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

Facts

Buchmann GmbH, Cascades SA, Enso-Gutzeit Oy, Europa Carton AG, Finnboard - the Finnish Board Mills Association, Fiskeby Board AB, Gruber & Weber GmbH & Co KG, Kartonfabriek de Eendracht NV (trading as BPB de Eendracht NV), NV Koninklijke KNP BT NV (formerly Koninklijke Nederlandse Papierfabrieken NV), Laakmann Karton GmbH & Co KG, Mo Och Domsjö AB (MoDo), Mayr-Melnhof Gesellschaft mbH, Papeteries de Lancey SA, Rena Kartonfabrik A/S, Sarrió SpA, SCA Holding Ltd (formerly Reed Paper & Board (UK) Ltd), Stora Kopparbergs Bergslags AB, Enso Española SA (formerly Tampella Española SA) and Moritz J. Weig GmbH & Co KG have infringed Article 85(1) of the EC Treaty by participating,

- in the case of Buchmann and Rena from about March 1988 until at least the end of 1990,

- in the case of Enso Española, from at least March 1988 until at least the end of April 1991,

- in the case of Gruber & Weber from at least 1988 until late 1990,

- in the other cases, from mid-1986 until at least April 1991,

in an agreement and concerted practice originating in mid-1986 whereby the suppliers of cartonboard in the Community

- met regularly in a series of secret and institutionalised meetings to discuss and agree a common industry plan to restrict competition,

- agreed regular price increases for each grade of the product in each national currency,

- planned and implemented simultaneous and uniform price increases throughout the Community,

- reached an understanding on maintaining the market shares of the major producers at constant levels, subject to modification from time to time,

- increasingly from early 1990, took concerted measures to control the supply of the product in the Community in order to ensure the implementation of the said concerted price rises,

- exchanged commercial information on deliveries, prices, plant standstills, order backlogs and machine utilisation rates in support of the above measures.

(...)

The following fines are hereby imposed on the undertakings named herein in respect of the infringement found in Article 1:

(...)

(ix) NV Koninklijke KNP BT NV, a fine of ECU 3 000 000;

(...)

'9. According to the Decision, the infringement took place within a body known as the Product Group Paperboard (hereinafter the PG Paperboard), which comprised several groups or committees.

10 In mid-1986 a group entitled the Presidents Working Group (hereinafter the PWG) was established within that body. This group brought together senior representatives of the main suppliers of cartonboard in the Community (some eight suppliers).

11 The PWG's activities consisted, in particular, in discussion and collaboration regarding markets, market shares, prices and capacities. In particular, it took broad decisions on the timing and level of price increases to be introduced by producers.

12 The PWG reported to the President Conference (hereinafter the PC), in which almost all the managing directors of the undertakings in question participated (more or less regularly). The PC met twice each year during the period in question.

13 In late 1987 the Joint Marketing Committee (hereinafter the JMC) was set up. Its main task was, on the one hand, to determine whether, and if so how, price increases could be put into effect and, on the other, to prescribe the methods of implementation for the price initiatives decided by the PWG, country-by-country and for the major customers, in order to achieve a system of equivalent prices in Europe.

14 Lastly, the Economic Committee discussed, inter alia, price movements in national markets and order backlogs, and reported its findings to the JMC or, until the end of 1987, to the Marketing Committee, the predecessor of the JMC. The Economic Committee was made up of marketing managers of most of the undertakings in question and met several times a year.

15 According to the Decision, the Commission also took the view that the activities of the PG Paperboard were supported by an information exchange organised by Fides, a secretarial company, whose registered office is in Zurich, Switzerland. The Decision states that most of the members of the PG Paperboard sent periodic reports on orders, production, sales and capacity utilisation to Fides. Under the Fides system, those reports were collated and the aggregated data were sent to the participants.

16 The applicant, NV Koninklijke KNP BT (KNP) exercised 100% control over KNP Vouwkarton BV Eerbeek (KNP Vouwkarton) until 1 January 1990, when the latter company was sold to Mayr-Melnhof. According to the Decision, KNP Vouwkarton, which was a division in KNP's Packaging Group, participated in meetings of the PWG (until mid-1988), the JMC, the PC and theEconomic Committee. During the period of its participation in PWG meetings, KNP Vouwkarton's representative, the head of the applicant's Packaging Group and a member of its management board, presided over meetings of the PWG and of the PC. The infringement by KNP Vouwkarton over the period from mid-1986 until 1 January 1990 was attributed to the applicant.

17 With effect from 31 December 1986, KNP also acquired the German packaging producer Herzberger Papierfabrik Ludwig Osthushenrich GmbH und Co KG, whose production unit, Badische Kartonfabrik (Badische), participated in meetings of the PC, the JMC and the Economic Committee. Badische last participated in the JMC in May 1989 and officially withdrew from the PG Paperboard at the end of that year. However, because Badische increased its prices after it had left the PG Paperboard, the Commission considered that it had continued to participate on the fringe of the cartel until April 1991. Badische's participation in the cartel was attributed to the applicant.

