Short Reads

Court of Justice refers case against Infineon in relation to smart card chips cartel back to the General Court

Court of Justice refers case against Infineon in relation to smart ca

Court of Justice refers case against Infineon in relation to smart card chips cartel back to the General Court

01.10.2018 EU law

On 26 September 2018, the European Court of Justice partially set aside the judgment of the General Court in the smart card chips cartel case. Infineon had argued that the General Court wrongfully assessed only five out of eleven allegedly unlawful contacts. The Court agreed with Infineon insofar as its argument related to the amount of the fine imposed. Philips had also appealed the General Court judgment but that appeal was dismissed in its entirety meaning that the Court of Justice upheld the European Commission's decision and fine.

In September 2014, the Commission imposed fines on Infineon, Philips, Renesas and Samsung for their alleged involvement in a single and continuous infringement in the market for smart card chips. According to the Commission, the companies coordinated their pricing behaviour through bilateral contacts on pricing, production capacity, future market conduct and customers from 2003 to 2005.

Infineon (and, separately, Philips) appealed the Commission's decision before the General Court. In its appeal, Infineon specifically requested the General Court to examine whether it actually participated in the infringement at issue and, if so, the precise extent of that participation. It argued that the Commission had violated the principle of proportionality by setting the amount of the fine without taking into account the small number of bilateral contacts in which Infineon participated. On 15 December 2016, the General Court dismissed the appeals in their entirety [see our January 2017 Newsletter].

In its action before the Court of Justice, Infineon complained that the General Court examined only five of the eleven allegedly unlawful bilateral contacts whereas Infineon had disputed all those contacts. Infineon argued that this incomplete and selective judicial review was unlawful and resulted in an insufficient review of the fine.

The Court of Justice first ruled that the General Court did not err by establishing an infringement on the basis of only a limited number of contacts. However, the Court sided with Infineon as regards the – insufficient – assessment of the amount of the fine. The Court recalled that EU courts have unlimited jurisdiction with regard to the assessment of fines. The courts must therefore examine all factual and legal arguments raised on appeal which seek to show that the amount of the fine is not proportional to the gravity or the duration of the infringement. One relevant factor that must be taken into account in this context is the number and intensity of the incidents of anticompetitive conduct.

The Court of Justice ruled that the General Court should have assessed Infineon's pleas on the proportionality of the fine imposed in relation to the number of contacts involving Infineon. It therefore referred the case back to the General Court for it to examine whether the Commission established the six contacts on which the General Court had not yet adjudicated.

This article was published in the Competition Law Newsletter of October 2018. Other articles in this newsletter:

1. EFTA Court offers guidance for assessing national limitation periods for follow-on damages claims
2. Dutch Trade and Industry Appeals Tribunal annuls mail market analysis decision
3. UK Court upholds fine against Ping for online sales ban

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