- with readers working within the Construction & Engineering industries
On 24 November 2011, the General Court ("GC") handed down its judgment in EFIM v. Commission. In its ruling, the GC dismissed an action by the European Federation of Ink and Ink Cartridge Manufacturers ("EFIM") against a previous 2009 European Commission decision to drop its antitrust investigation into manufacturers of ink-jet printers. The GC ruled that the Commission was right to find that EFIM did not, on the facts, provide sufficient evidence to establish an infringement, and was right to conclude that further investigation would have been disproportionate, given the slim likelihood of finding a breach. The main features of the ruling are laid out below.
On EFIM's claims concerning the Commission's alleged failure to state reasons and its alleged violation of the principle of good administration
The GC recalled that, according to previous established case law, the Commission's obligation to state reasons under Article 253 EC must be adapted to the circumstances at hand and must reveal clearly and unequivocally the Commission's reasoning. It is not a requirement that the Commission specifies all the elements of fact and law as long as it generally satisfies the criteria laid down in Article 253 EC. On the facts, the GC found that the Commission had expressly and clearly indicated its reasoning in the contested decision.
As for the Commission's alleged violation of the principles of good administration and obligation of diligence, the GC, in line with previous case law, reiterated that the Commission has a certain discretion in deciding on the priority of complaints and whether or not to accept or reject a complaint alleging a violation of Articles 101 and 102 TFEU. This discretionary power is not, however, without limits and the Commission must take into account all relevant elements of law and fact so as to decide on the outcome of the complaint. In the event where the Commission refuses to continue an investigation, its reasons must be sufficiently precise and detailed so that the GC can efficiently monitor and control the Commission's discretionary powers. In this case, the GC opined that, on the facts, the Commission was right to conclude that the applicant had not provided it with sufficient evidence on the existence of a concerted practice between Original Equipment Manufacturers ("OEMs") in breach of Article 101 TFEU.
On EFIM's claims that the Commission had erred in its assessment
In light of the imprecise and insufficiently clear character of the evidence submitted by the applicant, the GC ruled that the Commission did not commit any manifest errors of assessment as regards either the alleged Article 101 or 102 TFEU infringements.
Furthermore, as regards the alleged Article 102 infringement, the GC implicitly accepted the Commission's reasoning that competition on the primary market for ink-jet printers can, in certain conditions, act as a constraint on a supplier's conduct on the secondary market for ink and ink cartridges, and thus rule out the existence of a dominant position on the secondary markets. The GC appears to have accepted that such a constraint can arise where primary and secondary markets are closely related and endorsed the four factors relied by the Commission in the contested decision to establish this relationship (i.e., (i) consumers can make an educated choice concerning the total cost of the product, including purchases on the secondary market; (ii) it is likely that consumers will make such an educated choice when purchasing; (iii) in the event of excessive prices on the secondary markets, a sufficient number of consumers would adjust their purchasing practices on the primary market; and (iv) this adjustment would occur within a reasonable period).
According to the GC, applying this test, the Commission was correct to conclude that, on the evidence, there was real competition in the primary product markets and that the OEMs were not in a dominant position on the secondary markets (either HP alone or in a position of collective dominance or through any form of collusion). The GC also found that EFIM failed to bring convincing arguments and evidence likely to lead to a different conclusion and instead simply made unsubstantiated observations concerning the relevant markets. The GC held therefore that the Commission did not err in concluding that it was not likely that the primary and secondary markets were not closely related, and that no dominant position could be established on the part of any OEM.
Finally, the GC stated that the grounds invoked by the Commission in the contested decision were sufficient to demonstrate that the case was complex and that further investigation would have necessitated the investment of substantial resources. According to the Court, given the very low probability of establishing infringements of Article 101 and 102 TFEU, the Commission's decision not to proceed further with the investigation was not disproportionate.
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