- The Commission cannot summarily declare that cartel case documents are protected against disclosure but must undertake a concrete, individual examination of each documents
- European Competition Network Priorities: Defence of leniency Programme and Focus on the food sector
- Commission adopts rules on national support for electro-intensive users in context of the EU Emission Trading Scheme
- Preliminary ruling of the Court of Justice on a quantitative selective distribution system
1. The Commission cannot summarily declare that cartel case documents are protected against disclosure but must undertake a concrete, individual examination of each documents
Background of the Case
The applicant, EnBW Energie Baden-Württemberg AG (EnBW), is an energy-distribution company. It considers itself to have been affected by a cartel operated by producers of gas insulated switchgear (‘GIS’), which was fined by Commission Decision of 24 January 2007.
On 9 November 2007, the applicant sought from the Commission, on the basis of Article 2(1) of Regulation (EC) No 1049/2001, full access to the documents relating to proceedings in Case COMP/F/38.899 – Gas insulated switchgear. Then, following discussions with the Commission, the applicant, by fax of 11 January 2008, further clarified its request. It excluded from its demand three categories of documents: (i) all documents dealing exclusively with the structure of the undertakings concerned; (ii) all documents concerning exclusively the issue of who were the correct addressees of the Commission decision; and (iii) all documents that were drawn up wholly in Japanese.
On 30 January 2008, the Commission refused the applicant’s initial application, as amended on 11 January 2008. The applicant then made a confirmatory application, which was rejected by the Commission on 16 June 2008 (‘the contested decision’).
In the contested decision, the Commission classified the documents in Case COMP/F/38.899 in the following five categories:
1) documents provided in connection with an immunity or leniency application, namely statements from the undertakings in question and all documents submitted by them in connection with the immunity or leniency application;
2) requests for information and parties’ replies to those requests;
3) documents obtained during inspections, namely documents seized at on-the-spot inspections at the premises of the undertakings concerned;
4) statement of objections and parties’ replies thereto;
5) internal documents:
a. documents relating to the facts, that is, (i) background notes on the conclusions to be drawn from the evidence gathered, (ii) correspondence with other competition authorities and (iii) consultation of other Commission departments to have been involved in the case;
b. procedural documents, that is, inspection warrants, inspection reports, lists of documents obtained in the course of inspections, documents concerning the notification of certain documents and file notes.
The Commission explained that each of the categories fell within the exceptions provided for in the first (protection of the commercial interests of a natural or legal person) and third indent (the purpose of inspections and investigations) of Article 4(2) of Regulation No 1049/2001 and that the documents in category 5(a) also fell within the exception in Article 4(3) of Regulation No 1049/2001 (protection of the decision decision-making process). Furthermore, the Commission refused to grant partial access to the case-file because all the documents contained in the file were covered in their entirety by the exceptions listed in Regulation No 1049/2001.
On 25 August 2008, the applicant brought an action to annul the contested decision.
On 22 May 20121, the General Court upheld the action for annulment brought by EnBW. First, the General Court considered that the Commission erred in law when restricting the scope of the demand for access to documents whereas the applicant’s request was unequivocal. Second, the General Court concluded that the categories used by the Commission for the classification of the documents were artificial since it was based on the type of documents instead of the content. Third, the General Court states that the Commission misapplied the exceptions that exempt from proceeding to an individual, concrete examination of the documents. Finally, the General Court concludes that the Commission failed to establish to the required legal standard that the disclosure of the documents would undermine the very purpose of the investigation, would endanger commercial interests of the undertakings and would seriously undermine its decision-making process.
Findings of the Court
The scope of the request for access to documents
The General Court finds that the Commission erred in its restrictive interpretation of the scope of EnBW's request for access as regards internal procedural documents. The General Court notes that the applicant’s initial request and confirmatory request of 20 February 2008 has the same scope of disclosure even after the clarification sent by the fax of 11 January 2008, in that it seeks disclosure of ‘all the documents in the … Commission’s possession concerning the proceedings … in Case COMP/F/38.899’, with the exception of the three categories of document excluded. Therefore, the Commission should have called into question the restrictive interpretation it was giving to the scope of the request for access. The General Court decides to annul the contested decision in so far it refuses the applicant access to documents classified under category 5(b).
