On 10 March 2016, the Court of Justice ruled that the European Commission's requests for information addressed to several cement companies did not contain an adequate statement of reasons. Consequently, the Court of Justice set aside the judgments of the General Court upholding the Commission decisions [see our April 2014 newsletter].
In 2011, as part of an investigation into suspected infringements in the cement industry, the Commission requested several cement manufacturers to provide information on their market activities. The lengthy requests were sent to the companies to provide extensive and detailed information relating to a considerable number of domestic and international transactions in relation to twelve countries over a period of ten years.
Several cement companies filed an action for annulment before the General Court, arguing, among other things, that the request for information was disproportionate and did not provide adequate information on the subject and purpose of the investigation. In 2014, the General Court dismissed these arguments in their entirety and four cement manufacturers brought appeals before the Court of Justice.
The Court of Justice agreed with the undertakings involved that the requests for information did not adequately state the purpose of the requests. In this regard, it held that an "excessively succinct, vague and generic — and in some respects, ambiguous — statement of reasons does not fulfill the requirements of the obligation to state reasons." Because of these inadequacies, it was excessively difficult for the undertakings to determine whether the requested information was necessary for the purposes of the investigation and justified the adoption of the decisions. As the requests for information were sent at a time when the Commission already had sufficient information to indicate more precisely the suspicions of infringement by the cement companies, the Court of Justice concluded that the General Court erred in law in finding that the Commission decisions contained an adequate statement of reasons.
The strict approach taken by the Court of Justice in this judgment confirms that the Commission cannot conduct 'fishing expeditions' by sending broadly worded requests for information without clearly defining its purpose, particularly long after the start of an investigation. This is a welcome message for undertakings under investigation, which should be able to assess the scope of their duty to cooperate and safeguard their rights of defence.
This article was published in the Competition Law Newsletter of April 2016. Other articles in this newsletter:
1. Initial findings of Commission's e-commerce sector inquiry show widespread use of geo-blocking
2. ACM fined cold-storage companies and their executives EUR 12.5 million for breaching competition law during merger negotiations
3. Dutch Trade and Industry Appeals Tribunal confirmed that ACM can use EU-wide turnover in calculating the fines in onion cartel case
4. New Leniency Guidelines applicable in Belgium since 22 March 2016
5. Belgian Constitutional Court rules that actions for antitrust damages cannot be time-barred before the final infringement decision is rendered