YKK and Others v Commission (Judgment) [2014] EUECJ C-408/12 (04 September 2014)

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(Appeal - Agreements, decisions and concerted practices - Markets for zip fasteners and other fasteners and for attaching machines - Successive responsibilities - Legal upper limit of the fine - Article 23(2) of Regulation No 1/2003 - Concept of ‘undertaking’ - Personal responsibility - Principle of proportionality - Deterrence multiplier)

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 3 September 2012,

European Commission, represented by A. Bouquet and R. Sauer, acting as Agents, with an address for service in Luxembourg,

composed of R. Silva de Lapuerta, President of the Chamber, J.L. da Cruz Vilaça (Rapporteur), G. Arestis, J.-C. Bonichot and A. Arabadjiev, Judges,

having regard to the written procedure and further to the hearing on 16 October 2013,

after hearing the Opinion of the Advocate General at the sitting on 12 February 2014,

1 By their appeal, YKK Corporation (‘YKK Corp.’), YKK Holding Europe BV (‘YKK Holding’) and YKK Stocko Fasteners GmbH (‘YKK Stocko’) ask the Court to set aside the judgment of the General Court of the European Union in YKK and Others v Commission, T-448/07, EU:T:2012:322 (‘the judgment under appeal’), whereby the General Court dismissed their action for, primarily, the annulment of Commission Decision C(2007) 4257 final of 19 September 2007, relating to a proceeding under Article [81 EC] (Case COMP/39.168 - PO/Hard Haberdashery: Fasteners) (‘the contested decision’), in so far as it concerned them, and, in the alternative, the annulment or reduction of the fines imposed on them by that decision, a summary of which was published in the Official Journal of the European Union of 26 February 2009 (OJ 2009 C 47, p. 8).

2 Article 23(2) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [81 EC] and [82 EC] (OJ 2003 L 1, p.1). provides:

‘The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:

For each undertaking and association of undertakings participating in the infringement, the fine shall not exceed 10% of its total turnover in the preceding business year.

3 Section D of the Commission Notice on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4; ‘the 1996 Leniency Notice’) provided:

‘1. Where [an undertaking] cooperates without having met all the conditions set out in Sections B or C, it will benefit from a reduction of 10% to 50% of the fine that would have been imposed if it had not cooperated.

- before a statement of objections is sent, [an undertaking] provides the Commission with information, documents or other evidence which materially contribute to establishing the existence of the infringement;

- after receiving a statement of objections, [an undertaking] informs the Commission that it does not substantially contest the facts on which the Commission bases its allegations.’

4 Section B of the Commission notice on immunity from fines and reduction of fines in cartel cases (OJ 2002 C 45, p. 3; ‘the 2002 Leniency Notice’), provides:

‘20. Undertakings that do not meet the conditions under section A above may be eligible to benefit from a reduction of any fine that would otherwise have been imposed.

21. In order to qualify, an undertaking must provide the Commission with evidence of the suspected infringement which represents significant added value with respect to the evidence already in the Commission’s possession and must terminate its involvement in the suspected infringement no later than the time at which it submits the evidence.

23. The Commission will determine in any final decision adopted at the end of the administrative procedure:

(a) whether the evidence provided by an undertaking represented significant added value with respect to the evidence in the Commission’s possession at that same time;

(b) the level of reduction an undertaking will benefit from, relative to the fine which would otherwise have been imposed, as follows. For the:

In order to determine the level of reduction within each of these bands, the Commission will take into account the time at which the evidence fulfilling the condition in point 21 was submitted and the extent to which it represents added value. It may also take into account the extent and continuity of any cooperation provided by the undertaking following the date of its submission.

In addition, if an undertaking provides evidence relating to facts previously unknown to the Commission which have a direct bearing on the gravity or duration of the suspected cartel, the Commission will not take these elements into account when setting any fine to be imposed on the undertaking which provided this evidence.

28. From 14 February 2002, this notice replaces the 1996 notice for all cases in which no undertaking has contacted the Commission in order to take advantage of the favourable treatment set out in that notice. The Commission will examine whether it is necessary to modify this notice once it has acquired sufficient experience in applying it.’

5 The background to the dispute and the contested decision are set out as follows in paragraphs 1 to 6, 8, 10, 12, 14, 16 to 18 and 20 of the judgment under appeal:

‘1 The first applicant, YKK Corp., is a Japanese company. It is a global leader in the market for zip fasteners, but also operates in the “other fasteners” sector.

2 The second applicant, [YKK Holding] is an undertaking established in the Netherlands. It has 24 subsidiaries, including [YKK Stocko]. YKK Holding is a wholly-owned subsidiary of YKK Corp. Its subsidiaries manufacture buttons and fasteners. It is not active in the manufacturing, selling or distributing of any of those products, and is a purely financial holding company.

3 The third applicant, [YKK Stocko], formerly Stocko Fasteners GmbH and Stocko Verschlußtechnik GmbH & Co. KG, is a German company based in Wuppertal. It was created in 1901 and registered as YKK Stocko Fasteners in September 1995, when YKK Holding purchased 76% of its shares, before acquiring 100% ownership in March 1997.

4 The fastener manufacturing sector can be divided into two main categories: (i) zip fasteners; and (ii) “other fasteners”, consisting of different types of press buttons/snap buttons/press fasteners, clamp fasteners, hooks, eyelets, jeans buttons, rivets and accessories in metal and plastic for the leather and garments industries.

5 On 7 and 8 November 2001 the Commission of the European Communities … carried out investigations … at the premises of several … producers of hard haberdashery, other haberdashery and thread (including Entaco Ltd, Coats plc and William Prym GmbH & Co. KG), and also at the premises of the Fachverband Verbindungs- und Befestigungstechnik [an association promoting the interests of German undertakings in the metal products sector] (“VBT”).

6 On 26 November 2001 the Prym and Coats groups, relying on [the 1996 Leniency Notice], applied for leniency in relation to the zip fastener sector.

