Under point 37 of the 2006 Fining Guidelines, the European Commission ("Commission") may depart from its standard fining methodology if it is justified by the particularities of a given case or if there is a need to achieve deterrence in that particular case. In such circumstances, the Commission is required to provide a statement of reasons for this departure, including an explanation of the factors which enabled it to determine the gravity of the infringement and its duration, as well as explaining the weighting and assessment of the factors taken into account. The purpose of the obligation to state reasons is to provide the person concerned by a decision with sufficient information to know whether the decision may be vitiated by an error enabling its validity to be challenged, as well as permitting review by the EU Courts.
In the Streel abrasives case (Case T-433/16, Pometon SA v. Commission), the Commission had in April 2014 fined four companies (Ervin, Eisenwerk Würth, Metalltechnik Schmidt and Winoa) under the settlement procedure for coordination of steel abrasives prices. In May 2016, the Commission then fined the Italian company Pometon under the standard infringement procedure, after it failed to reach a settlement with the Commission (the "Decision"). On appeal, Pometon alleged that the Commission had failed to sufficiently state its reasoning for applying point 37 of the Fining Guidelines, thereby breaching the principles of proportionality and equal treatment.
In fixing the amount of the fines in the 2014 Settlement Decision, the Commission exercised its discretion by applying point 37 of the Fining Guidelines on the following three grounds: (i) the amount of the fines would have exceeded 10% of the total turnover of the companies involved in the infringement; (ii) the values of sales of the cartelised product represented a high proportion of the parties' total turnover and (iii) there were differences between the parties with regard to their individual participation.
In principle, the Commission may not discriminate in fixing the amount of the fine between the companies involved in the same infringement. In applying point 37 of the Fining Guidelines, the General Court ("GC") noted that the Commission did not refer to above point (ii) (i.e., the value of sales representing a significant part of the turnover) amongst the reasons justifying the reduction granted to Pometon. As a result, the GC considered that Pometon was not able to understand the difference between the reduction rate granted to it and the other participants in the cartel.
Due to the above, the GC determined that the statement of reasons in the Decision did not make it possible to identify the method of calculation used by the Commission to determine the level of fine adjustments and whether the reduction granted was granted in accordance with the principles of proportionality and equal treatment. The Decision was annulled on this basis.
The GC, in exercising its power of unlimited jurisdiction, re-calculated the fine and applied an exceptional reduction rate of 75% on the amount of the fine imposed on Pometon (from € 6.2 to € 3.8 million) based on, inter alia, its level of involvement in the infringement in comparison to the other settling companies.
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