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Cite as: [2005] ECR II-10, [2005] EUECJ T-74/3, [2005] EUECJ T-74/03
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JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber)
15 June 2005 (*)
(Competition - Cartels - Specialty graphite market - Price fixing - Liability - Calculation of fines - Cumulation of penalties - Duty to state reasons - Rights of the defence - Guidelines on the method of setting fines - Applicability - Gravity and duration of the infringement - Attenuating circumstances - Aggravating circumstances - Ability to pay - Co-operation during the administrative procedure - Methods of payment)
In Joined Cases T-71/03, T-74/03, T-87/03 and T-91/03,
Tokai Carbon Co. Ltd, established in Tokyo (Japan), represented by G. van Gerven and T. Franchoo, lawyers, with an address for service in Luxembourg,
Intech EDM BV, established in Lomm (Netherlands), represented by M. Karl and C. Steinle, lawyers,
Intech EDM AG, established in Losone (Switzerland), represented by M. Karl and C. Steinle, lawyers,
SGL Carbon AG, established in Wiesbaden (Germany), represented by M. Klusmann and P. Niggemann, lawyers,
applicants,
v
Commission of the European Communities, represented by W. Mölls, P. Hellström, F. Castillo de la Torre and S. Rating, acting as Agents, assisted, in Cases T-74/03 and T-87/03, by H.-'J. Freund, lawyer, with an address for service in Luxembourg,
defendant,
ACTIONS for annulment in full or in part of Commission Decision C(2002) 5083 final of 17 December 2002 relating to a proceeding under Article 81 EC and Article 53 of the EEA Agreement (Case COMP/E-2/37.667 - Speciality Graphite),
THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Second Chamber),
composed of J. Pirrung, President, A.W.H. Meij and N.J. Forwood, Judges,
Registrar: J. Palacio González, Principal Administrator,
having regard to the written procedure and further to the hearing on 21 September 2004,
gives the following
Judgment
Background to the dispute
1 By Decision C(2002) 5083 final of 17 December 2002 relating to a proceeding under Article 81 EC and Article 53 of the EEA Agreement (Case COMP/E-'2/37.667 - Specialty Graphite, -˜the Decision-™), the Commission found that various undertakings had participated in a series of agreements and concerted practices within the meaning of Article 81(1) EC and Article 53(1) of the Agreement on the European Economic Area (-˜EEA-™) in the specialty graphite sector in the period from July 1993 to February 1998.
2 For the purposes of the Decision, -˜specialty graphite-™ describes a group of graphite products, namely isostatic graphite, extruded graphite and moulded graphite used in diverse applications. It does not include steel-making graphite electrodes.
3 The mechanical characteristics of isostatic graphite are superior to those of extruded and moulded graphite and the price of each graphite category varies according to its mechanical characteristics. Isostatic graphite is used, inter alia, in the manufacture, by electrical-discharge machining, of metal moulds for the automobile and electronics industries. It is also used to make dies for the continuous casting of non-ferrous metals such as copper and copper alloys.
4 The production cost differential between isostatic graphite and extruded or moulded graphite is at least 20%. In general, extruded graphite is the cheapest and is therefore chosen if it meets the user-™s requirements. Extruded products are used in a wide range of industrial applications, mainly in the iron and steel, aluminium and chemical industries and in metallurgy.
5 Moulded graphite is generally used only in large-scale applications, because it is typically inferior to extruded graphite.
6 In general, specialty graphite products are supplied to customers either directly from the manufacturing plants as finished machined products or through intermediary machine shops. These machine shops buy unmachined graphite (in blocks or rods), machine them (i.e. customise the product according to the customer-™s needs) and sell the machined products to the end-user.
7 The Decision concerns two separate cartels, one relating to the market for isostatic specialty graphite and the other to that for extruded specialty graphite. There was no evidence of an infringement in respect of moulded graphite. Those cartels covered very specific products, namely graphite in the form of standard and cut blocks, but not machined products, that is made to order for the customer.
8 The major producers of specialty graphite in the western world are multinational corporations. Worldwide specialty graphite sales in 2000 were about EUR 900 million. Of this figure, isostatic graphite accounted for around EUR 500 million and extruded graphite for EUR 300 million. At Community/EEA level, sales in 2000 were EUR 100 to 120 million for isostatic graphite and EUR 60 to 70 million for extruded graphite. Unmachined products accounted for about EUR 35 to 50 million in the isostatic market and about EUR 30 million in the extruded market.
9 When the Decision was adopted, the largest producers of isostatic specialty graphite in the Community/EEA were the German company SGL Carbon AG (-˜SGL-™) and the French company Le Carbone-Lorraine SA (-˜LCL-™). The Japanese company Toyo Tanso Co. Ltd (-˜TT-™) ranked third, followed by other Japanese companies, namely Tokai Carbon Co. Ltd (-˜Tokai-™), Ibiden Co. Ltd (-˜Ibiden-™), Nippon Steel Chemical Co. Ltd (-˜NSC-™) and NSCC Techno Carbon Co. Ltd (-˜NSCC-™) and the American company UCAR International Inc. (-˜UCAR-™), which became GrafTech International Ltd.
10 In addition to these producers, Intech EDM BV, a company established under Netherlands law, and its Swiss subsidiary Intech EDM AG (also referred to together as -˜Intech-™), operated in the isostatic graphite sector. Intech did not have production facilities. Under a cooperation agreement, Intech was the sales partner of the Japanese producer Ibiden in several European countries where it enjoyed the exclusive right to sell Ibiden-™s artificial graphite products for use in electrical discharge machining. Intech could also sell these products on a non-'exclusive basis under its own brand name in other European countries.
11 The main participants in the world market for extruded graphite were UCAR (40%) and SGL (30%). On the European market they accounted for two thirds of sales. The Japanese producers together held about 10% of the world market and 5% of the Community market. The proportion of sales of extruded products in the form of blocks or cut blocks (unmachined products) was 20 to 30% for UCAR and 40 to 50% for SGL.
12 In June 1997 the Commission commenced an investigation into the graphite electrodes market. The investigation led to the decision of 18 July 2001 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement - Case COMP/E-'1/36.490 - Graphite electrodes (OJ 2002 L 100, p. 1). In the course of that investigation, UCAR contacted the Commission, in 1999, in order to submit a request on the basis of the Commission Notice on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4, -˜the Leniency Notice-™). The request related to alleged anti-'competitive practices in the markets for isostatic and extruded graphite.
13 On the basis of the documents submitted by UCAR, the Commission sent requests for information under Article 11 of Council Regulation No 17 of 6 February 1962 implementing Articles [81] and [82] of the Treaty (OJ English Special Edition 1959-62, p. 87, -˜Regulation No 17-™) to SGL, Intech, Ibiden, Tokai and TT, requiring detailed information concerning contacts with competitors. Those companies contacted the Commission and expressed their intention to cooperate with the Commission-™s investigations.
14 In the US, criminal proceedings were brought in March 2000 and in February 2001 against a subsidiary of LCL and a subsidiary of TT for participating in an illegal cartel on the specialty graphite market. The companies pleaded guilty and agreed to pay fines. In October 2001 Ibiden also pleaded guilty and paid a fine.
15 On 17 May 2002 the Commission sent a statement of objections to the addressees of the Decision. In their replies, all the companies apart from Intech EDM BV and Intech EDM AG admitted the infringement. None of them substantially contested the facts.
16 Given the similarity of the methods used by the cartel members, the fact that the two infringements concerned related products and that SGL and UCAR were involved in both cases, the Commission considered it appropriate to address the infringements in the two product markets in a single procedure.
17 The administrative procedure concluded on 17 December 2002 with the adoption of the Decision which found, first, that the applicants, TT, UCAR, LCL, Ibiden, NSC and NSCC had fixed worldwide indicative prices (target prices) on the unmachined isostatic graphite market and, second, that SGL and UCAR had committed a similar infringement, also worldwide, on the unmachined extruded graphite market.
18 With regard to the infringement on the isostatic graphite market, the Decision notes that prices were fixed and broken down by application, geographic area (Europe or the United States) and trade level (distributors/machine shops and large end-users with machining capability). The object of the cartel was to harmonise trading conditions and to exchange shipment records so as to ensure detailed monitoring of sales and the detection of deviations from cartel instructions. On some occasions, information was exchanged concerning the allocation of major customers.
19 The Decision states that collusive agreements were implemented on the isostatic graphite market by regular multilateral meetings at four levels:
- -˜top level meetings-™, attended by the top executives of the companies, at which the main principles of cooperation were established;
- -˜international working level meetings-™ concerning the classification of graphite blocks into different categories and the fixing of minimum prices for each category;
- -˜regional-™ (European) meetings;
- -˜local-™ (national) meetings concerning the Italian, German, French, British and Spanish markets.
20 The Decision states that in aiming to increase isostatic graphite prices, or to contain their fall, the cartel had an impact on the Community/EEA market. The prices fixed by the agreements and a consistent policy of price increases were applied during 1993 to 1998. Even though from 1997 the cartel members had difficulty in attaining the prices agreed at meetings, the termination of the concerted practices was immediately followed by a sharp drop in isostatic product prices.
21 With regard to the extruded graphite market, it is clear from the Decision that the two main players on the European market for such products, SGL and UCAR, admitted participation in a number of bilateral meetings dealing with that market in the period from 1993 to the end of 1996. UCAR and SGL agreed to increase extruded graphite prices on the Community/EEA market. They regularly discussed prices and the classification of products in order to avoid competing on prices. The new prices were in fact announced to customers in turn by one of the parties.
22 On the basis of the findings of fact and legal assessment in the Decision, the Commission imposed on the companies in question fines calculated in accordance with the method 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 Guidelines-™) and the Leniency Notice.
23 Under the first paragraph of Article 1 of the operative part of the Decision, the following undertakings infringed Article 81(1) EC and Article 53(1) of the EEA Agreement by participating, for the periods indicated, in a complex of agreements and concerted practices affecting the Community and EEA markets for isostatic specialty graphite:
(a) GrafTech International (UCAR), from February 1996 to May 1997;
(b) SGL, from July 1993 to February 1998;
(c) LCL, from July 1993 to February 1998;
(d) Ibiden, from July 1993 to February 1998;
(e) Tokai, from July 1993 to February 1998;
(f) TT, from July 1993 to February 1998;
(g) NSC and NSCC, jointly and severally liable, from July 1993 to February 1998;
(h) Intech EDM BV and Intech EDM AG, jointly and severally liable, from February 1994 to May 1997.
24 Under the second paragraph of the same provision, the following undertakings infringed Article 81(1) EC and Article 53(1) of the EEA Agreement by participating for the periods indicated in a complex of agreements and concerted practices affecting the Community and EEA markets for extruded specialty graphite:
- SGL, from February 1993 to November 1996;
- GrafTech International (UCAR) from February 1993 to November 1996.
25 Article 3 of the operative part imposes the following fines:
(a) GrafTech International (UCAR):
- Isostatic specialty graphite: EUR 0;
- Extruded specialty graphite: EUR 0;
(b) SGL:
- Isostatic specialty graphite: EUR 18 940 000;
- Extruded specialty graphite: EUR 8 810 000;
(c) LCL: EUR 6 970 000;
(d) Ibiden: EUR 3 580 000;
(e) Tokai: EUR 6 970 000;
(f) TT: EUR 10 790 000;
(g) NCS and NSCC, jointly and severally liable: EUR 3 580 000;
(h) Intech EDM BV and Intech EDM AG, jointly and severally liable: EUR 980 000.
26 Article 3 further orders that the fines are to be paid within three months of the date of notification of the Decision with default interest at the rate of 6.75%.
27 The Decision was sent to the applicants with a covering letter of 20 December 2002. It stated that after expiry of the period for payment specified in the Decision the Commission would take steps to recover the sums in question; however, if proceedings were commenced before the Court of First Instance the Commission would not take steps to enforce the judgment provided that interest at the rate of 4.75% was paid and a bank guarantee given.
28 The Decision was notified to the various applicants between 23 December 2002 and 8 January 2003.
Procedure
29 By separate applications lodged at the Registry of the Court of First Instance between 3 and 10 March 2003, Tokai, Intech EDM BV, Intech EDM AG and SGL brought the present actions. TT also brought an action (Case T-72/03).
30 Having heard the parties on the matter, by order of 15 June 2004 the President of the Second Chamber of the Court of First Instance ordered that the five cases be joined for the purposes of the oral procedure and judgment pursuant to Article 50 of the Rules of Procedure of the Court of First Instance. He also granted confidential treatment in respect of certain documents in the files.
31 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Second Chamber) decided to open the oral procedure and put certain questions to the parties. The parties replied to those questions within the prescribed period.
32 The parties presented oral argument and replied to the Court-™s questions at the hearing on 21 September 2004. In particular, the Commission responded at that hearing to a question which the Court put to it following a request by TT for a preparatory measure of inquiry seeking to clarify LCL-™s turnover in 1997 from sales of isostatic graphite on the EEA market.
33 By letter of 23 February 2005, TT withdrew its application. By order of 10 May 2005, Case T-72/03 was removed from the register.
Forms of order sought by the parties
34 Tokai (Case T-71/03) claims that the Court should:
- annul Article 3 of the Decision in so far as it imposes a fine of EUR 6.97 million on it or, in the alternative, substantially reduce that fine;
- order the Commission to pay the costs.
35 Intech EDM BV (Case T-74/03) claims that the Court should:
- annul the Decision in so far as it concerns it;
- in the alternative, reduce the fine imposed by Article 3(h) of the Decision;
- order the Commission to pay the costs.
36 Intech EDM AG (Case T-87/03) claims that the Court should:
- annul the Decision in so far as it concerns it;
- in the alternative, reduce the fine imposed by Article 3(h) of the Decision;
- order the Commission to pay the costs.
37 SGL (Case T-91/03) claims that the Court should:
- annul the Decision in so far as it concerns it;
- in the alternative, appropriately reduce the fine imposed on it by the decision;
- order the Commission to pay the costs.
38 In all the cases, the Commission contends that the Court should:
- dismiss the action;
- order the applicant to pay the costs.
Law
39 The action brought under Case T-71/03 seeks, in substance, only to set aside or reduce the amount of the fine imposed by alleging, inter alia, infringement by the Commission of its Guidelines and Leniency Notice, without substantially contesting the facts found in the Decision. The three other actions seek, as the principal remedy, the annulment of the Decision as a whole and are based on pleas in law alleging the unlawfulness of the Decision as a whole and/or errors committed by the Commission in finding the facts said to constitute the infringement. Finally, one action (Case T-91/03) challenges the rules relating to payment of the fines.
40 It is necessary, first of all, to examine the heads of claim seeking annulment of the Decision as a whole or certain findings of fact which appear in it. Next, the Court will examine the heads of claim seeking annulment of Article 3 of the Decision or the reduction of the fines set pursuant to the Guidelines and the Leniency Notice. Finally, the Court will examine the complaints concerning the rules for payment of the fines.
A - The applications for annulment in part of Article 1 of the Decision and of certain findings of fact therein
1. The pleas in law alleging, first, an error of law in finding that Intech committed an infringement in the isostatic graphite market and, second, a failure to state reasons in that regard (Cases T-74/03 and T-87/03)
a) Summary of the Decision
41 In paragraphs 378 and 401 to 424 of the Decision, the Commission found that Intech had directly participated in the cartel in the market for isostatic graphite. It rejected Intech-™s argument that its entire business in the graphite market in Europe was based on a cooperation agreement with Ibiden, that it was economically and legally dependent on Ibiden, that its personnel attended cartel meetings only on behalf of Ibiden and in accordance with Ibiden-™s instructions and that Intech EDM AG was not a founding member of the cartel and did not attend -˜high-level-™ or international meetings of the cartel.
42 The Commission, on the other hand, took the view that the behaviour of Intech and Ibiden in the cartel had to be assessed separately, and that they were both wholly responsible for their own part in the infringement. Intech EDM AG marketed specialty graphite in the Community and took part directly in European level cartel meetings. Intech EDM BV, the former parent company of Intech EDM AG and which held all the latter-™s shares during the infringement, was the only interface between the Intech group and Ibiden for transactions relating to the specialty products market; all Intech-™s European activities in relation to those products were carried out on the basis of the cooperation agreement between Intech and Ibiden.
b) Arguments of the parties
43 While admitting that they do not dispute the findings of fact in the Decision, Intech EDM BV and Intech EDM AG complain that the Commission accused them of being -˜principals-™ responsible for the infringement whereas in fact they were mere -˜accessories-™ to Ibiden-™s infringement who could not be penalised.
44 Thus the Commission ignored the fact that, at least until 26 September 1995, the applicant was not a principal responsible for an infringement of Article 81(1) EC. Prior to that date Ibiden was not present in person at the European meetings of the cartel, but sent Mr Ankli, a director of Intech EDM AG, to represent it. As Ibiden used Intech merely as an instrument, the latter can be regarded only as an accessory to Ibiden-™s infringement. However, mere complicity in the form of attending a cartel meeting is not punishable under Article 15(2) of Regulation No 17 and cannot therefore be sanctioned by a fine.
45 On the basis of a study of comparative law, Intech observes that the distinction between principal and accessory is a general principle of law. It follows that the commission of the act must be distinguished from mere complicity. The principal responsible for an infringement for the purposes of Article 15(2) of Regulation No 17 is the person who has control of events and commits the act, while the accessory, who has no control, takes part in the act of another person as an instrument or auxiliary party.
46 Moreover, an undertaking can be described as a principal in an infringement only if the restriction of competition enhances its market position and procures for it a direct economic advantage. That was precisely not the case for Intech here. The applicant had an interest in a price-reduction policy which would enable it to increase its market share.
47 Intech adds that the Commission itself found, in paragraph 515 of the Decision, that Intech obeyed Ibiden-™s instructions with a view to implementing, by its presence at European and national meetings as Ibiden-™s distributor, the decisions of principle made at a higher level of the cartel.
48 However, the Commission made no mention at all of Intech-™s economic dependence on Ibiden. In disregarding this essential factor in the assessment of the question of complicity, the Commission failed in its duty to state reasons pursuant to Article 253 EC.
49 On this point, Intech observes that as a mere distributor with no production facilities it was economically dependent on Ibiden and, accordingly, subject to its control. It is a small enterprise, operating only at regional level and with a small turnover equal to approximately 1% of Ibiden-™s. Therefore it did not have the economic strength necessary to ignore Ibiden-™s instructions. The continuation of its business depended on supplies of specialty graphite from large international producers. Likewise Intech was not in a position to replace Ibiden by another producer to ensure supplies: by means of establishments, branches or sales partnerships, all the other suppliers were connected in one way or another and also organised as a group within the cartel. Consequently Intech was entirely dependent on Ibiden as its supplier.
50 Intech was also unable to avoid Ibiden-™s will by refusing to attend cartel meetings and informing the Commission of the cartel. By the time the cartel had finished by being dismantled, Intech would have become insolvent long before as neither Ibiden nor any other supplier would have supplied it with specialty graphite. For the applicant, refusing to obey Ibiden-™s instructions would have meant the end of its business.
51 In view of the relative economic strength of Ibiden and Intech, the latter had no choice but to apply - against its own interest - the target prices agreed on by the producers at a higher level of the cartel. In this context, Intech asks that Mr Ankli be examined as a witness in order to show that it was bound by Ibiden-™s instructions. In any case, Mr Ankli did not represent Intech EDM BV, but was employed by Intech EDM AG, so that his conduct could not be attributed to the former.
52 Lastly, contrary to the Commission-™s assertions, the fact that representatives of Intech EDM AG took part in several meetings of the cartel at European and national level does not preclude that company from being subject to Ibiden-™s control. Intech EDM BV did not take part in any meeting of the cartel. In any event, the Commission misinterpreted several documents, in particular certain minutes of meetings organised by the cartel, on which it based its assessment of the role played by the two Intech companies.
53 While accepting that Articles 3 and 15(2)(a) of Regulation No 17 authorise the Commission to sanction only undertakings which have themselves infringed the competition rules, whereas mere -˜complicity-™ is not caught by those provisions, the Commission observes that, in the present case, Intech is undoubtedly a -˜principal-™ in a breach of Article 81 EC. This type of infringement consists in participation by an undertaking in a cartel, such participation being established where there is a common anti-competitive intention shared by that undertaking and one or more other undertakings.
c) Findings of the Court
54 It is clear from the case-law that, in prohibiting undertakings inter alia from entering into agreements or participating in concerted practices which may affect trade between Member States and have as their object or effect the prevention, restriction or distortion of competition within the common market, Article 81(1) EC is aimed at economic units made up of a combination of personal and physical elements which can contribute to the commission of an infringement of the kind referred to in that provision (Case T-6/89 Enichem Anic v Commission [1991] ECR II-1623, paragraph 235). An undertaking within the meaning of Article 81 EC can therefore include several subjects of the law (Case 170/83 Hydrotherm [1984] ECR 2999, paragraph 11).