8 On 8 August 2003 [YKK Stocko] (now YKK Stocko Fasteners), relying on [the 2002 Leniency Notice], applied for leniency in relation to “other fasteners”.

10 On 16 September 2004 the Commission addressed a statement of objections (“the statement of objections”) concerning “other fasteners”, attaching machines and zip fasteners to Prym Fashion, William Prym, Éclair Prym, Fiocchi Prym, Fiocchi Snaps France, YKK Stocko Fasteners, YKK Holding, YKK Corp., Coats, A. Raymond, Berning & Söhne, Berning France, Scovill Fasteners Europe (formerly Unifast), Scovill Fasteners and VBT.

12 On 12 November 2004 the Prym group, relying on the 2002 Leniency Notice, submitted, on behalf of all its subsidiaries, an application for immunity or, in the alternative, a reduction in the amount of the fines relating to “other fasteners”.

14 On 18 February 2005 the YKK group, relying on the 2002 Leniency Notice, submitted an application for a reduction in the amount of the fines relating to “other fasteners”.

16 The evidence provided in support of the applications submitted by the Prym group and the YKK group pursuant to the 2002 Leniency Notice enabled the Commission to send, on 7 March 2006, a supplementary statement of objections (“the supplementary statement of objections”).

17 That supplementary statement of objections relating to “other fasteners”, attaching machines and zip fasteners was addressed to A. Raymond, Berning & Söhne and Berning France, Coats and Coats Deutschland, Éclair Prym, Prym Fashion, Fiocchi Prym, Scovill Fasteners Europe, Scovill Fasteners, William Prym, YKK Corp., YKK Holding, [YKK Stocko], and VBT. …

18 The supplementary statement of objections covered the same products as the statement of objections and, where necessary, corrected, refined, consolidated and widened the objections identified therein. …

20 After consulting the Advisory Committee on Restrictive Practices and Monopolies and in the light of the final report of the hearing officer, the Commission adopted on 19 September 2007 [“the contested decision”].’

6 By the contested decision, the Commission found, first, that there were four distinct infringements of the European Union rules of competition committed in the sector of hard haberdashery and fasteners and, secondly, that the appellants participated in three of the infringements, namely:

- the cooperation within the framework of the Baseler-Wuppertaler Circle and the Amsterdamer Circle on the market for metal and plastic fasteners (‘other fasteners’) and attaching machines, in the period from May 1991 until March 2001, in which context the participants agreed, at meetings, on coordinated price increases and exchanged confidential information on prices and the implementation of prices increases, at the German and European levels (‘the BWA cooperation’);

- the bilateral cooperation between the Prym and YKK groups on the market for other fasteners, between 1999 and 2003. That infringement consisted of agreements and concerted practices on the fixing of prices, notably minimum, average and target prices, monitoring price increases through the regular exchange of price lists and frequent bilateral contacts and the allocation of customers, at the European level and worldwide, and

- the tripartite cooperation between the YKK, Coats and Prym groups, on the market for zip fasteners, in the period from April 1998 until November 1999, during which the participants exchanged price information, discussed prices and price increases and agreed on a methodology to fix minimum prices for standard products on the European market (‘the tripartite cooperation’).

7 Consequently, the Commission imposed on the undertakings concerned fines for the infringement of Article 81 EC, the amount being calculated in accordance with the methodology set out in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty (OJ 1998, C 9, p. 3; ‘the 1998 Guidelines’), and in the 1996 and 2002 Leniency Notices.

8 As regards the BWA cooperation, the contested decision imposed fines on the following undertakings:

- Scovill Fasteners Europe S.A. and Scovill Fasteners Inc., jointly and severally liable: EUR 6 002 000;

- William Prym GmbH & Co. KG and Prym Inovan GmbH & Co. KG, jointly and severally liable: EUR 24 913 000;

- YKK Stocko: EUR 68 250 000, of which YKK Corp. and YKK Holding are jointly and severally liable for EUR 49 000 000;

9 In that regard, it must be observed that, according to the contested decision, YKK Stocko participated in the infringement for its entire duration, namely for nine years and nine months, whereas YKK Corp. and YKK Holding started to take part (directly or indirectly) only after the purchase of the German company Stocko (which became YKK Stocko) in 1997 and participated in the infringement for four years (recitals 466 to 468 and Article 1(1) of the contested decision).

10 That is why, first, YKK Corp. and YKK Holding are held liable not for payment of the whole of the fine imposed on YKK Stocko, but only for the sum of EUR 49 000 000 and, secondly, YKK Stocko was held solely liable for payment of the remainder of the fine imposed on it, that is, EUR 19 250 000 (Article 2(1) of the contested decision).

11 As regards the bilateral cooperation between the Prym and YKK groups on the ‘other fasteners’ market, a fine of EUR 19 500 000 was imposed on YKK Corp., YKK Holding and YKK Stocko, who were held jointly and severally liable. However, according to the contested decision, the Prym group met the conditions to qualify for full immunity from the fine which would otherwise have been imposed on it for that infringement.

12 Finally, as regards the infringements committed within the context of the tripartite cooperation, the following fines were imposed:

- Coats Holdings Ltd. and Coats Deutschland GmbH, jointly and severally liable: EUR 12 155 000;

- William Prym GmbH & Co. KG and Prym Inovan GmbH & Co. KG, jointly and severally liable: EUR 6 727 500, of which Éclair Prym Group SA is jointly and severally liable for EUR 5 850 000.

13 In support of their action for the annulment of the contested decision, the appellants relied on eight pleas in law. The General Court examined those pleas in a different order and divided them into three categories.

