ABB Asea Brown Boveri Ltd v European Commission: T-31/99

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ABB Asea Brown Boveri Ltd v European Commission: T-31/99

[2002] ECR II-1881, [2002] All ER (D) 305 (Mar)

Court: CFI

Judgment Date: 20/03/2002

Catchwords & Digest

EUROPEAN COMMUNITY - RULES ON COMPETITION - AGREEMENTS PREVENTING, RESTRICTING OR DISTORTING COMPETITION - CARTEL - DISTRICT HEATING SECTOR - EUROPEAN DISTRICT HEATING UNDERTAKINGS PARTICIPATING IN AGREEMENT DIVIDING NATIONAL MARKETS ON BASIS OF QUOTAS, ALLOCATING MARKETS AND PROJECTS, FIXING PRICES AND PROTECTING CARTEL FROM ONLY SUBSTANTIAL NON-MEMBER - COMMISSION RULING THAT AGREEMENT INFRINGING RULES ON COMPETITION AND FINING PARTIES - UNDERTAKING SEEKING ANNULMENT OF DECISION - COMMISSION DECISION (EC) 1999/60 - COUNCIL REGULATION (EEC) 17/62 - ARTICLE 81 EC (FORMERLY EC TREATY, ART 85)

The applicant was a multinational group company involved in district heating where premises were heated by a system where water heated at a central site was taken by underground pipes to the premises. In 1995, the Swedish undertaking Powerpipe AB complained to the Commission of the European Communities that other manufacturers and suppliers of district heating pipes had shared the European market in a cartel and that they had adopted concerted measures to harm its activities. Unannounced and simultaneous investigations were carried out by representatives of the Commission and various competition authorities of member states at 10 undertakings concerned in the sector including the applicant. The Commission initiated the procedure under Council Regulation (EEC) 17/62 (First Regulation implementing Articles 85 and 86 of the Treaty [now arts 81 EC and 82 EC]) and served a statement of objections on the applicant and the other undertakings concerned. Subsequently, the Commission adopted Decision (EC) 1999/60 which found that the undertakings had infringed art 81(1) EC. Under art 3(1) of the decision, the applicant was fined ECU 70 000 000. The applicant applied to the Court of First Instance of the European Communities for annulment of art 3 of the decision, or in the alternative, reduction of the fine imposed. It contended that (i) there had been factual errors in the application of art 81 EC; (ii) there had been an infringement of the rights of defence; (iii) there had been an infringement of the principle of sound administration; (iv) there had been an infringement of general principles and factual errors in determining the fine; and (v) there had been an infringement of the obligation to state reasons in connection with the determination of the fine. Seven of the nine other undertakings also brought separate actions against the decision in cases T-9/99, T-15/99, T-16/99, T-17/99, T-21/99, T-23/99 (see [2002] All ER (D) 303 (Mar))and T-28/99 (see [2002] All ER (D) 304 (Mar)).
Held - The application would be allowed in part: (1) The Commission had been correct to find that the applicant's participation in the cartel had been conceived, approved and directed at a senior level of its group management, as were the measures to deny or conceal the existence of the cartel and to continue its operation after the investigation. Moreover, the Commission had been correct to find that the applicant had systematically used its economic power and resources as a major multinational company to reinforce the effectiveness of the cartel and to ensure that other undertakings complied with its wishes. It followed that the plea alleging factual errors in the application of art 81(1) EC was rejected.
(2) The applicant's right to be heard had not placed the Commission under an obligation to inform it of its intention to apply the new guidelines. Furthermore, since the applicant had informed the Commission of the way in which it considered the new guidelines should be applied, it could not therefore claim that it had not had the opportunity to state its views on the application of those guidelines. Accordingly, the plea alleging infringement of the right to be heard was rejected.
(3) Whilst there had been regrettable conduct on the part of a member of the team which had dealt with the case, that did not in itself vitiate the legality of the decision. Even if that official had infringed the principle of sound administration, the contested decision was adopted by the College of Commissioners. Furthermore, where it had been established that an undertaking had been involved in a cartel at the level of the group to which it belonged, a premature manifestation by the Commission of its conviction that the group in question was involved did not vitiate the actual evidence of such involvement. Accordingly, the plea alleging infringement of the principle of sound administration was rejected.
(4) Undertakings could not acquire a legitimate expectation that the Commission would not exceed the level of fines previously applied and since the Commission's previous practice had not consisted solely in using a method based on turnover, the applicant could not therefore legitimately have expected that such a method would be applied to it. Further, as the same calculation method was used in the applicant's case as the other undertakings concerned and any difference in treatment was the direct consequence of the maximum limit placed on fines by Regulation 17/62 which applied only where the fine exceeded 10% of the turnover of the undertaking concerned, the allegations alleging infringement of the principles of legitimate expectation and equal treatment were not made out. However, since the Commission had not observed the principle of equal treatment in so far as it should have taken into consideration, when assessing the applicant's co-operation, the fact that the applicant did not dispute the main facts, it had incorrectly set at 30% the reduction to be granted to the applicant for its co-operation during the administrative procedure. Accordingly, the allegation that the leniency notice had been misapplied would be upheld only in so far as it criticised the Commission for not having granted a reduction greater than 30% of the fine and the fine was reduced to ECU 65 000 000.
(5) It was not necessary for the reasoning to have gone into all the relevant facts and points of law, since the question whether the statement of reasons for a measure met the requirements of art 190 of the Treaty had to be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. As the Commission had undertaken to apply the new guidelines when determining the amount of fines, it was not required to state whether, and on what grounds, it would apply them in the applicant's case. Accordingly, the plea alleging infringement of the obligation to state reasons was rejected.