55 In the present case, in subparagraph (h) of the first paragraph of Article 1 of the Decision, the Commission states that Intech EDM AG and Intech EDM BV infringed Article 81(1) EC and Article 53(1) of the EEA Agreement -˜by participating-™ in the cartel operating in the isostatic specialty graphite markets and, moreover, doing so on the same basis as the other members of the cartel, including Ibiden.
56 It is therefore necessary to examine whether that specific allegation is supported by the findings in the Decision. If it is, then the pleas in law put forward by the two Intech companies must be rejected, but if it is not, then subparagraph (h) of the first paragraph of Article 1 of the Decision must be annulled and there will be no need to rule whether the Intech companies acted as accomplices.
57 It should be noted in this regard that the two applicants expressly stated in their applications that they did not challenge the findings of fact in the Decision. The present pleas in law therefore do not seek to challenge the interpretation of the unchallenged facts found by the Commission in assessing the role played by Intech EDM AG and Intech EDM BV within the cartel.
58 According to those findings (paragraphs 66 and 421), Intech EDM AG was a wholly-owned subsidiary of Intech EDM BV during the period of the infringement found to have been committed by Intech, namely from February 1994 to May 1997.
59 In those circumstances the Commission rightly referred to the case-law (paragraphs 420 and 421 of the Decision) entitling it to find that the Intech companies belonged in principle to an economic entity and therefore both of them constituted one -˜undertaking-™ for the purposes of competition law (Case 107/82 AEG v Commission [1983] ECR 3151, paragraph 50, and case T-65/89 BPB Industries and British Gypsum v Commission [1993] ECR II-389, paragraph 149).
60 According to the settled case-law of the Court of Justice and the Court of First Instance (Case T-354/94 Stora Kopparbergs Bergslags v Commission [1998] ECR II-2111, paragraph 80, confirmed by Case C-286/98 P Stora Kopparbergs Bergslags v Commission [2000] ECR I-9925, paragraphs 27 to 29), the Commission can generally assume that a wholly-owned subsidiary essentially follows the instructions given to it by its parent company without needing to check whether the parent company has in fact exercised that power.
61 Before the Court, neither of the applicants has established that the subsidiary, Intech EDM AG, decided independently on its own conduct on the market rather than carrying out the instructions given to it by its parent company and such that they fall outside the definition of an -˜undertaking-™. The two applications are silent on that point. It is only in their replies that the applicants asserted that the subsidiary -˜acted largely independently of its former parent company-™. That assertion, unsupported by any evidence, was made out of time and so must be disregarded under Article 48(2) of the Rules of Procedure as a new and therefore inadmissible plea in law.
62 It follows that, in applying the definition of -˜undertaking-™, the two Intech companies could be regarded as jointly liable for conduct alleged against them, with the acts of one being imputable to the other (see, to that effect, Case T-9/99 HFB and Others v Commission [2002] ECR II-1487, paragraphs 54, 524 and 525). That finding is not undermined by the fact that the text of the Decision sometimes departs from the proper terminology and erroneously uses the term -˜undertaking-™ - for example, in paragraph 407 the Commission talks about -˜two undertakings of the Intech group-™ - to describe one or other of the two Intech companies.
63 It is therefore necessary to examine which acts the Commission took into consideration and imputed reciprocally to both of the Intech companies, so as to establish their participation in the infringement found in the Decision.
64 The Commission found on this point, without being contradicted by the applicants, that Intech EDM AG took part in almost all the meetings organised by the cartel at European level (paragraph 408 of the Decision) and in several local meetings concerning the German, British, French and Italian markets (paragraphs 243, 248, 254, 261 and 267 of the Decision).
65 To the extent that the applicants submit that Intech EDM AG did not act as a -˜perpetrator-™ of the infringement at those meetings, it suffices to note that according to settled case-law, where an undertaking participates, even if not actively, in meetings between undertakings with an anti-competitive object and does not publicly distance itself from what occurred at them, thus giving the impression to the other participants that it subscribes to the results of the meetings and will act in conformity with them, it may be concluded that it is participating in the cartel resulting from those meetings (Case T-7/89 Hercules Chemicals v Commission [1991] ECR II-1711, paragraph 232; Case T-12/89 Solvay v Commission [1992] ECR II-907, paragraph 98; Case T-141/89 Tréfileurope v Commission [1995] ECR II-791, paragraphs 85 and 86; and HFB and Others v Commission, paragraph 62 above, paragraph 137).
66 Intech EDM AG never publicly distanced itself from the anti-competitive content of the meetings it attended. In particular, it did not publicly demonstrate a clear wish to participate in those meetings not on its own behalf but as a mere representative of Ibiden. None of the minutes and records of those meetings discloses a public statement to that effect. Without such a statement it is not enough for the applicants to claim that some of those documents should be interpreted objectively as showing that Intech EDM AG acted in Ibiden-™s sole interest, a claim which the Commission strongly disputes.
67 Moreover, the Commission was right to emphasise the extent of Intech EDM AG-™s participation in the meetings of the cartel both at European and local level. The present case concerned a cartel fixing target prices broken down by geographic area, namely Europe or the United States (paragraph 98 of the Decision). Consequently, it was not sufficient to fix prices at the highest levels of the cartel, that is at -˜top-level meetings-™ and -˜international working meetings-™, but it was also important to ensure their actual application at regional and local levels. The fact that Intech EDM AG never took part in one of those -˜top-level meetings-™ and -˜international working level meetings-™ does not mean that it did not take part in the cartel.
68 It follows that the Commission was right to regard Intech EDM AG-™s participation in the meetings at the European and local levels of the cartel as anti-competitive conduct. It was also entitled to impute that conduct to Intech EDM BV as it had been performed by its wholly-owned subsidiary, all the more so since activities of the Intech group in the graphite sector in Europe were carried out on the basis of a co-operation agreement that Intech EDM BV had itself entered into with Ibiden (paragraphs 67 and 421 of the Decision).
69 It should be added that objectively it was in Intech-™s interest to attend the meetings organised by the cartel at European and local level. The prices fixed by the cartel were broken down by trade level, that is by distributor/machine shop, on the one hand, and large end-users with machining capability, on the other (paragraph 98 of the Decision). Intech therefore had every interest in ensuring that the fixing of those prices did not affect its profit margin. That finding is confirmed by a fax produced by the applicants themselves (Annex A23 to the applications) from which it appears that Intech was very pleased about the increase in prices for itself, but did not agree with the increase in the purchase price and found the profit margin fixed for the distributors in October 1993 to be too tight.
70 Lastly, the Commission found, without being contradicted by the applicants, that Intech undertook to charge its own customers the prices agreed by the cartel (paragraph 403 of the Decision). Furthermore, Intech-™s interest in respecting the prices set by the cartel is clear from several documents referred to in the Decision, for example, a fax of 9 January 1994 from Intech to Ibiden, a letter in 1996 from Intech to Ibiden and a fax from NSCC of 27 August 1997 (paragraphs 285, 286 and footnote 533 of the Decision).
71 It follows from the foregoing that the Commission did not err in classifying the Intech group, comprised of Intech EDM AG and Intech EDM BV, as a perpetrator of an infringement of Article 81(1) EC and Article 53(1) of the EEA Agreement in the form of participation in the cartel in the isostatic specialty graphite market.
72 None of Intech-™s arguments to the contrary can be upheld.
73 Intech contradicts itself when it points to its economic dependence and subordination to Ibiden-™s instructions whilst at the same time pointing to its resistance to the prices set by the cartel and to the development of an independent pricing policy with the intention of capturing market share (paragraphs 51 to 57 of the applications).
74 On that last point it suffices to note that the fact that a cartel agreement is not honoured does not mean that it does not exist (Case T-141/94 Thyssen Stahl v Commission [1999] ECR II-347, paragraphs 233, 255, 256 and 341). In the present case, the infringement committed is not therefore cancelled out merely because Intech succeeded in deceiving the other members of the cartel and in using the cartel to its own advantage by not complying in full with the prices fixed (see, to that effect, Case T-308/94 Cascades v Commission [1998] ECR II-925, paragraph 230, concerning the assessment of attenuating circumstances).
75 The members of a cartel remain competitors, any one of whom may be tempted at any time to take advantage of the others-™ discipline in complying with cartel prices by lowering its own prices with a view to increasing its market share, whilst maintaining relatively high prices overall. In any event, the fact that Intech did not comply in full with the prices fixed does not mean that it therefore charged the prices that it would have been able to charge in the absence of the cartel.
76 In so far as Intech points to its economic dependence on Ibiden and the pressure exerted on it by that producer, it should be noted that, according to the case-law, the existence of such factors did not eliminate any possibility for Intech to refuse to take part in the restriction of competition within the cartel. That finding also covers Intech-™s specific situation. It was, as a distributor, a party to a horizontal agreement in which its supplier Ibiden also participated (see, to that effect, Case T-17/99 KE KELIT v Commission [2002] ECR II-1647, paragraphs 1 and 48 to 50, and the case-law cited).
77 Whilst Intech further submits that its economic position was so weak compared to Ibiden that any attempt to inform the Commission of the cartel and to depart from Ibiden-™s instructions would necessarily have resulted in its insolvency, the Court finds that that is a mere assertion wholly unsupported by evidence. In particular, Intech does not state why it was not able to contact the Commission anonymously or to obtain confidential treatment for its information.
78 In any event, it is apparent from the figures produced by the applicants themselves that the fate of the entire Intech group did not depend solely on supplies of isostatic graphite by Ibiden. By letter of 30 November 2001 (Annex A7 to the applications), Intech EDM AG informed the Commission, in response to a request for information, that -˜about 10% of the Intech EDM companies-™ overall turnover was achieved in Europe with the sale of isostatic graphite-™ (1.5), whereas the worldwide overall turnover was EUR 26.8 million and that from the product in question EUR 3.4 million (1.7), or about 13%. Even if the figures in Table 1 of the Decision (paragraph 16) had been taken into account, namely EUR 15.5 million overall turnover solely for Intech EDM AG and Intech EDM BV in 2001 and EUR 2.3 million turnover for them in 1997 in respect of the product, the relevant percentage would be about 15%.
79 In those circumstances, the Commission was entitled not to include in the Decision a statement of reasons specifically addressing the economic dependence of the applicants on the Japanese producer Ibiden, without thereby infringing Article 253 EC.
80 Neither is it necessary to grant Intech-™s request that a witness give evidence that the undertaking was indeed bound by Ibiden-™s instructions.
81 To the extent that Intech further submits that the increases in prices by the cartel were against its own economic interests, which in fact called for the adoption of an aggressive price policy and an expansion of its market share, it suffices to note that for an undertaking to be classified as a perpetrator of an infringement it is not necessary for it to have derived any economic advantage from its participation in the cartel in question (see, to that effect, Case T-304/94 Europa Carton v Commission [1998] ECR II-869, paragraph 141).
82 Consequently, the pleas in law raised by the two Intech companies challenging their classification as -˜perpetrators-™ in the infringement and the plea in law alleging a failure to state reasons cannot be upheld.
2. The pleas in law alleging an error in the finding that the cartel in the isostatic graphite market for blocks and cut blocks was worldwide (Case T-71/03)
a) Summary of the Decision
83 In paragraphs 22 to 25 and 29 of the Decision, the Commission stated that the market for isostatic graphite was worldwide. During the period in question (1993 to 1998), that market was dominated by eight global producers which controlled 80% of the world market. Transport costs and tariff barriers did not prevent producers from trading worldwide and the Japanese producers had even been able to gain more than 20% of the European market towards the end of the 1980s. The worldwide character of the market is confirmed by the structure, organisation and operation of the cartel itself.
b) Arguments of the parties
84 In connection with the pleas that the Commission was wrong in relying on its worldwide turnover, Tokai submits that the geographic market for isostatic graphite is not worldwide.
85 Tokai observes that, in its decision of 4 January 1991 (Case IV/M.0024 - Mitsubishi/UCAR), adopted pursuant to Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (OJ 1989 L 395, p. 1, amended by OJ 1990 L 257, p. 13), the Commission stated that the markets for graphite electrodes, carbon electrodes, graphite specialties and flexible graphite were Community-wide markets. Therefore the Commission confused the global scope of the present cartel and the geographic size of the relevant market.
86 Tokai alleges that the Commission infringed the principle of equal treatment by defining the relevant market as that for isostatic specialty graphite -˜in blocks-™, when the non-European producers sold almost exclusively blocks in Europe whereas European producers sold both machined graphite and graphite in blocks.
87 The Commission denies that it confused the nature of the cartel and the size of the market. It observes that the market for specialty graphite as a whole is worldwide (paragraphs 22 to 25 of the Decision), this definition of the geographic market having already been set out in the statement of objections (paragraphs 22 to 25). Tokai did not explicitly contest this finding in its replies to the statement and produces no evidence in support of its argument.
c) Findings of the Court
88 It is necessary to recall Tokai-™s express statement in its application (paragraph 31) that its action does not substantially contest the facts set out in the Decision but concerns the calculation of the fine alone. The Decision clearly finds as a fact that the cartel in the isostatic graphite market in which Tokai took part was worldwide (paragraphs 22 to 25). The real thrust of the plea in question is therefore that, in fixing the fine imposed on Tokai, the Commission disregarded the geographically-restricted role allegedly played by the applicant.
89 That conclusion is not contradicted by Tokai-™s reference to the Commission-™s decision of 4 January 1991 (see paragraph 85 above) in which the Commission found that, in a matter concerning a concentration between undertakings, there was a Community market for specialty graphite. It suffices to note in that connection that that decision was adopted in a context different from that in the present case and that it predates both the Commission-™s investigation in this case and the period of the infringement found in the Decision. It was precisely the detection, from 1999, of the cartel in which Tokai took part which enabled the Commission to find that the cartel members had fixed worldwide prices for specialty graphite. The reference to the 1991 decision is therefore otiose (see, mutatis mutandis, Joined Cases T-236/01, T-239/01, T-244/01 to T-246/01, T-'251/01 and T-252/01 Tokai Carbonand Others v Commission [1994] ECR II-'0000, hereinafter -˜Graphite electrodes-™, paragraph 66).
90 In so far as Tokai alleges that the Commission erred in defining the worldwide market as being that for isostatic graphite in blocks and cut blocks, its plea is manifestly irrelevant. It is not the Commission which arbitrarily chose the relevant market but the members of the cartel in which Tokai participated who deliberately concentrated their anti-competitive conduct on unmachined products, that is isostatic graphite in blocks and cut blocks.
91 It follows from the foregoing that Tokai-™s pleas directed against the finding in the Decision that the market for isostatic graphite in blocks and cut blocks was worldwide must be rejected.
92 The examination of the first group of pleas in law has revealed that none of the arguments raised by the applicants justifies annulment of the factual findings in the Decision. Consequently, the claim for annulment of part of Article 1 of the Decision must be rejected.
93 The same applies to SGL-™s claim for annulment of the Decision, which alleges that the Commission committed a basic error in respect of the basis for calculating the fines and concludes that that infringement of essential procedural requirements requires that the Decision be annulled on that ground alone (paragraph 70 of the application). It is plain that the Decision cannot be annulled in its entirety, including the findings of fact and the legal assessment of the infringement committed by SGL, merely because of an error vitiating the calculation of the fine imposed on the applicant. Such an error could clearly affect only the imposition of the fine per se. Consequently, that claim by SGL must be rejected and the pleas in law raised by it in that context will be examined below in the context of the pleas in law seeking annulment of Article 3 of the Decision or the reduction of the amount of the fines.
94 Accordingly, the subsequent examination of the form of order sought and the pleas in law directed to the setting of the fines will take account of the findings of fact in the Decision with the exception of those concerning the particular figures used by the Commission for the purpose of dividing the members of the cartel into categories in order to set the starting amounts of the fines.
B - The pleas in law that the fines be annulled or their amount reduced
1. The pleas in law alleging an infringement of the principle of the non-cumulation of penalties and of the Commission-™s duty to take account of penalties previously imposed and a failure to state reasons in that regard (Case T-71/03 and Case T-91/03)
a) Summary of the Decision
95 In paragraphs 545 to 550 of the Decision, the Commission rejected SGL-™s argument that it should have taken account of the penalties which were imposed on SGL for the same conduct in the United States. According to the Commission, the fines imposed elsewhere, including in the United States, have no bearing on those to be imposed for infringement of the Community competition rules.
96 The Commission also rejected SGL-™s argument that the agreements in question in the present case were closely linked to those which formed the subject-matter of the case giving rise to the Graphite electrodes judgment, in which the Commission had already imposed fines, and new penalties could not therefore be imposed in the Community.
97 According to the Commission, the present procedure concerned agreements which are clearly distinguishable from the agreements in the case giving rise to the Graphite electrodes judgment. That justified the two agreements being treated as separate infringements which might result in separate fines being imposed. For the same reason, the Commission rejected SGL-™s argument that it had not taken part in two separate cartels, namely for isostatic graphite and for extruded graphite.
b) Arguments of the parties
98 Tokai complains that the Commission infringed the principle of ne bis in idem and exceeded its powers by setting its fine according to its worldwide market shares and worldwide turnover. In so doing, the Commission took account of the relative size of the undertakings on markets other than the EEA and, consequently, their impact on competition in those markets. Such effects outside the EEA fall within the jurisdiction of other competition authorities and Tokai should be punished only for its impact on competition in the EEA.
99 Tokai adds that it was the subject of an investigation in the United States concerning the same matters as those covered by the Decision. As its request for immunity was accepted by the American authorities, Tokai was not fined. It is not for the Commission to call into question that decision of the American authorities. Consequently any fine imposed by the Commission which takes account of the effects of the cartel in the United States would amount to a double penalty for Tokai.
100 SGL submits that, by refusing to deduct from the fines imposed by the Decision the amount of the fines already imposed in the United States, the Commission breached the rule against the cumulation of penalties. That rule is based on the principles of equity and proportionality anchored in the constitutional law of the Community. It was confirmed by Article 50 of the Charter of Fundamental Rights of the European Union, proclaimed at Nice on 7 December 2000 (OJ 2000 C 364, p. 1) and by Articles 54 to 58 of the Convention implementing the Schengen Agreement of 14 June 1985, between the Governments of the States of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders (OJ 2000 L 239, p. 19) signed in Schengen (Luxembourg) on 19 June 2000. The rule against double jeopardy is also enshrined in Article 4 of Protocol No 7 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (-˜ECHR-™) signed in Rome on 4 November 1950, as interpreted by the judgment of 29 May 2001 of the European Court of Human Rights, Fischer v Austria.
101 SGL observes that this general principle has been recognised by several judgments of the Court of Justice and the Court of First Instance. SGL calls into question the recent judgment in Case T-224/00 Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission [2003] ECR II-2597 inasmuch as it is to be interpreted as meaning that the Court finds that the principle of ne bis in idem is not applicable in the case of a first prosecution by non-member States.
102 SGL submits that the matters found in the Decision have already been the subject of criminal and civil judgments in the United States. The principle of ne bis in idem prevents the Commission from bringing proceedings again in respect of the same conduct. SGL adds that a plea bargain was signed on 3 May 1999 by the United States and itself which covers all the competition law offences relating to the production and sale of graphite during the period in question -˜in the United States and elsewhere-™ and which provides for a fine of USD 135 million. This penalty also covers specialty graphite. In this connection, SGL proposes that several witnesses domiciled in the United States be examined.
103 According to the Decision, the most important of the cartel agreements restricting competition were formulated in a uniform manner on a worldwide basis at international meetings and were implemented at the regional and local levels both in North America and in Europe. The American authorities imposed fines on the entire cartel, namely both on the cartels on an international basis and on their local application in North America. In those circumstances, when pursuing SGL a second time, the Commission ought to have taken account of the penalties already imposed.
104 Even if the Commission had been entitled to impose a further fine for the conduct alleged against SGL in the Decision, a general principle of equity nevertheless required account to be taken, in calculating the new fine, of the penalties imposed by the Commission-™s decision concerning graphite electrodes and by the American authorities. The Commission was therefore limited, by virtue of the principle of proportionality, to imposing a token fine on SGL.
105 That requirement of equity means that, in the case of parallel proceedings, whether within the Community or in relation to non-member countries, the penalty which was first imposed should be taken into account in the second penalty. Penalties for offences under cartel law always have a deterrent function with the aim of protecting free competition. From that viewpoint, the objective of and legal interest protected by Community cartel law and American cartel law are identical as they both aim to protect free and open competition.
106 In this context SGL refers to the Agreement between the European Communities and the Government of the United States of America on the application of positive comity principles in the enforcement of their competition laws (OJ 1998 L 173, p. 28, -˜the comity agreement-™). SGL submits that this agreement brings together, under the definition of -˜competition law-™ or -˜competition rules-™, Articles 81 and 82 EC as well as sections 1 to 7 of the Sherman Act and sections 17 to 27 of the Clayton Act. The division of tasks between the Community authorities and the American authorities in connection with the prevention of international infringements of cartel law which have concentrated geographic effects can only be envisaged if, on both sides, the elements of the offences and objectives of the proceedings are consistent and if the matters in question are identical. If the powers of the Community and the American authorities did not overlap, there would not have been an administrative agreement on the alternative intervention of the investigating authorities.