14 First, the appellants raised five pleas in law relating to the tripartite cooperation, claiming, in essence:

- an erroneous assessment of the nature and implementation of the infringement and of the real impact of the infringement (second, third and fourth pleas), and

15 Second, while not disputing the existence of the infringement, the appellants raised two pleas relating to the BWA cooperation, claiming:

- incorrect application of the limitation of the fine in that the Commission did not apply the 10% upper limit to YKK Stocko, as a subsidiary, for the period prior to its being acquired, in 1997, by YKK Holding (sixth plea);

- incorrect application of the deterrence multiplier in the calculation of the fine imposed on YKK Stocko for the period prior to that acquisition (seventh plea).

16 Third, the appellants relied on an eighth plea which concerned both the infringements related to the tripartite cooperation and those related to the BWA cooperation and alleged a breach of the principles of equal treatment and proportionality in relation to the application of the 1.25 deterrence multiplier when calculating the fine.

17 In the judgment under appeal, the General Court rejected all the pleas relied on by the appellants, consequently dismissed their action, and ordered them to pay the costs.

- set aside the judgment under appeal and annul Article 2(1) and (3) of the contested decision in so far as they concern them, and/or reduce the fines imposed on them;

- in the alternative, dismiss the action for annulment of the contested decision, and

- order the appellants to pay all the costs both in relation to the appeal and to the proceedings at first instance.

The first ground of appeal: inadequate statement of reasons in the judgment under appeal concerning the tripartite cooperation

20 In their first ground of appeal, the appellants complain that the General Court did not properly state the reasons for the rejection of their plea in law that the starting amount of the fine of EUR 50 million was disproportionate, having regard to the lack of impact of the infringement in question on the relevant market. The appellants claim that the consequence of that failure to state reasons is that they do not know whether the General Court rejected their plea because it held that the Commission did sufficiently take account of the impact of the infringement on the market or, conversely, that the Commission did not take account of that impact because it was under no obligation to do so.

21 If the judgment under appeal were to have ruled that the Commission did sufficiently take account of the impact of the infringement on the market, the appellants argue that, in so ruling, the General Court misinterpreted the contested decision and infringed European Union law, in particular Article 23(2) and (3) of Regulation No 1/2003. The General Court also, according to the appellants, disregarded the case-law of the Court of Justice which requires that the Commission, when it deems it appropriate to take account of the impact of the infringement on the market in order to increase the starting amount of the fine above the minimum likely amount of EUR 20 million laid down by the 1998 Guidelines, should provide specific, credible and adequate evidence with which to assess the actual influence the infringement may have had on competition in that market.

22 On the other hand, if the judgment under appeal were to have ruled that the Commission did not take account of the impact of the infringement on the market because it was not obliged to do so, the appellants argue that, in so ruling, the General Court misapplied European Union law pursuant to which the penalties laid down by national law and European Union law must not only be real and deterrent, but also be proportionate to the infringement. In that regard, the appellants submit that it is disproportionate to raise the minimum likely amount from EUR 20 million to EUR 50 million (a 250% increase) without taking into account the tripartite agreement’s absence of impact on the market. If that factor was neglected, the judgment under appeal accorded too much significance to the size of the undertaking as a factor in determining the fine and was thus inconsistent with the 1998 Guidelines and the case-law of the Court of Justice.

23 The Commission considers that the appellants’ arguments should be rejected as being either unfounded or inadmissible.

24 It must at the outset be noted that the General Court clearly set out, notably in paragraphs 140 to 143 of the judgment under appeal, the reasons why, in its view, the Commission was entitled to regard the infringement at issue as ‘particularly serious’ and to fix, consequently, the starting amount of the fine at EUR 50 million, without taking account of the actual impact of that infringement on the relevant market, since the Commission was under no obligation to do so.

25 As the General Court stated in paragraphs 140 and 143 of the judgment under appeal, referring to Section 1A of the 1998 Guidelines, that impact is to be taken into consideration only ‘where this can be measured’. According to the General Court, since there was a global agreement designed to restrict potential competition, the actual effects thereof being ex hypothesi difficult to measure, the Commission was not required precisely to demonstrate the actual impact of the cartel on the market and to quantify it, but could confine itself to estimates of the probability of such an effect.

26 That analysis is consistent with the case-law of the Court to the effect that the actual impact of the infringement on the market is not a decisive criterion for the determination of the amount of fines. In particular, factors relating to the intentional aspect of the infringement may be more significant than those relating to its effects, particularly where they relate to infringements which are intrinsically serious, such as market sharing (see the judgments in Thyssen Stahl v Commission, C-194/99 P, EU:C:2003:527, paragraph 118; Prym and Prym Consumer v Commission, C-534/07 P, EU:C:2009:505, paragraph 96; and Carbone-Lorraine v Commission, C-554/08 P, EU:C:2009:702, paragraph 44).

27 Further, the General Court clearly explained, in paragraphs 141 and 142 of the judgment under appeal, that there is no contradiction in the fact that, in the contested decision, it could be held that, first, the tripartite cooperation had been fully implemented and was likely to have had an effect on the market and, secondly, that that impact was none the less not measurable, because it was impossible to determine with sufficient certainty the competitive parameters (price, commercial terms, quality, innovation etc.) which would have applied in the absence of the infringements.

28 In the light of the foregoing, there is no need to examine the other arguments relied on by the appellants in the event that the judgment under appeal were to have ruled that the Commission did take account, in the contested decision, of the actual impact of the infringement on the market.

29 In so far as the appellants complain that the judgment under appeal did not find fault with the allegedly disproportionate nature of the starting amount of the fine because of the tripartite cooperation’s absence of impact on the market, suffice it to state that it is clear from settled case-law that it is the task of the General Court to examine whether the amount of a fine is appropriate and, as a general rule, it is not the task of the Court, when it rules on questions of law in an appeal, to substitute, on grounds of fairness, its own assessment for that of the General Court exercising its unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements by them of European Union law (see the judgments in SGL Carbon v Commission, C-328/05 P, EU:C:2007:277, paragraph 98, and Quinn Barlo and Others v Commission, C-70/12 P, EU:C:2013:351, paragraph 57 and case-law cited).

