1. ECJ confirms annulment of EUR 100 million fine on Aalberts
On 4 July 2013, the European Court of Justice (“ECJ”) rendered a judgement in the Aalberts case (C-287/11 P). The appeal as initiated by the Commission was rejected in its entirety. As a result the over EUR 100 million fine imposed on a number of entities of the Aalberts group has now been annulled definitively.
In 2006, the Commission had fined a number of entities in the Aalberts group (“Aalberts”) for alleged participation in the Fittings cartel (COMP/F 1/38.121). In 2011 Aalberts had already been successful in contesting the Commission’s evidence that it had re-joined the cartel after the Commission had conducted inspections in 2001. The General Court ("GC") sided with Aalberts and quashed the Commission decision in relation to Aalberts. The GC held at the time that the Commission had insufficiently established that two subsidiaries of Aalberts had actually been involved in infringing behaviour after 2001.
Subsequently, the Commission appealed the GC’s judgement arguing, essentially, that the GC had “distorted” the evidence presented to it, inter alia, by failing to jointly assess various pieces of evidence pertaining to two Aalberts subsidiaries. As a second point, the Commission took issue with the fact that the GC had annulled the Commission decision in its entirety, whereas it should have at least upheld part of the fine in view of the participation by one of the Aalberts’ subsidiaries in an anti-competitive meeting. On the first point, AG Mengozzi actually agreed with the Commission in his Opinion of 28 February 2013.
The ECJ, however, rejects both arguments. On the first point the Court agrees with the Commission that the GC erred in law by examining whether the two Aalberts’ subsidiaries participated in the infringement separately without first ruling on the issue whether these subsidiaries formed part of the same “undertaking”. The ECJ continues to note, however, that as long as other grounds remain to uphold the conclusions of the GC, such finding would have no consequences. Next, the ECJ notes that for the undertaking Aalberts to have infringed the competition rules, at least one of the Aalberts’ subsidiaries must be considered to have done so. This latter point was examined by the GC and established that this was not the case. In relation to the Commission’s arguments that the GC had distorted the evidence in the context of that latter assessment, the ECJ remains unconvinced. The Court notes that on the one hand the Commission asked for a re-assessment of evidence whereas such a factual assessment is only for the GC to conduct. On the other hand, it notes that there was no “clearly incorrect” assessment on the part of the GC warranting the conclusion that the GC “manifestly exceeded the limits of a reasonable assessment”. Consequently, the Court rejects the first appeal ground.
On the second point, the ECJ recalls that partial annulment of a decision is only possible if those elements that are to remain valid “can be severed from the remainder of the act”. The ECJ rejected the notion that this decision could be upheld in relation to the participation of one of the Aalberts subsidiaries in an alleged anti-competitive meeting, as the Commission had clearly identified a “single and continuous infringement” in its decision without specifying that the relevant meeting as such also qualified as an infringement. In contrast, the Commission had even noted in the decision that it would be “artificial” to split up the single and continuous infringement into separate infringements. Under those circumstances this element could not be severed from the annulled decision. Hence, also the second ground could not be successful.
This ECJ judgement marks the end of long lasting litigation and leads to the largest fine annulment ever based on the merits. In this sense it reconfirms the, perhaps increasingly, critical stance of the EU courts towards Commission fining decisions.
2. ECJ dismisses removal companies' appeals
On 11 July 2013, the European Court of Justice ("ECJ") dismissed a number of appeals brought by removal companies in the International Removal Service Markets cartel in Belgium (Team Relocations and Others v Commission C-444/11 P and Gosselin Group v Commission C-429/11 P).
The Court held in case the Gosselin Group v Commission that participation for the second time in the same cartel three years after the end of the first participation, is a continuation. Therefore the limitation period of 5 years to bring proceedings was interrupted and only started to run after the end of the second participation. Nevertheless, the Court agreed that the three years in between when there was no participation, cannot be taken into account when calculating the fine.
Again regarding the duration and the manner in which it is taken into account for calculating the fine, the Court upheld in case Team Relocations and Others v Commission that Article 23(3) of Regulation No 1/2003 does not preclude the multiplication of the fine by the number of years a company participated in the cartel. The Court upheld the General Court’s ruling that while this "represents a fundamental change in methodology as to how the duration of the cartel is taken into consideration", Article 23 nevertheless does not preclude such a development.
