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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Shell Petroleum and Others v Commission (Competition) [2011] EUECJ T-38/07 (13 July 2011)
URL: http://www.bailii.org/eu/cases/EUECJ/2011/T3807_J.html
Cite as: [2011] EUECJ T-38/07, [2011] EUECJ T-38/7
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JUDGMENT OF THE GENERAL COURT (First Chamber)
13 July 2011 (*)
(Competition – Agreements, decisions and concerted practices – Market in butadiene rubber and emulsion styrene butadiene rubber – Decision finding an infringement of Article 81 EC – Imputability of the offending conduct – Fines – Gravity of the infringement – Aggravating circumstances)
In Case T-38/07,
Shell Petroleum NV, established in The Hague (Netherlands),
Shell Nederland BV, established in The Hague,
Shell Nederland Chemie BV, established in Rotterdam (Netherlands),
represented initially by T. Snoep and J. Brockhoff, and subsequently by T. Snoep and S. Chamalaun, lawyers,
applicants,
v
European Commission, represented initially by M. Kellerbauer, V. Bottka and J. Samnadda, and subsequently by M. Kellerbauer and V. Bottka, acting as Agents,
defendant,
APPLICATION for annulment, so far as Shell Petroleum NV and Shell Nederland BV are concerned, of Commission Decision C(2006) 5700 final of 29 November 2006 relating to a proceeding under Article 81 [EC] and Article 53 of the EEA Agreement (Case COMP/F/38.638 – Butadiene Rubber and Emulsion Styrene Butadiene Rubber) or, in the alternative, annulment or reduction of the fine imposed on Shell Petroleum, Shell Nederland and Shell Nederland Chemie BV,
THE GENERAL COURT (First Chamber),
composed of F. Dehousse (Rapporteur), acting for the President, I. Wiszniewska-Białecka and N. Wahl, Judges,
Registrar: K. Pocheć, Administrator,
having regard to the written procedure and further to the hearing on 12 October 2009,
gives the following
Judgment
Background to the dispute
1 By Decision C(2006) 5700 final of 29 November 2006 (Case COMP/F/38.638 – Butadiene Rubber and Emulsion Styrene Butadiene Rubber; ‘the contested decision’), the Commission of the European Communities found that a number of undertakings had infringed Article 81(1) EC and Article 53 of the Agreement on the European Economic Area (EEA) by participating in a cartel on the market for those products.
2 The undertakings to which the contested decision is addressed are:
– Bayer AG, established in Leverkusen (Germany);
– The Dow Chemical Company, established in Midland, Michigan (United States) (‘Dow Chemical’);
– Dow Deutschland Inc., established in Schwalbach (Germany);
– Dow Deutschland Anlagengesellschaft mbH (formerly Dow Deutschland GmbH & Co. OHG), established in Schwalbach;
– Dow Europe, established in Horgen (Switzerland);
– Eni SpA, established in Rome (Italy);
– Polimeri Europa SpA, established in Brindisi (Italy) (‘Polimeri’);
– Shell Petroleum NV, established in The Hague (Netherlands);
– Shell Nederland BV, established in The Hague;
– Shell Nederland Chemie BV, established in Rotterdam (Netherlands);
– Unipetrol a.s., established in Prague (Czech Republic);
– Kaučuk a.s., established in Kralupy nad Vltavou (Czech Republic);
– Trade-Stomil sp. z o.o., established in Łódź (Poland) (‘Stomil’).
3 Dow Deutschland, Dow Deutschland Anlagengesellschaft and Dow Europe are wholly controlled, directly or indirectly, by Dow Chemical (collectively ‘Dow’) (recitals 16 to 21 to the contested decision).
4 Eni’s business in the relevant products was initially carried out by EniChem Elastomeri Srl, indirectly controlled by Eni through its subsidiary EniChem SpA (‘EniChem SpA’). On 1 November 1997, EniChem Elastomeri was merged into EniChem SpA. Eni controlled 99.97% of EniChem SpA. On 1 January 2002, EniChem SpA transferred its strategic chemical business (including its butadiene rubber and emulsion styrene butadiene rubber business) to its wholly-owned subsidiary Polimeri. Eni has had direct and full control of Polimeri since 21 October 2002. With effect from 1 May 2003, EniChem SpA changed its name to Syndial SpA (recitals 26 to 32 to the contested decision). The Commission uses the name ‘EniChem’ in the contested decision to refer to any company owned by Eni (‘EniChem’) (recital 36 to the contested decision).
5 Shell Nederland Chemie is a subsidiary of Shell Nederland, which is itself wholly controlled by Shell Petroleum (recitals 38 to 40 to the contested decision).
