European Union: The End Of The Road For The Bitumen (Spain) Cartel Proceedings

In three separate judgments, the Court of Justice rejected on 9 June 2016 appeals from Repsol, PROAS and CEPSA.  The appeals sought to set aside the General Court's judgments.  The General Court had rejected the request to annul the European Commission's infringement decision in relation to the bitumen (Spain) cartel or, alternatively, to obtain a reduction in fine for the appellants.  These judgments are expected to put an end to one of the longest outstanding cartel proceedings.  The bitumen (Spain) investigation was initiated by the European Commission in 2002 and resulted in fines totalling € 183 651 000.  Repsol was fined EUR 80 496 000 and CEPSA/ PROAS were fined jointly and severally EUR 83 850 000. 

Repsol judgment

In the Repsol appeal, the Court of Justice concluded that the General Court did not make any error in law in finding that RPA/Rylesa formed part of the Repsol group and were not autonomous entities.  The evidence provided by Repsol failed to reverse the presumption that Repsol exercised actual decisive influence which arose from Repsol's ownership of almost all of the shares in these subsidiaries.   

The Court of Justice also rejected Repsol's plea relating to a provision in the 2002 Leniency Notice which states that 'if an undertaking provides evidence relating to facts previously unknown to the Commission which have a direct bearing on the gravity or duration of the suspected cartel, the Commission will not take these elements into account when setting any fine to be imposed on the undertaking which provided this evidence'.  Repsol had argued before the General Court that, although the European Commission was in possession of documents showing that the cartel had continued from 1998 to 2002, it was Repsol's statement in its leniency application which had allowed the Commission to identify that the immunity applicant had concealed the real duration of the cartel and that the infringement had indeed extended to that period.  The General Court rejected the argument that a 'cognitive' test should be used to interpret 'facts previously unknown'.  The Court of Justice agreed with the General Court and added that evidence provided by a leniency applicant will only amount to evidence relating to 'facts previously unknown to the Commission' if it 'objectively presents significant added value with respect to the evidence already in the Commission's possession.'

This provision of the 2002 Leniency Notice on partial immunity was amended in the 2006 Leniency Notice with a more stringent test.  The expression 'evidence relating to facts previously unknown' has since been replaced with the reference to 'compelling evidence'.  The Notice therefore imposes a stricter requirement as the evidence should not only be of significant added value but also be compelling, i.e. written, direct and self-incriminating.  The judgment of the Court of Justice on partial immunity is therefore of lesser relevance.  In my view, it remains useful nevertheless to clarify that a 'cognitive' test should not be used in this context and that it suffices that the evidence is objectively in the hands of the Commission without the need to show that the Commission was cognizant of the content of that information.   

Finally the Court of Justice recognised that there does not appear to be an objective justification for the lengthy duration of the proceedings before the General Court (5 years and 9 months).   The General Court has an obligation under Article 47 of the Charter of Fundamental Rights of the European Union (the Charter) to adjudicate on cases within a reasonable time.  However, the Court concludes that the only recourse available to Repsol for such a breach is an action in damages before the General Court.  A reduction in fine is not an appropriate remedy. 

EPSA judgment

CEPSA's main ground of appeal was that the European Commission had sent it a statement of objections in English (rather than in Spanish which is the language of its Member State), thereby arguably infringing an essential procedural requirement.  As a result, the infringement decision against CEPSA should be annulled.  The Court of Justice rejected this argument on the ground that failure to send a statement of objections to a recipient in a Member State in the language of that Member State does not constitute an essential procedural requirement.  As a result, the validity of sending the statement of objections could only be called into question if sending the statement of objections in English had given rise to harmful consequences for CEPSA.  This was not shown.

CEPSA also argued that the fine imposed under the infringement decision was excessive.  As the judgment explains, the Court of Justice can only review the finding of the General Court on this ground if it concludes that the amount of the fine was excessive to the point of being disproportionate.  CEPSA argued that the fine was excessive because it amounted to 90% of its subsidiary's turnover.  The Court of Justice reiterated the principle that fines are calculated taking into account the entire group's turnover with the objective of deterrence in mind and taking into account the economic power of the entire group.  In this instance, the Court of Justice noted that whilst the fine represented 90% of the turnover of the subsidiary, it amounted only to 1% of the CEPSA group's turnover.   

The Court of Justice also discarded the argument pleading for a reduction of CEPSA's fine on the ground that both the administrative and judicial proceedings were unreasonably long.  Even if it were shown that the European Commission infringed its obligation to decide within a reasonable period, the Court of Justice concluded that such a breach could not lead to a reduction in fine.  This is not the appropriate remedy.  Likewise, the possible breach by the General Court of its duty to adjudicate within a reasonable period of time cannot lead to a reduction in fine but rather to a separate action in damages before the General Court.

PROAS judgment

In PROAS, the Court of Justice also considered the issue of excessive duration of the administrative and General Court proceedings.  The Court of Justice relied on the same arguments developed above in the Repsol and PROAS judgments.  It is worth adding that, with respect to the administrative proceedings, PROAS sought also the annulment of the infringement decision.  The Court reiterated that a breach of the Commission's obligation to adopt a decision within a reasonable time can only be sanctioned by annulment of the infringement decision if it is shown that the exercise of the rights of defence have been affected.  The Court of Justice found that this evidence was not provided.

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