In several cases, arguments were also raised in relation to the decision to calculate the basic fine based on 17% of the value of sales of the previous year in the relevant market and especially the Commission’s reasoning in this regard. Though the Court acknowledged that the gravity of the infringement should be assessed on an individual basis and the range should be somewhere between 0 and 30% of the value of the sales, it held that secret agreements on prices (including agreements on false quotes or “cover quotes”) and market sharing constitute a "very serious" infringement. The Commission 2006 Fining Guidelines clarify that in such a case, the proportion of the value of sales taken into account will generally be set "at the higher end of the scale". As the Commission and the General Court had established that the current cases concern these types of agreements, they did not have to provide more explanation regarding the choice to apply a percentage of 17%, given that this is in the lower end of the upper scales. The Commission is thus allowed to base its decision solely on the intrinsic gravity of the infringement and is not forced to take into account other elements and circumstances.
With regard to the determination of the basic amount of the fine the Court also held, in the Team Relocations case, that the concept of the relevant ‘value of sales’ on which to apply the calculation of fines "cannot extend to encompassing sales made by the undertaking in questions which do not fall within the scope of the alleged cartel". However, at the same time, the Court warned that it would be contrary to the goals of Article 101 TFEU to interpret point 13 of the 2006 Guidelines "as applying only to the turnover achieved by the sales in respect of which it is established that they were actually affected by that cartel". Such interpretation would amount to reward for being secretive.
3. The ECJ holds that absence of economic activity of a parent company is irrelevant for establishing parental liability
On 11 July 2013, the European Court of Justice ("ECJ") handed down its judgement in the case Commission v. Stichting Administratiekantoor Portielje and Gosselin Group NV (C-440/11 P). The ECJ found that the General Court ("GC") had committed errors in law in (i) requiring that the parent be engaged in economic activity before it can be held liable through parental liability established in Akzo Nobel and Others v Commission (C-97/08P) and (ii) accepting as sufficient the evidence adduced to rebut the presumption.
At first instance, the GC accepted Portielje's appeal arguments that the Commission should have established first that as a parent it was involved in an economic activity, thereby rendering it an undertaking in its own right, before it could impute the conduct of its virtually wholly owned subsidiary Gosselin. In the alternative, the GC also found that even if the presumption of decisive influence could be applied to Portielje, it had overcome this presumption through evidence demonstrating that the decisions and meetings of the board of directors had taken place after the infringement. In addition, the GC accepted Portielje's arguments that the personal links between Portielje's and Gosselin's board of directors did not demonstrate that there was exercise of decisive influence, direct or indirect. However, Portielje's win was short-lived.
The ECJ rejected the analysis of the GC as unfounded in the law. The ECJ held that it is not required to find that the parent is involved in an economic activity in its own right before the rebuttable presumption of decisive influence can be applied, given that it was already found to be part of an undertaking together with Gosselin. In addition, the ECJ found that the GC had only looked at national corporate law to find that the rebuttable presumption had been overcome and did not take into account other legal and economic links as established by the jurisprudence. The ECJ therefore held that the GC had committed errors of law and vacated its judgement.
Procedurally, the ECJ used its powers under Article 61 of the Statute of the Court of Justice of the European Union to give a final judgement in the case. It analysed the pleadings submitted by Portielje before the GC and agreed with the Commission's findings that Gosselin's infringement of Article 101 TFEU could be attributed to Portielje through the rebuttable presumption of decisive influence by a parent.
4. The ECJ rejects fundamental pleas brought forward in Schindler v Commission
On 18 July 2013, the European Court of Justice ("ECJ") dismissed the appeal of Schindler Holding Ltd. and several of its group companies ("Schindler") against a Commission decision finding that several national subsidiaries participated in an infringement on the market for the sales, installation, maintenance and modernization of elevators and escalators (C-501/11 P).
Schindler's pleas related primarily to breaches of its fundamental rights, in particular the nulla poena sine lege certa principle, the principle of retroactivity, and requirements of a fair process as contained in Article 6 of the European Convention of Human Rights and Article 47 of the Charter of Fundamental Rights. The ECJ either found these pleas unfounded by simply referring to existing case law or declared them inadmissible for being too obscure.
Several of Schindler's pleas related to the amount of the fine the Commission imposed. Schindler pleaded that the General Court had incorrectly reviewed the Commission's reduction in the amount of the fine for cooperation. In particular, Schindler argued the General Court had erred by ruling that such a decision can only be challenged when the Commission manifestly exceeds the bounds of its margin of discretion. The ECJ agreed with Schindler that the General Court cannot use the Commission's margin of discretion as a basis for determining whether the Commission applied the Leniency Notice correctly. However, the ECJ did find that the General Court had nevertheless fully reviewed the Commission's decision by examining the evidence relied upon by Schindler in order to determine whether they had provided significant added value.
