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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Britannia Alloys & Chemicals v Commission (Competition) [2007] EUECJ C-76/06 (07 June 2007) URL: https://www.bailii.org/eu/cases/EUECJ/2007/C7606_.html |
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(Appeals Competition Agreements, decisions and concerted practices Fines 'Preceding business year' for determining the turnover on which the calculation of the fine is based)
In Case C-76/06 P,
APPEAL pursuant to Article 56 of the Statute of the Court of Justice, brought on 7 February 2006,
Britannia Alloys & Chemicals Ltd, established in Gravesend (United Kingdom), represented by S. Mobley and M. Commons, solicitors,
applicant,
the other party to the proceedings being:
Commission of the European Communities, represented by F. Castillo de la Torre, acting as Agent, with an address for service in Luxembourg
defendant at first instance,
composed of K. Lenaerts, President of the Chamber, E. Juhász, R. Silva de Lapuerta (Rapporteur), G. Arestis and T. von Danwitz, Judges,
Advocate General: Y. Bot,
Registrar: R. Grass,
having regard to the written procedure,
after hearing the Opinion of the Advocate General at the sitting on 1 March 2007,
gives the following
Legal context
Regulation No 17
-1. The Commission may by decision impose on undertakings or associations of undertakings fines of from 100 to 5 000 units of account where, intentionally or negligently:
...
(b) they supply incorrect information in response to a request made pursuant to Article 11(3) or (5) ...
...
2. The Commission may by decision impose on undertakings or associations of undertakings fines of from 1 000 to 1 000 000 units of account, or a sum in excess thereof but not exceeding 10% of the turnover in the preceding business year of each of the undertakings participating in the infringement where, either intentionally or negligently:
(a) they infringe Article [81](1) or Article [82] of the Treaty ...
...
In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.'
The Guidelines
'The principles outlined ... by the Guidelines should ensure the transparency and impartiality of the Commission's decisions, in the eyes of the undertakings and of the Court of Justice alike, whilst upholding the discretion which the Commission is granted under the relevant legislation to set fines within the limit of 10% of overall turnover. This discretion must, however, follow a coherent and non-discriminatory policy which is consistent with the objectives pursued in penalising infringements of the competition rules.
The new method of determining the amount of a fine will adhere to the following rules, which start from a basic amount that will be increased to take account of aggravating circumstances or reduced to take account of attenuating circumstances.'
Background to the dispute
-1 Britannia ..., a company incorporated under English law, is a subsidiary of M.I.M. Holdings Limited ('MIM'), an Australian company. In October 1993, Pasminco Europe (ISC Alloys) Limited sold its zinc business to MIM, which transferred it to Britannia. That undertaking produced and sold zinc products, including zinc phosphate. In March 1997, Trident Alloys Limited ('Trident'), an independent company formed by Britannia's management, acquired Britannia's zinc business for GBP 14 359 072. Britannia is still in existence as a subsidiary of MIM, but is a non-trading company and therefore has no turnover.
2 Although they may have slightly differing chemical formulae, zinc orthophosphates form a homogeneous chemical product, generically referred to as 'zinc phosphate'. Zinc phosphate, which is derived from zinc oxide and phosphoric acid, is widely used as an anti-corrosion mineral pigment in the paint industry. It is marketed either as standard zinc phosphate or as modified (or activated) zinc phosphate.
3 In 2001, virtually all of the world zinc production was controlled by the following five European producers: Dr Hans Heubach GmbH & Co. KG ('Heubach'), James M. Brown Limited ('James Brown'), Société Nouvelle des Couleurs Zinciques SA ('SNCZ'), Trident (formerly Britannia) and Union Pigments AS (formerly Waardals AS) ('Union Pigments').
4 On 13 and 14 May 1998, the Commission carried out simultaneous and unannounced investigations under Article 14(2) of Regulation No 17 at the premises of Heubach, SNCZ and Trident ... .
5 On 11 December 2001, the Commission adopted the contested decision. The decision which is the subject of the present judgment is the one notified to the undertakings concerned, and which is annexed to the application ... .
