s participation in it. However, the duration of an infringement is neither the only factor nor necessarily the most important factor that the Commission and/or the General Court must take into account for the purpose of calculating the fine.

64 Thus, in this instance, the fines imposed on FLSmidth and the other companies involved in the cartel at issue were not calculated solely on the basis of the respective duration of the involvement of those companies. In particular, as regards FLSmidth, the amount of the fine imposed did not need to be strictly proportional, or, in principle, ‘reasonably’ proportional, to the duration of its participation in the infringement at issue, in so far as the amount appropriately reflects the gravity of the infringement committed.

65 As to the gravity of the infringement, it should be recalled that the infringement consisted in participating in a complex of agreements and concerted practices concerning six Member States and that it related to the fixing of prices and the establishment of common price calculation models, the sharing of markets and the allocation of sales quotas, the assignment of customers, deals and orders, concerted bidding in response to certain invitations to tender, and the exchange of individualised information. Furthermore, it is to be noted that the Commission, correctly, classified that infringement as ‘very serious’ in recital 765 of the decision at issue. That classification has not been called into question by FLSmidth in its appeal.

66 In those circumstances, it does not appear that, when the General Court set the sum for which FLSmidth was held jointly and severally liable, under Article 2(f) of the decision at issue, at EUR 14.45 million, namely at an amount markedly lower than the minimum amount of EUR 20 million — laid down in the third indent of point 1.A of the Guidelines — that is generally envisaged by the Commission as the starting amount for calculating fines for ‘very serious infringements’, it set the fine imposed, in the exercise of its unlimited jurisdiction, at a disproportionate amount.

67 In so far as FLSmidth, instead of pleading breach of the principle of proportionality, seeks, by this line of argument, only a fresh appraisal of the amount for which it has been held jointly and severally liable, it is to be recalled that, in accordance with its settled case-law, it is not for the Court of Justice, when ruling on points of law in the context of an appeal, to substitute, on grounds of fairness, its own assessment for that of the General Court exercising its unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements of European Union law (see, inter alia, Case C‑70/12 P Quinn Barlo and Others v Commission EU:C:2013:351, paragraph 57 and the case-law cited).

69 Nor, in the third place, can the Court uphold the argument to the effect that the finding set out in paragraph 55 of the judgment under appeal — that the fact that FLSmidth did not have knowledge of Trioplast Wittenheim’s unlawful conduct cannot amount to a mitigating circumstance given that the basis for liability resided in the fact that FLSmidth and Trioplast Wittenheim formed one economic unit — conflicts with the individualised approach chosen by the Commission.

70 Whilst it is true that the finding, in paragraph 44 of the judgment under appeal, that the parent companies of the subsidiaries that took part in the cartel at issue were ascribed the same starting amount, which was, in particular, adjusted in the light of the mitigating or aggravating circumstances pertaining to each parent company, does not apply to FLSmidth, which did not receive a reduction for mitigating circumstances, the fact remains that the General Court could not, in any event, have reduced the amount for which FLSmidth had been held jointly and severally liable on the ground that it had had no knowledge of Trioplast Wittenheim’s unlawful conduct.

71 Since, in accordance with settled case-law, liability of a parent company for an infringement of the European Union competition rules committed directly by one of its subsidiaries is based on the fact that those companies formed part of a single economic entity during the infringement (see, to that effect, inter alia Case C‑50/12 P Kendrion v Commission EU:C:2013:771, paragraphs 47 and 55 and the case-law cited), the requirement to take account of possible mitigating circumstances applies to the undertaking taken as a whole, at the time when the infringement was committed, and not to its constituent parts. This argument is therefore also unfounded and must, consequently, be rejected.