6 Kaučuk was created in 1997, following a merger between Kaučuk Group a.s. and Chemopetrol Group a.s. On 21 July 1997, Unipetrol acquired all assets, rights and obligations of the merged undertakings. Unipetrol owns 100% of the shares in Kaučuk (recitals 45 and 46 to the contested decision). Furthermore, according to the contested decision, Tavorex s.r.o. (‘Tavorex’), established in the Czech Republic, represented Kaučuk (and its predecessor Kaučuk Group) for exports between 1991 and 28 February 2003. Still according to the contested decision, from 1996 Tavorex represented Kaučuk at meetings of the European Synthetic Rubber Association (recital 49 to the contested decision).
7 Stomil, according to the contested decision, represented the Polish producer Chemical Company Dwory SA (‘Dwory’) in its export business for around 30 years, until at least 2001. Still according to the contested decision, between 1997 and 2000 Stomil represented Dwory at meetings of the European Synthetic Rubber Association (recital 51 to the contested decision).
8 The period taken to be the duration of the infringement is from 20 May 1996 to 28 November 2002 (for Bayer, Eni and Polimeri), from 20 May 1996 to 31 May 1999 (for Shell Petroleum, Shell Nederland and Shell Nederland Chemie), from 1 July 1996 to 28 November 2002 (for Dow Chemical), from 1 July 1996 to 27 November 2001 (for Dow Deutschland), from 16 November 1999 to 28 November 2002 (for Unipetrol and Kaučuk), from 16 November 1999 to 22 February 2000 (for Stomil), from 22 February 2001 to 28 February 2002 (for Dow Deutschland Anlagengesellschaft) and from 26 November 2001 to 28 November 2002 (for Dow Europe) (recitals 476 to 485 to and Article 1 of the operative part of the contested decision).
9 Butadiene rubber (‘BR’) and emulsion styrene butadiene rubber (‘ESBR’) are synthetic rubbers used essentially in tyre production. The two products are substitutable for each other and also for other synthetic rubbers and for natural rubber (recitals 3 to 6 to the contested decision).
10 In addition to the producers referred to in the contested decision, other producers located in Asia and in Eastern Europe sold limited quantities of BR and ESBR in the EEA. Moreover, a considerable amount of BR is produced directly by large tyre manufacturers (recital 54 to the contested decision).
11 On 20 December 2002 Bayer approached the Commission and expressed its desire to cooperate pursuant to the Commission notice on immunity from fines and reduction of fines in cartel cases (OJ 2002 C 45, p. 3; ‘the Leniency Notice’) with regard to BR and ESBR. As regards ESBR, Bayer provided an oral statement describing the activities of the cartel. That oral statement was recorded on tape (recital 67 to the contested decision).
12 On 14 January 2003 Bayer made an oral statement describing the activities of the cartel with respect to BR. That oral statement was recorded on tape. Bayer also provided minutes of meetings of the BR committee of the European Synthetic Rubber Association (recital 68 to the contested decision).
13 On 5 February 2003 the Commission notified Bayer of its decision to grant it conditional immunity from a fine (recital 69 to the contested decision).
14 On 27 March 2003 the Commission carried out an inspection pursuant to Article 14(3) of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition 1959-1962, p. 87) at the premises of Dow Deutschland & Co. (recital 70 to the contested decision).
15 Between September 2003 and July 2006 the Commission sent the undertakings to which the contested decision is addressed a number of requests for information pursuant to Article 11 of Regulation No 17 and Article 18 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 [EC] and 82 [EC] (OJ 2003 L 1, p. 1) (recital 71 to the contested decision).
16 On 16 October 2003 Dow Deutschland and Dow Deutschland & Co. met Commission staff and expressed their desire to cooperate pursuant to the Leniency Notice. At that meeting, an oral presentation of the cartel’s activities with respect to BR and ESBR was given. That oral presentation was recorded. A file containing documents relating to the cartel was also handed over (recital 72 to the contested decision).
17 On 4 March 2005 Dow Deutschland was informed of the Commission’s intention to grant it a reduction in its fine of between 30% and 50% (recital 73 to the contested decision).
18 On 7 June 2005 the Commission initiated the procedure and sent a first statement of objections to the undertakings to which the contested decision is addressed – with the exception of Unipetrol – and also to Dwory. The first statement of objections was also adopted against Tavorex but was not notified to that undertaking since it had been in liquidation since October 2004. The procedure against Tavorex was therefore closed (recitals 49 and 74 to the contested decision).
