Summary of significant case development
On 28 March 2019, the General Court ("GC") delivered a judgment on an appeal lodged by Pometon against the European Commission's ("Commission") decision in the Steel Abrasives cartel case (Case T-433/16, Pometon SA v. Commission).
In April 2014, the Commission imposed fines totalling over € 30 million on four companies (Ervin, Winoa, Metalltechnik and Eisenwek Würth) for their involvement in the Steel Abrasives cartel case (see VBB on Competition Law, Volume 2014, No. 4, available at www.vbb.com). The case was handled under the Commission's cartel settlement procedure. Pometon, an Italian abrasives producer under investigation, decided to discontinue the settlement discussions with the Commission and follow the standard infringement procedure. In May 2016, the Commission imposed a fine of € 6.2 million on Pometon (see VBB on Competition Law, Volume 2016, No. 5, available at www.vbb.com).
On appeal, the GC rejected most of the pleas raised by Pometon, including that the Commission had violated the principle of a fair trial, the principle of the presumption of innocence, the principle of impartiality and its rights of the defence because the Commission had referred to specific conduct of Pometon in the settlement decision. The GC, however, upheld the argument raised by Pometon that the Commission had failed to provide an adequate statement of reasons when departing from the standard fining methodology by applying point 37 of the Fining Guidelines in fixing the amount of the fine imposed on Pometon. The GC, in exercising its power of unlimited jurisdiction, reduced the amount of the fine imposed on Pometon from € 6.2 to € 3.8 million.
Analysis of important substantive and procedural developments
Steel Abrasives cartel case –The principle of fair trial in hybrid cartel settlement cases
Hybrid settlements cases arise when one or more parties withdraw from a settlement procedure and the Commission decides to continue the case against these parties under the standard infringement procedure. Because both procedures run in parallel, hybrid settlement cases raise questions on impartiality, objectivity, independence, equal treatment and legitimate expectations when the Commission adopts a decision under the standard infringement procedure.
In Pometon (Case T-433/16, Pometon SA v. Commission), the GC was called upon to rule on a hybrid cartel case and the interplay between the standard infringement procedure and the settlement procedure. Amongst the issues examined were the principle of fair trial, the principle of the presumption of innocence and the rights of defence.
In its judgment, the GC held that the Commission did not infringe its duty of impartiality nor the principle of the presumption of innocence in the standard infringement procedure against Pometon when it referred to Pometon (i.e., the non-settling party) in the settlement decision adopted two years prior to the adoption of the standard infringement decision. According to the GC, there was no indication in the settlement decision that the Commission had already decided that Pometon had infringed Article 101 of the Treaty on the Functioning of the European Union.
In this respect, the GC found that the Commission took the necessary editorial precautions when drafting the settlement decision to ensure that the procedural guarantees enjoyed by Pometon in the subsequent standard infringement procedure were not jeopardized. For example, the Commission only referred to Pometon in the description of the events and not in the legal assessment of the conduct at issue. In addition, Pometon was not an addressee of the settlement decision. A footnote of that decision even specified that: (i) the settlement decision was based on matters of fact as accepted by the settling parties; (ii) the references involving the non-settling party were exclusively used to establish liability of the settling parties and (iii) the standard procedure against the non-settling party was still pending.
In addition, the GC held that the references to Pometon in the settlement decision were useful to appropriately describe the origin of the cartel, as well as to clarify its territorial scope and evolution over time.
Interestingly, the GC stated that, when a company freely decides to follow a so-called hybrid procedure, that company cannot claim on the basis of the principle of innocence that the Commission must completely ignore in the settlement decision some of the facts set forth by the settling companies.
For all the above reasons, the GC concluded that Pometon's rights of defence were not infringed when the Commission adopted the infringement decision.
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