72 As regards, in the fourth place, the argument to the effect that the allegedly disproportionate nature of the liability attributed to FLSmidth has been reinforced by the fact that in Trioplast Industrier v Commission EU:T:2010:388 the General Court reduced the liability of Trioplast Industrier, the only other parent company held liable for Trioplast Wittenheim’s conduct, whilst FLSmidth states that Trioplast Wittenheim is in liquidation and that it must therefore bear the amount of that reduction although it was not a party to the proceedings that gave rise to that judgment, it must be held that this circumstance cannot render the judgment under appeal wrong in law. It need merely be pointed out that ordering a number of companies jointly and severally to pay a single fine is specifically intended to ensure that it is paid even if one of them is not in a position to do so.

73 In the light of the foregoing considerations, this final argument must also be rejected and, therefore, the third plea in the appeal must be dismissed in its entirety.

The fourth plea, alleging a failure to remedy the unequal treatment resulting from the 30% reduction of the basic amount of the fine that was granted to Trioplast Industrier

74 FLSmidth contends that the General Court erred in characterising as unlawful the award to Trioplast Industrier of the 30% reduction of the basic amount of the fine that was granted to Trioplast Wittenheim in the context of leniency, and that it could not therefore hold that the grant of a corresponding reduction to FLSmidth on the same grounds would be tantamount to its benefiting from an unlawful act committed in favour of Trioplast Industrier.

75 The General Court in fact accepted that reduction, awarded under the Leniency Notice, in its judgment in Trioplast Industrier v Commission EU:T:2010:388. The attribution of liability to FLSmidth and Trioplast Industrier was founded on the collective approach of the principle of one single economic unit. It cannot be contrary to European Union law for the Commission to carry that approach through to the assessment of leniency. The remedying of the breach of the principle of equal treatment by granting FLSmidth the same reduction as that granted to Trioplast Industrier would also be consistent with that approach.

76 In FLSmidth’s submission, even assuming that the reduction granted to Trioplast Industrier is unlawful, the General Court could not refuse for that reason to remedy the discrimination that it had identified, correctly, in paragraph 94 of the judgment under appeal.

77 Moreover, the Commission’s approach, consisting of denying it such a 30% reduction because it was not the parent company of Trioplast Wittenheim at the time when the latter cooperated with the Commission and the fine was imposed, is flawed. If FLSmidth is to bear the burden of its links with the single economic unit, it must also be able to benefit from them.

78 Furthermore, FLSmidth states that, in this instance, the 30% reduction that was granted to Trioplast Industrier and considered unlawful by the General Court has, following the liquidation of Trioplast Wittenheim, directly increased the amount that it will finally have to pay. In any event, the fines imposed on the two parent companies, which infringe the principle of equal treatment and which the General Court should have put right, are manifestly disproportionate.

79 The Commission submits that, although the General Court was correct in holding that FLSmidth was not entitled to benefit from the reduction in question, it did so on incorrect grounds. That reduction was granted to Trioplast Wittenheim and correctly extended to Trioplast Industrier, which was the parent company of Trioplast Wittenheim at the time when the latter cooperated with the Commission, that being the only time relevant in this regard. However, when that cooperation took place, FLSmidth, in the Commission’s submission, no longer formed an undertaking with Trioplast Wittenheim as the latter’s parent company. The General Court’s finding that FLSmidth was discriminated against in relation to Trioplast Industrier is therefore incorrect.

80 The Commission accordingly requests the Court to set aside paragraphs 92 to 97 of the judgment under appeal and substitute other reasoning in their place.

81 So far as concerns the fourth plea in the appeal, the General Court held in paragraphs 92 to 97 of the judgment under appeal that FLSmidth was not entitled to a 30% reduction of the basic amount of the fine, identical to the reduction granted to Trioplast Wittenheim. First, the General Court held in paragraph 93 of the judgment that ‘it [was] not apparent from either the [decision at issue] or the documents produced before the Court that Trioplast Industrier provided information justifying a reduction of 30% on account of cooperation’ and that ‘[t]he Commission none the less granted Trioplast Industrier such a reduction’. Second, the General Court recalled, in paragraph 95, that ‘a person may not rely, in support of his claim, on an unlawful act committed in favour of a third party’ and concluded, in the following paragraph, that FLSmidth ‘cannot rely on the fact that the Commission, wrongly, extended the benefit of Trioplast Wittenheim’s cooperation to Trioplast Industrier, in order to benefit from the same illegality’.