Finally, Schindler pointed out the fines companies in its group received for their participation in the infringement constituted a disproportionately large percentage of their average aggregated turnover. According to Schindler, a fine not exceeding the ceiling of 10% turnover could still be disproportionate. The ECJ dismissed the plea, considering that the evaluation of the proportionality of a fine should be based on the entire group's inability to pay. The Court considered that a legal person's ability to pay cannot be taken into consideration individually where fines are imposed on an undertaking which constitutes an economic unit and is composed only formally of a number of legal persons.
5. Rotterdam district court annuls the fine imposed on a waste collecting cartel over misuse of wiretaps
On 11 July 2013 the Rotterdam District Court annulled a fine that was imposed by the ACM (at the time, known as the NMa) on companies for manipulation of prices for waste collection in the port of Rotterdam. The annulment was due to the public prosecutor’s failure to adequately substantiate why it had provided the ACM with wiretaps that were obtained during an unrelated criminal investigation.
In 2006, the intelligence and investigation service of the Ministry of Housing, Spatial Planning and the Environment ("VROM-IOD"), investigated the infringement of the Environmental Management Act. The wiretaps that were used by the VROM-IOD revealed discussions that appeared to indicate infringements of the Dutch Competition Act.
After receiving authorization from the public prosecutor, an official report that contained the VROM-IOD's suspicions was provided to the ACM, including some transcripts of the wiretaps. This report was the only reason for the ACM to investigate the matter, as it had no other indication of illicit conduct. During the investigation, the ACM requested more transcripts, summaries and the tapes themselves, which were all provided with the authorization of the public prosecutor.
In its decision, the Court explicitly refers to its previous judgement of 13 June 2013, which also dealt with the sharing of wiretaps regarding a cartel concerning fake bids on construction contracts. The Court held that it had no reason to rule differently in this case. It therefore reiterated that there has to be an adequate substantiation from the public prosecutor when information from a criminal investigation is shared with third parties. Referring to Article 8 of the European Convention of Human Rights and Article 39 of the Judicial Data and Criminal Records Act, the Court held that the public prosecutor should also assess the necessity to provide the information and see whether the requirements of the principles of proportionality and subsidiarity are met.
The Court annulled the imposed fine as the public prosecutor failed to adequately substantiate why it had provided the information. Both this judgement and the judgement of 13 June 2013 demonstrate that there is a clear obligation for the public prosecutor to provide an assessment that can be checked and tested by a court. This is particularly so, as the use of wiretaps is a special investigatory method, for which a delegated judge has to give specific authorization.
The ACM has idicated a statement that it will appeal both judgements before the Trade and Industry Appeals Tribunal.
6. Commission consults on revision of De Minimis notice following the Expedia judgement
On 11 July 2013, the Commission invited third parties to submit their observations on its proposal to revise its guidance notice on the assessment of minor agreements that currently fall outside the scope of the prohibition on anti-competitive arrangements (i.e. the De Minimis notice). This notice currently provides for a safe harbour for companies whose market shares do not exceed 10% for agreements between competitors or 15% for agreements between non-competitors. The Commission now aims to bring the notice in line with the Expedia judgement of the European Court of Justice (“ECJ”). In this judgement the ECJ ruled that a national competition authority is not required to take into account the thresholds established in the De Minimis notice in order to determine whether or not a restriction of competition is appreciable. The Court concluded that an agreement that has an effect on the interstate trade and an anti-competitive object constitutes an appreciable restriction on competition per se.
In view hereof the Commission wishes to clarify in its revised notice that as regards agreements between competitors, the Commission will not apply the safe harbour to agreements containing price fixing arrangements, to agreements that limit output or sales or that allocate markets or customers. The Commission will neither apply the safe harbour to agreements containing any of the restrictions that are defined or listed as hardcore restrictions in any current or future Commission block exemption regulation. According to the Commission such restrictions are generally considered as restrictions by object. This implies that, for instance, a resale price maintenance obligation in a vertical agreement that has an effect on interstate trade will be caught by the prohibition of Article 101 (1) TFEU, even when the two parties to the agreement only possess minor market shares.
The consultation period lasts until 3 October 2013.