30 It follows from all the foregoing that the first ground relied on by the appellants in support of their appeal must be rejected.

The second ground of appeal: insufficient statement of reasons in the judgment under appeal and refusal to apply the lex mitior principle in relation to the tripartite cooperation

31 By their second ground of appeal, the appellants claim, first, that the General Court did not adequately state the reasons why it rejected the plea in law relating to the failure to apply the 2002 Leniency Notice.

32 As regards the substance, the appellants take the view that, by applying the 1996 Leniency Notice, and not the 2002 Leniency Notice, the General Court erred in law, and disregarded the lex mitior principle, as laid down by Article 7 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, and by Article 49(1) of the Charter of Fundamental Rights of the European Union, in accordance with which the more lenient law must apply retroactively.

33 In that regard, the appellants claim that, since the 1996 Leniency Notice, unlike the 2002 Leniency Notice, made the benefit of a reduction in the fine dependent on the facts not being contested, that benefit was refused to them on the basis of a condition which was no longer applicable at the date of the contested decision.

34 Consequently, the appellants consider that they should have had the benefit, under Point 23 of the 2002 Leniency Notice, not only of the partial immunity granted to them for having made it possible to establish the extended duration of the infringement, but also of a reduction in the fine on the basis of the evidence provided which represented significant added value with respect to the evidence already in the Commission’s possession.

35 The appellants state that they provided evidence that certain meetings took place, which enabled the Commission to extend the duration of the identified infringement, setting its starting date on 28 April 1998 instead of 2 June 1999. However, although a benefit equivalent to that provided for in the third subparagraph of Point 23(b) of the 2002 Leniency Notice was, de facto, granted by the Commission, in recitals 588 and 589 of the contested decision, the Commission did not, on the other hand, grant a reduction of the fine under Point 23(a) of that notice, on the sole ground, according to the appellants, that, by reference to Section D of the 1996 Leniency Notice, the appellants contested the anti-competitive object and content of the meetings.

36 The Commission does not accept those arguments, which it contends are unfounded.

37 In the circumstances of this case, it is necessary to determine whether the General Court erred in law by not finding fault with the contested decision on the ground that, in that decision, the Commission examined the appellants’ conduct in the light of the 1996 Leniency Notice, and consequently refused them the benefit of more favourable treatment which might have resulted if the 2002 Leniency Notice had been applied.

38 In that regard, it must be stated that while it is true that there is no provision in the 1996 Leniency Notice, which is applicable to this case ratione temporis, to the effect that the Commission will not take account of facts disclosed by the undertakings which have an effect on the gravity or duration of the cartel, the Commission none the less held, as is apparent from paragraphs 185 and 186 of the judgment under appeal, which refer to recitals 584, 585, 588 and 589 of the contested decision, that the appellants, by disclosing to the Commission facts previously unknown to it, had made it possible to establish that the infringement was of longer duration, to the inclusion in that duration of the period from 28 April 1998 to 2 June 1999. The Commission considered that cooperation to be a mitigating circumstance on the basis of which the appellants could be granted a reduction in the basic amount of the fine by EUR 9.375 million, in order not to penalise the appellants for their cooperation by imposing on them a fine higher than the one they would have paid in the absence of that cooperation. As stated by the General Court in paragraph 187 of the judgment under appeal, the basic amount, thus reduced, of the fine to be imposed on the appellants was therefore the same as the hypothetical amount which they would have had to pay for an infringement of less than one year’s duration.

39 The General Court also held, in paragraphs 177 and 180 of the judgment under appeal, that, as regards the period from 2 June to 12 November 1999, the appellants did not provide any evidence in addition to the evidence already in the Commission’s possession, doing no more than confirming that certain meetings took place, while contesting, moreover, the anti-competitive object of those meetings.

40 In accordance with the Court’s settled case-law, the cooperation of an undertaking with the Commission may justify a reduction of the fine under the 1996 Leniency Notice only if it actually allows the Commission to achieve its task of establishing the existence of an infringement and putting an end to it (see, to that effect, SGL Carbon v Commission, EU:C:2007:277, paragraph 83 and case-law cited). It should further be borne in mind that the Commission enjoys a wide discretion in assessing the quality and usefulness of the cooperation provided by an undertaking (SGL Carbon v Commission, EU:C:2007:277, paragraph 88).

41 As held by the General Court in paragraph 185 of the judgment under appeal, the Commission, pursuant to Point 28 of the 2002 Leniency Notice, assessed the tripartite cooperation between the appellants and the Prym and Coats groups in the light of the 1996 Leniency Notice, since those groups submitted their leniency applications as regards the infringements relating to the zip fasteners market before 14 February 2002, the date after which the 1996 Leniency Notice was replaced by the 2002 Leniency Notice.

42 It is however clear that it is a requirement of both the 1996 Leniency Notice (Sections C and D) and the 2002 Leniency Notice (Points 21 and 23) that, as a condition for qualifying for a reduction of the fine which would otherwise be imposed, the undertakings concerned must provide to the Commission evidence which contributes to establishing the infringement committed.

43 In that regard, it cannot reasonably be maintained that information which does not satisfy the condition that it must ‘contribute to establishing the existence of the infringement’, under the 1996 Leniency Notice, could constitute evidence representing ‘significant added value with respect to the evidence already in the Commission’s possession’, under Point 21 of the 2002 Leniency Notice.

44 It must be recalled, in that context, that, in accordance with settled case-law, the General Court has exclusive jurisdiction, first, to find the facts, except where the substantive inaccuracy of its findings is apparent from the documents submitted to it, and, second, to assess those facts. On the other hand, the Court has jurisdiction under Article 256 TFEU to review the legal characterisation of the facts by the General Court and the legal conclusions it has drawn from them, save where the clear sense of the evidence has been distorted. In any event, such distortion must be obvious from the documents in the case without it being necessary to undertake a fresh assessment of the facts and evidence.