82 Whilst the General Court was right in accepting that FLSmidth could not obtain the requested reduction of the amount of the fine, the reasoning followed by it cannot, however, be upheld.

83 As the Commission has pointed out, only an undertaking which has cooperated with it on the basis of the Leniency Notice can be granted, under that notice, a reduction of the fine which would have been imposed without that cooperation. That reduction cannot be extended to a company which, for part of the duration of the infringement in question, had formed part of the economic unit constituted by an undertaking, but no longer formed part of it at the time when the undertaking cooperated with the Commission.

84 A contrary interpretation, such as that contended for by FLSmidth, would mean generally that, in instances where one undertaking succeeds another, a company which participated initially in an infringement, as the parent company of a subsidiary directly involved in it, and which transferred that subsidiary to another undertaking would benefit, as the case may be, from a fine reduction granted to the latter undertaking in respect of its cooperation with the Commission, although that company neither contributed itself to the detection of the infringement in question nor exercised decisive influence at the time of that cooperation on its former subsidiary.

85 Consequently, in the light of the objective pursued by the Leniency Notice, consisting in promoting the detection of conduct contrary to European Union competition law, and in order to ensure effective application of that law, there is nothing to justify extending a fine reduction granted to an undertaking in respect of its cooperation with the Commission to an undertaking which, whilst having controlled, in the past, the area of activity involved in the infringement in question, did not itself contribute to detection of the infringement.

86 In the case in point, it is to be recalled that, when Trioplast Wittenheim cooperated with the Commission, namely from December 2002, it no longer formed an undertaking with FLSmidth. It follows that the 30% reduction of the basic amount of the fine, granted to the undertaking formed by Trioplast Wittenheim and its parent company Trioplast Industrier, cannot be extended to FLSmidth.

87 In those circumstances, it is, moreover, irrelevant whether the 30% reduction of the basic amount of the fine granted to Trioplast Industrier was rightly granted since, in any event, that reduction could not have been extended to FLSmidth by virtue of equal treatment given that it was not in a situation comparable to that of Trioplast Industrier. For the same reason, the amount of the payment for which FLSmidth was held jointly and severally liable likewise cannot, contrary to its contentions, be regarded as disproportionate solely because it was not reduced by 30%.

88 Finally, it is necessary to reject for the same reason as set out in paragraph 72 of the present judgment the argument put forward by FLSmidth that, in this instance, the 30% reduction of the basic amount of the fine that was granted to Trioplast Industrier directly increased, following the liquidation of Trioplast Wittenheim, the amount finally having to be paid by FLSmidth.

89 On those grounds, which should be substituted for those set out in paragraphs 92 to 97 of the judgment under appeal, the fourth plea in the appeal must also be dismissed.

The fifth plea, alleging misapplication of the Leniency Notice and breach of the principle of equal treatment

90 By its fifth plea, FLSmidth contends, first, that in confirming the decision at issue the General Court wrongly refused it a 10% reduction of the fine on the basis of the Leniency Notice because it had not contested the facts alleged in the statement of objections and, second, that the General Court thereby infringed the principle of equal treatment since Bonar Technical Fabrics NV (‘Bonar’), and not it, was granted such a reduction in the decision at issue although that company had adopted the same position as it in the administrative procedure.

91 According to FLSmidth, the judgment under appeal does not deal with its submissions on the case-law and does not rule on either the issue of the value of its non-contestation of the facts or the particular circumstances of the case. Nor did the General Court rule on whether the failure to grant it a reduction of the fine imposed constituted a breach of the principle of equal treatment.

92 FLSmidth adds, in this regard, that while it had contested that the facts set out in the statement of objections disclosed the existence of decisive influence, it had not substantially contested those facts. Furthermore, as to the two employees, Mr G. and Mr H., who were stated to have been present at the meetings organised by the cartel at issue although FLSmidth asserted that it was not aware of Trioplast Wittenheim’s participation in the cartel, FLSmidth observes that those employees were related to FLS Plast and not to it. Finally, should the Commission state that FLSmidth contested certain facts imputed to Trioplast Wittenheim, it would be referring to this end to FLS Plast’s reply to the statement of objections and not to its own reply.

