Between 13 and 16 September 2013, the General Court handed down 7 judgments in 3 different cartel cases. Whilst the General Court largely upheld the Commission's decisions, it nevertheless showed some sympathy for some of the cartelists and slightly reduced their fines.
General Court grants reductions in fines in bathroom fittings cartel case
On 16 September 2013, the General Court ("GC") issued a judgment reducing the fines imposed by the European Commission (the "Commission") on certain companies involved in the bathroom fittings cartel. In its decision of June 2010, the Commission imposed fines totalling over € 622 million on seventeen manufacturers of bathroom equipment for having participated in the cartel (see VBB on Competition Law, Volume 2010, No. 6, available at www.vbb.com). The Commission found that these companies had taken part, on a regular basis, in anti-competitive meetings between 1992 and 2004 in Germany, Austria, Belgium, France, Italy and the Netherlands. The cartel involved the coordination of annual price increases and other pricing elements, as well as the disclosure and exchange of sensitive business information. The Commission found that the infringement covered taps, fittings, shower enclosures and accessories and ceramic ware.
Some of the companies involved appealed to the GC, seeking the annulment of the Commission decision or a reduction of the fine. In its recent judgments, the GC upheld some aspects of the applicants' appeals.
The GC reduced the fine imposed on Trane Inc. from € 259 million to € 92.66 million. The fine imposed jointly and severally on Wabco Europe and Trane Inc. was reduced from € 45.06 million to € 15.82 million and the fine imposed jointly and severally on Ideal Standards Italia Srl was reduced from € 12.32 million to € 4.52 million. In making these reductions, the GC held that, in relation to the Italian market for ceramics, the companies concerned had only been involved in the cartel for a period between 2000 and 2001, and not for the whole period from 1993 to 2004 found by the Commission in its decision.
The GC also annulled the Commission decision in relation to the Villeroy & Boch group, to the extent that the Commission had concluded that the group had been involved in the cartel prior to 12 October 1994. This did not result in a reduction in the fine however as in its calculations the Commission had only taken account of the period after October 1994.
The Commission had also imposed fines of € 17.70 million jointly and severally on Roca Sanitario SA and its subsidiary Laufen Austria AG and € 6.7 million jointly and severally on Roca Sanitario and its other subsidiary Roca France. According to the GC, the Commission had determined the fine on Roca France without adequately considering its cooperation with the Commission during the administrative proceedings. Therefore, the GC reduced the fine on Roca France to € 6.298 million. The Court also reduced the fine on Roca Sanitario, which had been imposed solely in its capacity as Roca France's parent company. Therefore the fine imposed on Roca Sanitario on a joint and several basis was fixed at € 6.298 million.
The Court dismissed the actions of Masco Corp, Mamoli Robinetteria SpA, Zucchetti Rubinetteria SpA, Rubinetteria Cisal SpA, Aloys F. Dornbracht GmbH & Co. KG and Hansa Metallwerke AG.
General Court grants minor reductions in Spanish bitumen cartel appeals
On 16 September 2013, the General Court ("GC") handed down five judgments on appeals against the European Commission's decision fining Galp, Nynäs, Proas, Repsol and Cepsa for cartel behaviour in the Spanish bitumen market. The first two applicants obtained minor reductions in their fines, whereas the appeals filed by the other three undertakings were dismissed in their entirety.
The appeals were lodged against a Commission decision of 3 October 2007, which imposed fines totalling over € 183.65 million on thirteen companies within five corporate groups for fixing the prices of bitumen used in road construction in Spain (see VBB on Competition Law, Volume 2007, No. 10, available at www.vbb.com). According to the Commission, cartel members had established sales quotas, as well as market-sharing and customer-sharing arrangements on the basis of these quotas. At the same time, the companies had established a compensation mechanism that would correct any deviations from these arrangements. The Commission found that members of the cartel had agreed on variations of bitumen prices and their implementation dates. The companies had allegedly monitored the implementation of the market-sharing and customer-sharing arrangements through the exchange of sales volumes information. Although BP had participated in the cartel, it obtained immunity from fines under the EU leniency program.
In its recent judgment, the GC reduced Galp's fine from € 8,662,500 to € 8,277,500, finding that the Commission had failed to establish the applicants' participation in the monitoring system and in the compensation mechanism.
