On 4 September 2014, the Court of Justice of the European Union ("ECJ") handed down its judgment on appeals brought by YKK Corporation, YKK Holding Europe BV and YKK Stocko Fasteners (jointly referred to as "YKK") against a judgment of the General Court ("GC") dismissing their appeals against the Commission's decision in the fasteners cartel case. In its judgment, the ECJ partly upheld YKK's appeal with regard to the calculation of the fine imposed on YKK Stocko Fasteners and, as a result, substantially reduced the fine from € 19.25 million to € 2.79 million.
In September 2007, the Commission had imposed fines totaling € 328 million on seven groups of haberdashery and fasteners producers for their participation in a price-fixing cartel (see VBB on Competition Law, Volume 2007, No. 9, available at www.vbb.com). YKK Stocko was subject to a fine of € 68.25 million for its participation in the cartel, of which YKK Corporation and YKK Holding Europe were held jointly and severally liable for the period after their acquisition of Stocko (which then became YKK Stocko Fasteners), namely for € 49 million. On appeal, YKK argued that the infringement should not have been characterised as "very serious" since it had not been implemented, and also put forward arguments relating to the calculation of the fine. The GC, however, dismissed all the pleas presented by YKK and upheld the Commission's decision (see VBB on Competition, Volume 2012, No. 7, available at www.vbb.com).
Before the ECJ, YKK argued, among other things, that the GC had erred by rejecting their plea relating to the Commission's erroneous interpretation of the 10% ceiling laid down in Article 23(2) of Regulation 1/2003. According to the parties, the Commission had refused to apply the upper limit of 10% on the basis of YKK Stocko Fasteners' turnover to the part of the fine for which that company was held solely liable, and had instead applied the 10% upper limit on the basis of the YKK group turnover. This had resulted in the fine imposed solely on YKK Stocko Fasteners representing 55% of its total turnover in the relevant business year. YKK's remaining arguments related to the GC's failure to adequately state reasons in its judgment, and the application of a deterrence multiplier for the period prior to the YKK group's acquisition of YKK Stocko Fasteners.
In its ruling, the ECJ found that the Commission had correctly divided the responsibilities of each YKK group company given that, prior to the date when the YKK group acquired YKK Stocko Fasteners, the latter company and the YKK group constituted two "economic entities" or distinct undertakings for the purposes of Article 101 TFEU and Article 23(2) of Regulation 1/2003. The ECJ also noted that the objective of applying the upper limit of 10% of the turnover of each undertaking participating in an infringement is, inter alia, to ensure that the imposition of a fine cannot exceed the capacity of an undertaking to make payment at the time when it is identified as responsible for the infringement. Therefore, the ECJ concluded that in the present case, the requirement set out in Article 23(2) of Regulation 1/2003 is respected where that ceiling is determined solely on the basis of the turnover of the subsidiary, in respect of the fine which is imposed exclusively on it. Consequently, the ECJ set aside the GC's judgment as regards the application of the upper limit of 10% calculated on the basis of the YKK group turnover for the period prior to its acquisition of YKK Stocko Fasteners, and reduced the fine solely imposed on YKK Stocko Fasteners to € 2.79 million. All the remaining pleas of the parties were rejected by the ECJ.
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