19 The undertakings concerned lodged written comments in relation to that first statement of objections (recital 75 to the contested decision). They also had access to the file, in the form of a CD-ROM, and to the oral statements and documents relating thereto at the Commission’s premises (recital 76 to the contested decision).
20 On 3 November 2005 Manufacture française des pneumatiques Michelin (‘Michelin’) requested to intervene. It submitted written comments on 13 January 2006 (recital 78 to the contested decision).
21 On 6 April 2006 the Commission adopted a second statement of objections addressed to the undertakings to which the contested decision is addressed. The undertakings concerned lodged written comments in that regard (recital 84 to the contested decision).
22 On 12 May 2006 Michelin lodged a complaint pursuant to Article 5 of Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 [EC] and 82 [EC] (OJ 2004 L 123, p. 18) (recital 85 to the contested decision).
23 On 22 June 2006 the undertakings to which the contested decision is addressed (with the exception of Stomil) and Michelin took part in the hearing before the Commission (recital 86 to the contested decision).
24 Since it did not have sufficient evidence of Dwory’s participation in the cartel, the Commission decided to close the procedure against that undertaking (recital 88 to the contested decision). The Commission also decided to close the procedure against Syndial (recital 89 to the contested decision).
25 Furthermore, although two different case numbers (one for BR and one for ESBR) had initially been used (COMP/E-1/38.637 and COMP/E-1/38.638), after the first statement of objections the Commission used a single number (COMP/F/38.638) (recitals 90 and 91 to the contested decision).
26 The administrative procedure led to the adoption of the contested decision by the Commission on 29 November 2006.
27 According to Article 1 of the operative part of the contested decision, the following undertakings had infringed Article 81 EC and Article 53 EEA by participating, for the periods indicated, in a single and continuous infringement by which they agreed on price targets, shared customers by non-aggression agreements and exchanged sensitive information on prices, competitors and customers in the BR and ESBR sectors:
(a) Bayer, from 20 May 1996 to 28 November 2002;
(b) Dow Chemical, from 1 July 1996 to 28 November 2002; Dow Deutschland, from 1 July 1996 to 27 November 2001; Dow Deutschland Anlagengesellschaft, from 22 February 2001 to 28 February 2002; Dow Europe, from 26 November 2001 to 28 November 2002;
(c) Eni, from 20 May 1996 to 28 November 2002; Polimeri, from 20 May 1996 to 28 November 2002;
(d) Shell Petroleum, from 20 May 1996 to 31 May 1999; Shell Nederland, from 20 May 1996 to 31 May 1999; Shell Nederland Chemie, from 20 May 1996 to 31 May 1999;
(e) Unipetrol, from 16 November 1999 to 28 November 2002; Kaučuk, from 16 November 1999 to 28 November 2002;
(f) Stomil, from 16 November 1999 to 22 February 2000.
28 On the basis of the findings of fact and legal assessments set out in the contested decision, the Commission imposed fines on the undertakings concerned calculated according to 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 in the Leniency Notice.
29 Article 2 of the operative part of the contested decision imposes the following fines:
(a) Bayer: EUR 0;
(b) Dow Chemical: EUR 64.575 million, of which:
(i) EUR 60.27 million jointly and severally with Dow Deutschland;
(ii) EUR 47.355 million jointly and severally with Dow Deutschland Anlagengesellschaft and Dow Europe;
(c) Eni and Polimeri, jointly and severally: EUR 272.25 million;
(d) Shell Petroleum, Shell Nederland and Shell Nederland Chemie, jointly and severally: EUR 160.875 million;
(e) Unipetrol and Kaučuk, jointly and severally: EUR 17.55 million;
(f) Stomil: EUR 3.8 million.
30 Article 3 of the operative part of the contested decision orders the undertakings listed in Article 1 immediately to bring to an end the infringements referred to in that article, in so far as they have not already done so, and to refrain from repeating any act or conduct described in Article 1 and from any act or conduct having the same or similar object or effect.
Procedure and forms of order sought by the parties
31 By application lodged at the Registry of the Court on 16 February 2007, Shell Petroleum, Shell Nederland and Shell Nederland Chemie (collectively ‘Shell’) brought the present action.
32 By decision of the President of the General Court of 2 April 2009, N. Wahl was designated to complete the Chamber as one of its members was prevented from attending.
33 Upon hearing the report of the Judge-Rapporteur, the Court (First Chamber) decided to open the oral procedure.
34 The parties presented oral argument and their answers to the questions put by the Court at the hearing on 12 October 2009.
