Cement companies have appealed to the European Court of Justice seven rulings the EU General Court upholding the European Commission's broad requests for information ("RFI") in an antitrust investigation.
Following the opening of its investigation, the Commission requested detailed and voluminous information from the investigated cement manufacturers. The companies challenged the requests before the General Court, alleging that the Commission failed adequately to explain the presumed infringements and that the RFIs imposed a disproportionate workload in relation to the volume and type of information requested and adherence to an elaborate questionnaire format.
The General Court rejected the cement companies' claims, with the exception of the claim brought by Schwenk Zement that the Commission failed to grant sufficient time for responding to a particular set of very detailed questions. The General Court rulings confirm the Commission's broad investigatory powers in assessing suspected anticompetitive activity.
Background and overview of the case
In 2010, the Commission opened antitrust investigations in the cement industry and sent detailed and voluminous RFIs to a number of cement manufacturers. The companies challenged these requests.
(1) The Commission failed to set out concrete allegations. The Commission's RFIs set forth the presumed infringements in the cement sector as follows: "restrictions on trade flows in the European Economic Area (EEA), including restrictions on imports in the EEA coming from countries outside the EEA, market-sharing, price coordination and related anti-competitive practices in the cement market and related product markets."
The General Court acknowledged that the alleged infringements were set out in very general terms and justifiably could be criticized for their lack of precision. Nevertheless, it found that the RFIs satisfied the minimum level of clarity to be consistent with the requirements under EU law.
(2) The requested information largely failed to coincide with the claimed allegations. The cement companies complained that, for the most part, the information requested by the Commission had no connection with the alleged infringements. In particular, the existence of a breach of competition law could not be established on the basis of the majority of the Commission's questions, which concerned, for example, cement sales over the preceding ten years. Complainants contended that such a large volume of sought-after information suggested the exploratory nature of the Commission's request.
The General Court disagreed, stating that the Commission may legitimately pursue a broad-reaching investigation, provided that it is in possession of information in the form of sufficiently serious evidence consistent with the suspicion of an infringement of the competition rules. In view of preserving the effectiveness of its inquiry, the Commission need not furnish such evidence to complainants.
(3) The Commission imposed a disproportionate workload in relation to the volume of information requested and the imposed questionnaire format. Complainants contested the burdensome nature of the extensive scope of the information requested and the highly detailed format of the questionnaire. According to one company, preparation of its response to the questionnaire took a substantial part of its resources over the course of nearly three months.
The General Court was unswayed by these claims. While acknowledging the significant amount of information requested and the very precise nature of the questionnaire, the General Court found that the need for extensive information was justified by the scope of the alleged infringements and the large number of companies active in the cement industry. A specific questionnaire format would facilitate the Commission's ability to compare the responses of the various companies. This justified the additional burden placed on the companies to abide by such detailed format.
(4) The time-limit for response to the request for information was inadequate. The complainants also challenged as insufficient the allowed response time for the RFIs, given the large volume of information involved and the necessity of then inputting such information into the mandatory questionnaire format.
Again, the General Court was largely unmoved by these claims despite acknowledging the particularly onerous nature of the Commission's request. The General Court found that the complainants could be reasonably considered as equipped with the necessary means to produce a satisfactory response to the questionnaire, and in particular since the original deadline of 12 weeks (for the first 10 set of questions) was extended to 17 weeks.
The General Court accepted one sole claim (concerning time-limits). The General Court, in its sole exception to rejecting all of the complainants' arguments, agreed with cement manufacturer Schwenk Zement as to the unreasonable nature of the two-week deadline for responding to the 11th set of questions in the Commission's RFI.
This set of questions required the identification of all contacts (including very informal ones) established over periods of 5-6 years by certain employees of Schwenk Zement with the producers of cement or their representatives, as well as detailed information concerning meetings involving Schwenk Zement and other cement companies over the course of nine years. The General Court observed the difficulty of properly compiling such information requested, particularly because the information must be complete, accurate, and not misleading, otherwise subjecting the respondent to fines.
The General Court also admonished the Commission for certain procedural missteps in handling the issue of time-limits for responding to the questionnaire:
- The General Court rejected the Commission's claim that it had orally informed Schwenk Zement that it would not be subject to fines in providing a staggered response to the 11th set of questions at issue (which would therefore partially fall outside of the two-week deadline imposed by the Commission). The General Court observed that the Commission had provided no evidence to demonstrate that it had in fact assured Schwenk Zement that it would not be subject to fines in case of providing such staggered reply.
- Furthermore, the General Court flagged the Commission's inconsistency in fixing time-limits for responding to the questionnaire. The Commission had clearly stated in a letter that the Commission would provide two months to respond to an eventual questionnaire. This letter referred to a set of questions substantially identical to the final 11th set of questions. Therefore, the General Court found that Schwenk Zement could legitimately expect that it would have had two months to respond.
This ongoing dispute illustrates the impact and burden on companies of the Commission's pursuit of increasingly large amounts of information, stretching over long periods and a wide material and geographical scope. The General Court's rulings are a clear message to companies that they should expect to comply with such complex RFIs, affirming the Commission's broad discretion in conducting its investigations and determining what information it deems necessary from companies when investigating suspected anticompetitive activity. The General Court's overall affirmation comes in spite of its recognition of certain deficiencies in the clarity of the Commission's allegations and holding the Commission accountable for certain procedural missteps in relation to setting clear and consistent time-limits.
Review of the appeals by the Court of Justice, which has jurisdiction to rule on points of law only, will likely take about two years.
The General Court judgments can be found here (English translations not yet available): lectus. Cemex v Commission; Holcim v Commission; Cementos Portland Valderrivas v Commission; Buzzi Unicem v Commission; HeidelbergCement v Commission; Italmobiliare v Commission; Schwenk Zement v Commission.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.