6 In the contested decision, the Commission states that a cartel, consisting of Britannia (Trident as from 15 March 1997), Heubach, James Brown, SNCZ and Union Pigments, existed between 24 March 1994 and 13 May 1998. The cartel was limited to standard zinc phosphate. The members of the cartel first adopted a market sharing agreement with sales quotas for the producers. Subsequently, they agreed on 'bottom' or 'recommended' prices at each meeting, which they generally followed. There was also a certain amount of customer allocation.
7 The operative part of the contested decision reads as follows:
'Article 1
Britannia ... , Heubach ... , James Brown, [SNCZ], Trident ... and [Union Pigments] have infringed the provisions of Article 81(1) of the Treaty and Article 53(1) of the EEA Agreement by participating in continuing agreement and/or concerted practice in the zinc phosphate sector.
The duration of the infringement was as follows:
...
(b) in the case of Britannia ...: from 24 March 1994 until 15 March 1997
...
Article 3
For the infringement referred to in Article 1, the following fines are imposed:
(a) Britannia ...: EUR 3.37 million;
(b) ... Heubach ...: EUR 3.78 million;
(c) James ... Brown ...: EUR 940 000;
(d) [SNCZ]: EUR 1.53 million;
(e) Trident ...: EUR 1.98 million;
(f) [Union Pigments] ...: EUR 350 000.
...'
8 In calculating the fines, the Commission applied the method set out in the Guidelines ... and the Commission Notice of 18 July 1996 on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4, 'the Leniency Notice').
9 The Commission found first that the appropriate basic amount of fine for the applicant was EUR 3.75 million ([paragraph] 313 [of the grounds of] the contested decision). Next, it referred to the limit which, under Article 15(2) of Regulation No 17, the fine to be imposed on each of the undertakings concerned may not exceed. In fixing the upper limit of 10% of turnover achieved in the previous financial year laid down by that provision, the Commission, in the case of the applicant, 'took into account its global turnover for the business year ending 30 June 1996, which is the last available figure reflecting an entire year of normal economic activity' ([paragraph] 345 ... ). As that turnover was EUR 55.7 million ([paragraph] 50), the upper limit of the fine was set at about EUR 5.5 million. As the amount of the fine before application of the Leniency Notice was below that upper limit, the Commission did not reduce it on that basis.
10 Finally, the Commission granted the applicant a reduction of 10% under the Leniency Notice ([paragraph] 366). The final amount of the fine imposed on the applicant was thus EUR 3.37 million ([paragraph] 370).'
The procedure before the Court of First Instance and the judgment under appeal
Forms of order sought by the parties to the appeal
set aside the judgment under appeal in so far as it dismissed its action;
annul Article 3 of the contested decision in so far as it concerns the applicant;
in the alternative, amend Article 3 in so far as it concerns the applicant, so as to annul or substantially reduce the fine imposed on the applicant therein;
further, in the alternative, refer the case back to the Court of First Instance for judgment in accordance with the judgment of the Court of Justice as to the law;
in any event, order that the Commission bear its own costs and pay Britannia's costs relating to the proceedings before the Court of First Instance and the Court of Justice.
dismiss the appeal in part as inadmissible, or, in the alternative, dismiss it as unfounded;
order the applicant to pay the costs.
The appeal
The first plea, alleging breach of Article 15(2) of Regulation No 17
Arguments of the parties
Findings of the Court
The second plea, alleging infringement of the principle of equal treatment
The first part of the second plea
Arguments of the parties
Findings of the Court
The second part of the second plea
Arguments of the parties
Findings of the Court
The third plea, alleging infringement of the principle of legal certainty
The first part of the third plea
Arguments of the parties
Findings of the Court
The second part of the third plea
Arguments of the parties
Findings of the Court
Costs
On those grounds, the Court (Fourth Chamber) hereby:
1. Dismisses the appeal;
2. Orders Britannia Alloys & Chemicals Ltd to pay the costs.
[signatures]
* Language of the case: English.