93 The Commission contests the admissibility of this plea in that it seeks a re-examination, on the merits, of its assessment of the value of the submissions made by FLSmidth during the investigation and of its analysis of the substance of its decision to grant Bonar a 10% reduction of the fine imposed, without FLSmidth having however alleged, in a precise manner, a distortion of the facts by the General Court.

94 As the General Court correctly pointed out in paragraph 84 of the judgment under appeal, the Commission enjoys a broad discretion in assessing the quality and usefulness of the cooperation provided by an undertaking, in particular by reference to the contributions made by other undertakings, and in exercising that discretion the Commission cannot disregard the principle of equal treatment.

95 According to the Commission, the General Court rejected, at least implicitly, the line of argument alleging discriminatory treatment. In the alternative, the Commission contends that, where it has been established that FLSmidth did not forgo contesting the facts or provide sufficient assistance to the Commission, that argument is ineffective even assuming that the assistance provided by Bonar is deemed comparable to that of FLSmidth. That is because an undertaking cannot, by praying in aid the principle of equal treatment, benefit from an advantage which has unlawfully been afforded to a third party.

96 The cooperation provided by Bonar was deeper and that undertaking accepted certain key facts which facilitated the Commission’s task of proving certain factual elements of the infringement at issue.

97 In its reply, FLSmidth states that the present plea is admissible, as the Court is able to rule on this issue without having to carry out further factual appraisal. The Commission disputes that line of argument in its rejoinder.

98 By its fifth plea, FLSmidth submits, first, that it did not substantially contest the facts found by the Commission in the statement of objections, which facilitated the Commission’s task of proving the infringement at issue, and second, that the General Court should have reduced by 10% the amount for which it was held jointly and severally liable. At the very least, the grounds stated in the judgment under appeal are not sufficient in this regard.

99 It should be recalled first of all that the General Court observed in paragraph 97 of the judgment under appeal that the Commission had taken the view, in the exercise of its broad discretion, that the fact that FLSmidth had not substantially contested the facts had not helped it to establish the existence of an infringement of Article 81 EC. Furthermore, the General Court held in the same paragraph that FLSmidth had not put forward any argument establishing that its cooperation had facilitated the Commission’s task.

100 In order to challenge that factual appraisal on appeal, FLSmidth, in accordance with settled case-law, would have had to plead distortion of the facts or evidence by the General Court, which it did not do. Even supposing that FLSmidth, by its arguments, implicitly pleaded distortion of facts or evidence by the General Court, which does not however seem to be the case, those arguments are not such as to demonstrate that the General Court distorted the facts or evidence, so that they must also be considered unfounded.

101 Therefore, in so far as the present plea seeks a review by the Court of the appraisal of the facts carried out by the General Court, it must be dismissed as inadmissible.

102 Next, so far as concerns FLSmidth’s line of argument that the General Court infringed the principle of equal treatment, the considerations set out in paragraphs 99 to 101 of the present judgment should be referred to. In order to be able to compare the conduct of FLSmidth, on the one hand, and that of Bonar, on the other, it would be necessary to conduct a fresh appraisal of the facts that were at issue before the General Court, which is a matter for the Court on appeal only in the case of distortion of the facts or evidence by the General Court. Such distortion has been neither pleaded nor demonstrated by FLSmidth. Accordingly, this line of argument must also be rejected as inadmissible.

103 Finally, so far as concerns FLSmidth’s submission of failure to state grounds, it is clear from paragraph 97 of the judgment under appeal that the General Court, taking account of the broad discretion which the Commission enjoys in assessing the quality and usefulness of the cooperation provided by an undertaking, in particular by reference to the contributions made by other undertakings, considered that the matters put forward before it by FLSmidth to establish that its alleged abstention from substantially contesting the facts had helped the Commission to establish the infringement at issue were not sufficient (see, in particular, Case C‑328/05 P SGL Carbon v Commission EU:C:2007:277, paragraph 88). Whilst that reasoning of the General Court is admittedly very succinct, it is nevertheless sufficient to enable FLSmidth to understand the reasons why the General Court rejected the corresponding argument, raised by FLSmidth, and to enable the Court of Justice to carry out its judicial review. A failure to state grounds in the judgment under appeal therefore cannot be established. Consequently, this argument is unfounded.

104 Accordingly, it is also necessary to dismiss the fifth plea as inadmissible and as in part unfounded.

The sixth plea, alleging infringement of the right to a judgment in a reasonable time

105 FLSmidth submits that, by not adjudicating within a reasonable time, the General Court infringed Article 47 of the Charter and Article 6(1) of the ECHR and that this infringement must be remedied by lightening the liability that has been attributed to it.

106 FLSmidth points out that, in this instance, the duration of the judicial review conducted by the General Court exceeded six years as the action for annulment was brought on 24 February 2006 and the judgment under appeal was delivered on 6 March 2012. Furthermore, that period contains extensive periods of inactivity on the part of the General Court. FLSmidth was informed on 5 March 2007 that the written procedure had been closed, but the hearing did not take place until 22 June 2011, that is to say, four years and four months later. In addition, following the hearing, the General Court took more than eight months to deliver its judgment.

107 FLSmidth considers that such a length of time taken to process the case cannot be justified. The General Court was able to deliver a judgment on 13 September 2010 in the almost identical case of Trioplast Industrier v Commission EU:T:2010:388. Possible case allocation issues within the General Court must not operate to the detriment of the persons concerned. In those circumstances, FLSmidth submits that a 50% reduction of the liability that has been attributed to it would constitute an effective and reasonable remedy for the infringement of Article 47 of the Charter.

108 The Commission, first, objects that this plea is inadmissible. The proper remedy for proceedings before the General Court that were of excessive duration is an action for damages.

109 Second, the Commission disputes that a prima facie infringement of Article 47 of the Charter and Article 6(1) of the ECHR may be established by considering merely the duration of the proceedings.

110 Third, in the light of the circumstances of the case, the duration of the judicial proceedings was, in the Commission’s submission, reasonable. Almost all of the facts on which the decision at issue was based were contested in the legal proceedings and had to be verified. Moreover, no fewer than 15 companies brought actions for annulment of that decision, in six different languages. Furthermore, since some of the cases concerned parent companies and their subsidiaries, certain measures of organisation were taken so that those cases could, where possible, be heard and adjudicated upon together.

111 As is apparent from the first paragraph of Article 58 of the Statute of the Court of Justice and from its case-law, the Court has jurisdiction, in an appeal, to verify whether a breach of procedure adversely affecting the appellant’s interests was committed by the General Court (see, inter alia, Case C‑385/07 P Der Grüne Punkt — Duales System Deutschland v Commission EU:C:2009:456, paragraph 176).

112 So far as concerns infringement of Article 47 of the Charter, pleaded by FLSmidth, it should be pointed out that, under the second paragraph of that provision, ‘[e]veryone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law’. As the Court has repeatedly held, that article relates to the principle of effective judicial protection (see, inter alia, Der Grüne Punkt — Duales System Deutschland v Commission EU:C:2009:456, paragraph 179 and the case-law cited).

113 On that basis, such a right, which was affirmed as a general principle of European Union law before the Charter entered into force, is applicable in the context of proceedings brought against a Commission decision (see, inter alia, Der Grüne Punkt — Duales System Deutschland v Commission EU:C:2009:456, paragraph 178 and the case-law cited).

114 It should also be pointed out that, according to the European Court of Human Rights, a failure to adjudicate within a reasonable time must, as a procedural irregularity constituting the breach of a fundamental right, give rise to an entitlement of the party concerned to an effective remedy granting him appropriate relief (see Kudła v. Poland [GC], no. 30210/96, §§ 156 and 157, ECHR 2000-XI).

115 According to the case-law, however, having regard to the need to ensure that the competition rules of European Union law are complied with, the Court cannot allow an appellant to reopen the question of the amount of a fine which has been imposed upon it, on the sole ground that there was a failure to adjudicate within a reasonable time, where all of its pleas directed against the findings made by the General Court concerning the amount of that fine and the conduct that it penalises have been dismissed (see, in particular, Case C‑58/12 P Groupe Gascogne v Commission EU:C:2013:770, paragraph 78 and the case-law cited).

116 Indeed, the Court has also held that the sanction for a breach, by a Court of the European Union, of its obligation under the second paragraph of Article 47 of the Charter to adjudicate on the cases before it within a reasonable time must be an action for damages brought before the General Court, since such an action constitutes an effective remedy. It follows that a claim for compensation for the damage caused by the failure by the General Court to adjudicate within a reasonable time may not be made directly to the Court of Justice in the context of an appeal, but must be brought before the General Court itself (see, in particular, Groupe Gascogne v Commission EU:C:2013:770, paragraphs 83 and 84).

117 It is thus for the General Court, sitting in a different composition from that which heard the dispute giving rise to the proceedings whose duration is criticised, to assess both the actual existence of the harm alleged and the causal connection between that harm and the excessive length of the legal proceedings at issue by examining the evidence submitted for that purpose (see, in particular, Groupe Gascogne v Commission EU:C:2013:770, paragraphs 88 and 90).

118 Whilst that is so, it must be stated that the duration of the proceedings before the General Court, which amounted to more than six years, cannot be justified by any of the particular circumstances of the case at issue.

119 It is apparent, in particular, that the period between the end of the written procedure, when the Commission’s rejoinder was lodged in February 2007, and the opening, in June 2011, of the oral procedure lasted for approximately four years and four months. The length of that period cannot be explained by the circumstances of the case, whether it be the complexity of the dispute, the conduct of the parties or supervening procedural matters.

120 As regards the complexity of the dispute, it is apparent from examining the action brought by FLSmidth, as summarised in paragraphs 9 and 10 of the present judgment, that, whilst the pleas relied on required a detailed examination, they were not of particular difficulty. Although it is true that around 15 addressees of the decision at issue brought actions for its annulment before the General Court, that fact could not have prevented it from scrutinising the documents in the case and preparing for the oral procedure within a period of less than four years and four months.

121 So far as concerns the conduct of the parties, there is nothing in the file to indicate that FLSmidth contributed by its conduct to a slowing of the handling of the case.

122 Finally, it is not apparent from the file that the proceedings were interrupted or delayed by the supervening of procedural matters capable of justifying their length.

123 In the light of the foregoing, it must be found that the procedure in the General Court infringed the second paragraph of Article 47 of the Charter in that it did not comply with the requirement to adjudicate within a reasonable time, which constitutes a sufficiently serious breach of a rule of law intended to confer rights on individuals (see, to that effect, Case C‑352/98 P Bergaderm and Goupil v Commission EU:C:2000:361, paragraph 42).

124 It is clear, however, from the considerations set out in paragraphs 115 to 117 of the present judgment that the sixth plea must be dismissed.

125 It follows that, as none of the pleas put forward by FLSmidth in support of its appeal has been upheld, the appeal must be dismissed.

126 In accordance with Article 184(2) of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to the costs.

127 Under Article 138(1) of the Rules of Procedure, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and FLSmidth has been unsuccessful, the latter must be ordered to bear its own costs and to pay those incurred by the Commission.

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	Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> FLSmidth v Commission (Judgment of the Court) [2014] EUECJ C-238/12 (30 April 2014) URL: http://www.bailii.org/eu/cases/EUECJ/2014/C23812.html Cite as: ECLI:EU:C:2014:284, EU:C:2014:284, [2014] EUECJ C-238/12

Court of Justice of the European Communities (including Court of First Instance Decisions)