The contested judgment

The plea that the Decision contains an inadequate statement of reasons as to the fixing of the amount of the fine

'67 It is settled law that the purpose of the obligation to give reasons for an individual decision is to enable the Community judicature to review the legality of the decision and to provide the party concerned with an adequate indication as to whether the decision is well founded or whether it may be vitiated by some defect enabling its validity to be challenged; the scope of that obligation depends on the nature of the act in question and on the context in which it was adopted (see, inter alia, Case T-49/95 Van Megen Sports v Commission [1996] ECR II-1799, paragraph 51).

68 As regards a decision which, as in this case, imposes fines on several undertakings for infringement of the Community competition rules, the scope of the obligation to state reasons must be assessed in the light of the fact that the gravity of infringements falls to be determined by reference to a number of factors including, in particular, the specific circumstances and context of the case and the deterrent character of the fines; moreover, no binding or exhaustive list of criteria to be applied has been drawn up (Order of 25 March 1996 in Case C-137/95 SPO and Others v Commission [1996] ECR I-1611, paragraph 54).

69 Moreover, when fixing the amount of each fine, the Commission has a margin of discretion and cannot be considered obliged to apply a precise mathematical formula for that purpose (see, to the same effect, the judgment in Case T-150/89 Martinelli v Commission [1995] II-1165, paragraph 59).

70 In the Decision, the criteria taken into account in order to determine the general level of fines and the amount of individual fines are set out in points 168 and 169 respectively. Moreover, as regards the individual fines, the Commission explains in point 170 that the undertakings which participated in the meetings of the PWG were, in principle, regarded as ringleaders of the cartel, whereas the other undertakings were regarded as ordinary members. Lastly, in points 171 and 172, it states that the amounts of fines imposed on Rena and Stora must be considerably reduced in order to take account of their active cooperation with the Commission, and that eight other undertakings, including the applicant, were also to benefit from a reduction, to a lesser extent, owing to the fact that in their replies to the statement of objections they did not contest the essential factual allegations on which the Commission based its objections.

71 In its written pleas to the Court and in its reply to a written question put by the Court, the Commission explained that the fines were calculated on the basis of the turnover on the Community cartonboard market in 1990 of each undertaking addressed by the Decision. Fines of a basic level of 9 or 7.5% of that individual turnover were then imposed, respectively, on the undertakingsconsidered to be the cartel ringleaders and on the other undertakings. Finally, the Commission took into account any cooperation by undertakings during the procedure before it. Two undertakings received a reduction of two-thirds of the amount of their fines on that basis, while other undertakings received a reduction of one-third.

72 Moreover, it is apparent from a table produced by the Commission containing information as to the fixing of the amount of each individual fine that, although those fines were not determined by applying the abovementioned figures alone in a strictly mathematical way, those figures were, nevertheless, systematically taken into account for the purposes of calculating the fines.

73 However, the Decision does not state that the fines were calculated on the basis of the turnover of each undertaking on the Community cartonboard market in 1990. Furthermore, the basic rates of 9 and 7.5% applied to calculate the fines imposed on the undertakings considered to be ringleaders and those considered to be ordinary members do not appear in the Decision. Nor does it set out the rates of reduction granted to Rena and Stora, on the one hand, and to eight other undertakings, including the applicant, on the other.

74 In the present case, first, points 169 to 172 of the Decision, interpreted in the light of the detailed statement in the Decision of the allegations of fact against each of its addressees, contain a relevant and sufficient statement of the criteria taken into account in order to determine the gravity and duration of the infringement committed by each of the undertakings in question (see, to the same effect, Case T-2/89 Petrofina v Commission [1991] ECR II-1087, point 264).

75 Second, where, as in the present case, the amount of each fine is determined on the basis of the systematic application of certain precise figures, the indication in the decision of each of those factors would permit undertakings better to assess whether the Commission erred when fixing the amount of the individual fine and also whether the amount of each individual fine is justified by reference to the general criteria applied. In the present case, the indication in the Decision of the factors in question, namely the reference turnover, the reference year, the basic rates adopted, and the rates of reduction in the amount of fines, would not have involved any implicit disclosure of the specific turnover of the addressee undertakings, a disclosure which might have constituted an infringement of Article 214 of the Treaty. As the Commission has itself stated, the final amount of each individual fine is not the result of a strictly mathematical application of those factors.

76 The Commission also accepted at the hearing that nothing prevented it from indicating in the Decision the factors which had been systematically taken into account and which had been divulged at a press conference held by the Member of the Commission responsible for competition policy on the day on which thatdecision was adopted. In that regard, it is settled law that the reasons for a decision must appear in the actual body of the decision and that, save in exceptional circumstances, explanations given ex post facto cannot be taken into account (see Case T-61/89 Dansk Pelsdyravlerforening v Commission [1992] ECR II-1931, paragraph 131, and, to the same effect, Case T-30/89 Hilti v Commission [1991] ECR II-1439, paragraph 136).