107 SGL adds that the Decision is contrary to the rule against the cumulation of penalties also within the European Union, given that the Commission has imposed fines on SGL, in separate decisions, first, for an offence in relation to graphite electrodes and, now, for offences concerning specialty graphite (isostatic and extruded graphite). However, the procedure relating to graphite electrodes and that to specialty graphite were based on the same conduct, so that the Commission penalised the same conduct twice. The agreements concerning graphite electrodes and specialty graphite had the same objective, were adopted and implemented in the same way and had the same grounds.
108 The separation of the two procedures was all the more artificial because, in the Decision, the Commission imposed a fine on two cartels for different products, namely isostatic graphite and extruded graphite, considering that, in view of the similarity of the methods used and the fact that the two offences concerned related products, the agreements relating to the two products should be examined in a single procedure (paragraph 346 of the Decision). The same reasoning should apply to the relationship between the conduct which is the subject of the present proceedings and that which was the subject of the proceedings relating to graphite electrodes.
109 Referring to the legal concept of a continuous infringement, SGL states that the infringements in the sector of specialty graphite and that of graphite electrodes constitute a single substantive element, so that they should have been punished only once. Those infringements were directed against the same legal interest (competition in the EEA) and were committed in the same way: the market for graphite electrodes and the market for specialty graphite were closely connected and similar by reason of their structure and the main economic operators active in those markets. In particular, the agreements relating to graphite electrodes and those relating to specialty graphite followed the same model and were based on the global plan established by SGL, UCAR and Tokai for extending the existing cartel for graphite electrodes to specialty graphite.
110 Finally, if the Commission wishes to impose separate penalties, it is necessary for it to be able to exclude both the application of the notions of the theoretical co-existence of infringements and also of the continuous infringement. However, in the present case it did not even address the submission concerning a continuous infringement. Consequently the Commission did not fulfil its obligation under Article 253 EC to state reasons in the present proceedings.
111 The Commission contends that the Court should reject those pleas in law.
c) Findings of the Court
112 As regards the pleas in law alleging unlawful cumulation of penalties imposed by the Commission on the one hand and the US authorities on the other, it is settled case-law that where the facts on which two offences are based arise out of the same set of agreements but they nevertheless differ as regards both their object and their geographical scope, the principle of ne bis in idem does not apply (see Case 7/72 Boehringer v Commission [1972] ECR 1281, paragraphs 3 and 4, and Graphite electrodes, paragraph 133, and the case-law cited).
113 In the present case, under the principle of territoriality, there are no conflicts in the exercise by the Commission and by the US authorities of their power to impose fines on undertakings which infringe the competition rules of the EEA and of the United States (see, to that effect, Graphite electrodes, paragraphs 133 to 148).
114 In those circumstances, there is no need to consider SGL-™s assertion that the penalties imposed on it in the United States for its participation in the graphite electrodes cartel also concerned specialty graphite or to hear on this point from the witnesses named by SGL. Even if that assertion were correct, the US penalties did not preclude the Commission from imposing a fine on SGL for its participation in the cartel in the specialty graphite market.
115 It follows that the allegation of an infringement of the principle of ne bis in idem must also be rejected in so far as Tokai claims that the Commission took into account its worldwide turnover and market share (see, to that effect, Graphite electrodes, paragraph 138), all the more so since those figures in respect of the worldwide market were only used by the Commission to distinguish the relative impact of the undertakings implicated in the cartel (see paragraphs 167 to 170 below).
116 That conclusion is not undermined by the comity agreement (see paragraph 106 above). In so far as SGL claims that that agreement entails the application of the principle of ne bis in idem in relations between the United States and the Community, the applicant-™s argument is based on an erroneous reading of that agreement. It is clear from Article I(2)(b) and Article III of that agreement that the legal interests protected by the Community authorities and the US authorities are not the same and that the purpose of the agreement is not the principle of ne bis in idem but solely to enable the authorities of one of the contracting parties to take advantage of the practical effects of a procedure initiated by the authorities of the other.
117 By its plea in law alleging unlawful cumulation of penalties imposed by the Commission within the Community itself, SGL claims that by imposing on it a fine in respect of graphite electrodes and then fines in respect of specialty graphites, the Commission penalised it for the same facts twice. It claims that the agreements on graphite electrodes and on specialty graphite constituted a continuous infringement based on an overall plan in which the existing cartel for graphite electrodes was extended to specialty graphite. The separation of the two proceedings is claimed to be all the more artificial since, in the Decision, after the same proceeding, the Commission penalised two cartels in respect of different products, namely isostatic graphite and extruded graphite.
118 It should be noted in this connection that the Commission was entitled to impose on SGL three separate fines, each within the limits imposed by Article 15(2) of Regulation No 17, provided that the applicant had committed three separate infringements of Article 81(1) EC.
119 As is clear from paragraphs 4 and 5 of the contested decision in the case giving rise to the Graphite electrodes judgment (see paragraph 12 above) and paragraphs 4 to 12 of the Decision, graphite electrodes and specialty graphite belonged to distinct markets. As SGL expressly confirmed in reply to a request for information (Annex 14 to the application in Case T-91/03), the properties, price and applications of isostatic graphite and extruded graphite are very different (paragraph 5, footnote 5 and paragraphs 10 to 12 and 19 to 21 of the Decision).
120 Furthermore, the three cartels did not have the same members. LCL, Ibiden, TT, NSC/NSCC and Intech did not take part in the graphite electrodes cartel, whereas VAW, SDK, Nippon, SEC and C/G - which were members of that cartel - did not take part in the isostatic graphite cartel. Only SGL and UCAR were members of both specialty graphite cartels, since the other participants in the isostatic graphite cartel were not participants in the extruded graphite cartel. SGL and UCAR were therefore the only undertakings who were party to all three cartels.
121 Lastly, contrary to SGL-™s assertions, the cartel in the specialty graphite market was not simply an -˜extension-™ of the graphite electrodes cartel.
122 In addition to a price-fixing system, the graphite electrodes cartel included a very strict system of market sharing based on the principle of -˜home producer-™ under which -˜non-home-™ producers had to abandon all aggressive competition in the territories reserved to other producers and withdraw from those territories: UCAR was responsible for the United States and certain parts of Europe, SGL for the rest of Europe, and four Japanese undertakings were responsible for Japan and certain parts of the Far East (Graphite electrodes, paragraphs 12 and 13).
123 By contrast, there was no such market sharing in the cartel in the market for specialty graphite, notwithstanding certain, apparently unsuccessful, attempts to share customers (see, in particular, paragraphs 171, 174, 178 to 180, 192, 203, 292 and 295 of the Decision). On the contrary, transport costs and tariff barriers did not prevent producers from trading on a worldwide scale, as is demonstrated by the fact that the Japanese producers, although not having any production sites outside Japan, were able to sell their products in Europe and obtain a market share of more than 20% (paragraph 24 of the Decision).
124 It is therefore on objective grounds that the Commission initiated separate procedures in respect of the markets for graphite electrodes and specialty graphite, found three separate infringements and imposed three separate fines.
125 That finding is not undermined by the fact that the Decision penalises two cartels at the same time (isostatic graphite and extruded graphite) on the ground that they concerned neighbouring products (paragraph 347). As those cartels concerned neighbouring products the Commission had no choice but to dispense with dual proceedings. However, the members of each cartel received specific fines, one in respect of the isostatic graphite market and the other in respect of that for extruded graphite, as the fact that the products were neighbouring products had no bearing on the fines.
126 As regards the plea alleging failure to state reasons, in that the Commission failed to address the argument that the infringement was continuous, it should be noted that, according to settled case-law, the statement of reasons must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure so as to defend their rights and to enable the Community judicature to carry out its review (Graphite electrodes, paragraph 149, and Joined Cases T-12/99 and T-63/99 UK Coal v Commission [2001] ECR II-2153, paragraph 196).
127 In the present case, SGL could easily infer from the Commission-™s conduct that in the present case it did not intend to apply the concept of a continuous infringement. In the Decision, it described in detail the various specialty graphites, but not graphite electrodes, which were in fact the subject of an earlier and separate decision. That clearly sufficed to inform SGL that it was being fined several times, which the Commission could not have done if it had found that SGL committed one single infringement. Furthermore, SGL was perfectly able to defend its view that its involvement in the various cartels should be treated as a continuous infringement.
128 It follows from the foregoing that the pleas in law alleging an infringement of the principle of non-cumulation of penalties and the Commission-™s duty to take account of penalties previously imposed and a failure to state reasons in that regard must all be rejected.
129 Consequently, the Court must also reject the plea that undue weight was given to the gravity of the infringement alleged against SGL in that the Commission set three separate starting amounts, in respect of graphite electrodes, isostatic graphite and extruded graphite, even though the procedures in the three cases were based on the same facts and the infringements penalised are a single act for the purposes of Article 15 of Regulation No 17. As set out above, the Commission was entitled to find that there were three separate infringements which could be penalised by three separate fines.
2. The pleas in law alleging an infringement of the rights of the defence (Case T-'91/03)
a) Arguments of the parties
130 SGL complains first that the Commission infringed its right to be heard and its rights of defence. First, the Commission found in the statement of objections that LCL and SGL should be regarded as ringleaders of the cartel in the isostatic graphite market, so that SGL was justified in assuming that its participation and that of LCL had been assessed by the Commission in such a way as to lead to the conclusion that the contribution to the cartel of the two companies had been comparable. However, in the Decision the Commission altered its assessment and found that SGL was the sole leader and instigator of the infringement. The resulting 50% increase in SGL-™s fine is therefore a new and independent objection on which the applicant has not had an opportunity to be heard. With this totally unforeseeable change in its assessment of the facts, the Commission made an important distinction between LCL and SGL.
131 SGL states that, in view of the provisional assessment in the statement of objections, it saw no reason to object to an identical evaluation of the contributions of LCL and SGL in the present case. The fundamentally balanced presentation in the statement of objections of their respective contributions to the offence did not, in the absence of a ringleader, suggest any increase, or at most suggested the same level of increase in the starting amount. On the other hand, the applicant would certainly have strongly disputed an assessment in the statement of objections which described SGL alone as the leader of the cartel and revealed that a substantial increase of 50% would be added to the proposed fine on SGL only.
132 Second, the Commission entrusted the present case to officials who did not have a sufficient command of German and were therefore unable, from the point of view of language, to make a proper assessment of SGL-™s arguments. In the Decision, the Commission took no account whatsoever of SGL-™s reply of 25 July 2002 to the statement of objections. In that reply, SGL clearly drew the Commission-™s attention to the fact that the statement contained erroneous figures and submitted correct figures. The Decision, however, repeated the figures originally contained in the statement and made no comment on the corrected figures supplied by the applicant.
133 Third, to calculate the basic amount of the fines by reference to the turnover and market shares of the companies involved, the Commission took 1997 as the reference year in the Decision. In the statement of objections, on the other hand, the figures for 1998 were taken as the basis. The use of different reference years deprived the applicant of the possibility of commenting on the figures ultimately adopted in the Decision against the applicant. The statement of objections and the decision should not refer to different facts (Case T-213/00 CMA CGM and Others v Commission [2003] ECR II-913, paragraph 109). The Commission ought to have drawn attention to its change of approach (Joined Cases T-191/98 and T-'212/98 to T-'214/98 Atlantic Container Line and Others v Commission [2003] ECR II-3275, paragraphs 162 to 168, 170 to 172 and 188).
134 The Commission contends that SGL-™s complaints should be rejected.
135 It asserts that all the correspondence between its services and the applicant was in German. Only the third request for information was in English. However, SGL did not request a translation and replied in German.
136 Regarding the role of SGL and LCL in the isostatic graphite cartel, the Commission considers that the fact that LCL was not regarded as another leader of the cartel in no way influenced the decision concerning the applicant. The Commission based its conclusions in the Decision on the same facts as in the statement of objections. It merely found that the role of leader alleged against LCL in the statement of objections was not sufficiently proven (paragraph 487 of the Decision).
137 Lastly, the Commission denies that it used turnover figures for different years (1998 and 1997 respectively) in the statement of objections and in the Decision. In the statement of objections, the Commission pointed out that it would consider whether the addressees should be fined. Consequently the addressees were in a position to arrange their defence not only against a finding of an infringement, but also against the imposition of fines (HFBand Others v Commission, paragraph 62 above, paragraph 313 et seq.).
b) Findings of the Court
138 According to settled case-law, the statement of objections must be couched in terms which, even if succinct, are sufficiently clear to enable the parties concerned properly to identify the conduct complained of by the Commission and to enable them properly to defend themselves, before the Commission adopts a final decision. That obligation is satisfied where the decision does not allege that the persons concerned have committed infringements other than those referred to in the statement of objections and only takes into consideration facts on which the persons concerned have had the opportunity of making known their views (see CMA CGM and Others v Commission, paragraph 133 above, paragraph 109 and the case-law cited).
139 More specifically, as regards the calculation of the fines, it is also settled case-law that the Commission satisfies its obligation to respect the right of undertakings to be heard where it expressly states, in the statement of objections, that it is going to consider whether it is appropriate to impose fines on the undertakings and also indicates the main factual and legal criteria capable of giving rise to a fine, such as the gravity and the duration of the alleged infringement and the fact that the infringement was committed -˜intentionally or negligently-™. In doing so it gives them the necessary details to enable them to defend themselves not merely against the finding of an infringement but also against the imposition of fines (Joined Cases 100/80 to 103/80 Musique diffusion française and Others v Commission [1983] ECR 1825, paragraph 21, and Case T-23/99 LR AF 1998 v Commission [2002] ECR II-1705, paragraph 199, and the case-law cited).
140 Thus, so far as concerns the determination of the amount of the fines, the rights of defence of the undertakings are guaranteed before the Commission through their opportunity to make submissions on the duration, the gravity and the forseeability of the anti-competitive nature of the infringement (Case T-83/91 Tetra Pak v Commission [1994] ECR II-755, paragraph 235; HFB and Others v Commission, paragraph 62 above, paragraph 312, and LR AF 1998 v Commission, paragraph 139 above, paragraph 200).
141 By contrast, where it has indicated the elements of fact and of law on which it would base its calculation of the fines, the Commission is under no obligation to explain the way in which it would use each of those elements in determining the level of the fine. To give indications as regards the level of the fines envisaged, before the undertakings have been invited to submit their observations on the allegations against them, would be to anticipate the Commission-™s decision and would thus be inappropriate (see LR AF 1998 v Commission, paragraph 139 above, paragraph 206 and the case-law cited).
142 It is in the light of the case-law set out above that SGL-™s pleas in law must be examined.
143 First of all, it should be noted in this regard that SGL does not claim that the Decision contains complaints as to its unlawful participation in the cartels in question which, although not found in the statement of objections, were made against it in Article 1 of the Decision.
144 The Commission clearly stated in paragraphs 402 to 411 of the statement of objections that it was going to impose on the undertakings concerned fines which would take account, first, of the gravity, duration, nature and specific effects of the infringement and the size of the relevant geographic market, second, of any aggravating or attenuating circumstances in respect of each undertaking and, third, of the need to set fines at an appropriate level to ensure a sufficient dissuasive effect.
145 Thus, the Commission indicated the principal elements of fact and law capable of giving rise to the imposition of a fine on SGL and stated that it would determine that fine in particular on the basis of the gravity and duration of the infringement.
146 Respect for SGL-™s rights of defence did not require the Commission to indicate more precisely in the statement of objections the way in which it would use each of those elements in setting the fine.
147 That finding is reinforced by the fact that, when SGL became aware of the statement of objections in May 2002, it was aware of the Guidelines, published by the Commission in 1998 and which had already been held by the Court of First Instance on 20 March 2002 (LR AF 1998 v Commission, paragraph 139 above, paragraphs 231 to 237) not to exceed the legal limits of penalties as defined by Article 15(2) of Regulation No 17. It therefore had to expect that the calculation of any fine would take account of the matters set out in detail in the guidelines that were expressly intended to -˜ensure the transparency and impartiality-™ of the calculation of the fines (see the first paragraph of the Guidelines).
148 As regards SGL-™s pleas in law, the Court notes that the statement of objections alleged that SGL and LCL played the role of leader or instigator in the cartel (paragraph 410). That same allegation was taken into account in respect of SGL as an aggravating circumstance in the Decision (paragraphs 485 to 488). Contrary to SGL-™s argument, it cannot therefore be regarded as a new complaint against it.
149 Neither has SGL succeeded in demonstrating that the failure to take LCL into account as the second ringleader of the cartel could influence the calculation of its own fine. There is nothing in the Decision to suggest that SGL-™s liability as ringleader of the cartel was increased by the attribution to it of part of the joint leadership role originally attributed by the Commission to LCL.
150 In any event it is not in dispute that in its reply to the statement of objections SGL did not challenge the Commission-™s provisional assessment that SGL and LCL should be regarded as ringleaders of the cartel. Since SGL was previously implicated in at least one other completed cartel investigation, it was aware that the statement of objections was purely provisional in that each undertaking to which it was addressed had an opportunity to submit its observations and influence the Commission-™s preliminary findings and that this might induce it to amend its assessment and abandon in the final decision one or other of the complaints which it had initially intended to uphold against that undertaking.
151 SGL could not therefore reasonably rule out that LCL would challenge its provisional classification as ringleader and that the Commission would uphold that finding. Since it did not simultaneously deny that it was a ringleader, the applicant had therefore to expect that the Commission might find in the Decision that there was only one leader of the cartel, namely SGL, and increase its basic amount by 50%, as it had already done in paragraph 356 of Commission Decision 2001/418/EC of 7 June 2000 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/36.545/F3 -” Amino Acids) (OJ 2001 L 152, p. 24, -˜the Lysine decision-™).
152 As for the reference year used in the Decision for the purposes of calculating fines, that is the last whole calendar year of the infringement, SGL has not stated how its rights of the defence could have been infringed by the fact that the Decision adopted the relevant figures for 1997, whereas the statement of objections used the 1998 figures. Both the 1997 and 1998 figures were provided by SGL itself before the statement of objections was drawn up. The applicant was therefore able to make any comment it considered useful in respect of those figures.
153 In any event, SGL could expect that the reference year finally adopted might differ from that provisionally indicated in the statement of objections as the choice of that year depended on the precise duration of the infringement. That duration was finally established, on the basis of the replies to the statement of objections, only in the Decision.
154 Lastly, the allegation that the Commission entrusted SGL-™s -˜German file-™ to officials who did not have sufficient command of German is a pure supposition unsupported by any reliable evidence. In any event, whilst it is true that the Decision does not take account of the applicant-™s observations on the allegedly inaccurate figures in the statement of objections and reproduced in that form in the Decision, that omission still does not infringe SGL-™s rights of defence. If the Court found that the Commission, contrary to SGL-™s observations, had relied on accurate figures, the Commission would have been right to discount those observations. On the other hand, if SGL succeeded in showing that the figures were indeed inaccurate, the Decision would be vitiated by a substantive error and would have to be annulled in that respect.
155 It follows from the foregoing that all of the pleas in law alleging an infringement of the rights of the defence must be rejected.
3. The pleas in law alleging an infringement of the Guidelines, the unlawfulness of the Guidelines and a failure to state reasons in that regard
a) The legal framework within which the fines were imposed on the applicants and the applicability of the Guidelines (T-91/03)
156 Article 15(2) of Regulation No 17 states that -˜the Commission may by decision impose on undertakings -¦ fines of from [EUR] 1 000 to 1 000 000 -¦, 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 -¦ they infringe Article [81](1) -¦ of the Treaty-™. That provision also states that -˜in fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement-™.
157 That provision confers a discretion on the Commission when setting the fines, which is, inter alia, a function of its general competition policy. It is in that context that the Commission adopted its Guidelines in 1998 in order to ensure the transparency and impartiality of its decisions in respect of fines. They are intended to define, while complying with higher-ranking law, the criteria which it proposes to apply in the exercise of its discretion; the consequence is a self-limitation of that power in so far as the Commission must comply with guidelines which it has itself laid down (see Graphite electrodes, paragraph 157, and the case-law cited).
158 In the present case, in accordance with paragraphs 430 to 560 of the Decision, the Commission imposed fines on all the applicants in respect of the infringement of Article 81(1) EC and Article 53(1) of the EEA Agreement. It is apparent from those paragraphs that the fines were imposed under Article 15(2) of Regulation No 17 and that the Commission - even though the Decision does not expressly refer to the Guidelines - fixed the fines by applying the method laid down in the Guidelines.
159 SGL complains that the general method of calculation laid down by the Guidelines is unlawful because the fines imposed are not proportionate to turnover. By adopting the Guidelines and applying them in practice, the Commission had voluntarily discarded the approach it had taken for years, whereby it set a fine proportionate to turnover. The Commission-™s new method leads to unfair results, in particular large fines to the detriment of small and medium-sized undertakings such as SGL.
160 It suffices to note in that regard that the general method for setting fines described in the Guidelines is based on the two criteria referred to in Article 15(2) of Regulation No 17, namely the gravity of the infringement and its duration, and observes the upper limit determined by reference to the turnover of each undertaking, as laid down in that provision. Consequently, the Guidelines do not go beyond the legal framework for fines set out in that provision (see Graphite electrodes, paragraphs 189 and 190 and the case-law cited).