Failure to undertake a concrete, individual examination of the content of the document requested
The General Court recalls that according to case law there are three exceptions to the obligation to undertake a concrete, individual examination of the content of the document requested:
1) it is obvious, on the basis of a general presumption that access to documents requested had to be refused ;
2) documents belonging to the same category if they contain the same type of information;
3) the administrative burden entailed by a concrete individual examination of the documents would prove particularly heavy.
In the present case, the Commission based its decision on the first and the second exception but does not state to which documents these two exceptions apply.
First, the General Court rejects the Commission’s defence that the limitation of the request agreed by the applicant “was insufficient in view of the amount of the work generated by a concrete, individual examination”. The General Court makes clear that the reasons for a decision must appear in the actual body of the decision and explanations given ex post facto by the Commission cannot be taken into account. Consequently, this latter argument does not amount to a reason that was decisive in the adoption of the contested decision.
Secondly, as regards the first exception to a concrete, individual assessment based on the fact that documents were manifestly covered by an exception to the right of access, the General Court recognises that there are restrictions on access to the file that may apply in particular procedures such as State aid and cartel procedures. However, this does not mean that the Commission is able to hold that all the documents in its files related to cartel procedures are automatically covered by one of the exceptions laid down in Article 4 Regulation No 1049/2011. The Commission was not entitled to assume, without undertaking a specific analysis of each document that all the documents requested were clearly covered by the exception laid down in third indent of Article 4(2) of Regulation No 1049/2001.
Thirdly, as regards the second exception the General Court observes that a single justification may be applied to documents belonging to the same category, particularly if they contain the same type of information. However, in the present case the classification neither facilitated nor simplified the Commission’s task as regards the examination of the request and the justification for its decision, since the categorisation was by document type, irrespective of the information in the documents concerned. The Commission merely stated, very briefly, that the disclosure of those documents would threaten the purpose of the investigation but did not put forward any independent reasons connected to the specific content of the documents within that category. The Commission’s division into categories was thus, in the case of categories 1, 2, 4 and 5(a), artificial. It did not reflect real differences in the content of the documents within the various categories.
In the case of category 3, the General Court concludes that it was the only category of documents defined by the Commission which served any purpose in the examination of the request for access. The General Court seems to concede that for documents seized in the course of inspections at the premises of the undertakings, the Commission can rely specifically, on the legitimate expectation of the undertakings that documents which it has obtained in the exercise of its powers are not made public but are used exclusively for the purpose of competition proceedings. In fact those documents, contrary to the documents falling within the other categories which were provided by the undertakings on a voluntary basis, are obtained against the will of the undertakings concerned during unannounced inspections. The General Court admits that the justification given by the Commission with regard to the category 3 documents is based on specific criteria which are to be taken into account when deciding whether the documents in question should be disclosed. Nonetheless, that conclusion cannot pre-empt a concrete, individual examination.
Protection of the investigation in progress (Third indent of Article 4(2) of Regulation No 1049/2001)
The General Court notes that in the present case on the date of the adoption of the contested decision, the Commission had already adopted almost 17 months earlier the GIS cartel decision and thereby closing the proceedings. So, on that date, there was no investigation in progress to prove the existence of the infringements in question which could have been jeopardised by the disclosure of the requested documents.
The General Court considers that this finding is not altered by the fact that actions were pending before the General Court against this cartel decision, with the effect that if that decision was annulled, the proceedings could be re-opened. The General Court recalls that the investigation in a given case must be regarded as closed once the final decision is adopted, regardless of whether that decision might subsequently be annulled by the courts, because it is at that moment that the institution in question has itself considered the proceedings to be completed. The General Court once again refuses to make the access dependent on uncertain events, namely the outcome of that action and the conclusions which the Commission might draw from it. Furthermore, nothing in Regulation No 1049/2001 gives grounds for assuming that EU competition policy should enjoy treatment different from other EU policies. There is thus no reason to interpret the concept of the ‘purpose of investigations’ differently in the context of competition policy than in other EU policies.
Protection of the Commercial interests (First indent of Article 4(2) of Regulation No 1049/2001)
As regards the question how long the information has been in existence, the General Court states that there can be no question of applying a strict rule whereby all information relating to facts in existence for a particular length of time should be regarded as no longer affecting the commercial interests of the company to which it relates. Nevertheless, the fact that the information in question has been in existence for a particular period of time increases the likelihood that the commercial interests of the companies concerned will no longer be affected to an extent that justifies the application of an exception to the principle of transparency embodied in Regulation No 1049/2001.
