JUDGMENT OF THE COURT (Fifth Chamber)
16 November 2000 (1)
(Appeal - Article 15(2) of Regulation No 17 - Joint and several liability for payment of a fine)
In Case C-294/98 P,
Metsä-Serla Oyj, formerly Metsä-Serla Oy, established in Espoo (Finland),
UPM-Kymmene Oyj, formerly United Paper Mills Ltd, established in Helsinki (Finland),
Tamrock Oy, formerly Tampella Corporation, established in Tampere (Finland),
Kyro Oyj Abp, formerly Oy Kyro Ab, established in Tampere,
represented by H. Hellmann, Rechtsanwalt, Cologne, and H.-J. Hellmann, Rechtsanwalt, Mannheim, with an address for service in Luxembourg at the Chambers of Loesch and Wolter, 11 Rue Goethe,
appellants,
APPEAL against the judgment of the Court of First Instance of the European Communities (Third Chamber, Extended Composition) of 14 May 1998 in Joined Cases T-339/94 to T-342/94 Metsä-Serla and Others v Commission [1998] ECR II-1727, seeking to have that judgment set aside,
the other party to the proceedings being:
Commission of the European Communities, represented by R. Lyal, of its Legal Service, acting as agent, assisted by D. Schroeder, Rechtsanwalt, Cologne, with an address for service in Luxembourg at the Chambers of C. Gómez de la Cruz, of the same department, Wagner Centre, Kirchberg,
defendant at first instance,
THE COURT (Fifth Chamber),
composed of: A. La Pergola, President of the Chamber, M. Wathelet (Rapporteur), D.A.O. Edward, P. Jann and L. Sevón, Judges,
Advocate General: J. Mischo,
Registrar: R. Grass,
having regard to the report of the Judge-Rapporteur,
after hearing the Opinion of the Advocate General at the sitting on 18 May 2000,
gives the following
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:
...
(v) Finnboard - the Finnish Board Mills Association, a fine of ECU 20 000 000, for which Oy Kyro AB is jointly and severally liable with Finnboard in the sum of ECU 3 000 000, Metsä-Serla Oy in the sum of ECU 7 000 000, Tampella Corporation in the sum of ECU 5 000 000 and United Paper Mills Ltd in the sum of ECU 5 000 000;
...
'9 The applicants are Finnish cartonboard producers and were addressees of the Decision. They market their products in the Community and on other markets through Finnish Board Mills Association - Finnboard (hereinafterFinnboard). Finnboard is a trade association governed by Finnish law which, in 1991, had six member companies, including the applicants.
10 As is apparent from point 174 of the Decision, the Commission imposed a fine on Finnboard on the ground that it was Finnboard itself rather than the member companies which actively and directly participated in the cartel. However, it also decided that each of the applicant companies should be jointly and severally liable with Finnboard for that part of the total fine which is approximately proportionate to the cartonboard sales made on its behalf by Finnboard.
The contested judgment
The application for annulment of the Decision
'42 [Article 15(2) of Regulation No 17] does not expressly state whether an undertaking which has not been specifically and formally held liable for an infringement found by the Commission may be declared jointly and severally liable with another undertaking for payment of a fine imposed on that other undertaking, which has committed and been penalised for the infringement.
43 However, this provision must be interpreted as meaning that an undertaking may be declared jointly and severally liable with another undertaking for payment of a fine imposed on the latter undertaking, which has committed an infringement intentionally or negligently, provided that the Commission demonstrates, in the same decision, that the infringement could also have been found to have been committed by the undertaking held jointly and severally liable.
44 In the present case, whilst Finnboard is the undertaking held specifically and formally liable for the infringement of Article 85(1) of the Treaty (Article 1 of the Decision), and whilst the fine provided for by Article 3(v) of the Decision is therefore imposed on it, each of the applicants is none the less declared jointly and severally liable with Finnboard for payment of part of that fine, because the Commission took the view that Finnboard had acted as their alter ego and in their interest (point 174, second paragraph, of the Decision).
45 The Court should therefore consider whether the economic and legal links between Finnboard and the applicants were such that the Commission was entitled to hold each of them specifically and formally liable for the infringement.
46 It is clear from the Decision that the Commission took the view that the applicants were liable for the acts of Finnboard (point 174, second paragraph).
47 To assess the merits of that claim, the principal information, as contained in the documents before the Court, must be examined and, in particular, the applicants' reply to the written questions of the Court regarding the organisation of Finnboard and its legal and factual relations with its member companies and the applicants in particular.
48 According to its statutes of 1 January 1987 (paragraph 2), Finnboard is an association which markets the cartonboard produced by the applicants and paper goods produced by other members.
49 Under paragraphs 10 and 11 of those statutes, each of the members is to have one representative on the Board of Directors, responsible, inter alia, for the adoption of guidelines for the operations of the association; confirmation of the budget, the financing plan and principles regarding the division of expenses among the member companies; and the appointment of the Managing Director.
50 Paragraph 20 of the statutes provides:
The members shall be jointly and severally liable for undertakings given on behalf of the Association as if it were for their own debt.