7. District Court of Rotterdam partly rejects jurisdiction in elevator damage claims case
On 17 July 2013, the District Court of Rotterdam ruled in an interim decision on jurisdiction in an antitrust 'follow-on' litigation case between Stichting Elevator Cartel Claim and Kone and ThyssenKrupp (C/10/390424 / HA ZA 11-2071). The Court rejected jurisdiction with regard to claims against non-Dutch subsidiaries of Kone and ThyssenKrupp.
Kone and ThyssenKrupp were fined by the European Commission for four separate infringements on the elevator and escalator market, relating to the national markets in the Netherlands, Belgium, Luxembourg and Germany. Stichting Elevator Cartel Claim is a foundation which represents various parties that claim to be harmed by the alleged infringements. The foundation instituted claims against the ultimate parent companies of the Kone and ThyssenKrupp groups and against the national subsidiaries that were directly involved in the infringements according to the Commission decision.
The Court ruled that it has jurisdiction to assess the claims against the Dutch subsidiary of ThyssenKrupp as it is established within the judicial district of the Rotterdam court. The Rotterdam Court also found that it had jurisdiction over the Dutch subsidiary of Kone given that Kone did not dispute jurisdiction in that regard.
The Court holds it does not have jurisdiction over the non-Dutch subsidiaries of ThyssenKrupp and Kone as the claims against these entities do not have the required close relationship to the claims against the Dutch subsidiaries. The Court considers that the Commission decision relates to four national infringements regarding the national subsidiaries of ThyssenKrupp and Kone. These four national infringements have different characteristics with regard to their nature, duration and the products involved. In addition, the applicable civil law will most likely also be different per infringement. Consequently, the claims relating to the alleged infringements in Belgium, Luxembourg and Germany against the non-Dutch subsidiaries do not have a sufficiently close relationship to the claim relating to the alleged infringement in the Netherlands against the Dutch subsidiaries. Therefore, the Court cannot assume jurisdiction on this basis. The Court also cannot assume jurisdiction on the basis of the location of the tort, given that neither the Handlungsort nor the Erfolgsort are in the judicial district of the Rotterdam district court.
The Court does partly assume jurisdiction for the claims against the parent companies of Kone and ThyssenKrupp. The court considers that Stichting Elevator Cartel Claim holds the parent companies, inter alia, liable for the alleged infringement in the Netherlands by their Dutch subsidiaries. If the Court would not assume jurisdiction in relation to parent company liability for the Dutch infringements there would be a risk of contradictory decisions, which should be prevented. The Court however rejects jurisdiction for the claims against the parent companies for the non-Dutch infringements.
The Court does not decide whether the parent companies can actually be held liable in civil proceedings for an infringement by a subsidiary. Parent company civil liability is not a question of jurisdiction and should be answered at a later stage of the proceedings.
The practical effect of the decision is that the Court may only assess the claims relating to the alleged infringement in the Netherlands, and not the claims relating to the alleged infringements in Belgium, Luxembourg and Germany.
8. ACM consults on draft guidelines on investigations into analogue and digital data
On 3 July 2013 the Authority for Consumers & Markets (Autoriteit Consument & Markt; "ACM") published a consultation document presenting two sets of draft guidelines: the "2013 ACM Guidelines on investigations into analogue and digital data" (ACM Werkwijze onderzoek analoge en digitale gegevens 2013; "WOADG") and the "2013 ACM Guidelines on privileged data" (ACM Werkwijze geprivilegieerde gegevens 2013; "WGG"). The guidelines describe how the ACM will treat data collected during investigations into possible competition law infringements or other infringements supervised by the ACM. They replace the guidelines of the three supervisors that merged into the ACM.
The very concise WOADG are based on the legal safeguards that have to be provided to parties involved in investigations of the ACM. Under the WOADG the procedural steps for investigations of data will be decided on a case by case basis. During a presentation of the consultation document the ACM indicated that under the WOADG, the principle of on-site investigation of digital data will be abandoned. Digital data will be secured at the premises of the undertakings involved and will be subsequently be searched at the premises of the ACM. Furthermore, the ACM indicated that under the WOADG, the investigation of metadata will become more important.
The WGG includes a detailed description of the different procedural steps that have to be followed if data is claimed legally privileged. Contrary to the old system, digital data will not be searched by the ACM until the undertakings involved have been given the opportunity to claim legal professional privilege and these claims have been assessed by a "Legal Professional Privilege officer" that is not involved in ACM investigations in any other way.
The ACM invites any party involved to provide her with input on the consultation document. The ACM particularly requests for suggestions that could improve the practicability of the guidelines. Responses can be sent to the ACM before 20 August 2013. The ACM expects to adopt the final versions of the guidelines by the end of 2013.