'88 According to point 170, first paragraph, of the Decision, the 'ringleaders, namely the major producers of cartonboard which took part in the PWG (Cascades, Finnboard, [Mayr-Melnhof], MoDo, Sarrió and Stora), must bear a special responsibility. They clearly constituted the main decision-makers and were the prime movers of the cartel.

89 According to the second paragraph of point 170, the applicant must also therefore be considered as a ringleader of the cartel during the period of its membership of the PWG, that is to say until mid 1988 (point 36, second paragraph). The Decision states that the applicant's representative presided over the PC and the PWG at a critical time.

90 Furthermore, it amply describes the central role of the PWG in the cartel (in particular, points 36 to 38 and 130 to 132 of the Decision.

91 The Decision therefore clearly contains an adequate statement of the reasons for the Commission's view that the applicant was a ringleader.

92 As to the correctness of those reasons, the Court points out that the applicant does not dispute that it participated in the PWG meetings, nor that it provided the president for it during the first two years of the cartel. Nor does it dispute that the object of the PWG was in fact essentially anti-competitive or that the conduct found by the Commission was in fact anti-competitive.

93 The applicant was therefore correctly characterised as a ringleader for the purpose of calculating the fine. Its actual conduct in the PWG and its reasons for assuming the presidency of that body do not vitiate the Commission's finding.

94 However, having regard to the above considerations, the applicant could have been characterised as a ringleader, and therefore fined on that basis, only in respect of the period from mid-1986 until mid-1988. The Court will examine the implications of that conclusion in the context of its unlimited jurisdiction in regard to fines when it considers the plea alleging errors in the calculation of the fine imposed on the applicant (paragraph 104 et seq. below).

95 Consequently, this plea cannot be upheld.

The plea that errors were made in calculating the fine imposed on the appellant

'55 It has already been held ... that the Commission was entitled to attribute Badische's unlawful conduct to the applicant.

56 The applicant accepts that after it withdrew from the committees of the PG Paperboard at the end of 1989 it nevertheless continued to receive information on the price initiatives.

57 Nor does the applicant dispute that Tables F and G annexed to the Decision show that in April 1990 and January 1991 it increased its prices for GD cartonboard in Germany and the United Kingdom to the same level as those applied by the undertakings which participated in the committees of the PG Paperboard until April 1991.

58 As it could not have been unaware that the information which it used was the product of collusion, it is therefore clear that it deliberately continued to profit from conduct that infringed Article 85(1) of the Treaty.

59 The Commission therefore correctly found in the sixth paragraph of point 162 of the Decision, that the applicant had to be held a party to the infringement up to the date of the investigation, that is to say, 23 and 24 April 1991.

60 The plea must therefore be rejected.

'104 As the Court has already found ..., the Commission rightly held the applicant to be responsible for the unlawful conduct of KNP Vouwkarton and Badische. The Commission also rightly took the view that the applicant had participated in the cartel from mid-1986 until April 1991 ... .

105 The applicant's arguments alleging that its participation in the cartel was incorrectly assessed must therefore be rejected.

The first plea

'points 169 to 172 of the Decision, interpreted in the light of the detailed statement in the Decision of the allegations of fact against each of its addressees, contain a relevant and sufficient statement of the criteria taken into account in order to determine the gravity and duration of the infringement committed by each of the undertakings in question (see, to the same effect, Case T-2/89 Petrofina v Commission [1991] ECR II-1087, paragraph 264).

The second plea

The third plea

The fourth plea

The action for annulment

'46 First, the applicant does not contend that it was unable to exert a decisive influence on the commercial policy of KNP Vouwkarton and Badische.

47 Moreover, it is not disputed that a member of the applicant's management board participated in, and even presided over, the meetings of the PWG until 1988. According to the Decision, the main discussions with an anti-competitive object took place in the PWG and that finding is not disputed by the applicant.

48 In those circumstances, the Commission has proved that through the involvement of the member of its management board the applicant was actively implicated in the anti-competitive conduct of KNP Vouwkarton. In involving itself in that way in the participation of one of its subsidiaries in the cartel, the applicant was aware, and must also have approved of, Badische's participation in the infringement in which KNP Vouwkarton took part.

49 The applicant's responsibility is not affected by the fact that the attendance of the member of its management board at meetings of the bodies of the PG Paperboard ceased in 1988. It was for the applicant, as parent company, to adopt in regard to its subsidiaries any measure necessary to prevent the continuation of an infringement of which it was aware. Furthermore, the applicant has not disputed that it did not even attempt to prevent the continuation of the infringement.

50 It also follows that the sale of KNP Vouwkarton to Mayr-Melnhof with effect from 1 January 1990 did not affect the applicant's responsibility for Badische's continuing anti-competitive conduct.

Costs