In the present case, the information concerning the commercial activities of the companies in question covered a period of 16 years (from 1988 to 2004) and the Commission had therefore an obligation to carry out a concrete, individual examination of the documents requested from the point of view of the exception concerning the protection of commercial interests and could not confine itself to general assessments covering all the documents.
The General Court concludes that the passage of time is likely gradually to reduce the need for protection on grounds of commercial interests of the information held in a case-file. The fact that a period of more than two years had elapsed between the grant of access to the file under Article 27(2) of Regulation No 1/2003, in April 2006, and adoption of the contested decision, on 16 June 2008, was sufficient for the Commission to be obliged to carry out a further examination of the requirements for confidentiality deriving from the protection of the commercial interests of the undertakings concerned.
Protection of the decision making process (Second subparagraph of Article 4(3) of Regulation No 1049/2001)
The General Court examines whether the Commission made an error of law in that, having refused access to documents, falling within Category 5 (a) on the basis of the second subparagraph of Article 4(3) of Regulation No 1049/2001, its refusal covered documents which did not contain any opinions for internal use.
According to the Commission, settled case law of the Courts of the EU have considered as internal documents containing opinions within the meaning of second subparagraph of Article 4(3) of Regulation No 1049/2001, a note sent by DG COMP to the Advisory Committee, a file note and a report concerning the consequences of a judgment and the documents relating to the preparation of that report.
For the General Court the Commission is just seeking, by means of generalisations and analogies, to equate the concept of ‘opinions for internal use as part of deliberations and preliminary consultations’, within the meaning of the second subparagraph of Article 4(3) of Regulation No 1049/2001, with that of a ‘document drawn up by an institution for internal use’ within the meaning of the first subparagraph of that provision. The General Court considers that the Commission has failed to establish to the required legal standard that all the documents falling within category 5(a) contained opinions within the meaning of the second subparagraph of Article 4(3) of Regulation No 1049/2001.
Furthermore, the General Court emphasises that if the exception provided for in the second subparagraph of Article 4(3) of Regulation No 1049/2001 is to apply; the Commission had to show the decision-making process would have to be ‘seriously’ undermined. However, the Commission’s arguments are insufficient to justify the refusal to access to the documents requested.
Throughout this case, the General Court explains once again that the derogations from the principle of the widest possible public access to documents must be interpreted and applied strictly, in particular when related to antitrust procedures. The General Court does not admit general assertions that the disclosure of documents requested by a damage claimant will undermine the interests protected by the Transparency Regulation but instead, it requires the Commission to conduct a serious and a specific analysis of each documents requested.
2. European Competition Network Priorities: Defence of leniency Programme and Focus on the food sector
IIn May 2012, the Commission published on its website the European Competition Network (ECN) Resolution on protection of leniency material in the context of civil damages actions2 and the ECN Report on competition law enforcement and market monitoring activities by European competition authorities in the food sector3.
The ECN prioritises the protection of the leniency programme:
Following the judgment in Pfleiderer, the NCAs state their common position as regards the protection of leniency material. The NCAs view the development of private enforcement through damage actions as a complementary tool to enforce competition rules.
The resolution explains the joint position of all ECN competition authorities that the protection of leniency material is fundamental to the effectiveness of anti-cartel enforcement. The NCAs stress that action for damages are made possible only thanks to leniency programmes which permit to discover cartel activities. That is the reason why it is essential that leniency materials should be protected against disclosure to the extent necessary to ensure the effectiveness of leniency programmes.
ECN activities in the Food Sector:
The report shows that the food sector has been a priority of competition authorities in Europe over the last few years and that their action has intensified since the food price crisis broke out in 2007.
A155-page report provides a comprehensive overview of the most significant enforcement and monitoring actions undertaken by NCAs and the Commission from 2004 to 2011. In total, they have launched more than 180 investigations, reviewed approximately 1300 merger operations and monitor more than 100 markets.