161 The change in the Commission-™s administrative practice brought about by the Guidelines does not alter the legal framework determining the permissible level of fines contrary to the principles of non-retroactivity of legislation and legal certainty. The proper application of the Community competition rules in fact requires that the Commission may at any time adjust the level of fines to the needs of that policy (Graphite electrodes, paragraphs 191 and 192, and the case-law cited).
162 It follows that the plea that the Guidelines should not have been applied must be rejected.
163 It is therefore by taking account, in particular, of the framework laid down by those Guidelines that it must be decided whether, as the applicants allege, the fines imposed in Article 3 of the Decision are excessive and were set on the basis of the wrong method.
164 It should be noted in this regard that, although the Commission has a discretion when determining the amount of each fine and is not required to apply a precise mathematical formula, the Court none the less has, pursuant to Article 17 of Regulation No 17, unlimited jurisdiction within the meaning of Article 229 EC in actions brought against the decisions whereby the Commission has fixed a fine and may therefore cancel, reduce or increase the fine imposed. Its assessment of the appropriateness of the fine may, independently of any manifest errors of assessment made by the Commission, justify the production and taking into account of additional information which is not mentioned in the Commission decision (see Graphite electrodes, paragraph 165, and the case-law cited).
b) Summary of the Decision
165 In paragraphs 436 to 478 of the Decision the Commission set the starting amount of each fine according to the gravity of the infringement. In that context it took account of:
- the nature of the two infringements, which consisted essentially of fixing prices and which brought about a significant distortion of competition, finding them to be very serious infringements of Article 81(1) EC and Article 53(1) of the EEA Agreement;
- the actual impact of the infringements on the isostatic graphite and extruded graphite markets in the EEA, finding that the cartel members covered most of the world and relevant European markets and that the prices were not only fixed but also imposed throughout the infringement period, such that they had an actual effect on the market;
- the size of the relevant geographic market, pointing out that the two infringements covered the whole of the common market and, following its inception, the whole of the EEA.
166 Given those factors, the Commission found that the undertakings in question had committed -˜very serious infringements-™.
167 Next, in order to take account of the effective economic capacity of each undertaking to cause serious damage to competition, the Commission distinguished them by dividing them into several categories on the basis of turnover and worldwide market share. The comparison was made on the basis of worldwide market shares for the relevant products (isostatic and extruded specialty graphite in blocks and cut blocks) during the final calendar year of the infringements, namely 1997.
168 The Commission referred in this respect to column 4 of Table 1 (which appears in paragraph 16 of the Decision), as regards isostatic graphite products:
.png)
It noted that according to the undertakings-™ statements, blocks and cut blocks made up the following share of their total turnover for isostatic graphite:
SGL: [45 to 55%], LCL: [20 to 30%], Ibiden: [20 to 30%], Tokai: [55 to 65%], TT: [25 to 35%], UCAR: [35 to 45%], NSCC: [50 to 60%] and Intech: [80 to 90%] (Table 2, paragraph 16).
169 In the case of extruded graphite products, the Commission referred to column 3 of Table 3 (which appears in paragraph 17 of the Decision):
.png)
It noted that, according to the undertakings-™ statements, blocks and cut blocks amounted to [20 to 30%] and [40 to 50%] of the total turnover for extruded graphite for UCAR and SGL respectively.
170 Given the data in respect of the isostatic graphite market, SGL - considered to be by far the largest producer of isostatic graphite in blocks and cut blocks in the worldwide market (market share between 30 and 40%) - was placed in the first category (starting amount of EUR 20 million). TT was placed in the second category (market share between 21 and 27%) with a starting amount of EUR 14 million. LCL and Tokai, with market shares in excess of 10%, were placed in the third category (starting amount of EUR 7.4 million). Ibiden and NSC/NSCC, with market shares between 5 and 10%, were placed in the fourth category (starting amount of EUR 3.8 million). UCAR and Intech, with market shares of less than 5%, were placed in the fifth category (starting amount of EUR 1.4 million).
171 Given the data in respect of the extruded graphite market, UCAR and SGL, occupying a similar position on the world market, with market shares of between 25 and 35%, were placed in a single category (starting amount of EUR 15 million).
c) The starting amounts imposed in respect of the gravity of the infringements (Case T-71/03, Case T-74/03 and Case T-87/03 )
Arguments of the parties
172 Tokai and Intech raise several pleas in law and arguments directed at the method used by the Commission to calculate the starting amount for the cartel members in the isostatic specialty graphite market, the figures used and the assessment of the gravity of the infringement committed.
173 Tokai complains that the Commission infringed the principles of proportionality and equal treatment, that it manifestly erred in fact and in law and that it disregarded the fourth and sixth paragraphs of Section 1A of the Guidelines by relying exclusively on worldwide turnover in the relevant product and worldwide market share to place the recipients of the Decision in categories and to assign to each category a specific -˜starting amount-™ for the fine. The Commission was wrong to ignore EEA sales and market shares, as these figures best reflect each firm-™s capacity to damage competition in the EEA and each firm-™s real impact on competition in the EEA.
174 Tokai submits that the judgments in the case of Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission (paragraph 101 above, paragraphs 192, 193 and 196) and in Case T-230/00 Daesang and Sewon Europe v Commission [2003] ECR II-2733, paragraphs 48 to 53), both concerning the lysine cartel (see the Lysine decision, paragraph 151 above) support their case in that the Court also made an assessment of the actual strength of the undertakings in the market affected, namely the EEA. It cannot be ruled out that an undertaking with a strong position in a market outside the Community may have only a weak position in the EEA market. In that regard, Tokai states that, as a Japanese producer, it has always been less active in the EEA market because its natural market is Asia and the Far East. Ignoring sales in the EEA penalises the Japanese producers and favours the European producers.
175 Tokai observes that it was put in the same category as LCL, even though Tokai-™s EEA sales of isostatic graphite were about one sixth of those of LCL. Furthermore, the starting amount of Ibiden-™s fine was set at approximately half of Tokai-™s, although its EEA isostatic graphite sales, in absolute terms, were almost the same. Tokai notes that its worldwide market share was 9%, but only 4% in the EEA. Therefore Tokai should, at most, be placed in the fourth category, with a starting amount of EUR 3.8 million.
176 Tokai complains that in any case the Commission is in breach of Article 253 EC. The Commission does not explain why the EEA market shares were disregarded for the purpose of calculating the fine, nor does it explain why the EEA market shares are not a reliable indication of the impact of the companies-™ conduct on competition in the EEA.
177 Intech by contrast submits that the Commission should have taken account of the total worldwide turnover alone (all products combined). That total turnover figure accurately reflects the strength of the undertaking concerned and ensures that a disproportionate fine is not imposed on that undertaking.
178 The Commission contends that all the pleas in law and arguments put forward by the applicants should be rejected.
179 It contends in particular that it did not rely exclusively on worldwide turnover in fixing the starting amount of the fines, but took account of a number of different factors. However, worldwide turnover and worldwide market share demonstrate the relative importance of the undertakings in the market concerned, and hence their capacity to cause significant damage to competition in the EEA.
Findings of the Court
180 In so far as Intech complains that the Commission did not determine the various starting amounts on the basis of total turnover for all products, it should be observed, first, that the only express reference to turnover in Article 15(2) of Regulation No 17 concerns the limit that a fine may not exceed and, second, that that limit is understood to refer to total turnover. Provided that it observes that limit, the Commission may in principle choose which turnover, in terms of territory and products, to take in order to determine the fine and it is not required to take total turnover alone (see Graphite electrodes, paragraph 195, and the case-law cited).
181 In that context, the Court has already held that the Commission, in applying its Guidelines, is entitled to choose as the starting point for the calculation for all the undertakings concerned an amount fixed according to the nature of the infringement committed, which is then adjusted in respect of each of the undertakings according to various factors (CMA CGM and Others v Commission, paragraph 133 above, paragraphs 384, 385, 416 and 437).
182 Intech does not dispute that in the present case the Commission applied that method as laid down by the Guidelines. Consequently, Intech cannot validly assert that the Commission was required in law to base its decision on total turnover alone. Its complaint must therefore be rejected.
183 As for Tokai-™s argument that the Commission, instead of adopting a -˜worldwide approach-™, should have based its decision on the turnover and market share from sales of the product in Europe, it should be noted that the Commission, in applying its Guidelines, adopted a two-stage approach when dividing into categories the undertakings involved in the active isostatic graphite cartel.
184 In the first stage, in accordance with the first two paragraphs of section 1A of the Guidelines, it determined the gravity of the infringement as such, which consisted in the creation of a price-fixing cartel implemented throughout the EEA market (paragraphs 437 to 457 of the Decision).
185 In the second stage, pursuant to the third, fourth and sixth paragraphs of section 1A of the Guidelines, the Commission took account of the factors which justified the different treatment of the individual undertakings. It is apparent from the Decision that the Commission took account of the effective economic capacity of each party to the infringement to cause substantial damage to the other operators and of the specific weight and therefore the real impact on competition of each undertaking-™s unlawful conduct, so as to ensure that the fines imposed had a sufficient deterrent effect (paragraphs 458 to 475 of the Decision).
186 It is in that context that it considered that, as this was a worldwide cartel, it was appropriate to take the respective worldwide product market shares as the basis for comparison of the relative importance of each undertaking in the relevant market, since those figures gave the most appropriate picture of the undertakings-™ capacity to cause significant damage to the other operators in the European market and gave an indication of their contribution to the effectiveness of the cartel as a whole or, conversely, of the instability which would have affected the cartel had they not participated (paragraph 471 of the Decision).
187 That reasoning cannot be criticised merely because the cartel in question did not have a strict system of sharing markets geographically, as was the case in the graphite electrodes market.
188 By adhering to the prices fixed by the cartel, its members deliberately gave up one of the most important parameters of competition, namely the acquisition of additional market share, particularly in Europe, by reducing their prices. Their undertaking not to sell below the prices fixed meant that their overall, that is worldwide, competitive potential was not therefore applied for the benefit of the European market. If they had not taken part in the price-fixing cartel, they would have been free to set their price policy without any commitment to their competitors, and therefore to sell below the prices fixed by the cartel and so increase their market share in Europe.
189 TT has confirmed that there is a close relationship between price and market share. In its reply to the statement of objections (Annex A3 to the application in Case T-72/03, p. 14/15 and 17), TT expressly stated that:
- its long-term strategy was to -˜raise its market share in Europe by increasing its sales, which could only be achieved by offering lower prices-™;
- SGL complained that -˜Toyo Tanso was not respecting the pricing arrangement which had been agreed [and] stressed that Toyo Tanso had increased shipments to North America and Europe-™;
- a report on current market information in Europe had stated that -˜the biggest problem in terms of price is the attitude of Toyo Tanso, who could gain significant market share by not respecting prices-™.
190 Although TT abandoned its action after the hearing (see paragraph 33 above), its evidence may be taken into consideration by the Court in the exercise of its unlimited jurisdiction (see paragraph 164 above), all the more so since Case T-'72/03 was joined with the other cases (see paragraph 30 above).
191 Moreover, NSCC stated that TT could gain significant market share by not respecting the prices fixed (paragraph 286, penultimate subparagraph, of the Decision).
192 Tokai-™s argument, that it had already fully deployed its worldwide competitive potential on the European market by obtaining 20% of that market is contradicted by the close relationship between price and market share just referred to. Moreover, that applicant cannot validly claim that the effect of its non-aggressive pricing conduct on the European market would have been the same if it had not participated in the price-fixing cartel. It suffices to find in this respect that its conduct in respect of the prices fixed by the cartel on the European market faithfully corresponded to the object of the collusive agreements and the proper functioning of the cartel. It is therefore possible to infer from it that Tokai prevented its worldwide competitive potential from being brought to bear on the European market notwithstanding its 20% share of that market (see to that effect Graphite electrodes, paragraph 207).
193 That finding is not contradicted by the Graphite electrodes judgment, which concerned a cartel which fixed prices and shared markets according to the -˜home producer-™ principle by which non-EEA producers, instead of competing aggressively on the EEA market, were required to withdraw from a market which was not -˜their home market-™. It is true that in that judgment (paragraph 198) the Court held that a calculation of the starting amount of the -˜non-home producers-™ on the basis of their low turnover in the EEA for the relevant product would have rewarded them for having complied with one of the basic principles of the cartel and for having agreed not to compete on the EEA market.
194 However, whilst that reasoning emphasises that a -˜worldwide approach-™ is particularly appropriate in the case of the sharing of markets on geographic grounds, as had been practised in the graphite electrodes market, it cannot be concluded a contrario from this that a -˜worldwide approach-™ should strictly be excluded in the case of a price-fixing cartel which does not have a market-sharing system.
195 It is true that in the judgments in Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission, paragraph 101 above, and Daesang and Sewon Europe v Commission, paragraph 174 above, cited by Tokai, the Court, in the exercise of its unlimited jurisdiction, replaced the calculation of the starting amounts in the contested decision by a calculation based on turnover from the product in the EEA (Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission, paragraphs 189, 197, 198 and 204, and Daesang and Sewon Europe v Commission, paragraphs 45, 53, 54 and 62). However, it should be noted that the Commission-™s calculation was criticised in those judgments because it was based essentially on the total turnover of the undertakings concerned from all businesses, which the Court found to present a misleading picture (Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission, point 193, and Daesang and Sewon Europe v Commission, point 49).
196 In the present case, the Decision is not based on data considered to be misleading. The Commission relied on worldwide turnover from sales of the relevant product. As has just been stated, there is no error in choosing that approach.
197 It follows that the pleas in law alleging an error in the choice of the turnover to be used in determining the starting amounts must be rejected and that the Commission has not erred in basing its decision on worldwide turnover from sales of the relevant product. In any event, the Court finds in the exercise of its unlimited jurisdiction that the method adopted by the Commission in the present case provides an appropriate picture of the capacity of the undertakings to affect free competition.
198 Neither can the Court uphold the plea in law alleging a failure to state reasons, in that the Commission failed to explain why shares of the EEA market were not used in the present case. In paragraph 471 of the Decision, the Commission set out the reasons for adopting a -˜worldwide approach-™ and, in paragraph 473, the reasons why EEA market share was not used. In those circumstances, the applicants were able to put forward all the arguments they considered relevant in putting their case to the Court.
199 Consequently, it is not necessary to adopt the measure of organisation of procedure sought by Tokai on 14 September 2004, since it seeks clarification of figures for turnover in the EEA market which are irrelevant in the present context.
d) The use of the specific figures used to divide the cartel members into categories and fix the corresponding starting amounts (Case T-71/03 and Case T-91/03)
Arguments of the parties
200 Tokai observes that the Commission put Tokai in the third category, together with LCL, because Tokai had a worldwide market share of more than 10% in 1997. However, the Commission overestimated the market share because it underestimated the total market size. In reality, Tokai-™s worldwide market share for isostatic graphite in blocks and cut blocks was less than 10%.
201 In this connection, Tokai adds that, according to column 4 of table 1, each undertaking-™s sales range in 1997, in absolute figures, is identical to its market share range (for Tokai 9-14 [9-14%]). According to Tokai, that can only be so if the Commission estimated that total sales of isostatic graphite in blocks and cut blocks were EUR 100 million (which equals 100%). However, the figure of EUR 100 million underestimates the total market size. As shown in column 3 of table 1, in 1997 the total sales of isostatic graphite of all the addressees of the Decision were EUR 315 million.
202 However, the Commission itself stated, in paragraph 23 of the Decision, that the isostatic graphite market was dominated by eight global producers (TT, Tokai, SGL, LCL, Ibiden, NSC/NSCC, UCAR and POCO) who -˜controlled 80% of the world market-™. In view of POCO-™s worldwide sales, Tokai concludes that the total market for isostatic graphite sales in 1997 was approximately EUR 440 million. If the overall range of 32-41% (in column 4 of table 1) is applied to this figure, a range of worldwide sales of blocks and cut blocks of between EUR 140 million and EUR 180 million is obtained. Consequently, as Tokai-™s actual sales totalled EUR [9-14] million in 1997, Tokai-™s market share was in any case less than 10%.
203 Tokai and SGL infer from this that the figures used by the Commission to categorise the undertakings according to their individual economic strength are doubtful or even incorrect. According to those applicants, the Commission has grossly underestimated the size of the relevant market.
204 Consequently, Tokai should not have been included in the third category, but the fourth. The incorrect assessment and classification on the part of the Commission constitute a manifest error of assessment.
205 Finally, the Commission infringed Article 253 EC because the Commission-™s estimate is not supported by data adduced in the Decision and is based on inconsistencies. In any case, whilst the Commission did in fact take account of -˜relative market shares-™, that is not clear from the Decision.
206 SGL alleges that the Commission made a fundamental mistake in respect of the basis for calculating the fines.
207 Regarding isostatic graphite, the statement of objections and the Decision - particularly Table 1 (see paragraph 168 above) (paragraph 16 of the Decision) - are both based, so far as SGL is concerned, on data supplied by SGL itself, namely the turnover of its -˜industrial applications-™ division for the period 1993-98 which it sent to the Commission on 15 June 2000. Appended to those figures were comments showing that SGL-™s total sales of isographite products worldwide must be considerably less than the total sales of the -˜industrial applications-™ division, in particular in respect of the -˜semicon-™, -˜analytical-™ and -˜powder-™ divisions. Without taking this into account, the Commission used the total sales figures and thereby gave a distorted picture of the relative competitive strengths.
208 SGL observes that it had already criticised this erroneous account in its reply to the statement of objections of 15 June 2002. In particular, it complained that the facts set out by the Commission gave the false impression that the applicant was the leader in the world market for isographite, whereas approximately two thirds of the world capacity was situated in Japan. Regarding Tokai, SGL observes, in that reply, that in the course of the procedure Tokai had itself estimated its turnover as approximately double the turnover given in the statement of objections.
209 In reply to the statement of objections, SGL sent the Commission a table showing its correct sales figures for isographite for 1993-98. As the table shows, worldwide turnover was EUR 45.6 million in 1997 not EUR 80.4 million. When supplying these figures, SGL asked the Commission to clarify the relative sizes of the companies for the purpose of correct calculation of the fines. However, in the Decision the Commission did not take account of the sales figures provided by SGL or verify as a whole the sizes of the companies and their market shares. Instead, it based its decision on manifestly erroneous figures.
210 With regard to the figures showing the share of blocks and cut blocks in the total turnover for isostatic graphite (paragraph 168 above), SGL submits that they too are wrong. In its reply to the statement of objections, it drew the Commission-™s attention to the fact that the figure of 45 to 55% used for SGL should be reduced because it also covered its own consumption (10 to 11%).
211 SGL adds that the setting of the starting amount would have taken a completely different form if the Commission had critically considered the figures of the other companies involved and if it had established the correct figures for those companies. In its reply to the statement of objections, SGL has already drawn attention to the fact that the sales figures in the said statement and the resulting relative strengths of the companies concerned were totally inconsistent with worldwide capacities in the isostatic graphite market and could not therefore be correct.
212 SGL also complains of erroneous data relating to the extruded graphite market. It does not understand how the Commission arrived at the market shares shown in Table 3 (paragraph 17 of the Decision) (see paragraph 169 above). SGL had pointed this out in its reply to the statement of objections, which showed the same figures for market shares as the Decision. These market shares were based on the estimates of the companies concerned, including the applicant. However, the Commission does not disclose how it deduced from these estimates that the applicant had a worldwide market share of 30% in 2000 and 25-30% in 1995. It is also surprising that the applicant and UCAR had the same sales figures for 1995 and were put in the same category.
213 Finally, SGL maintains that the Commission has failed in its obligation to state reasons laid down by Article 253 EC. The sales and market figures used by the Commission are contradictory and incomprehensible.
214 The worldwide turnover figures in column 4 of Table 1 (see paragraph 168 above) correspond exactly to the market shares. However, that is true only if the volume of the market shares on which the figures are based were up to EUR 100 million. No such finding appears in the Decision, nor would it be realistic. The same applies to Table 3 of the Decision (see paragraph 169 above), which also shows turnover figures identical with the market shares of UCAR and SGL in the extruded graphite sector. Furthermore, it is impossible to understand how the Commission arrived at the figures in column 4 of the table from the total sales figures in column 3.
215 The Commission contends that all those pleas in law and arguments should be rejected.
216 In response to SGL-™s pleas, the Commission admits that it used the figures regarding the isostatic graphite market in the applicant-™s letter of 15 June 2000. These are the applicant-™s estimates of its isostatic graphite sales in Europe and worldwide. The worldwide turnover figure for 1997 was DEM 158 million, which corresponds to the EUR 80.4 million figure in column 3 of Table 1 of the Decision. That table comprises all isostatic graphite products, that is to say, necessarily also the -˜powder-™ and -˜semicon-™ divisions. Even if the -˜analytical-™ item also contains non-isostatic graphite, this is not decisive because the corresponding turnover is only EUR 2 million.