45 Before the Court the appellants have neither demonstrated nor even claimed that the General Court manifestly distorted the clear sense of the facts in holding that the appellants did not satisfy the requirement of the 1996 Leniency Notice mentioned in paragraph 42 of this judgment, and, consequently, the similar requirement stated in the 2002 Leniency Notice.

46 Further, as regards the period before 2 June 1999, it must be observed that, as stated in paragraph 38 of this judgment, the appellants’ cooperation was rewarded by the reduction in the basic amount of the fine to be imposed, granted to the appellants on the basis of a mitigating circumstance outwith the provisions of the 1996 Leniency Notice.

47 As stated by the Advocate General in paragraphs 69 to 71 of his Opinion, the undertakings concerned cannot claim the right to a twofold reward for the same information, namely that which made it possible for them to qualify for partial immunity in respect of the period to which that information refers, if that information did not provide, for the period following that period, any added value to the Commission’s investigation.

48 It follows that the second ground relied on by the appellants in support of their appeal must be rejected, and there is no need to give a ruling on the alleged applicability of the lex mitior principle to the area of infringements of European Union rules of competition covered by the 1996 and 2002 Leniency Notices.

The third ground of appeal: the refusal to apply the upper limit of 10% of YKK Stocko’s turnover to the part of the fine for which that company was held solely liable in relation to the BWA cooperation

49 In their third ground of appeal, the appellants claim that, by rejecting the plea in law on the incorrect application of the 10% ceiling, in relation to the BWA cooperation, in the period prior to the acquisition by YKK Holding of YKK Stocko, a period in which YKK Stocko was regarded as exclusively responsible for the infringement, the General Court infringed Article 23(2) of Regulation No 1/2003, and also the principle of proportionality, the principle of equal treatment and the principle that penalties must be specific to the individual concerned, so that an undertaking may be penalised only for conduct which can be attributed to it personally.

50 The part of the fine relating to the initial period of the infringement amounts to EUR 19.25 million, which represents 55% of YKK Stocko’s total 2006 turnover, which was EUR 34.91 million, and is considerably more than the 10% upper limit laid down in the second subparagraph of Article 23(2) of Regulation No 1/2003.

51 The Commission’s response is that that argument rests on a legally erroneous interpretation of the purpose of the 10% ceiling laid down in that provision of Regulation No 1/2003.

52 According to the Commission, a single fine had to be imposed. The Commission considers that the limit laid down in the second subparagraph of Article 23(2) of Regulation No 1/2003 is not an element of the fine linked to cooperative conduct during the period of the infringement, but rather a legal maximum which is related to financial capacity to pay the fine, its purpose being principally to protect an undertaking against the imposition of a fine which may be excessive, taking into account its size, at the time when the decision imposing the fine is adopted. The crucial factor is therefore the economic power of the undertaking, of which the overall turnover gives an indication, at the time when the decision imposing the fine is adopted. Those considerations alone offer an explanation of why that provision expressly refers to the business year preceding the adoption of the Commission decision as the basis for the calculation of the 10% ceiling. Consequently, the fact that an undertaking had less financial capacity at a given time in the past, before the acquisition of the company concerned by an economic group, as in this case, is of no relevance as regard the determination of the amount of the fine.

53 The Commission adds that, even if the parent company decides not to give any financial support to its subsidiary so far as concerns the part of the fine for which that subsidiary is held solely liable, which could threaten the viability of the subsidiary, that is a risk which is inherent in the investment made by the parent company, linked to a legal person (the subsidiary) which, before, but also after, the parent company’s acquisition engaged in anti-competitive behaviour punishable by fines. By acquiring control over the subsidiary, the parent company assumes that risk, which it can nevertheless limit by providing for compensation in the contract of sale concluded with the initial owner of that company.

54 The Commission adds that it is solely the undertaking responsible during the last stages of the infringement and at the time when the final decision is adopted which is the appropriate reference entity for assessing questions of liability and of deterrent effect, to the extent that the Commission establishes that that undertaking, that is to say the entity which includes the new parent company, participated in the infringement. For those same reasons, the Commission submits that the appellants cannot reasonably claim that the fine was imposed in breach of the principles of proportionality or equal treatment.

55 The third ground of appeal raises the question of the determination of the legal upper limit of the fine, for the purposes of Article 23(2) of Regulation No 1/2003, where there are successive responsibilities within the context of the same cartel, and more specifically, where an entity participating in the cartel comes under the control of another undertaking during the period of the cartel, within an economic group which also participates in the infringement.

56 In that regard, the appellants criticise the judgment under appeal in that, in paragraphs 192 to 195 and 204 thereof, the General Court upheld the approach of the Commission in the contested decision, which consists in choosing a single legal upper limit, calculated solely on the basis of the consolidated turnover of the YKK group, for the entire period of the infringement from 24 May 1991 to 15 March 2001, in other words a duration of nine years and nine months, which includes the first period of the infringement, from 24 May 1991 to 1 March 1997, in other words a duration of five years and nine months, in respect of which YKK Holding and YKK Corp. are however not regarded as responsible, on the ground that the subsidiary YKK Stocko did not belong to them in the latter period.

57 It should be noted that the third ground of appeal is such as to affect solely the part of the fine, amounting to EUR 19 250 000, which is imposed exclusively on YKK Stocko in relation to what it alone did, before its acquisition by YKK Holding, and that the remainder of that fine, amounting to EUR 49 000 000, has not, in any event, been challenged in this appeal.

58 In that regard, first, the wording of the second subparagraph of Article 23(2) of Regulation No 1/2003 is clear in so far as it imposes the requirement that, ‘[f]or each undertaking and association of undertakings participating in the infringement, the fine shall not exceed 10% of its total turnover in the preceding business year’.