The NCAs have scrutinised all levels of the supply chain. The majority of cases concern the processing level (28% of the antitrust cases) followed by the retail sector (25% of the antitrust cases). Half of the total number of individual cases pursued by competition authorities focused on horizontal agreements among competitors, meaning in practice that authorities have sanctioned more than 50 cartels involving price fixing, market and customer allocation and the exchange of sensitive business information. They are investigating more than 30 further potential cartels at present. The remaining infringements include vertical restrictions, such as resale price maintenance - i.e. a food manufacturer setting the minimum price at which a retailer has to sell its products - and abuses of dominance, such as exclusivity obligations or imposing minimum purchasing quantities. The report outlines that "cereals, dairy and a category of multiproductsare the most investigated sectors in antitrust cases”.4
In the accompanying press release, the Commission makes clear that the food sector will remain a high priority for European Competition Authorities. They are currently investigating about 60 further antitrust cases and carrying out further monitoring actions. Also, at the beginning of this year, the Commission created the task force food within DG COMP to address the increase of workload and the complex competition issues experienced by DG COMP in the agri-food sectors.
3. Commission adopts rules on national support for electro-intensive users in context of the EU Emission Trading Scheme
On 22 May 2012, the Commission adopted a Communication “Guidelines on certain State aid measures in the context of the Greenhouse Gas emission allowance Trading Scheme”.5
The provisions of the EU Emissions Trading Scheme (ETS) 6 agreed in 2009 and which will apply as from 1 January 2013 mean that electricity bills for companies in the EU are expected to increase as a result of the stricter cap under the ETS post 2012. However, under Article 10a (6) of the ETS Directive “Member States may grant State aid in favour of sectors or subsectors deemed to be exposed to a significant risk of carbon leakage due to costs relating to greenhouse gas emissions passed on in electricity prices (hereinafter referred to as indirect emission costs), in order to compensate for those costs in accordance with State aid rules”.
The Communication sets up the framework under which Member states may compensate some electro-intensive users for part of the higher electricity costs expected due to the ETS as from 2013.
Annex II of the Communication identifies 14 industrial sectors that can be eligible for state aid. The sectors or subsectors listed in the Annex II have been deemed to be exposed to a significant risk of carbon leakage if the intensity of trade with third countries is above 10 % and the sum of indirect additional costs induced by the implementation of the ETS Directive would lead to a substantial increase in production costs, calculated as a proportion of the gross value added, amounting to at least 5%.
Also, the maximum aid amount that Member States can grant must be calculated according to a formula that takes into account the installation’s baseline production levels or the installation’s baseline electricity consumption levels as defined in these Guidelines, as well as the CO2 emission factor for electricity supplied by combustion plants in different geographic areas.
From 6 June 2012, the Commission applies the Guidelines. They will be applicable until 31 December 2020. The Commission will apply these Guidelines to all notified aid measures in respect of which it is called upon to take a decision after the Guidelines are published in the Official Journal, even where the projects were notified prior to their publication.
Sectors deemed ex-ante to be exposed to a significant risk of carbon leakage due to indirect emission costs For the purposes of these Guidelines, an aid beneficiary's installation may receive State aid for indirect emission costs under Section 3.3 of these Guidelines, only if it is active in one of the following sectors and subsectors. No other sectors and subsectors will be considered eligible for such aid.
||Mining of chemical and fertiliser minerals
||Manufacture of other inorganic chemicals
||Lead, zinc and tin production
||Manufacture of leather cloths
||Manufacture of basic iron and steel and of ferro-alloys, including seamless steel pipes
||Manufacture of paper and paperboard
||Manufacture of fertilisers and nitrogen compounds
||Manufacture of other organic basic chemicals
||Spinning of cotton-type fibres
||Manufacture of man-made fibres
||Mining of iron ores
||24161039 24161035 24161050 24165130 24163010 24164040
||The following sub-sectors within the Manufacture of plastics in primary forms sector (2416): Low Density Polyethylene (LDPE) Linear Low Density Polyethylene (LLDPE) High Density Polyethylene (HDPE) Polypropylene (PP) Polyvinyl Chloride (PVC) Polycarbonate (PC)
4. Preliminary ruling of the Court of Justice on a quantitative selective distribution system
In a judgment handed down on 14 June 20127, the Court of Justice concludes that, in order to benefit from an exemption under the Motor Vehicle Block Exemption Regulation No 1400/2002 (‘MVBER’), a supplier who decides to use a quantitative selective distribution system to organize its distribution network, is under no obligation to guarantee that quantitative criteria are objectively justified and does not have to apply those criteria in a uniform and non-differentiated manner in respect of all applicants for authorisation.