217 When SGL was asked to provide an annual estimate of the proportion of blocks and machined products in its turnover from isostatic products between 1993 and 1998, SGL replied that in 1997 45% of its worldwide turnover from isostatic graphite products was from -˜semi-finished products-™ in general (that is to say, blocks and cut blocks) and 11%, from semi-finished products processed within the group. Consequently the Commission calculated that the turnover in the relevant market for the purpose of the infringement was 45% of the worldwide turnover from isographite, i.e. EUR 80.4 million, and thus EUR 36.1 million. In the Decision, this figure was replaced by a range of 30-40 for reasons of confidentiality (Table 1, column 4).
218 The Commission objects that the applicant is disputing the accuracy of its own turnover figures. The applicant-™s statement on this point is totally unsupported by evidence. First, the applicant asserts that the Commission-™s calculation erroneously took into account semi-conductor products, but does not specify which products. Secondly, the manner in which the turnover figures are determined remains a mystery.
219 Regarding the figure of EUR 45.6 million produced by SGL, the Commission complains that the applicant did not explain how a portion of EUR 34.8 million of the amount which it itself gave as the turnover in isostatic products (80.4 - 45.6) did not ultimately correspond to the relevant product market, when it was for SGL to produce reliable turnover figures.
220 Regarding the allegedly insufficient statement of reasons, the Commission submits that the Decision gives a sufficient explanation of the method of determining market shares. In so far as SGL is in doubt particularly as to the correspondence between the turnover ranges and market shares in column 4 of table 1 and in table 3 (see paragraphs 168 and 169 above), the Commission points out that the total turnover in fact corresponded to some EUR 100 million.
221 To the pleas in law advanced by Tokai, the Commission replies that the figures in Table 1 indicate, as the title shows, the -˜relative-™ importance of the undertakings in the worldwide isostatic graphite market. It takes the view that establishing relative market shares was an appropriate method for estimating the relative importance of the cartel members and to differentiate between them because there were no reliable industry data available that could provide objective information on the very specific product (isostatic graphite in blocks and cut blocks) or could establish exactly the market shares of all the companies in the market.
222 Furthermore, even if POCO-™s estimated turnover and the fact that the total represented only 80% of the worldwide market were taken into account, that would not affect the classification of the addressees of the Decision. The relative position of each cartel member in relation to the others would remain the same.
Findings of the Court
223 The Court notes as a preliminary point that the pleas in law advanced by SGL and Tokai do not concern the assessment phase during which, pursuant to the first and second paragraphs of section 1A of its Guidelines, the Commission assessed the gravity of the two infringements as such, namely the establishment and implementation of horizontal price-fixing agreements covering the whole of the EEA in the market for isostatic and extruded graphite in blocks and cut blocks (see paragraph 184 above). Even in the context of its unlimited jurisdiction, the Court should not therefore overturn the Commission-™s assessment (paragraphs 437 to 457 of the Decision) that those agreements constitute -˜very serious-™ infringements (see, to that effect, Case C-359/01 P British Sugar v Commission [2004] ECR I-0000, paragraph 50), in consequence of which the highest starting amount in respect of isostatic graphite was set at EUR 20 million and the two starting amounts in respect of extruded graphite were each set at EUR 15 million.
224 The present pleas in law only refer to the phase of the assessment in which the Commission fixed the specific starting amount for the two cartel members in respect of extruded graphite and distinguished between the treatment of the members of the cartel in respect of isostatic graphite, by dividing them into categories and setting corresponding individual starting amounts (see paragraph 185 above).
- The method applied to combine the relevant figures for the cartel in the isostatic graphite market
225 It should be noted that the distinction made in respect of the cartel in the isostatic graphite market did not consist in measuring the gravity of the infringement committed by each undertaking involved - it was during the earlier assessment phase that the gravity of the infringement was taken into account in the light of the cartel as a whole (see, to that effect, Graphite electrodes, paragraph 203) - , but in determining, pursuant to the third, fourth and sixth paragraphs of section 1A of the Guidelines, the individual contribution of each undertaking, in terms of effective economic capacity, to the success of the cartel so as to place it in the appropriate category.
226 In the present case, the Commission assessed that individual contribution on the basis of the worldwide turnover of each undertaking from the relevant product. As stated above (paragraphs 180 to 197 above), the principle behind that approach is not flawed.
227 As for the figures relied on in the present case, the Commission stated, without contradiction from the applicants on that point, that there were no industry data on which objective findings could be based in respect of the very specific product in question, since the figures on the product markets in the narrow sense make no distinction, either in the published accounts or in the undertakings-™ internal accounts, between blocks and cut blocks or between isostatic graphite and extruded graphite. Consequently, the Commission stated, the relevant turnover figures were specially calculated and forwarded by each undertaking in reply to requests for information. The Commission added that it had no reason to doubt the accuracy of the those figures.
228 The Commission was therefore faced with a market lacking transparency as regards the turnover for the very specific product in question. Without official and objective turnover figures, the Commission was therefore unable to determine the objective market shares of all undertakings in the economic sector in question.
229 In those circumstances, the Commission obtained the relevant figures from the members of the cartel alone, as is clear from the number and identity of the undertakings referred to in Table 1 of the Decision (paragraph 16). That table disregards the figures relating not only to POCO but also to other -˜outsiders-™ holding about 20% of the worldwide market for isostatic graphite (paragraph 23 of the Decision). The Commission therefore used the turnover figures which each member of the cartel forwarded in order to place those undertakings in categories according to -˜their relative importance-™ in the worldwide isostatic graphite market (see the heading of that table).
230 It is therefore clear from the Decision that, by collecting solely from the cartel members the figures necessary for their classification, the Commission applied a -˜relativist-™ method using figures which only took account of the cartel members.
231 Whilst certain passages of the Decision - such as certain terms used in paragraphs 471 and 475 and the apparent correspondence between turnover and market share in column 4 of Table 1 - may at first sight give the false impression that the Commission intended to refer to absolute shares of the worldwide market as a whole, any doubts in that regard are clearly dispelled by the limited number and identity of the undertakings and relative figures which appear in Table 1.
232 Furthermore, the applicants were not misled in this respect, as is plain from the pleas in law criticising that method. Accordingly, the plea in law alleging a failure to state reasons in that regard cannot be upheld.
233 In the particular circumstances of the present case, the Commission cannot be criticised on the merits for having chosen the -˜relativist-™ method referred to above. Moreover, none of the applicants submitted that the Commission could have based its decision on a more solid and objective method by obtaining official figures relating to the market as a whole.
234 In any event, the applicants have no legitimate interest in challenging the principle underlying the method chosen by the Commission. If no distinction were made between the applicants by dividing them into categories, each could, in application of the first and second paragraphs of section 1A of the Guidelines, be allocated a starting amount of EUR 20 million, which is the lowest -˜likely-™ amount for taking part in the cartel in question. None of the applicants would therefore gain any benefit, in terms of a reduction in the starting amount, from the annulment of the method chosen by the Commission, even less so since the Court does not consider it appropriate, in the exercise of its unlimited jurisdiction, to substitute another method for calculating the starting amounts.
235 It follows that the pleas in law alleging that the figures used by the Commission are doubtful, and that it miscalculated the size of the worldwide market as a whole, must be rejected. Consequently, those pleas in law do not invalidate the method of categorisation chosen by the Commission. The classification of Tokai in the third category cannot therefore be criticised on that ground, particularly as Tokai did not challenge its own turnover figures, as notified by it to the Commission.
236 The same applies in respect of the pleas in law contesting the reliability of certain specific figures which the Commission took into account when classifying the cartel members.
237 Thus, in so far as SGL criticises the Commission for not critically reviewing the figures provided by the other undertakings, it suffices to state that, by that complaint, the applicant indulges in pure conjecture. Its complaint is not based on any evidence in the light of which its merits might be assessed and must therefore be rejected.
238 Whilst SGL further complains that the Commission misinterpreted the figures attributed to Tokai, since the latter undertaking itself assessed its turnover at about double that in fact recorded in the statement of objections, it should be noted that, in reply to that complaint advanced in the application, the Commission stated in its defence that the figure for Tokai-™s turnover, challenged by SGL, comprised the sales of all specialty graphite products (isostatic, extruded and moulded graphite). By letter of 31 October 2001, Tokai gave a worldwide turnover figure in isostatic graphite of approximately EUR 29.3 million for 1997. However, that is not the turnover in the relevant product, namely blocks and cut blocks. For this reason the Commission in principle used, as in SGL-™s case, the figure given by Tokai in its reply of 7 December 2001 as the relevant worldwide turnover for the infringement. This figure is within the range of EUR 9 million to 14 million shown, on grounds of confidentiality, in column 4 of Table 1 of the Decision. That specific and plausible explanation was not challenged by SGL either in its reply or at the hearing. Consequently, its complaint cannot be upheld.
- The figures adopted in respect of SGL by which it was placed in the highest category of members of the cartel in the isostatic graphite sector
239 It should be noted that the Commission regarded SGL as being -˜by far the largest producer of isostatic specialty graphite in blocks and cut blocks in the worldwide market (market share of 30 to 40%)-™ and that that classification was based on figures which the applicant itself had provided to the Commission.
240 Those figures were reproduced in Table 1 of the Decision (see paragraph 168 above) as the worldwide turnover for isostatic graphite in 1997 of EUR 80.4 million (column 3) and as the worldwide turnover for isostatic graphite in blocks and cut blocks of EUR 30 to 40 million (column 4), that latter turnover figure being calculated by multiplying the figure of 80.4 by the range of [45-55%] which SGL had stated as representing the proportion of its overall turnover for isostatic graphite represented by blocks and cut blocks.
241 It is not in dispute that SGL did not challenge that range of [45-55%], merely the Commission-™s use of the EUR 80.4 million figure. The chronology of relevant events as it appears from the file should be noted first of all in that regard.
242 On 28 March 2000, the Commission sent SGL a request for information seeking, inter alia, data on the undertaking-™s worldwide turnover -˜in the specialty graphite sector-™ from 1993 to 1998 and similar data, still with regard to the -˜specialty graphite sector-™, for the EEA, the European Community and the various Member States.
243 In its letter in reply of 15 June 2000, SGL stated that it was prepared to cooperate with the Commission and that it hoped, in so doing, to benefit from the application of the Leniency Notice. As for the information requested, the letter explained (on page 7) that SGL-™s isographite production division was technically attached to its -˜Industrial applications-™ division and included semi-finished products (blocks and cut blocks) and machined products.
244 Furthermore, a table was attached to Annex 16 (-˜the initial table-™) entitled -˜World/European (EU/EEA) isostatic turnover 1993-98, Industrial applications (semi-finished products and machined products) (DEM million)-™ which gave the different business sectors, namely -˜concast-™, -˜general applications-™, -˜EDM-™, -˜semicon-™, -˜analytical-™ and -˜powder-™, with the corresponding individual turnover figures, which amounted to DEM 158 million in 1997 and DEM 148.7 million in 1998.
245 That table contained the following comments:
-˜powder-™: intended for filling plastics/rubber and the manufacture of synthetic diamonds;
-˜analytical-™: exclusively machined products for analytical technology manufactured partly from isostatic graphite and partly from extruded specialty graphite;
-˜semicon-™: the worldwide turnover figures also include activities carried out in the United States (manufacture of US extruded and isostatic semi-finished products and US machining). The share amounts to about 50-60%. 10-15% of the worldwide turnover was from graphite felt. Felt is not an isostatic product.
246 It is clear from a straightforward reading of those explanatory comments that the total figures in that table (DEM 158 million (EUR 80.4 million) in 1997 and DEM 148.7 million (EUR 74.3 million in 1998) could not be the turnover solely from the isostatic graphite market. Whilst SGL did not give the precise breakdown of the shares from the various non-isostatic products, the Commission could not criticise it for not doing so at that stage of the administrative procedure, since its request for information of 28 March 2000, far from requiring that sort of specific breakdown in respect of the isostatic products, merely sought the figures in respect of specialty graphite as a whole.
247 It follows that the Commission was not permitted to consider those total figures as being exclusively from sales of isostatic graphite, without first checking whether that was the case. Further checks with SGL were all the more appropriate since the applicant had indicated its willingness to cooperate with the Commission. At the hearing, the Commission moreover admitted that it would have been better if it had sought further clarification from SGL under Article 11 of Regulation No 17.
248 However, without commenting on the qualifications made by SGL, referred to above, the Commission stated in the statement of objections that the total figure of EUR 74.3 million (DEM 148.7 million) was SGL-™s worldwide turnover in 1998 exclusively from the sale of isostatic graphite.
249 In its reply of 25 July 2002 to the statement of objections, SGL pointed to the qualifications it had made regarding the total figures in the original table, stating that neither the -˜powder-™ nor the felt were isostatic products. It sent an -˜amended table-™ which it claimed referred exclusively to isostatic graphite. Of the figures for the various business divisions for 1997, those (in EUR) for -˜concast-™, -˜EDM-™ and -˜general applications-™ correspond to those (in DEM) set out in the initial table. The entry for -˜powder-™ was removed, whilst the entries for -˜semicon-™ and -˜analytical-™ were reduced respectively from DEM 95 million to EUR 23.5 million and from DEM 13 million to EUR 2.2 million. SGL concluded from this that its worldwide turnover in 1997 from the sale of isostatic graphite was EUR 45.6 million.
250 In the Decision, without taking account of the new figures provided by SGL, in particular in the -˜amended table-™, the Commission found that the worldwide turnover in 1997 from sales of isostatic graphite was EUR 80.4 million.
251 It follows from the foregoing that, in so doing, the Commission committed a manifest error of assessment. Although it expressly claimed that it based its decision in respect of isostatic graphite solely on figures provided by the undertakings themselves, in SGL-™s case, the Commission took account of figures which, according to the express statements which the applicant had sent to it within the time-limit, included products other than isostatic graphite.
252 None of the arguments put forward by the Commission to the contrary can be upheld.
253 First, the Commission submits that the figures in the -˜amended table-™ submitted by SGL following the statement of objections remained obscure and questionable because SGL was only obliged to state the truth when replying to a request for information under Article 11 of Regulation No 17. It suffices to note in that respect that the Commission was satisfied with the figures disclosed in the original table and did not seek further explanation or disclosure of the documents from which those figures had been calculated as a means of checking them. In those circumstances, SGL cannot validly be criticised for having provided in its -˜amended table-™ less reliable figures in terms of evidence than those in its initial table.
254 Moreover, the Commission has no valid reason for objecting to the way in which SGL clarified and amended - in reply to the statement of objections - certain data that it had disclosed to it by letter of 25 July 2000. It was only by reading the statement of objections that SGL could reasonably be aware that the Commission was intending to use the figures in the initial table to determine the turnover from isostatic graphite alone, whereas the request for information had referred to specialty graphite in general.
255 Moreover, the Commission had already allowed SGL to make a correction in the same context: whilst the applicant stated in the comments attached to the initial table that it was not possible to provide a breakdown of the quantities of blocks and cut blocks on the one hand, and machined products on the other, the Commission allowed it to reconsider that statement and to state, by letter of 10 December 2001, that it estimated that proportion in 1997 to be 45% for semi-finished products and 55% for machined products, and the Commission did not allege that those figures were questionable or lacked probative value in that regard.
256 Second, in so far as the Commission claims before the Court that, contrary to SGL-™s assertions, both graphite felt and powder were in fact isostatic products, it should be noted that the Decision makes no specific finding in that regard, even though SGL expressly alleged otherwise in its letter of 25 July 2002. As regards SGL-™s -˜semicon-™ division, the Decision makes no finding on the share of non-isostatic products claimed by SGL in that letter, but merely notes in passing that the cartel did not cover products for semi-conductor applications, which were machined and therefore -˜customised-™ products (paragraph 7).
257 It should be added that, before the Court, the Commission did not try to adduce evidence to show that SGL-™s assertions were plainly contrary to the basic tenets of industrial technology. It merely challenged the figure of EUR 45.6 million by alleging that there were contradictions between the figures in the initial table and those in the -˜amended table-™.
258 The Commission-™s conduct during both the administrative procedure (see paragraphs 253 to 255 above) and the procedure before the Court (see paragraph 257 above) leads to the conclusion that, had the Commission asked SGL in its request for information of 28 March 2000 to disclose the turnover from isostatic graphite alone and had SGL replied with the figure of EUR 45.6 million without further comment, the Commission would have accepted that figure, just as it accepted the figure of DEM 59.469 million disclosed by SGL, again without comment, for turnover from extruded graphite in 1995 (Annex 17 to its letter of 15 June 2000, see paragraph 270 below).
259 In those circumstances, in order to remedy the manifest error of assessment in the Decision, the Court considers that it is necessary to exercise its unlimited jurisdiction by having regard to the principle adopted by the Commission, by which it was satisfied with the disclosure by the undertakings concerned of estimates of the worldwide turnover in 1997 from sales of isostatic graphite. In that respect, it is necessary to take into account the figures which SGL disclosed in its -˜amended table-™ of 25 July 2002, since the Court has no reason to doubt the reliability of those figures. Consequently, the relevant turnover of SGL from isostatic graphite should be taken to be EUR 45.6 million, not EUR 80.4 million.
260 The calculation of the proportion of that turnover of EUR 45.6 million which comes from isostatic blocks and cut blocks in 1997 should be based on the figure of 45% put forward by SGL. Contrary to SGL-™s contention, there is no reason to subtract from that 45%, the percentage of the turnover resulting from SGL-™s own internal consumption. According to settled case-law, it is appropriate to take account of the internal turnover of a group in order to avoid giving an unjustified advantage to vertically integrated companies when calculating fines under Article 15(2) of Regulation No 17 (Case C-248/98 P KNP BT v Commission [2000] ECR I-9641, paragraphs 61 and 62, and Europa Carton v Commission, paragraph 81 above, paragraph 128).
261 Consequently, given that 45% of the turnover of EUR 45.6 million from isostatic graphite was from sales of blocks and cut blocks, SGL-™s relevant turnover was EUR 20.5 million.
262 It follows that SGL cannot be regarded as having been by far the largest producer of isostatic graphite in blocks and cut blocks in the worldwide market (paragraph 475 of the Decision) and that the starting amount of EUR 20 million for the fine for the applicant (paragraph 476 of the Decision) must be adjusted.
263 The Court considers, in the exercise of its unlimited jurisdiction, that it suffices to replace the amount of EUR 20 million by an appropriate starting amount of EUR 11.3 million, which takes account of actual sizes and places SGL in a category between TT (EUR 14 million) and Tokai (EUR 7.4 million). However, there is no need to adjust the system of categories as a whole.
264 First, whilst the Commission faithfully converted the turnover figures of the members of the cartel into starting amounts and set those amounts for the undertakings other than SGL in the form of a percentage of the amount of the EUR 20 million allocated to SGL, it is nevertheless the case that, notwithstanding the disappearance of that -˜reference amount-™, the proportions between the undertakings other than SGL remain unchanged in terms of turnover. It follows that the starting amounts attributed to those undertakings correctly reflect relative sizes.
265 Second, it is true that the Court is not prevented - in order to remain within the general logic of the Commission (see, to that effect, Graphite electrodes, paragraph 233) which classified the infringement as -˜very serious-™ - from imposing a starting amount of EUR 20 million on TT, which has in fact proved to be the largest producer, and from increasing proportionally the starting amounts for the other applicants. However, the difference between EUR 20 million and EUR 14 million, as -˜reference amount-™, is not so great that the adoption of EUR 14 million as the reference amount would deprive the fines of their practical effect. Moreover, the second paragraph of section 1A of the Guidelines, far from imposing a starting amount of EUR 20 million in every case involving a -˜very serious-™ infringement, merely describes such an amount as -˜likely-™.
266 Furthermore, the Commission was itself content to impose a starting amount of EUR 15 million in respect of extruded graphite in blocks and cut blocks (paragraph 478 of the Decision), even though the infringement committed in that sector was also classified as -˜very serious-™ (paragraph 457 of the Decision) and the economic importance of that sector was comparable to that of the isostatic sector (paragraphs 15 and 23 of the Decision).
- The method of combining the relevant figures for the cartel in the extruded graphite sector and the figures in fact adopted
267 It should be noted that some of the complaints raised by SGL in that context match those which have already been submitted and rejected with regard to the isostatic graphite market. Thus, SGL claims not to understand how the Commission could arrive at the figures, in particular with regard to market share, set out in Table 3 of the Decision (see paragraph 169 above) and to be surprised that that table can contain turnover figures which are the same as the market shares.
268 It suffices to note in this connection that the Commission did not have any official and objective figures on the matter. Consequently, it was obliged to obtain relevant figures solely from the members of the cartel in the extruded graphite sector, as is clear from the number and identity of the undertakings referred to in Table 3 (see paragraphs 227 and 228 above). That table disregards the figures relating not only to the Carbide Graphites Group, but also to other -˜outsiders-™ holding about 25% of the worldwide market for extruded graphite (paragraph 23 of the Decision). For the reasons set out above (see paragraphs 231 to 235 above), the -˜relativist-™ approach adopted by the Commission is not flawed by an inadequate statement of reasons or by an error of law or assessment.