Nynäs' fine was reduced from € 10,642,500 to € 10,406,000, since the GC found that the Commission had failed to establish to the requisite legal standard that the applicants participated in the system for monitoring the market-sharing and customer-allocation arrangements.
The appeals lodged by Repsol, Cepsa and Proas were dismissed in their entirety. The GC found that the Commission had not erred in fining Repsol and Cepsa as parent companies for the actions of companies within their respective groups. Moreover, the Court rejected Repsol's argument that the Commission had breached its rights of defence when it charged Repsol with being the cartel's leader, also dismissing Proas' and Repsol's claims that the Commission had incorrectly found that they had acted as leaders in the cartel. The General Court further found that the Commission had correctly categorised the gravity of the infringement; according to the Court, the fines had been correctly calculated and were proportionate.
General Court grants € 2.7 million reduction of Total's fines in paraffin wax cartel case
On 13 September 2013, the General Court ("GC") handed down two judgments largely dismissing appeals brought by Total and its subsidiary Total Raffinage (formerly called Total France) against the Commission's decision of 1 October 2008 in the paraffin wax cartel case. In its decision, the Commission had imposed fines totalling € 676 million on Total and eight other groups: ENI, ExxoMobil, Hansen & Rosenthal, Tudapetrol, MOL, Repsol, Sasol and RWE (see VBB on Competition Law, Volume 2008, No. 10, available at www.vbb.com). However, the GC granted a reduction of almost € 2.7 million of Total's fine to reflect the actual duration of its participation in the cartel.
In its 2008 decision, the Commission found that producers of paraffin waxes and slack wax had participated in a price-fixing cartel for paraffin waxes that had lasted from 1992 to 2005. A number of the producers, including Total, were also found to have engaged in market sharing for this product and to have fixed prices for slack wax sold to end customers in Germany. As a result, the Commission imposed a total fine of € 128 million on Total and Total Raffinage, which were held jointly and severally liable for the infringement.
On appeal, Total raised a number of pleas which mainly related to the Commission's attribution of parental liability arguing, for example, that a presumption of liability purely based on the parent company's stake in a subsidiary, without the requirement for any further evidence to support this presumption, was arbitrary and in breach of the principle of legal and economic autonomy of subsidiaries. The GC rejected Total's claims and recalled, in applying established EU case law, that where a parent company holds all or almost all of the capital in a subsidiary there is a rebuttable presumption that the parent company actually exercises a decisive influence over the commercial conduct of that subsidiary, and that this presumption is neither arbitrary nor irrefutable.
In a separate appeal, Total Raffinage argued, among other things, that the Commission had erroneously found a single and continuous price-fixing and market-sharing infringement. According to Total Raffinage, the Commission had ignored the absence of evidence with regard to the implementation of price-fixing agreements and had placed too great evidential importance on statements made by other cartel participants in their leniency applications. The GC rejected Total Raffinage's arguments, stating that the fact that certain evidence has been provided in leniency applications does not call into question the probative value of that information.
Total Raffinage also raised a number of arguments related to the fine calculation, claiming that the calculation method set out in paragraph 24 of the Commission's 2006 Fining Guidelines is illegal as its application resulted in the parties being sanctioned for a duration that exceeds the actual duration of their participation by 11 months. The GC did not specifically address the point of illegality of paragraph 24 of the 2006 Fining Guidelines. However, the GC found that the application by the Commission of the multiplication coefficient in this case (as calculated according to the method set out in paragraph 24) had resulted in the appellant being sanctioned for a considerable number of days for which the Commission had not established its participation in the cartel and that, by doing so, the Commission had breached the principle of proportionality. The GC also found that the application of paragraph 24 in the present case infringed the principle of equal treatment as the Commission had assimilated Total Raffinage's last year of participation of 7 months and 28 days with a participation of one year, and that it had done the same thing in the case of ExxonMobil for its last year of participation of 11 months and 20 days, and in the case of Sasol for its last year of participation of 11 months and 27 days. As a result, Total Raffinage was sanctioned for an additional duration of 4 months and 3 days, while the two other parties were only sanctioned for an additional duration of 10 days and 3 days, respectively. The Commission had therefore treated different situations in an identical manner, and had solely based this unequal treatment on the calculation method set out in paragraph 24 of the 2006 Fining Guidelines.
As a result, the GC adjusted the multiplication coefficient in order to reflect the actual duration of Total Raffinage's participation in the cartel, which resulted in a reduction of the total fine from € 128 million to € 125 million.
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