59 Yet the concept of an ‘undertaking participating in the infringement’ for the purposes of that provision must necessarily be the same as for the application of Article 81 EC, since that concept cannot be capable of differing interpretations for the purposes of attribution of responsibility for the infringement and for the purposes of application of the 10% upper limit.

60 Accordingly, where, as in this case, an undertaking regarded by the Commission as responsible for an infringement of Article 81 EC is acquired by another undertaking within which it retains, as a subsidiary, the status of a distinct economic entity, the Commission must take account of the specific turnover of each of those economic entities in order to apply to them, where necessary, the 10% upper limit.

61 In this case, the Commission correctly divided the responsibilities of each undertaking which participated in the infringement, given that, prior to March 1997, the date when YKK Holding acquired YKK Stocko, the latter company and the YKK group constituted two ‘economic entities’ or distinct undertakings for the purposes of Article 81 EC and the second subparagraph of Article 23(2) of Regulation No 1/2003. The Commission did not however draw from that fact the necessary conclusion as regards the application of the 10% upper limit.

62 Consequently, the Court cannot accept the argument relied on by the Commission that there is only one and the same undertaking, its structure and financial capacity changing over time, which is at issue during the period of the infringement. Further, in this case, such a change is not the result of structural growth of the undertaking YKK Stocko, of an increase in its turnover or even the acquisition by YKK Stocko of independent undertakings during the cartel, but constitutes, on the contrary, the result of the acquisition of that undertaking by another undertaking.

63 It must be observed, in that regard, that the objective sought by the establishment, in Article 23(2), of an upper limit of 10% of the turnover of each undertaking participating in an infringement is, inter alia, to ensure that the imposition of a fine higher in amount that that ceiling should not exceed the capacity of an undertaking to make payment at the time when it is identified as responsible for the infringement and a financial penalty is imposed on it by the Commission.

64 The finding in the preceding paragraph is confirmed by the second subparagraph of Article 23(2) of Regulation No 1/2003 which requires, as regards the 10% upper limit, that it should be calculated on the basis of the turnover in the business year preceding the Commission decision imposing a penalty for an infringement. Such a requirement is fully respected where, as in this case, that ceiling is determined solely on the basis of the turnover of the subsidiary, in respect of the fine which is imposed exclusively on it, in relation to the period prior to its acquisition by the parent company, which the appellants do not dispute in this appeal. It follows that, in such circumstances, the structural changes in the undertaking responsible as an economic entity are in fact taken into account in the calculation of the fine.

65 Likewise, the Commission’s argument that a single fine should have been imposed in respect of the period of the infringement cannot be accepted. As the Commission acknowledged at the hearing, as regards the part of the fine for which YKK Stocko was held to be exclusively liable, it would not be possible to enforce that part of the fine against the parent company if YKK Stocko were to default on payment. A company cannot be held to be responsible for infringements committed independently by its subsidiaries before the date of their acquisition, since the latter must themselves answer for their unlawful conduct prior to that acquisition, and the company which has acquired them cannot be held to be responsible (see the judgment in Cascades v Commission, C-279/98 P, EU:C:2000:626, paragraphs 77 to 79).

66 In addition, it is clear that the findings made in paragraphs 60 to 65 of this judgment are compatible with, first, the principle of proportionality and, second, the principle of personal responsibility and the principle that penalties must be specific to the individual, as stated in the case-law of the Court (the judgment in Britannia Alloys & Chemicals v Commission, C-76/06 P, EU:C:2007:326, paragraph 24, as regards the principle of proportionality; the judgments in General Química and Others v Commission, C-90/09 P, EU:C:2011:21, paragraphs 34 to 36; and ThyssenKrupp Nirosta v Commission, C-352/09 P, EU:C:2011:191, paragraph 143, as regards the principle of personal responsibility and the principle that penalties must be specific to the individual).

67 It follows from the foregoing, and without it being necessary to examine the argument on the breach of the principle of equal treatment, that the third ground of appeal must be declared to be well founded, since the General Court misinterpreted the second subparagraph of Article 23(2) of Regulation No 1/2003.

68 Consequently, the judgment under appeal must be set aside as regards, in the context of the BWA cooperation, the application, for the purposes of determining the maximum amount of the fine, of an upper limit of 10% calculated on the turnover of the YKK group in the year preceding the adoption of the contested decision, as regards the period of the infringement for which YKK Stocko was held solely responsible.

The fourth ground of appeal, relating to the application of a deterrence multiplier concerning the BWA cooperation in respect of the period prior to the acquisition of YKK Stocko by YKK Holding

69 The fourth ground raised by the appellants in support of their appeal consists of two parts.

70 As regards the first part of this ground, the appellants claim that the General Court was in breach of the obligation to state reasons under Articles 36 and 53 of the Statute of the Court of Justice of the European Union.

71 In that regard, they claim that the General Court failed to give a ruling on their argument that, although the Commission had justified the application of the deterrence multiplier by reference to the greater financial resources available to the appellants as compared with their competitors, such a consideration could not apply to YKK Stocko, because of its size and limited resources, although YKK Stocko is solely responsible for the infringement in the period prior to March 1997.

72 According to the appellants, the General Court did no more than repeat that turnover is an appropriate criterion for the assessment of an undertaking’s economic power and recall the case-law of the Court concerning the purposes to be served by the adoption of a deterrence multiplier. Consequently, the appellants claim that they are not in a position to appreciate the reasons why their plea in law concerning the application of the deterrent coefficient was rejected.

73 As regards the second part of that ground, the appellants consider that the General Court infringed Article 23(2) of Regulation No 1/2003, the principle of proportionality, the principle that punishments and penalties must be specific to the individual and the principle of equal treatment by holding that the application of a deterrence multiplier was justified not only for the period of infringement subsequent to March 1997, but also for the period prior to that date, when YKK Stocko was acquired by YKK Holding.