269 SGL also complains that the Commission failed to explain how it arrived at the conclusion that its own share of the market was 25 to 30% in 1995. It should again be noted in that regard that the starting amounts were determined exclusively on the basis of the turnover figures declared by the undertakings to the Commission.
270 In Annex 17 to its letter of 15 June 2000 (see paragraph 243 above), SGL sent the Commission a table referring to a worldwide turnover of DEM 59.469 million (EUR 31.7 million) for 1995. Contrary to what was found with regard to the table attached to Annex 16 (see paragraphs 244 and 245 above), the figure of DEM 59.469 million was not subject to any qualifying comment. The Commission was therefore entitled to base its decision on that figure, expressed in euro. Moreover, SGL stated in its letter of 10 December 2001 (see paragraph 255 above) that it made 45% of its sales of extruded graphite from -˜semi-finished products-™. The Commission therefore did not err in finding that the relevant turnover figure for SGL was about EUR 14 million, that amount having been replaced in Table 3 of the Decision by a range of [12-17] for reasons of confidentiality.
271 It is true that Table 3 differs from Table 1 in that it gives identical market shares of [25-35%] for SGL and UCAR which appear to correspond to the objective worldwide market shares of the two undertakings, given that SGL, UCAR and the -˜outsider-™ Carbide Graphites together held about 75% of that market (paragraph 23 of the Decision). However, the question of the accuracy of those figures for market share and of their relation to the turnover figures for SGL and UCAR is irrelevant in the present context. As stated above, the starting amounts for the two undertakings were set solely on the basis of their turnover, without dividing the undertakings into separate categories.
272 As for SGL-™s claim to be surprised that the figures for its undertaking are the same as those used for UCAR, it should be stated that the applicant did not put forward a specific complaint against the turnover figure used in the case of UCAR, which was replaced in Table 3 by a range of [12-17] on the grounds of confidentiality. Since SGL-™s allegation was not based on any evidence, the Commission could validly reject it by pointing out that the figures for SGL and UCAR for 1995 were in fact of the same order of magnitude.
273 It follows that the pleas in law challenging the method of combining the relevant figures for the cartel in the extruded graphite sector must be rejected and that the Commission did not err in relying on those figures in setting the starting amount for SGL on the basis of its participation in that cartel. In any event the Court finds no reason, in the exercise of its unlimited jurisdiction, to alter that method or that amount.
e) The basic amount set for SGL on the basis of the duration of the infringements (Case T-91/03)
274 SGL submits that quota cartels, classified in the Guidelines as -˜very serious-™ infringements, normally last several years. Such longevity is inherent in infringements of that kind. Therefore a quota cartel, which is by nature long-lasting, cannot be treated in the same way, as regards its duration, as an infringement such as, for example, the abuse of a dominant position, which is already -˜very serious-™ when committed in isolation. Therefore the duration of a quota cartel can lawfully be taken into account only where it is substantially greater than the typical duration of that type of offence. On this point, SGL disputes the legality of the Guidelines in so far as they treat the duration of an infringement in the same way, irrespective of its nature.
275 It suffices to note in that regard that SGL had already put forward a similar argument in the dispute giving rise to the judgment in Graphite electrodes. For the reasons set out in paragraphs 259 and 260 of that judgment, that argument should be rejected: even if certain types of cartel are inherently meant to last, a distinction should always be made, pursuant to Article 15(2) of Regulation No 17, between the duration of their effective operation and their gravity as resulting from their particular nature.
276 It follows that the plea in law alleging that the duration of the infringements found to have been committed by SGL was wrongly taken into account must be rejected, even in the light of the Court-™s unlimited jurisdiction.
277 However, since the starting amount for SGL in respect of the gravity of the infringement in the isostatic graphite sector has been reduced to EUR 11.3 million, the basic amount set in respect of duration (paragraphs 480 and 484 of the Decision) will be changed from EUR 29 million to EUR 16.4 million.
f) Attenuating circumstances (Case T-74/03 and Case T-87/03 )
Summary of the Decision
278 In paragraphs 515 and 516 of the Decision, the Commission found that Intech-™s involvement in the cartel in the isostatic graphite sector was of a particular kind, in that to a large extent Intech acted on the instructions of Ibiden in implementing, by its presence at European and national meetings as Ibiden-™s distributor, the decisions of principle taken at a higher level. The Commission considered that those particular circumstances justified a reduction of 40% of the basic amount fixed for Intech. It refused on the other hand to recognise other attenuating circumstances.
Arguments of the parties
279 Intech submits that the Commission wrongly refused to take into account its role as a passive member and follower and its voluntary decision to terminate the infringement before the other companies. Accordingly the Commission infringed section 3 of its Guidelines and the principle of proportionality.
280 If the Commission classified cartel members as -˜active members-™ because they regularly attended meetings concerning their respective national markets (paragraph 498 of the Decision), it ought to have classified as active members all the other distributors who attended meetings concerning national markets and fined them accordingly. However, the Commission refrained from fining distributors other than the applicant. Consequently, the Commission-™s statement of reasons is wholly inadequate.
281 Intech observes that it in no way participated in the creation, development or management of the cartel or in its international meetings. Its attendance at European and national meetings was much more sporadic than the ordinary members of the cartel. In particular, Intech never had the slightest influence in fixing target prices. These were fixed by the producers alone at their international meetings (paragraph 102 of the Decision). Furthermore, in the course of the administrative procedure Ibiden expressly informed the Commission that Intech had played only a passive role in the cartel.
282 In that context, Intech lists several European and national meetings in which it claims not to have taken part or to have played an insignificant role.
283 Intech adds that for most of the time it did not adhere to the minimum prices imposed on them by the leading members of the cartel, but tried to follow a sales policy voluntarily focused on competition in order to gain market share. For example, at the second European meeting on 20 June 1994, Intech was accused of reducing its prices (paragraph 199 of the Decision).
284 Furthermore, Intech asserts that as a general rule it broke the price agreements concluded by the producers, with the aim of increasing its market share in Europe. On this point the applicant refers to several documents in the investigation file, the grounds of the Decision and its price lists for the German market, which show that between 1993 and 1998 Intech-™s selling prices to consumers were going down rather than up. According to the Guidelines, the non-application of price agreements should be regarded as justifying a reduction in the fine.
285 Finally, Intech points out that it voluntarily terminated the infringement in May 1997, that is, almost three years before the Commission-™s intervention and more than one year before the other companies concerned. It refers to two decisions adopted in 1981 and 1982 and claims that in past decisions the Commission reduced an undertaking-™s fine as a reward for ending an infringement before any intervention by the Commission. According to section 3 of the Guidelines, even the termination of infringements after the Commission first intervenes is still deemed an attenuating circumstance. In those circumstances it would have been all the more usual to allow the applicant a substantial reduction in its fine on this basis.
286 The Commission replies that the applicant-™s claim that it merely followed the other companies passively is refuted by several items of evidence. First, from the start Intech attended 8 out of the 10 European meetings organised. Second, it attended numerous national meetings. Lastly, several documents prove that the applicant supported the application of the prices agreed in the cartel. It matters little that the applicant did not always adhere to those prices and had no influence at the international level.
287 As regards the voluntary termination of the infringement before the Commission-™s intervention, it points out that that situation is not covered by the Guidelines. In that case, the shorter duration of the infringement is sufficiently accounted for in setting the basic amount.
Findings of the Court
288 It should be noted that section 3 of the Guidelines provides for a reduction of the basic amount where there are -˜attenuating circumstances-™ such as, in particular, an exclusively passive or follow-my-leader role, the non-implementation in practice of the collusive agreements and the termination of the infringements as soon as the Commission intervenes.
289 It should be noted that the Guidelines do not list the attenuating circumstances that the Commission must take into account. Consequently, the Commission retains a certain discretion when making a global assessment of the size of any reduction in the fines to reflect attenuating circumstances (see, to that effect, Case T-50/00 Dalmine v Commission [2004] ECR II-0000, paragraph 326).
290 Intech-™s argument based, more particularly, on -˜the termination of the infringement as soon as the Commission intervenes-™, referred to in section 3 of the Guidelines, cannot succeed.
291 Logically there can be an attenuating circumstance within the meaning of the Guidelines only if the undertakings concerned were encouraged to cease their anti-competitive conduct by the interventions in question. The purpose of that provision is to encourage undertakings to terminate their anti-competitive conduct as soon as the Commission launches an investigation into it. The fine cannot be reduced on that basis where the infringement has already come to an end before the date on which the Commission first intervenes. A reduction in such circumstances would duplicate the reduction for duration in calculating the fine (Dalmine v Commission, paragraph 289 above, paragraphs 328 to 330).
292 In any event the Commission is under no obligation in the exercise of its discretion (see paragraph 289 above) to reduce a fine for the termination of a manifest infringement, whether that termination occurred before or after its investigation.
293 In the present case, since the fixing of prices in the isostatic graphite sector was unquestionably a manifest infringement, rightly described by the Commission as -˜very serious-™, Intech is therefore wrong to criticise the Commission for not reducing its fine because it terminated its involvement in that infringement before the investigation began.
294 Even if, in the past, the Commission regarded the voluntary termination of the infringement as an attenuating circumstance, the Guidelines permit it to take account of the fact that very serious manifest infringements, even though they have been unlawful since the start of the Community-™s competition policy, are still relatively frequent and thus to consider that that lenient practice should be abandoned and not to reward the termination of such an infringement with a reduction of the fine (see, by analogy, Musique diffusion françaiseand Others v Commission, paragraph 139 above, paragraphs 108 and 109). In any event, the Court sees no reason, even in the exercise of its unlimited jurisdiction, to overturn the Commission-™s assessment.
295 As for the allegedly passive or follow-my-leader role of the two Intech companies and their alleged failure to apply the prices set by the cartel, the complaints raised overlap with those challenging the finding that they committed the infringement, which were rejected above. It therefore suffices to note, first, that the Commission was entitled to find that Intech EDM AG and Intech EDM BV were one undertaking, either one of whom could be held responsible for the conduct of the other, and, second, that the Commission has adequately established that Intech had attended numerous meetings of the cartel and repeatedly charged the high prices fixed by the cartel (see paragraphs 58 to 82 above).
296 Consequently, the Commission was entitled to find that Intech-™s role was not -˜exclusively-™ passive or follow-my-leader and that its occasional non-'implementation of the anti-competitive agreements was not -˜in practice-™ for the purposes of the Guidelines. That is particularly true for Ibiden-™s statement, referred to by Intech, that the applicant played a passive role in the cartel (Annex A19 to the application), since that statement concerned Intech-™s attendance at a single European meeting of the cartel. It does not therefore constitute adequate proof of -˜exclusively-™ passive conduct throughout the period of Intech-™s involvement in the cartel.
297 Moreover, the fact that Intech did not charge the agreed prices in full does not mean that there was a non-'implementation -˜in practice-™ of the collusive agreements. An undertaking which, notwithstanding that it acts in concert with its competitors, follows a more or less independent policy on the market may merely be seeking to use the cartel for its own advantage (see paragraph 74 above).
298 It follows that Intech-™s complaints alleging a failure to grant a further reduction in respect of other allegedly attenuating circumstances must be rejected, even in light of the Court-™s unlimited jurisdiction.
299 Lastly, the allegation that there was a failure to state reasons cannot be upheld either. Paragraphs 410 and 498 of the Decision clearly set out the reasons for the Commission-™s finding that, unlike the other distributors in the sector, Intech was an active member of the cartel. Those paragraphs of the Decision therefore enabled Intech to submit its pleas in law and arguments so as to be able effectively to put forward its case before the Court.
g) The aggravating circumstances (Case T-91/03 )
Summary of the Decision
300 In paragraphs 485 to 488 of the Decision, the Commission found that SGL was the leader and instigator of the infringement in the isostatic graphite market in that it took the initiative to launch the cartel and steered its development throughout the infringement period. That conduct constituted an aggravating circumstance justifying an increase of 50% in the basic amount of the fine for SGL. By contrast, after finding in its statement of objections that LCL had also acted as a leader of the cartel, the Commission, following LCL-™s submissions, withdrew its original assessment and stated that it had not sufficiently established that LCL had clearly acted as a leader.
Arguments of the parties
301 SGL objects to the 50% increase imposed on it for having been the leader and instigator of the isostatic graphite cartel.
302 It repeats its plea that in the statement of objections the Commission made findings of fact which differed from those in the Decision (see paragraphs 130 and 131 above). Because its right to be heard was infringed, the applicant-™s silence is not equivalent to a tacit acceptance of the objection that it was the ringleader of the cartel. Furthermore, SGL does not fulfil the requirements for attribution of that role.
303 The Commission-™s assessment is not supported by the facts. SGL was no more responsible for the functioning of the cartel than LCL, Tokai and TT. Therefore the Commission was wrong not to find that the applicant was an active member like those three companies.
304 In the first place, SGL was not responsible for creating and setting up the cartel. On the contrary, the agreements were based on existing contacts between the European producers and the Japanese producers (paragraphs 106 to 113 of the Decision). Within that cooperation, none of the companies concerned acted as leader, but all participated at the same level (paragraph 118 of the Decision).
305 At the beginning of 1993 SGL, together with Tokai, TT and LCL, expressed a common desire to renew the international cooperation which they had broken off in 1991 (paragraph 120 et seq. of the Decision), none of them having acted as ringleader. Accordingly SGL, Tokai and LCL actively participated in the planning of the first meeting. Tokai also insisted that TT and Ibiden cooperate and organised the first top-level meeting, the founding meeting of the undertakings participating in the cartel (paragraphs 122, 123 and 128 of the Decision).
306 SGL was likewise not specifically responsible for the organisation, chairmanship and conduct of the various cartel meetings. On the contrary, the cartel members shared these tasks, which they carried out in turn.
307 SGL also denies that it took measures to enlarge the cartel. At the beginning of the cartel, the initiative for extending it was taken by Tokai, which insisted that TT in particular should attend the first meeting. LCL was active in persuading other companies to join the cartel, particularly POCO (paragraphs 123 and 138 of the Decision). Consequently, SGL-™s contact with UCAR (paragraph 138 of the Decision) went no further than the measures taken by the other companies.
308 Furthermore, SGL did not act as the leader in price fixing and implementing other concerted practices. All strategic decisions concerning the nature and consolidation of the cooperation were taken by the companies jointly (paragraphs 130, 131, 165, 199 and 202 of the Decision).
309 Regarding LCL-™s role, the applicant observes that LCL was active in drawing up projects and proposals relating to the aims of the cartel. Like the applicant, LCL represented the position of the European graphite producers. However, as LCL-™s conduct was not deemed to be an aggravating circumstance, that should also be the case with regard to the largely identical conduct of SGL.
310 Alternatively, SGL contends that in any case the Commission attached disproportionate weight to the applicant-™s role as ringleader in increasing its fine by 50%. The applicant considers that a 50% increase is contrary to the Commission-™s usual administrative practice. In this context, it refers to several decisions in which the punishment imposed by the Commission for the role of ringleader was of a lesser amount.
311 The Commission observes that in the administrative procedure the applicant did not deny acting as ringleader of the cartel. Its fine was reduced because it did not substantially contest the facts on which the Commission-™s objections were based (paragraph 542 of the Decision). It cannot therefore change its position before the Court. Otherwise, the fine would have to be increased in accordance with section E of the Leniency Notice.
312 The Commission observes that SGL led, organised and encouraged the cartel in such a decisive manner, distinguishing itself so clearly from the other members, that the additional 50% is justified. SGL combined the roles of instigator, planner of the cartel-™s policy and many of its practical measures, coordinator, upholder of order and initiator of measures to enlarge the cartel.
313 Thus, the applicant took the initiative in resuming the cooperation which had been broken off in 1991. Although LCL and Tokai may have supported it in its task, their position is not comparable to that of the applicant. In this context, the Commission mentions in particular the role of instigator played by the applicant-™s chairman and managing director, (paragraphs 121 to 124, 126 and 129 of the Decision), and finds that no other member of the cartel contributed so decisively to the planning and implementation of the cartel.
314 As regards measures for enlarging the cartel, the Commission asserts that the invitation to TT at the formative stage of the cartel arose from an initiative of the applicant, who was supported by Tokai alone (paragraph 122 of the Decision). The applicant also contacted LCL, Tokai and Ibiden to induce them to join the cartel (paragraphs 120 to 126 of the Decision). In addition, after promising in November 1993 that it would establish contact with UCAR, the applicant-™s efforts came to fruition in February 1996 (paragraphs 138, 157, 162 and 214 of the Decision).
315 Regarding the alternative complaint that it failed to follow its previous decisions, the Commission observes that it has a discretion with regard to aggravating circumstances. It has no obligation to apply a mathematical formula nor is it generally bound by previous decisions.
Findings of the Court
316 Where an infringement has been committed by a number of undertakings, it is necessary, in determining the amount of the fines, to establish their respective roles in the infringement throughout the duration of their participation in it. It follows, in particular, that the role of -˜ringleader-™ played by one or more undertakings in a cartel must be taken into account for the purposes of calculating the amount of the fine, in so far as the undertakings which played such a role must therefore bear special responsibility in comparison with the other undertakings (see Graphite electrodes, paragraph 301, and the case-law cited).
317 In accordance with those principles, section 2 of the Guidelines sets out a non-exhaustive list of aggravating circumstances which may result in an increase in the basic amount of the fine, including the role of -˜leader in or instigator of the infringement-™.
318 In the present case, paragraph 485 of the Decision states that, according to the facts found by the Commission, SGL was the leader and instigator of the infringement in the isostatic graphite market. That undertaking took the initiative to launch the cartel and steered its development throughout the infringement period.
319 In assessing the pleas in law contesting that finding, it is first necessary to recall the chronology of the various stages of the administrative procedure and to analyse the contents of both the statement of objections and the statements of SGL.
320 In reply to requests for information, SGL, by letters of 8 June 1999 and 15 June 2000, stated that it would cooperate voluntarily with the Commission and on that basis sought the application of section C of the Leniency Notice (-˜Substantial reduction -¦ of 50 to 75% of the fine-™).
321 In its subsequent statement of objections of 17 May 2002, the Commission expressly stated that it was going to impose fines on the undertakings under Article 15(2)(a) of Regulation No 17 (paragraph 411) and that it would therefore consider the role played by each undertaking and would take account of any aggravating circumstances in each case (paragraphs 406 and 409). In that context, it noted (paragraph 410) that -˜in the present case, SGL and LCL [were] to be treated as leaders or instigators of the cartel in the isostatic graphite sector, which bear the primary responsibility-™.
322 In its reply of 25 July 2002, SGL pointed out that, from the beginning, it had fully cooperated with the Commission and thus -˜had significantly contributed to the finding of the infringements which are the subject of these proceedings-™. It further stated that, for that reason, it was merely pointing out several inaccuracies and mistakes in the account of the facts as set out in the statement of objections. The corrections put forward in that regard concerned the definition of the relevant market and the figures on which the Commission based its decision.
323 At the hearing of 10 September 2002 before the Commission (paragraph 88 of the Decision), SGL merely repeated its criticism, in terms of the facts, of the Commission-™s use of certain figures which distorted the applicant-™s economic strength.
324 It follows from the foregoing that, by its conduct during the administrative procedure, SGL not only refrained from challenging the facts found to constitute the infringement - with the exception of those relating to the definition of the relevant market and to certain figures - but also referred to its own vital contribution in establishing those facts. In those circumstances, SGL must be regarded as having explicitly admitted during the administrative procedure the substantive truth of the facts which the Commission alleges against it in the statement of objections, other than the two matters mentioned above. Those facts must thereafter be regarded as established, as the undertaking is estopped in principle from disputing them during the present proceedings (see, to that effect, Graphite electrodes, paragraph 108, and Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission, paragraph 101 above, paragraph 227).
325 Those facts also include the evidence set out by the Commission in the Decision, particularly in the 48 paragraphs listed in footnote 552, in support of the finding that SGL was the leader and instigator of the cartel, given that the Commission made that finding without infringing SGL-™s rights of the defence (see paragraphs 148 to 151 above). A finding to that effect had already been made in the statement of objections essentially on the basis of the same evidence. In any event, SGL has not criticised the Commission for using evidence in the Decision which had not been adduced in the statement of objections.
326 It follows that the finding that SGL was an actual ringleader and the matters relating thereto must be regarded as conclusively proven for the purposes of the present dispute, so that SGL can no longer challenge that aggravating circumstance found against it.
327 By contrast, in respect of the assessment of the seriousness of the role played by SGL, in the Decision the Commission found for the first time that the aggravating circumstance in question justified a 50% increase of the basic amount imposed on the applicant. Consequently, there is no bar to SGL challenging the increase of the basic amount as being excessive merely because it did not challenge the finding that it was a ringleader. In any event, the Court may, in its unlimited jurisdiction, review whether the 50% uplift was appropriate by assessing the respective roles played by the undertakings involved in the infringement.
328 It should be noted in that respect that, whilst the relevant passages of the Decision show that SGL was the ringleader of the cartel, they also show that the conduct of the other members of the cartel, in particular LCL and Tokai, is not so readily distinguishable from that of SGL as the Commission alleges.