The MVBER provides a safe harbour that exempts a whole category of vertical agreements (motor vehicle distribution and repair agreements) from the prohibition laid down in Article 101(1) TFEU. In the context of a ‘selective distribution system’, the supplier undertakes to sell the contract goods or services, either directly or indirectly, only to distributors or repairers selected on the basis of ‘specified criteria’. There are two types of selective distribution systems covered by the exemption regulation: (i) quantitative selective distribution systems (in order to select distributors, the supplier uses criteria which directly limit their number ); and (ii) qualitative selective distribution systems (the supplier uses purely qualitative criteria for the selection of distributors which are laid down uniformly for all distributors and applied in a non-discriminatory manner, and do not directly limit the number of distributors). The present case concerns a quantitative distribution system. Jaguar Land Rover France (‘JLR’) imports new motor vehicles and LAND ROVER branded products into France. From 1994 to 2002, Auto 24 was the exclusive distributor of JLR inPérigueux. After termination of the contract, JLR concluded with Auto 24 anauthorised repairer contract but rejected Auto 24’s application to be an authoriseddistributor. In 2005, JLR was condemned for discriminatory conduct and was ordered to pay EUR 100 000 to Auto 24 in damages for the loss of profit which the latter could have made if it had acquired the status of authorised distributor. However, JLR again refused Auto 24 the status of authorised distributor inPérigueux, on the basis of a ‘numerus clausus’ drawn up by Land Rover, which establishes the possibility to appoint 72 dealers covering 109 sites in France. Auto 24 brought an appeal before the French Supreme Court and maintains that all quantitative criteria which directly limit the number of distributors or repairers must satisfy objective economic justifications, of which the supplier must provide evidence, and must be applied in a uniform and non-discriminatory manner in all of the catchment areas and to all of the potential candidates for the distribution system. The French Supreme Court decided to stay the proceedings and to refer a question to the Court of Justice. The Referring Court asks whether the term ‘specified criteria’ in Article 1(1)(f) of the MVBER must be interpreted as meaning that it requires, in order to benefit from the exemption, a quantitative selective distribution system to be based on criteria which are objectively justified and applied in a uniform and non-differentiated manner in respect of all applicants for authorisation.
The Court of Justice observes that as regards both quantitative selective distribution systems and qualitative selective distribution systems, within the meaning of the Regulation, distributors must be selected on the basis of ‘specified criteria’, as provided for in Article 1(1)(f) of the MVBER. The Court of Justice confirms that the term ‘specified criteria’ must be interpreted as referring to criteria whose precise content may be verified. However, it is not necessary that, with a view to verification of their precise content, that the supplier publishes the selection criteria used for the purposes of a selective distribution system, at the risk of compromising business secrets, or even facilitating possible collusive behavior. In addition, nothing in the definition of the concept of ‘quantitative selective distribution system’ in the Regulation, tends to assert that the criteria applied by the supplier must be objectively justified and applied in a uniform and non-differentiated way with regard to all applicants for authorisation. It is only in the context of qualitative selective distribution systems that the Regulation, stipulates that the selection criteria used by the supplier should be ‘required by the nature of the contract goods or services, … laid down uniformly for all distributors or repairers applying to join the distribution system, [and] not applied in a discriminatory manner’. Also, it is not apparent from the scheme of the Regulation that the legislator wished to impose the same conditions for exemption as regards quantitative selective distribution systems. The Court of Justice underlines that if the same notion of specified criteria was imposed on the two systems, “that would result in a conflation of the conditions required by the Regulation for the application of the exemption to qualitative selective distribution systems and those required for the application of the exemption to quantitative selective distribution systems.” The Court of Justice confirms that in the context of the MVBER, the carmakers are allowed to use a quantitative selective distribution system to organize their distribution network. The quantitative selection criteria must not be objectively justified and non-discriminatory but still the system must be based on criteria whose precise content may be verified.
- Case T-344/08 -EnBW Energie Baden-Württemberg v Commission  ECR II-0000 22 May 2012
- Resolution - Protection of leniency material in the context of civil damages actions- 23 May 2012
- Sector Report - ECN activities in the food sector – 24 May 2012
- Commission 2011 Annual report on Competition Policy – COM (2012) 253 final of 30 May 2012, published on DG COMP Website on 19 June 2012
- Commission Communication - Guidelines on certain State aid measures in the context of the greenhouse gas emission allowance trading scheme post 2012 adopted on 22 May 2012 –  OJ C 158/4 5 June 2012
- Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community –  OJ L140/63 5 June 2009
- Case C-158/11 – Auto 24 SARL v Jaguar Land Rover France SAS  ECR I-0000 14 June 2012
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