74 Concerning the infringement of the principle that penalties must be specific to the individual, the appellants claim that the General Court disregarded the link that must exist between responsibility and penalty, by approving the Commission’s approach whereby the deterrence multiplier could be applied, because of the size and resources of the YKK group, even to the part of the fine relating to the period of infringement prior to the acquisition of YKK Stocko by YKK Holding.

75 According to the appellants, the case-law offers two main reasons which are capable of justifying the application of a deterrence multiplier coefficient, namely the need to ensure that a fine has a significant deterrent effect and the fact that large undertakings might have available to them, during the period of the infringement, resources greater than those of their competitors and are better placed than those competitors to know the law and act within its limits. In particular, as regards the second reason for increasing the fine, the General Court has recognised that the size of the undertakings concerned must relate to their situation at the time of the infringement (the judgment in Hoechst v Commission, T-410/03, EU:T:2008:211, paragraphs 379 and 382). It follows that, for the application of the deterrence multiplier, only the resources and means of the undertaking responsible for the infringement may be taken into consideration.

76 However, although the Commission had correctly taken the view that YKK Stocko, in the period of infringement prior to its acquisition by YKK Holding, that is, in the period from May 1991 until March 1997, was the only undertaking responsible for the infringement, the Commission none the less, for the application of the deterrence multiplier, took into account the size and overall resources of YKK Holding and YKK Corp., while failing to take account of the fact that YKK Stocko was a small company with limited resources and without a legal department.

77 As regards the second purpose of the deterrence multiplier, namely its deterrent effect, the appellants claim that it is solely the undertaking responsible for the infringement of Article 81 EC which is obliged to pay the fine, not its parent companies. Accordingly, because of YKK Stocko’s limited resources, the amount of the fine could not be increased for the purpose of deterrence without infringing the principle of proportionality.

78 As regards the breach of the principle of equal treatment, the appellants consider that what the General Court did, by applying a deterrence multiplier to the part of the fine imposed in respect of the period prior to March 1997, was, in essence, to treat in the same way two situations which were not comparable, namely the situation of YKK Stocko and that of the YKK group.

79 The Commission contests all the appellants’ arguments and considers them to be unfounded.

80 As regards the arguments relating to the claim that the statement of reasons in the judgment under appeal is insufficient, it must be stated, first, that, in paragraphs 203 and 204 of that judgment, the General Court set out the reasons which, in its opinion, may justify the taking into account of the turnover of the economic entity constituted by the appellants as a body at the time when the contested decision was adopted, for the purposes of applying a deterrence multiplier.

81 Further, as the Commission has correctly stated, it is evident from paragraph 114 of the appeal that the appellants were able to understand the General Court’s reasoning, in, inter alia, paragraphs 203 and 204 of the judgment under appeal, to the effect that the determining factor to be taken into consideration for the purposes of calculating the amount of the fine and its deterrent effect is the economic capacity of the undertaking concerned as it exists when the decision imposing a fine is adopted.

82 In those circumstances, the appellants’ arguments relating to the claim that the statement of reasons in the judgment under appeal is insufficient must be rejected.

83 In the second part of their fourth ground, the appellants claim that the General Court erred in law by holding, in paragraph 204 of the judgment under appeal, that the Commission was entitled to take into account, in order to determine the deterrence multiplier, the size and turnover of the appellants regarded as a single economic entity in the year preceding that when the contested decision was adopted.

84 In that context, it should be recalled that ‘deterrence’ is one of the factors to be taken into account in calculating the amount of the fine. It is settled case-law that the fines imposed for infringements of Article 81 EC, as laid down in Article 23(2) of Regulation No 1/2003, are designed to penalise the unlawful acts of the undertakings concerned and to deter both the undertakings in question and other economic operators from infringing, in future, the rules of European Union competition law. In that regard, the link between, on the one hand, undertakings’ size and overall resources and, on the other, the need to ensure that a fine has deterrent effect cannot be denied (the judgments in Showa Denko v Commission, C-289/04 P, EU:C:2006:431, paragraph 16, and Lafarge v Commission, C-413/08 P, EU:C:2010:346, paragraph 102).

85 Taking into consideration the size and overall resources of the undertaking in question is, primarily, justified by the impact sought on the undertaking concerned, in order to ensure that the fine has sufficient deterrent effect, as the penalty must not be negligible in the light, particularly, of its financial capacity (Lafarge v Commission, EU:C:2010:346, paragraph 104).

86 It follows that, in order to impose a fine of an amount capable of deterring the undertakings concerned from infringing, in the future, European Union rules of competition, account must be taken of the size and overall resources of those undertakings at the time when the contested decision is adopted. Consequently, that fact that the size and overall resources of those undertakings may be smaller at an earlier stage of the infringement has no bearing on the determination of a deterrence multiplier (the judgment in Alliance One International v Commission, C-668/11 P, EU:C:2013:614, paragraph 64).

87 Consequently, the fact that YKK Holding and YKK Corp. are not held jointly and severally liable for the infringement committed by YKK Stocko for the period prior to March 1997 has no bearing on the determination of a deterrence multiplier.

88 That conclusion is not invalidated by the arguments of the appellants as summarised in paragraphs 73 to 78 of this judgment.

89 As regards the claimed break in the link between responsibility and penalty, it is clear that the appellants confuse the logic which underlies fixing an upper limit on the fine at 10% of turnover, laid down in the second subparagraph of Article 23(2) of Regulation No 1/2003, a point which has been examined above in relation to the third ground of appeal, with the logic underpinning the application of the deterrence multiplier.

90 The purpose of setting an upper limit is to adjust the amount of the fine imposed in respect of the infringement committed to the economic capacity of the undertaking held to be responsible, even though the reference period for the calculation of turnover to be taken into account is the business year preceding that when the Commission decision imposing a penalty on that undertaking is adopted.

