On 9 September 2015, the General Court ("GC") largely upheld the Commission's decision in the TV and computer monitor tubes cartel on both the substantive issues and the general principles followed to set the level of the fines. The GC, however, reduced the fine imposed on Toshiba because the Commission had not sufficiently established Toshiba's awareness of the overall cartel. The GC also reduced the fines imposed on Panasonic, Toshiba and their joint venture Matsushita Toshiba Picture Display ("MPTD") on the ground that the Commission should have calculated their fines on the basis of the more detailed value of sales figures provided by the companies.
In 2012, the Commission imposed fines totalling over €1.47 billion on seven producers of cathode ray tubes for TVs and computers for their involvement in one or both of two distinct cartels that operated between 1996 and 2006. One cartel concerned colour picture tubes ("CPT") used for televisions and the other concerned display tubes ("CDT") used in computer monitors (see VBB on Competition Law, Volume 2012, No. 12, available at www.vbb.com). Five of the seven producers (LG Electronics, Panasonic, Phillips, Samsung and Toshiba) appealed before the GC. The most cogent aspects of the GC's recent judgments on the appeals are detailed below.
First, the GC largely confirmed the Commission's substantive assessment of the case, in particular that the meetings organised by the cartelists in Europe and in Asia to discuss various product variations (i.e., CPT and CDT) were an integral part of a single and continuous infringement. However, the GC found that the evidence did not sufficiently establish Toshiba's awareness of the overall cartel and that Toshiba had intended to contribute, by its own conduct, to the common objectives pursued by all the participants in the cartel from May 2000 to March 2003. It followed that Toshiba could not be held liable for its direct participation in the single and continuous infringement, and the fine should therefore be annulled accordingly for that period (resulting in a reduction of €28 million).
Second, the GC agreed with the Commission that a parent company is liable for the anti-competitive behaviour of its joint venture irrespective of its level of share ownership, provided that it has joint control over the joint venture. Thus, Toshiba was held jointly and severally liable for the behaviour of the MPTD joint venture it formed with Panasonic despite having only a 35.5% shareholding in MPTD. The GC based its findings on factors establishing the decisive influence Toshiba exercised over its joint venture (e.g., veto rights with respect to matters of strategic importance and appointment of a Toshiba director to the joint venture's board).
Third, the GC confirmed that the Commission had jurisdiction to impose fines for sales of cartelised components that had occurred outside of the EEA when such components had been incorporated into a finished product sold within the EEA. The GC based its findings on the fact that the cartel arrangements had directly influenced the setting of prices and volume of the finished product delivered to the EEA, and thus had repercussions in the EEA. According to the GC, this is true even though the market for the finished product constitutes a separate market from that concerned by the infringement.
Fourth, the GC largely confirmed the fining methodology used by the Commission. For example, the proportion of the value of sales of the cartelised components (e.g., CRT or CDT) incorporated into a finished product (e.g., television set or computer monitor) could be used in calculating the value of sales when the finished products are sold by the vertically integrated cartelist to independent third parties established within the EEA. This is due to the fact that the sale of finished products distorted competition in the EEA, either because: (i) the price increase of the cartelised components had been passed on by the cartelists in the price of the transformed goods; or in the case of the price increase not being passed on, (ii) the vertically integrated cartelists were granted a cost advantage as compared to their competitors who had obtained those same components on the market for goods that are the subject of the infringement.
However, the GC reduced the fines imposed on Panasonic, Toshiba and MPTD (from €157 million to €128 million) because the Commission had not, pursuant to the Fining Guidelines, taken into account the undertakings' best available figures in determining the value of sales. The companies had provided more detailed value of sales figures (i.e., figures taking into account the number of CPT incorporated, according to their size and their price, per year concerned) than those the Commission had used (i.e., average value of the direct EEA sales, multiplied by the number of CPTs concerned). The fines imposed were therefore reduced accordingly to take account of the more detailed data supplied by the parties.
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