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General Court annulled Commission's EUR 790 million fining decision in Air Cargo case

General Court annulled Commission's EUR 790 million fining decision in Air Cargo case

05.01.2016 NL law

On 16 December 2015, the General Court ("GC") annulled the Commission's fining decision holding 21 carriers liable for an infringement on the Air Cargo market. The GC found that the grounds of the decision were inconsistent with the operative part and the grounds moreover contained substantial internal inconsistencies. 

The inconsistencies were liable to infringe the defence rights of the carriers and prevented the GC from exercising its power of review. As a result, the decision in which fines amounted to approximately EUR 790 million was overturned.

On 9 November 2010, the Commission adopted a decision in which the grounds refer to one single and continuous infringement of EU competition rules by all 21 addressees. The operative part of the decision, however, describes four infringements relating to different periods, routes and varying groups of carriers. The division of the operative part in four infringements was based on the changed scope of the Commission's competence over the years: at the start of the alleged infringement the Commission was only competent to apply European competition law to routes between airports in the EEA. In later years,  the scope of its powers had increased. All but one carrier appealed the Commission's decision.

The GC considered that, in principle, as regards the scope and nature of the infringement, what is important is the operative part and not the statement of reasons. Therefore, the operative part of a decision must be particularly clear and precise to safeguard the rights of defence as enshrined in Article 47 of the Charter of Fundamental Rights of the European Union. Furthermore, an unambiguous and clear wording is important for national courts to draw the necessary inferences as regards civil claims for damages. 

According to the GC, the operative part was not sufficiently clear because no possible interpretation could be consistent with the grounds of the decision. Specifically, it was not clear from the decision why certain carriers were omitted from certain articles in the operative part. In addition, the grounds of the decision themselves suffered from significant internal inconsistencies.

The GC decided that as a result of these inconsistencies, the carriers were not in a position to understand the nature and scope of the alleged infringement. Therefore, their rights of defence were infringed and the GC was precluded from exercising its power of review. As a consequence, the GC annulled the decision in its entirety in relation to the carriers that had asked for full annulment. 

The Commission may appeal the judgment before the Court of Justice, choose to adopt a new fining decision, or do both.

This article was published in the Competition Law Newsletter of January 2016. Other articles in this newsletter:

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