91 Conversely, the objective of pursuing a deterrent effect through the financial penalty is essentially to control, in the future, the conduct of the economic entity to which the Commission decision is addressed. Such an effect must necessarily be produced on the undertaking in the state which it exists at the time when that decision is adopted.

92 In this case, as stated by the Commission, YKK Stocko no longer existed as an independent economic entity at the time when the contested decision was adopted. Consequently, the pursuit of a deterrent effect by means of the fine had necessarily to apply to the YKK group, of which YKK Stocko was now part, regardless of the fact that YKK Corp. and YKK Holding had not participated in the infringement in the period from May 1991 until March 1997.

93 Further, it must be stated that the pursuit of a deterrent effect does not concern solely the undertakings specifically targeted by a decision imposing fines, since it is also necessary to prompt undertakings of similar sizes and resources to refrain from participating in similar infringements of the European Union competition rules (the judgment in Caffaro v Commission, C-447/11 P, EU:C:2013:797, paragraph 37).

94 It follows from the foregoing that the fourth ground relied on by the appellants in support of their appeal must be rejected.

95 Pursuant to the second sentence of the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if a judgment under appeal is set aside the Court may give final judgment in the matter where the state of the proceedings so permits. That applies to the present case with regard to the part of the proceedings relating, in the context of the BWA cooperation, to the setting of the 10% upper limit laid down in the second subparagraph of Article 23(2) of Regulation No 1/2003.

96 To that end, taking into consideration what has been said in paragraphs 55 to 68 of this judgment, it is necessary to annul the contested decision in so far as it took into account, for the application of the 10% upper limit laid down in the second subparagraph of Article 23(2) of Regulation No 1/2003, the consolidated turnover of the YKK group, in the last business year preceding the adoption of that decision, as regards the period of the infringement when YKK Stocko was held solely responsible for that infringement.

97 Further, it must be recalled that the appellants have not challenged the Commission’s determination of the starting amount of the fine. Consequently, it is appropriate that the Court, in the exercise of its unlimited jurisdiction, should fix the fine imposed exclusively on YKK Stocko in respect of the unlawful acts committed by it independently and on its own responsibility, in the context of the BWA cooperation, at EUR 3 491 000, that sum representing 10% of the turnover it achieved in the business year preceding the adoption of the contested decision.

98 Last, it must be observed that the appellants had claimed before the General Court that they should qualify for a 20% reduction, pursuant to the 2002 Leniency Notice, in the amount of the fine capped at 10% of their relevant turnover. In that regard, taking into consideration the fact that the Commission, in relation to the fine imposed in respect of the infringement relating to the BWA cooperation, granted such a reduction and that that reduction was applied to all the companies in the YKK group, including YKK Stocko, it is appropriate to use for the calculation of the final amount of the fine the same method as that applied by the Commission in the contested decision, in accordance with the provisions of the 1998 Guidelines, and consequently to apply the reduction on the basis of cooperation after the application of the upper limit of 10% of turnover.

99 Accordingly, that 20% reduction, pursuant to the 2002 Leniency Notice, must be applied to the revised amount of the fine, as determined in paragraph 97 of this judgment. Consequently, the amount of the fine imposed exclusively on YKK Stocko, as regards the BWA cooperation, must be fixed at the sum of EUR 2 792 800.

100 Under Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is well founded and the Court itself gives final judgment in the case, the Court is to make a decision as to costs. Article 138(3) of those Rules of Procedure, applicable to proceedings on appeal under Article 184(1) of those rules, provides that, where each party succeeds on some and fails on other heads, the parties are to bear their own costs. However, if it appears justified in the circumstances of the case, the Court may order that one party, in addition to bearing its own costs, pay a proportion of the costs of the other party.

101 In this case, only one of the grounds relied on by the appellants was upheld by the Court in this appeal.

102 In those circumstances, it is appropriate to decide that the appellants should, as regards the proceedings as a whole both before the General Court and before the Court, bear their own costs and should pay three quarters of the costs of the Commission, which should bear one quarter of its own costs.

1. Sets asides the judgment of the General Court of the European Union in YKK and Others v Commission (EU:T:2012:322), as regards the application, for the purposes of determining the maximum amount of the fine, in the context of the cooperation in the Baseler-Wuppertaler and Amsterdamer circles on the market for metal and plastic fasteners and attaching machines, of a 10% upper limit calculated on the basis of the YKK group turnover in the year preceding the adoption of Commission Decision C(2007) 4257 final of 19 September 2007 relating to a proceeding under Article [81 EC] (Case COMP/39.168 - PO/Hard haberdashery: fasteners), as regards the period of the infringement for which YKK Stocko Fasteners GmbH was held to be solely responsible;

3. Annuls Article 2(2) of Commission Decision C(2007) 4257 final in so far as it concerns the calculation of the fine for which YKK Stocko Fasteners GmbH was held to be solely liable in the framework of the cooperation in the Baseler-Wuppertal and Amsterdamer circles;

4. Orders the fine imposed on YKK Stocko Fasteners GmbH for the infringement for which it is exclusively liable, in the framework of the cooperation in the Baseler-Wuppertaler and Amsterdamer circles, to be fixed at EUR 2 792 800;

5. Orders YKK Corporation, YKK Holding Europe BV and YKK Stocko Fasteners GmbH to bear their own costs and pay three quarters of the costs of the European Commission relating both to the proceedings at first instance and to the appeal proceedings;

6. Orders the European Commission to bear one quarter of its own costs relating both to the proceedings at first instance and to the appeal.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> YKK and Others v Commission (Judgment) [2014] EUECJ C-408/12 (04 September 2014) URL: http://www.bailii.org/eu/cases/EUECJ/2014/C40812.html Cite as: ECLI:EU:C:2014:2153, EU:C:2014:66, ECLI:EU:C:2014:66, EU:C:2014:2153, [2014] EUECJ C-408/12

Court of Justice of the European Communities (including Court of First Instance Decisions)