The liability for debt and undertakings shall be distributed in proportion to the net invoicings of the members for the current year and for the two preceding years.
51 As regards the sale of cartonboard products, it is clear from the applicants' reply to the Court's written questions that, at the material time, they had given Finnboard authority to make all their sales of cartonboard, with the sole exception of the intra-group sales of each applicant company and sales of small quantities to occasional customers in Finland (see also paragraph 14 of the statutes of Finnboard). In addition, Finnboard fixed and announced identical prices for the applicants.
52 The applicants also explain that, in the case of individual sales, customers placed their orders with Finnboard and generally indicated which mill they preferred. Such preferences are attributable, inter alia, to differences in quality between the products of each of the applicants. Where no preference was expressed, orders were divided amongst the members of Finnboard, pursuant to paragraph 15 of its statutes, under which:
The orders received are to be divided justly and equally for manufacture by the members, in consideration of the production capacity of each member as well as the principles of distribution laid down by the Board of Directors.
53 Finnboard was authorised to negotiate conditions of sale, including prices, with each potential customer, the applicants having drawn up general guidelines for such individual negotiations. Each order had none the less to be submitted to the applicant company concerned, which decided whether or not to accept it.
54 The procedures for individual sales and the accounting principles applied for such sales are described in a statement of 4 June 1997 by Finnboard's accountants:
Finnboard acts as Commission agent for the principals, invoicing 'in its own name on behalf of each Principal.
1. Each order is confirmed by the Principal mill.
2. At the moment of shipment from the mill, the mill issues a base invoice to Finnboard ('Mill invoice). The invoice is entered into the Principals' Account as a receivable and into Finnboard's purchase ledger as a debt to the mill.
3. The mill invoice (less the estimated costs of transport, storage, delivery and financing) is prepaid by Finnboard within an agreed period (10 daysin 1990/91). Finnboard thus finances the foreign stocks and customer receivables of the mill without taking title to the goods shipped.
4. At the moment of delivery to the customer, Finnboard issues a customer invoice on behalf of the mill. The invoice is recorded as a sale in the Principals' Account and as a receivable in Finnboard's sales ledger.
5. Customer payments are recorded in the Principals' Accounts and the possible differences between estimated and actual prices and costs (ref. point 3) are cleared through the Principals' Account.
55 It is thus clear, first, that, even though Finnboard was authorised to negotiate prices and other conditions of sale with the end customer in accordance with the guidelines set by the applicants, a sale could not be made unless the applicant company concerned had first approved the price and the other conditions of sale.
56 Second, it is common ground that title passed directly from the applicant company to the end customer.
57 Finally, the commission received by Finnboard, which appears as its turnover in its annual reports, covers only expenses connected with the sales it effected on behalf of its member companies, such as transport or financing costs. It follows that Finnboard had no economic interest of its own in taking part in collusion on prices, since the price increases announced and implemented by the undertakings meeting in the bodies of the PG Paperboard could not generate any profit for it. On the other hand, the applicants had a direct economic interest in Finnboard's participation in such collusion.
58 In the circumstances of the present case, the economic and legal links between Finnboard and each of the applicants were thus such that, in marketing cartonboard for the benefit of the applicants, Finnboard merely acted as an auxiliary organ of each of those companies. In the light of those links and the fact that it was bound to follow the instructions issued by each of the applicants and could not adopt conduct on the market independently of any of them, Finnboard in practice formed an economic unit with each of its cartonboard-producing member companies (see, by analogy, Suiker Unie and Others v Commission, cited above, paragraphs 538 to 540).
59 Accordingly, the Commission correctly considered, in the statement of reasons for the Decision, that the applicants were liable for the anti-competitive actions of Finnboard, with the result that it would have been possible to find that each of them had intentionally infringed Article 85(1) of the Treaty. It was thus entitled, instead of imposing a fine directly on each of the applicant companies, to decide to hold each of them jointly and severally liable with Finnboard for payment of part of the fine imposed on that trade association.
60 In the light of the foregoing, the plea must be dismissed.
The applications for reduction of the amount of the fines
The appeal
The allegation that the bringing of the appeal is flawed
Substance
The first plea
The second plea
Costs
40. Under Article 69(2) of the Rules of Procedure, which applies to appeals by virtue of Article 118, the unsuccessful party is to be ordered to pay the costs, if they have been applied for in the successful party's pleadings. Since the Commission has asked for costs to be awarded against the appellants and the latter have been unsuccessful in all their pleas, the appellant must be ordered to pay the costs.
On those grounds,
THE COURT (Fifth Chamber),
hereby:
1. Dismisses the appeal.
2. Orders Metsä-Serla Oyj, UPM-Kymmene Oyj, Tamrock Oy and Kyro Oyj Abp to pay the costs.
La Pergola
JannSevón
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Delivered in open court in Luxembourg on 16 November 2000.
R. Grass A. La Pergola
Registrar President of the Fifth Chamber
1: Language of the case: German.