35 Shell Petroleum claims that the Court should:
– principally, annul the contested decision in full, in so far as it is addressed to Shell Petroleum;
– in the alternative:
– annul Article 2(d) of the contested decision; or
– reduce the fine imposed on the ground that it is inappropriate;
– order the Commission to pay the costs.
36 Shell Nederland claims that the Court should:
– principally, annul the contested decision in full, in so far as it is addressed to Shell Nederland;
– in the alternative:
– annul Article 2(d) of the contested decision; or
– reduce the fine imposed on the ground that it is inappropriate;
– order the Commission to pay the costs.
37 Shell Nederland Chemie claims that the Court should:
– annul Article 2(d) of the contested decision or reduce the fine on the ground that it is inappropriate;
– order the Commission to pay the costs.
38 The Commission contends that the Court should:
– dismiss the action as unfounded;
– order the applicants to pay the costs.
Law
39 Shell relies on four pleas in law in support of its claims. By its first plea, Shell disputes the Commission’s imputation of the infringement to Shell Petroleum and Shell Nederland. By its second plea, Shell challenges the 50% increase of the basic amount of the fine imposed for repeated infringement. By its third plea, Shell submits that the Commission erred in the application of a multiplier for deterrence. By its fourth plea, Shell maintains that the Commission erred in setting the starting amount of the fine.
40 As a preliminary point, Shell observes that the Commission states in its written submissions that Shell does not contest any of the facts as set out in the contested decision, including its degree of involvement in the cartel. Likewise, the Commission states, by reference to the contested decision and to Bayer’s statements, that Shell played a prominent role in the discussions on fixing both BR and ESBR prices. Those assertions suggest that Shell acknowledges that it played a prominent role in the infringement. In fact, that is not the case, although Shell accepts that Shell Nederland Chemie infringed Article 81 EC. Shell disputed Bayer’s assertions during the administrative procedure. Furthermore, the Commission does not draw any legal consequences from Bayer’s assertions.
1. Claim for annulment in part of the contested decision
First plea in law: unlawful imputation of the infringement to Shell Petroleum and Shell Nederland
41 Shell submits that the Commission infringed Article 81 EC and Articles 7(1) and 23(2) of Regulation No 1/2003 by imputing the infringement to Shell Petroleum and Shell Nederland.
42 Shell’s first plea consists of three parts. In the context of the first part, Shell maintains that the Commission applied an incorrect standard for assessment of the liability of a parent company. In the context of the second part, Shell submits that, in any event, Shell Petroleum and Shell Nederland rebutted the presumption that they were liable. In the context of the third part, Shell draws the conclusions from the error made by the Commission.
First part: incorrect application of the conditions for the imputability of the infringement
– Arguments of the parties
43 Shell maintains that the imputation of liability for the infringement to Shell Nederland and Shell Petroleum ignores the fact that Shell Nederland Chemie (which participated directly in the infringement) has its own legal personality.
44 According to Case T-31/99 ABB Asea Brown Boveri v Commission [2002] ECR II-1881, paragraph 60, the Commission must answer two questions. The first question is which undertaking, within the meaning of Article 81 EC, committed the infringement; and the second is to which natural or legal person is the contested decision addressed and can the infringement be attributed. The concept of an economic unit is relevant to the first question, but not to the second. If the concept of undertaking were decisive for the attribution of liability, an infringement committed by a company belonging to a group would always automatically be attributed to the highest holding company within the group.
45 In Shell’s submission, the acts of a subsidiary can be attributed to the parent company only in ‘certain circumstances’ (Case 48/69 Imperial Chemical Industries v Commission [1972] ECR 619, paragraph 135). That means that the parent company must have effectively made use of its decisive influence on the subsidiary in regard to the subsidiary’s conduct (Imperial Chemical Industries v Commission, paragraph 137; Case 52/69 Geigy v Commission [1972] ECR 787, paragraph 45; and Case 6/72 Europemballage and Continental Can v Commission [1973] ECR 215, paragraph 16). The judgment in Case 107/82 AEG-Telefunken v Commission [1983] ECR 3151, paragraph 50, does not indicate a different approach in that regard. The Court held in that case that ‘certain circumstances’ had existed which made it possible to impute liability for the infringement to the parent company. Furthermore, in paragraph 29 of its judgment in Case C-286/98 P Stora Kopparbergs Bergslags v Commission [2000] ECR I-9925 (‘Stora’), the Court of Justice held that the Court of First Instance, now the General Court, could legitimately assume that the parent company had in fact exercised decisive influence over its subsidiary’s conduct, ‘particularly since’ it had found that during the administrative procedure the parent company had presented itself as being the Commission’s sole interlocutor. