On 12 December 2014, the EU General Court ("GC") handed down judgments on a number of appeals against the European Commission's decision in the paraffin-wax cartel case. ENI was the only successful appellant and it saw its initial fine of € 29,100,000 reduced to € 18,200,000.
In October 2008, the European Commission imposed fines totalling € 676 million on nine groups of companies for infringing Article 101(1) TFEU by engaging in a price-fixing and market-sharing cartel in the paraffin-wax sector over a 13-year period. ENI's fine for its involvement in the cartel was increased by 60% on account of recidivism (see VBB on Competition Law, Volume 2008, No. 11, available at www.vbb.com).
In ENI's case, the GC held that the Commission had erred in applying an increase in the fine on account of ENI's purported recidivism. In the decision, the Commission based its finding of recidivism on the involvement of ENI's subsidiaries Anic SpA and EniChem SpA in two previous infringement decisions, the 1986 Polypropylene cartel decision and the 1994 PVC cartel decision. ENI was not however an addressee of either of these previous decisions.
The GC concluded that, in taking account of these earlier decisions to increase the fine, the Commission had violated ENI's rights of defence, as ENI was not an addressee of those previous decisions and therefore had not had the opportunity at the relevant time to contest any attribution of liability to it in its capacity as parent company of Anic and EniChem. By taking the prior conduct of Anic and EniChem into account, the Commission retrospectively imputed responsibility to ENI for these earlier infringements for which it had not been found responsible at the relevant time. The GC accordingly reduced the fine imposed on ENI to the level that would have been set absent the 60% recidivism increase. ENI's other arguments as to its involvement in the cartel were dismissed.
At the same time as its ruling on ENI's appeal, the GC handed down judgments on four other appeals against the Commission's fines from Tudapetrol, Repsol and units of the Hansen and Rosenthal group, dismissing all of them.
Most of the cartel members filed appeals before the GC in this case. Out of nine companies fined by the Commission, five have now had their fines reduced. Earlier this year, the GC had handed down three judgments reducing the fines imposed by the Commission, most notably Sasol, whose fine was reduced from € 318 million to € 159 million (see VBB on Competition Law, Volume 2014, No. 7, available at www.vbb.com). The GC had ruled that the Commission had incorrectly found Sasol liable for the conduct of an entity that, for part of the cartel, was only a subsidiary, without establishing to the necessary degree Sasol's actual influence over the subsidiary. Esso and RWE AG also saw their fines reduced. Esso saw a reduction of € 20,800,000, while the GC slightly reduced the amount of the fine imposed on RWE AG by € 1,560,000. Similarly in 2013, one of the cartelists – the French company Total – saw its fines slightly reduced from € 128 million to € 125 million.
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