329 Thus, the desire to resume anti-competitive cooperation in 1993 in the isostatic graphite sector was very pronounced not only on the part of SGL, but also on that of Tokai (paragraphs 120, 122, 123 and 128 of the Decision). Moreover, LCL played a particularly active role in the development of a common strategy on the part of the European undertakings (paragraphs 137, 179, 200 and 219 of the Decision). Furthermore, the organisation and chairing of the various meetings was shared more or less equally between the cartel members. Finally, several anti-competitive suggestions put forward by SGL, often supported by LCL, particularly on the question of sharing customers and quantitative restrictions, were unsuccessful as the other members of the cartel rejected them (paragraphs 143, 171, 180, 192 and 203).
330 Consequently, the difference between the gravity of SGL-™s infringement on the one hand and those of Tokai and LCL on the other does not appear so significant as to justify an increase of 50% in the basic amount fixed for SGL. In that context it is necessary to take account in particular of the fact that Tokai and LCL received no increase in respect of any aggravating circumstance - not even under the last indent of section 2 (-˜other-™) of the Guidelines - for their particularly active conduct in the cartel.
331 In the exercise of its unlimited jurisdiction, the Court therefore considers that the uplift should be reduced from 50 to 35% of the basic amount for SGL. As that amount was set at EUR 16.4 million on the basis of the duration of the infringement in respect of isostatic graphite (see paragraph 277 above), the new amount to be imposed on SGL on the basis of aggravating circumstances is EUR 22.14 million.
h) The alleged failure to take account of SGL-™s inability to pay within the meaning of section 5 of the Guidelines (Case T-91/03)
332 SGL complains that the Commission took no account of its extremely difficult financial situation and its resulting lack of funds with which to pay the fine. In the Decision (paragraphs 555 and 556), the Commission found that the applicant has to face considerable financial difficulties and is therefore in a very unfavourable financial situation. However, the Commission did not consider it necessary to adjust the fine. Under section 5(b) of the Guidelines, the fine must be related to the economic situation of the undertakings in question, particularly their real ability to pay.
333 It suffices to note in this regard that SGL had already put forward a similar plea in law in the case giving rise to the judgment in Graphite electrodes. For the reasons set out in that judgment (paragraphs 370 to 372), that plea cannot succeed because the Commission was right to find that if it were under an obligation to take account of SGL-™s difficult financial situation that would give an unfair advantage to one of the undertakings least adapted to the conditions of the market. Furthermore, the fact that a measure taken by a Community authority results in the insolvency or liquidation of a particular undertaking is not precluded as such by Community law.
i) The allegedly disproportionate amount of the fine imposed on SGL on the basis that there was no need for a deterrent effect in respect of that applicant (Case T-91/03)
334 SGL claims that there was no need for a deterrent effect when its fine was fixed. The colossal fine imposed on it by the Commission on 18 July 2001 as a result of the proceeding relating to graphite electrodes (EUR 80.2 million) is a lasting and full deterrent for SGL. In addition, there are the high fines imposed on the applicant in North America. Under the fourth paragraph of section 1A of the Guidelines, the essential objective of punishing cartels with fines is to produce a deterrent effect on undertakings. As that objective has already been attained, it is not sufficient to reduce the applicant-™s fine by 33% (paragraphs 558 and 559 of the Decision), because there is nothing to justify the remaining 67% either. Consequently, the Commission ought to have merely imposed a symbolic fine on the applicant pursuant to section 5(d) of the Guidelines.
335 It suffices to note in this regard that SGL-™s pleas in law alleging an infringement of the principle of the non-cumulation of penalties and the Commission-™s duty to have regard to penalties previously imposed have been rejected (paragraphs 112 to 128 above). The Commission was therefore entitled to draw a distinction, in terms of procedures and penalties, between the graphite electrodes cartel, the isostatic graphite cartel and the extruded graphite cartel. In particular, it was not required to take account of the penalties imposed by the US authorities.
336 It follows that it was open to the Commission to impose further fines on SGL in respect of its participation in the isostatic graphite and extruded graphite cartels intended to deter that undertaking and so exceeding the level of a purely symbolic penalty. That conclusion is not contradicted by the fact that the Commission considered in the circumstances of the present case that an amount reduced by 33% was sufficient to ensure the desired deterrent effect (paragraphs 558 and 559 of the Decision).
337 Consequently, the plea in law alleging a failure to take account of the deterrent effect of the fines imposed on SGL cannot be upheld, even in light of the Court-™s unlimited jurisdiction.
4. The pleas alleging an infringement of the Leniency Notice (Case T-71/03 and Case T-91/03)
338 Tokai and SGL submit that the Commission accorded them insufficient reductions in fines under sections C and D of the Leniency Notice.
339 Section C of the Leniency Notice, headed -˜Substantial Reduction in a Fine-™, provides as follows:
-˜Enterprises which both satisfy the conditions set out in section B, points (b) to (e) and disclose the secret cartel after the Commission has undertaken an investigation ordered by decision on the premises of the parties to the cartel which has failed to provide sufficient grounds for initiating the procedure leading to a decision, will benefit from a reduction of 50 to 75% of the fine.-™
340 The conditions set out in section B, to which section C refers, are where the undertaking in question:
-˜(a) informs the Commission about a secret cartel before the Commission has undertaken an investigation, ordered by decision, of the enterprises involved, provided that it does not already have sufficient information to establish the existence of the alleged cartel;
(b) is the first to adduce decisive evidence of the cartel-™s existence;
(c) puts an end to its involvement in the illegal activity no later than the time at which it discloses the cartel;
(d) provides the Commission with all relevant information and all the documents and evidence available to it regarding the cartel and maintains continuous and complete cooperation throughout the investigation;
(e) has not compelled another enterprise to take part in the cartel and has not acted as an instigator or played a determining role in the illegal activity-™.
341 Under paragraph 1 of section D, -˜[w]here an enterprise 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-™ and, under paragraph 2 of that section, -˜[s]uch cases may include the following:
- before a statement of objections is sent, an enterprise 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 enterprise informs the Commission that it does not substantially contest the facts on which the Commission bases its allegations-™.
a) Summary of the Decision
342 In paragraphs 521 to 526 of the Decision, the Commission acknowledged that UCAR was the first undertaking to provide conclusive proof of the existence of an international cartel in the isostatic and extruded specialty graphite sectors in the EEA and that in respect of the two infringements it satisfied the criteria under section B of the Leniency Notice. The Commission therefore accorded UCAR a 100% reduction of the fine that would have been imposed had there been no cooperation. However, it considered that none of the other undertakings satisfied the conditions set out in section C of that notice.
343 As for section D of the Leniency Notice, the Commission stated in paragraphs 527 to 543 of the Decision that Tokai, TT, SGL, LCL, Ibiden and NSC/NSCC had disclosed information and documents which significantly contributed to establishing the existence of the infringements since none of those undertakings challenged the accuracy of the facts on which the Commission based its statement of objections. Furthermore, it was impossible to distinguish between the value added by those statements to the investigation into the isostatic graphite market, because they all provided a similar quantity of evidence. Moreover, none of those submissions on its own was essential for the Commission to keep the substance of its objections since they overlapped each other as to the evidence adduced.
344 The Commission therefore came to the conclusion that Tokai, TT, SGL, LCL, Ibiden and NSC/NSCC satisfied the conditions in the first and second indents of paragraph 2 of section D of the Leniency Notice and granted those undertakings a reduction of 35% of the fine which they would have received had they not cooperated with the Commission.
b) Arguments of the parties
345 According to Tokai, the Commission misapplied the Leniency Notice by refusing to reduce its fine under section C of the Notice. Tokai was the first of the undertakings to submit decisive evidence in respect of the period when UCAR did not participate in the infringement (1993 to 1996, 1997 and 1998). As it satisfied all the other conditions required under section C of the Leniency Notice, it should receive a reduction of at least 50 to 75% in its fine.
346 According to the Commission-™s own findings, UCAR did not participate in the cartel from July 1993 to February 1996 and from May 1997 to February 1998. UCAR could not therefore adduce decisive evidence of the cartel-™s existence for the periods during which it was not a member. Consequently, it could not benefit from leniency for these periods.
347 For Tokai, it is perfectly possible that two undertakings may be -˜the first-™ to adduce decisive evidence regarding different periods of the cartel and that both of them fulfil the conditions of section B or C of the Leniency Notice. That is especially so where the undertaking which discloses the cartel, like UCAR, has no information regarding a period of the cartel during which it did not participate. Moreover, UCAR provided only limited information regarding three European meetings between February 1996 and May 1997, although the Commission identified 10 of them in the Decision. UCAR did not refer to any of the -˜top level-™ and -˜international working level-™ meetings.
348 Lastly, Tokai-™s cooperation was more valuable than that of the other members of the cartel.
349 SGL complains that the Commission infringed the principle of equal treatment by not reducing its fine in the same way as that for UCAR. The 35% reduction accorded to SGL took only very limited account of the applicant-™s cooperation. If the Commission had paid attention to all the applicant-™s contributions, it ought to have allowed it a much larger reduction within the highest range of category C of the Leniency Notice, namely 50 to 75%.
350 SGL informed the Commission of the facts in question at the same time as did TT, Tokai, LCL, Intech and Ibiden. In particular, the Commission disregarded the fact that the applicant was the only undertaking to provide evidence of UCAR-™s involvement from 1993 in the infringements relating to isographite. As UCAR did not inform the Commission of its early participation in the cartel, its statement in the context of its cooperation with the Commission is incomplete, so that UCAR should not receive any reduction in its fine for cooperation. The more favourable, and illegal, treatment of UCAR has a direct effect on the applicant-™s rights.
351 SGL adds that it was the only company to give information concerning Conradty-™s participation in the cartel in the extruded graphite industry. However, the Commission did not take that evidence into account.
352 The Commission states that for each cartel there can only be one beneficiary of section C of the Leniency Notice, namely the undertaking which was -˜the first-™ to adduce decisive evidence of the cartel-™s existence.
353 In the present case, the Commission found that the isostatic graphite cartel constituted -˜a single continuing infringement-™, and that UCAR was the first undertaking to submit decisive evidence of the existence of that cartel in its letter of 13 April 1999. Tokai-™s claim that it was the first to submit evidence is based on an unsupported assertion.
354 Furthermore, Tokai-™s interpretation could easily lead to abuse. The members of a cartel could split up information to be passed to the Commission, so that each one could provide information on a specific period.
355 As for the complaints raised by SGL, the Commission replies that there is no reason to think that UCAR did not provide all the information available in relation to the two cartels concerning isostatic graphite and extruded graphite. There is no doubt that UCAR was the first company to supply - on 13 April 1999, that is to say, more than one year before the first contacts between SGL and the Commission - decisive information on the two cartels.
356 Regarding the alleged misinterpretation of evidence provided by the applicant, the Commission observes that the applicant gave no concrete information concerning UCAR-™s alleged participation in the cartels before 1996. The applicant-™s letter of 15 June 2000 did not give a specific period and even claims that UCAR did not attend European working meetings until -˜subsequently, at the earliest in late 1994/95-™ (paragraph 4 of Annex A11 to the application), although in its reply to the statement of objections it claims that such participation in the bilateral contacts with the applicant took place -˜from 1993-™.
357 In summary, the Commission observes that it was difficult, in this case, to decide which contribution by the different undertakings had the greatest value, given that all the contributions (except that of UCAR) were in response to the same request for information and provided evidence of similar quality. For this reason, the same 35% reduction, in accordance with the 10 to 50% range laid down in section D of the Leniency Notice, was granted to all the undertakings qualifying under section D of the Leniency Notice. It was the combination of all the contributions which was decisive, not each contribution considered separately.
c) Findings of the Court
358 In its Leniency Notice, the Commission set out the conditions under which undertakings cooperating with it during its investigation into a cartel may be exempted from fines or may be granted reductions in the fine which would otherwise have been imposed upon them (section A3 of the Leniency Notice).
359 Since Tokai and SGL both submit that the Commission wrongly refused to grant the reduction referred to in section C of the Leniency Notice, it is necessary to verify whether the Commission misinterpreted the conditions for the application of that section and, in particular, whether either or both of the two applicants should have been regarded as -˜the first to adduce decisive evidence of the cartel-™s existence-™.
360 It should first of all be held in that context that it is common ground between the parties that UCAR was the first undertaking to have provided the Commission with evidence of the two cartels concerning the periods of February 1996 to May 1997 and February 1993 to November 1996 during which, according to the Commission, they committed the infringements.
361 As Tokai has asserted that the information supplied by UCAR did not cover every meeting organised by the cartel on isostatic graphite, it is necessary to go on to consider whether the Commission was entitled to find that UCAR had provided it with -˜decisive evidence-™ of the cartel-™s existence.
362 It is clear from the express wording of section B(b) that the -˜first-™ undertaking does not have to have provided all the evidence demonstrating every detail of the operation of the cartel, provided that it adduces -˜some-™ decisive evidence. In particular, that section - as shown by a comparison with section B(a) - does not require that the evidence adduced is sufficient in itself in order to draw up the statement of objections, or for the adoption of a final decision establishing the existence of an infringement. In any event, it must be noted that the Commission enjoys a margin of discretion in assessing whether the cooperation in question was -˜decisive-™ in enabling it to perform its duty of establishing the existence of an infringement and bringing it to an end (Graphite electrodes, paragraph 435) and can be censured only where that discretion is manifestly exceeded.
363 In the present case, Tokai does not seriously challenge the decisive nature of the evidence adduced by UCAR. In particular, it does not challenge the Commission-™s findings that the evidence adduced by UCAR on 13 April 1999 enabled it to establish the existence, content and participants of several cartel meetings in both the isostatic and extruded specialty graphite markets during the periods under investigation (paragraph 521 of the Decision). Neither does Tokai challenge the Commission-™s description of the infringements on the specialty graphite markets as -˜a single continuing infringement of Article 81(1) [EC] and Article 53(1) of the EEA Agreement-™ (paragraph 346 of the Decision).
364 In those circumstances, Tokai has not adequately established that the evidence that UCAR was the first to adduce to the Commission was clearly not -˜decisive evidence of the cartel-™s existence-™. Accordingly, the Commission was entitled to find that UCAR alone was the -˜first-™ undertaking for the purposes of sections B and C of the Leniency Notice.
365 Consequently, it does not matter that certain periods in the life of that cartel - such as those in which UCAR did not commit the infringements - were not mentioned in UCAR-™s evidence. In any event, the Commission was under no obligation to treat Tokai, alongside UCAR, as the second -˜first-™ undertaking in respect of any evidence relating to those periods. It was entitled to adhere to the wording of section B(b) and section C which provide for a very substantial or substantial reduction in the fine only for the undertaking which was genuinely the -˜first-™ to adduce decisive evidence.
366 Consequently, as UCAR was the only undertaking to satisfy section B(b) of the Leniency Notice, Tokai was not entitled to a reduction in the fine under section C.
367 The same necessarily applies in respect of SGL, all the more so since SGL, as ringleader of the isostatic graphite cartel, did not satisfy the conditions under section B(e) of the Leniency Notice, which also precluded it from qualifying under section C.
368 In so far as SGL asserts that it was the first to adduce evidence enabling the Commission to find UCAR liable for a further period (1993 to 1995) and to establish Conradty-™s participation in the extruded graphite cartel, it suffices to note that, as is clear from the Decision (paragraphs 3, 119, 364 and Article 1 of the Decision), the Commission did not rely on any of that evidence either to find or punish an infringement of Community competition law, or to increase, because of a longer duration, the fine imposed for that infringement. The Commission was therefore under no obligation to reward the cooperation invoked by SGL in that regard by a substantial reduction in the fine, since that cooperation did not enable it to perform its duty of establishing the existence of an infringement and bringing it to an end (see paragraph 362 above).
369 In any event, no provision of Regulation No 17 requires the Commission - which does not have exclusive jurisdiction in the matter - to find and sanction all anti-competitive conduct. As is plain from Articles 3 and 15 of that regulation, it only has the power to act in that way (-˜may-™) where it considers that the infringement in question so justifies.
370 Furthermore, if the Court were to find, in the present dispute - if only for the purposes of reducing the fine - that the Commission, in the light of the evidence available to it, should have found that there was an infringement during a particular period by a particular undertaking, it would assume for itself the powers of that administrative authority and would come to a decision outside the procedure laid down for that purpose, that is, without a statement of objections and without giving the undertakings concerned, namely Conradty and UCAR, which are not parties to the present action, an opportunity to be heard.
371 To the extent that each of the two undertakings further submits that its cooperation was of greater value than that of the other members of the cartel, while it is settled case-law that, in assessing the cooperation provided by the members of a cartel, the Commission cannot ignore the principle of equal treatment (see Graphite electrodes, paragraph 394, and the case-law cited), the Commission nevertheless has a wide discretion in assessing the quality and usefulness of the cooperation provided by the various members of a cartel, and only a manifest abuse of that discretion can be censured.
372 In the present case, since the file does not reveal any such abuse, the Commission was not obliged to consider as decisive the fact that one of the undertakings may have been somewhat faster in coming forward than the other undertakings or that the cooperation by one differed to some extent from that of the others. Rather it was justified in finding that the contributions of the different undertakings were all submitted shortly after the formal request for information and with little time difference, that they provided evidence of similar quality and that they substantially overlapped (paragraph 538 of the Decision). On the basis of those findings, the Commission was entitled to reduce the fine imposed on Tokai and SGL by 35%.
373 Lastly, SGL-™s argument that by concealing its early involvement in the cartel UCAR should lose any right to a reduction of the fine is not intended to increase the value of its own cooperation, but merely to devalue the cooperation of another undertaking and to criticise the allegedly unduly favourable, and therefore unlawful, treatment of the latter. That argument cannot therefore secure a greater reduction in SGL-™s fine (see Graphite electrodes, paragraph 398), which is why that argument cannot be upheld. A person may not rely in support of his claim on an unlawful act committed in favour of a third party (see Graphite electrodes, paragraph 316, and LR AF 1998 v Commission, paragraph 139 above, paragraph 367).
374 It follows that all the pleas alleging an infringement of the Leniency Notice must be rejected, even in the light of the Court-™s unlimited jurisdiction.
375 It should however be noted that the basic amount set for SGL on the basis of its involvement in the cartel in the isostatic graphite sector is, after correction, taking account of aggravating circumstances, EUR 22.14 million (see paragraph 331 above). The amount after the reduction of 35% in respect of SGL-™s cooperation is therefore EUR 14.391 million.
5. The alleged failure to observe the upper limit of the fines
a) Case T-91/03
376 SGL claims that the Commission artificially divided a single whole, namely the graphite electrodes and the specialty graphite cartel, in order to impose separate penalties. In doing so it exceeded the ceiling of 10% laid down by Article 15(2) of Regulation No 17. In SGL-™s case that ceiling had already been exhausted by the penalties imposed on it in the United States (USD 135 million) and by the Commission (EUR 80.2 million) for its involvement in the cartel in the graphite electrodes market. SGL adds that the Commission intentionally delayed its investigations in the specialty graphite sector - after exhausting the abovementioned ceiling in 2001 - in order once again to obtain a legal basis for fining the applicant.
377 It suffices to note in this respect that SGL-™s allegations of an infringement of the principle of the non-cumulation of penalties and of the Commission-™s obligation to have regard to penalties previously imposed have been rejected (see paragraphs 112 to 128 above). The Commission was therefore entitled to draw a distinction, for the purposes of the procedures and the penalties, between the cartels in the graphite electrode, isostatic graphite and extruded graphite markets. In particular, it was not required to take account of the penalties imposed by the US authorities. It is clear from Article 15 of Regulation No 17 that the ceiling of 10% only applies to fines imposed for infringement of Articles 81 EC and 82 EC and that it applies to each separate infringement of those articles.
378 In any event, the three cumulative fines that the Commission imposed on SGL (EUR 107.95 million) do not exceed the 10% ceiling, regardless of whether this is based on the overall turnover for 2000 (EUR 1 262 million) or 2001 (EUR 1 233 million). In those circumstances, the allegation of deliberate delay by the Commission in its investigation is irrelevant. Even if the Commission had adopted its final decision in respect of the cartel on the specialty graphite market at the same time as that in respect of the graphite electrodes market (i.e., in 2001), it still would not have exceeded the 10% ceiling.
379 It follows that the plea in law that in SGL-™s case the upper limit of fines was not observed must be rejected.
b) Case T-74/03 and Case T-87/03
Arguments of the parties
380 Intech claims that the fine imposed jointly on Intech EDM BV and its former subsidiary Intech EDM AG (EUR 980 000) is in breach of the principle of proportionality and the Guidelines because it exceeds the upper limit of 10% of the total turnover of Intech EDM AG and cannot therefore be upheld in relation to Intech EDM BV. In the last financial year preceding the adoption of the Decision, namely 2001, the total turnover of Intech EDM AG was EUR 4.2 million and that of Intech EUR 11.3 million. This means that the fine represents more than 23% of the total turnover of Intech EDM AG and almost 9% of that of Intech EDM BV. However, pursuant to Article 15(2) of Regulation No 17, as clarified by section 5(a) of the Guidelines, the final amount of a fine may not in any case exceed 10% of the worldwide turnover of the undertakings.
