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Court of Justice dismissed Toshiba's appeal in the power transformers cartel case

Court of Justice dismissed Toshiba's appeal in the power transformers cartel case

02.02.2016 EU law

On 20 January 2016, the Court of Justice dismissed all appeal grounds brought by Toshiba and upheld the fine for its participation in the power transformers cartel. In 2009, the Commission imposed a fine of EUR 13.2 million on Toshiba for breaching Article 101 TFEU by participating in a market-sharing agreement with six other Japanese and European power transformer producers. 

During several meetings between 1999 and 2003, the parties orally agreed that the Japanese producers would not sell power transformers in Europe, and that the European producers would refrain from selling these products in Japan. Both the Commission and the GC considered that this "gentlemen's agreement" was a restriction of competition by object.

Toshiba argued on appeal that the GC could not have established the existence of a restriction of competition by object, since the parties to the cartel were not potential competitors. The Court of Justice found that the GC had properly assessed whether there was potential competition between the Japanese and European producers, in particular by showing that the barriers to enter the European market were not insurmountable. Moreover, the GC had considered that the oral agreement between the Japanese and European producers in itself was a strong indication that the parties were potential competitors.

Furthermore, the Court of Justice dismissed Toshiba's arguments in relation to the duration of the infringement. According to Toshiba, the GC had wrongly concluded that Toshiba had not distanced itself from the cartel activities at one of the meetings. The Court considered that it is sufficient for the Commission to show that the undertaking concerned participated in meetings at which anticompetitive agreements were concluded - without manifestly opposing them - to prove to the requisite standard that the undertaking participated in a cartel. Interestingly, the Court noted that the concept of "public distancing" reflects a factual situation and thus a number of indicia should be taken into account on a case-by-case basis. [See also our newsletter article on Eturas above]. In the present case, the GC had found that Toshiba had not distanced itself once and for all from the cartel, in particular because the terms of the agreement were confirmed during a meeting at which Toshiba was present and there were doubts as to whether Toshiba stopped participating in the cartel after that meeting. The perception of the other parties to the cartel therefore is of critical importance when it comes to evidence of "public distancing". [See also the Total judgment].

Finally, Toshiba claimed that the Commission and the GC should not have used worldwide market shares when calculating the fine, because the infringement only concerned the EEA and Japan. The Court held that limiting the geographic area to the EEA and Japan would not have appropriately reflected the weight of the undertakings in the cartel, as the power transformer producers were active worldwide.

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

  1. Court of Justice confirmed independence of EU and national leniency programmes
  2. Court of Justice reduced fine imposed on Galp Energía España and acknowledged excessive duration of General Court proceedings
  3. Court of Justice clarified the concept of a concerted practice for unilateral announcements
  4. Belgium's "excess profit" tax scheme qualified as illegal state aid
  5. German Competition Authority fined ASICS for restricting Internet sales of its distributors

Team

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