381 Nor is the failure to observe the upper limit in the case of Intech EDM AG justified by the argument that this company is not solely liable for the fine, but is jointly and severally liable with Intech EDM BV. Under Article 15(2) of Regulation No 17, the 10% maximum is calculated by reference to the turnover of -˜each of the undertakings that participated in the infringement-™ (Case T-29/92 SPO and Others v Commission [1995] ECR II-289, paragraph 385). In the case of joint and several liability, the 10% limit must be calculated on the basis of the undertaking with the smallest turnover. Intech adds that the fine cannot be maintained in relation to Intech EDM BV because it is a single fine in a single decision which is solely addressed to two addressees.
382 The Commission replies that the competition rules apply to undertakings, which may consist of more than one legal person. That is the case where such legal persons constitute an economic entity. The companies belonging to such an entity are jointly and severally liable for the conduct which is the subject of complaint (HFB and Others v Commission, paragraph 62 above, paragraphs 54, 524 and 525).
383 In the present case, Intech EDM BV and its former subsidiary Intech EDM AG constituted an economic entity (paragraphs 66, 67, 412 to 415 and 421 of the Decision). The latter was wholly owned by the former, which controlled it and was aware of its unlawful conduct. In addition, Intech EDM AG operated on the basis of the cooperation agreement between Intech EDM BV and Ibiden, signed by Mr Ankli, who also attended the European meetings of the cartel on behalf of Intech EDM AG.
384 The Commission observes that, according to settled case-'law, an undertaking within the meaning of Article 81 EC may consist of several persons (Hydrotherm, paragraph 54 above, paragraph 11) and the responsibility of a parent company for the conduct of its subsidiary is based on the concept of undertaking as an economic entity and not on any kind of separate legal concept of -˜attribution-™. An undertaking is in breach of Article 81 when it takes part in a cartel restricting competition. The same -˜undertaking-™ could logically be punished by a fine under Article 15(2)(a) of Regulation No 17. On the other hand, none of these provisions enables an -˜undertaking-™ to be held responsible for an infringement by another -˜undertaking-™ by virtue of mere -˜attribution-™.
385 Consequently, it is also logical to calculate the ceiling laid down by Article 15(2) of Regulation No 17 in the same way for one and the same undertaking. Only the total aggregate turnover of all the companies belonging to a group presenting itself as an economic entity reflects the size and economic strength of that entity and therefore of the undertaking in question (HFB and Others v Commission, paragraph 62 above, paragraphs 54, 528 and 529).
386 The Commission adds that in the present case it fined the undertaking in its composition as it existed at the time of the infringement (see, to that effect, Case C-'279/98 P Cascades v Commission [2000] ECR I-9693, paragraphs 78 to 80). Only the historic components of the -˜undertaking-™ which committed the offence are the addressees of the Decision. It is therefore also logical that, having regard to those components, the Commission calculated the maximum fine referred to by Article 15(2) of Regulation No 17 as an overall amount.
Findings of the Court
387 It should be recalled, first, that the Commission was entitled to treat the two Intech companies as a single -˜undertaking-™ which committed the infringement alleged against them (paragraphs 58 to 82 above). Second, those companies, which carried on their business activities until the adoption of the Decision, could be jointly and severally penalised for their unlawful behaviour (see, to that effect, Cascades v Commission, paragraph 386 above, paragraphs 78 and 79).
388 As for the application of the 10% ceiling in the present case, section 5(a) of the Guidelines, with which the Commission must comply (see paragraph 157 above), states that the final amount calculated as laid down by Article 15(2) of Regulation No 17 may not -˜in any case-™ exceed 10% of the worldwide turnover. Furthermore, the Commission has not submitted before the Court that the 10% ceiling did not apply to the fine under EUR 1 million imposed on Intech. That ceiling must not therefore be exceeded in the present case.
389 Under Article 15(2) of Regulation No 17, the 10% refers to the financial year preceding the date of the decision imposing the fine. It refers to the total turnover of the undertaking concerned, -˜which alone gives an indication of that undertaking-™s size and influence on the market-™ (Graphite electrodes, paragraphs 365 and 367). Thus the ceiling aims inter alia to protect undertakings against excessive fines which could destroy them commercially. It is therefore logical that the ceiling refers not to the period of the infringements penalised, which may precede the date of the fine by several years, but to a period closer to that date.
390 It follows that the objective sought by the introduction of the 10% ceiling can be realised only if that ceiling is applied initially to each separate addressee of the decision imposing the fine. It is only if it subsequently transpires that several addressees constitute the -˜undertaking-™, that is the economic entity responsible for the infringement penalised, again at the date when the decision is adopted, that the ceiling can be calculated on the basis of the overall turnover of that undertaking, that is to say of all its constituent parts taken together. By contrast, if that economic unit has subsequently broken up, each addressee of the decision is entitled to have the ceiling in question applied individually to it.
391 In the present case, it is not in dispute that, when the Decision was adopted, Intech EDM BV was no longer the parent company of Intech EDM AG and - as Intech-™s reply to the statement of objections makes clear - had not been since 1997. It is true that the two Intech companies have, since 1997, belonged to the same Swiss holding company which describes itself as the -˜grandparent-™ company of the two Intech companies, which belong to two separate parent companies (paragraph 66 of the Decision and footnote 40 thereto). However, the Decision does not state how far the term -˜undertaking-™ can be applied, as regards the holding of shares and the power to give orders, within that holding company and in particular in light of the connection between the two Intech companies.
392 Consequently, since Intech EDM AG-™s overall turnover in 2001 was EUR 4.2 million (see column 2 of Table 1, paragraph 168 above), the Decision must be annulled in so far as it imposes on Intech EDM AG a fine exceeding the ceiling of EUR 420 000 and the joint and several liability of the two Intech companies exceeds that ceiling.
393 By contrast, there is nothing to preclude the Decision from imposing on Intech EDM BV alone, whose overall turnover in 2001 was EUR 11.3 million (see column 2 of Table 1, paragraph 168 above), a fine up to the ceiling of EUR 1.13 million. Since there is no basis for concluding that that company and its former subsidiary constituted a single -˜undertaking-™ when the Decision was adopted, there is no rule of Community law which requires that, in the case of Intech EDM BV, the 10% ceiling be calculated on the basis of the lower turnover of Intech EDM AG. The plea in law in respect of the calculation in the case of Intech EDM BV must therefore be rejected.
6. The pleas in law alleging an infringement of the principles of proportionality and equal treatment in setting the amount of some fines and a failure to state reasons in that regard (Case T-74/03 and Case T-87/03)
394 Intech complains that the Commission, first, infringed the principle of equal treatment by fining Intech alone and none of the other distributors present at cartel meetings and, secondly, by fining it much more, in relation to Intech-™s size and economic strength, than the producer members of the cartel. Furthermore, the Commission discriminated against it in relation to Conradty by not fining the latter for its participation in the specialty extruded graphite cartel.
395 It suffices to point out, in order to reject those complaints, that, as stated above (see paragraphs 58 to 82 above), the Commission was entitled to treat Intech EDM AG and Intech EDM BV as a single undertaking which committed the infringement alleged against them in the Decision.
396 As for the Commission-™s failure to penalise the other distributors and Conradty, it should be noted that in the present dispute the applicants cannot compel the Commission or the Court to declare that the other undertakings should have been fined for an infringement of competition law (see paragraphs 369 and 370 above).
397 It should be added that, according to settled case-law, even if the situation of another economic operator to which the decision was not addressed were comparable to that of Intech, that could not constitute a ground for setting aside the finding of an infringement by Intech, provided that that infringement was properly established; Intech cannot therefore escape a penalty on the ground that no fine was imposed on other economic operators, their circumstances not even being the subject of proceedings before the Court (see, to that effect, Graphite electrodes, paragraph 283).
398 As for the comparisons drawn by Intech between the fines on the one hand and the overall turnover on the other, it suffices to note that the Commission applied the specific method chosen in the Guidelines in order to produce a deterrent effect. That method - which specifically does not refer to overall turnover alone, but takes account of the extent of the involvement of each individual undertaking in the infringement by considering the circumstances, nature and gravity of that infringement - has been found to be lawful by the Community Courts (see paragraphs 160 and 161 above).
399 Since the final amount of the fines imposed on the Intech companies was calculated in accordance with the methodology laid down in the Guidelines and since the 10% ceiling laid down in Article 15(2) of Regulation No 17 was not exceeded (see paragraphs 392 and 393 above), the Commission was not required to ensure that the final amount of the fines for the Intech companies was exactly proportional to their respective turnovers or to that of the other undertakings involved (see, to that effect, LR AF 1998 v Commission, paragraph 139 above, paragraph 278, and Joined Cases T-5/00 and T-6/00 Nederlandse Federatieve Vereniging voor de Groothandel op Elektrotechnisch Gebied and Technische Unie v Commission [2003] ECR II-0000, paragraphs 431 and 432).
400 Intech further submits that, under Article 15(2) of Regulation No 17 the Commission should have applied the system of -˜unit fines-™. This system aims to ensure that -˜in otherwise similar circumstances, the rich and the poor suffer a degree of financial loss that affects them equally-™. The weight of punishment from the fine does not depend on its final amount, but on the relationship between it and the perpetrator-™s situation.
401 It suffices to note in that regard that, in the present case, the Commission was entitled to apply the method of calculation set out in its Guidelines (see paragraphs 160 and 161 above) and in its Leniency Notice. The fact that it did not adopt the method suggested by Intech does not therefore vitiate the fines imposed on the Intech companies (see, to that effect, mutatis mutandis, Graphite electrodes, paragraph 194).
402 The plea in law alleging a failure to state reasons also cannot be upheld. The Decision sets out all the relevant evidence which enabled the Intech companies to understand how their fine was calculated on the basis of the gravity and duration of the infringement (see, to that effect, Cascades v Commission, paragraph 386 above, paragraphs 38 to 47): paragraphs 437 and 458 to 460 list the criteria applied in calculating the fine as regards the gravity of the infringement, paragraphs 438 to 457 apply those criteria to the facts of the present case and paragraphs 490 to 518 explain why Intech obtained a 40% reduction of the fine by reason of its subordination to Ibiden. Lastly, paragraph 410 states why the Commission did not penalise distributors other than Intech.
403 It follows that Intech-™s pleas in law alleging an infringement of the principles of proportionality and equal treatment and a failure to state reasons must also be rejected.
7. The increase in the fine imposed on SGL (Case T-91/03)
404 At the hearing the Commission stated that if the Court significantly reduced the starting amount imposed on SGL, the 33% reduction in the fine allowed to that applicant (paragraphs 556 to 559 of the Decision) would be unjustified.
405 In so far as that statement is to be interpreted as an application for an increase in the fine imposed on SGL, it cannot be upheld. The reduction in question was granted because the Commission - given SGL-™s very unfavourable financial situation and the recent imposition of another fine of EUR 80.2 million - did not consider that in order to ensure effective deterrence it was necessary to impose the full amount of the fine, particularly as SGL had not reoffended in committing the infringement (paragraph 558 of the Decision).
406 In the exercise of its unlimited jurisdiction, the Court finds that those factors remain valid even after the adjustments which have been made to the starting amount of the fine imposed on SGL. The infringement which SGL is found to have committed remains the same and the adjustments in question merely reflect the lesser real impact of its offence. Consequently, the need to ensure effective deterrence cannot be regarded as more pressing simply by reason of those adjustments.
407 It should however be noted that, since the basic amount of the fine imposed on SGL in the light of its cooperation has been set at EUR 14.391 million (see paragraph 375 above), the final amount of the fine fixed on the basis of its participation in the cartel in the isostatic graphite sector is, following the 33% reduction, EUR 9 641 970.
C - Annulment of the interest rates fixed in the third paragraph of Article 3 of the Decision and the letter of 20 December 2002 (Case T-91/03)
408 SGL seeks the annulment of Article 3 of the Decision. It disputes the legality of the interest rate of 6.75% and complains that it was set without reference to a legal basis and without a reason being given for specifically choosing such a high rate. SGL observes that the Decision was sent to it by the Commission under cover of a letter of 20 December 2002 (paragraph 27 above), informing SGL that, after expiry of the period for payment, the Commission would recover the amount owed, charging interest at 6.75%, and that, if the matter were brought before the Court of First Instance, the Commission would waive recovery of the amount for the duration of the judicial proceedings, provided that SGL consented to interest being charged at the rate of 4.75%. SGL also disputes the legality of the latter rate.
409 SGL maintains that the right to charge default interest merely aims to avoid unfounded appeals and to ensure that undertakings which pay -˜late-™ are not favoured. Therefore, although the Commission can refer to the interest rates actually applied in practice, it is not justified to add a further 3.5 percentage points to such a market rate. In any case, the Commission should take into account later reductions in the refinancing rates of the European Central Bank, by virtue of the principle that the most favourable rate must be applied.
410 In its reply, SGL submits that the Commission itself recently proposed to pay interest on provisional payments of fines, at the rate of 2% for the time being. The rates fixed prior to the introduction of this practice of a security deposit account were necessarily too high, at least by that amount, because the Commission-™s new practice has not led to an upward adjustment in the general -˜calculation practice-™ for default interest. Therefore the Commission itself considers that there is no fear of manifestly unfounded actions by undertakings seeking to make savings on interest, even with interest rates 2% lower than those which were set. Consequently the rates fixed in the present case are too high, at least to that extent.
411 It should be noted in this connection that SGL had already raised similar pleas in law in the dispute giving rise to the judgment in Graphite electrodes. It suffices therefore to refer to paragraphs 475 to 477 of that judgment in order to reject SGL-™s pleas. The Commission-™s power under Article 15(2) of Regulation No 17 includes the power to set the date by which the fines are payable and on which interest for late payment begins to accrue, the rate of that interest and to determine the detailed arrangements for implementing its decision. The Commission is thus entitled to fix default interest at the market rate plus 3.5 percentage points and, where a banker-™s guarantee is given, at the market rate plus 1.5 percentage points, since the Court has accepted, in its case-law, interest for late payment at the rate of 7.5, 13.25 and 13.75%, holding that the Commission is entitled to adopt a point of reference higher than the market rate offered to the average borrower so far as may be necessary to deter unlawful conduct.
412 In those circumstances, in the present case the Commission did not exceed its discretion in setting the rate of default interest. SGL, as a prudent and informed economic operator, was deemed to be aware of the Commission-™s decision-making practice and the above case-law. It could not expect that the Commission would apply a more lenient interest rate in its case. In the present context - which is not referred to in Articles 242 EC and 256 EC or in Articles 104 to 110 of the Rules of Procedure - , the Commission was not required to take into consideration, inter alia, SGL-™s financial position.
413 To the extent that SGL referred in its reply to a practice of the Commission to pay interest at the rate of 2% on provisional payments made by the undertakings in satisfaction of their fines, that plea is out of time - SGL does not explain why it was not possible to raise it in its application - and must be rejected as inadmissible under Article 48(2) of the Rules of Procedure.
414 In any event, the interest rate applied by the Commission to fines which are subsequently found to have been unduly paid pursues an objective completely different from that of default interest: the former is intended to prevent the Community-™s unjust enrichment at the expense of an undertaking which wins an action to annul its fine, whereas the latter interest rate is intended to prevent improper delay in the payment of a fine.
415 It follows from the entirety of the foregoing that the actions in Cases T-'71/03 and T-74/03 must be rejected. In Cases T-87/03 and T-91/03 the fines for Intech EDM AG will be reduced to EUR 420 000 and the fine for SGL, in respect of its involvement in the cartel in the isostatic graphite sector, reduced to EUR 9 641 970.
Costs
416 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party-™s pleadings. The first subparagraph of Article 87(3) provides that the Court of First Instance may order that the costs be shared if each party succeeds on some and fails on other heads.
417 In Cases T-71/03 and T-74/03 the applicants have been unsuccessful. Consequently they will pay the costs in full.
418 In Cases T-87/03 and T-91/03, as the applicants have succeeded in a substantial number of their claims, it will be a fair reflection of the circumstances of the case if they bear two thirds of their own costs and pay two thirds of the costs incurred by the Commission, and the Commission bear one third of its own costs and pay one third of those incurred by Intech EDM AG and SGL.
On those grounds,
THE COURT OF FIRST INSTANCE (Second Chamber)
hereby:
1. In Case T-71/03 Tokai Carbon v Commission:
- dismisses the application;
- orders the applicant to pay the costs.
2. In Case T-74/03 Intech EDM BV v Commission:
- dismisses the application;
- orders the applicant to pay the costs.
3. In Case T-87/03 Intech EDM AG v Commission:
- sets the fine imposed on the applicant by Article 3 of Decision COMP/E-2/37.667 at EUR 420 000;
- amends Article 3(h) of Decision COMP/E-2/37.667 so that the joint and several liability of Intech EDM AG is limited to EUR 420 000;
- dismisses the remainder of the application;
- orders the applicant to bear two thirds of its own costs and to pay two thirds of the costs incurred by the Commission, and the Commission to bear one third of its own costs and to pay one third of the costs incurred by the applicant.
4. In Case T-91/03 SGL Carbon v Commission:
- sets the fine imposed on the applicant by Article 3 of Decision COMP/E-2/37.667 at EUR 9 641 970 in respect of the infringement committed in the isostatic graphite sector;
- dismisses the remainder of the application;
- orders the applicant to bear two thirds of its own costs and to pay two thirds of the costs incurred by the Commission, and the Commission to bear one third of its own costs and to pay one third of the costs incurred by the applicant.
|
Pirrung |
Meij |
Forwood |
Delivered in open court in Luxembourg on 15 June 2005.
|
H. Jung |
J. Pirrung |
|
Registrar |
President |
Table of contents
Background to the dispute
Procedure
Forms of order sought by the parties
Law
A - The applications for annulment in part of Article 1 of the Decision and of certain findings of fact therein
1. The pleas in law alleging, first, an error of law in finding that Intech committed an infringement in the isostatic graphite market and, second, a failure to state reasons in that regard (Cases T-74/03 and T-87/03)
a) Summary of the Decision
b) Arguments of the parties
c) Findings of the Court
2. The pleas in law alleging an error in the finding that the cartel in the isostatic graphite market for blocks and cut blocks was worldwide (Case T-71/03)
a) Summary of the Decision
b) Arguments of the parties
c) Findings of the Court
B - The pleas in law that the fines be annulled or their amount reduced
1. The pleas in law alleging an infringement of the principle of the non-cumulation of penalties and of the Commission-™s duty to take account of penalties previously imposed and a failure to state reasons in that regard (Case T-71/03 and Case T-91/03)
a) Summary of the Decision
b) Arguments of the parties
c) Findings of the Court
2. The pleas in law alleging an infringement of the rights of the defence (Case T-'91/03)
a) Arguments of the parties
b) Findings of the Court
3. The pleas in law alleging an infringement of the Guidelines, the unlawfulness of the Guidelines and a failure to state reasons in that regard
a) The legal framework within which the fines were imposed on the applicants and the applicability of the Guidelines (T-91/03)
b) Summary of the Decision
c) The starting amounts imposed in respect of the gravity of the infringements (Case T-71/03, Case T-74/03 and Case T-87/03 )
Arguments of the parties
Findings of the Court
d) The use of the specific figures used to divide the cartel members into categories and fix the corresponding starting amounts (Case T-71/03 and Case T-91/03)
Arguments of the parties
Findings of the Court
- The method applied to combine the relevant figures for the cartel in the isostatic graphite market
- The figures adopted in respect of SGL by which it was placed in the highest category of members of the cartel in the isostatic graphite sector
- The method of combining the relevant figures for the cartel in the extruded graphite sector and the figures in fact adopted
e) The basic amount set for SGL on the basis of the duration of the infringements (Case T-91/03)
f) Attenuating circumstances (Case T-74/03 and Case T-87/03 )
Summary of the Decision
Arguments of the parties
Findings of the Court
g) The aggravating circumstances (Case T-91/03 )
Summary of the Decision
Arguments of the parties
Findings of the Court
h) The alleged failure to take account of SGL-™s inability to pay within the meaning of section 5 of the Guidelines (Case T-91/03)
i) The allegedly disproportionate amount of the fine imposed on SGL on the basis that there was no need for a deterrent effect in respect of that applicant (Case T-91/03)
4. The pleas alleging an infringement of the Leniency Notice (Case T-71/03 and Case T-91/03)
a) Summary of the Decision
b) Arguments of the parties
c) Findings of the Court
5. The alleged failure to observe the upper limit of the fines
a) Case T-91/03
b) Case T-74/03 and Case T-87/03
Arguments of the parties
Findings of the Court
6. The pleas in law alleging an infringement of the principles of proportionality and equal treatment in setting the amount of some fines and a failure to state reasons in that regard (Case T-74/03 and Case T-87/03)
7. The increase in the fine imposed on SGL (Case T-91/03)
C - Annulment of the interest rates fixed in the third paragraph of Article 3 of the Decision and the letter of 20 December 2002 (Case T-91/03)
Costs
* Languages of the case: German and English.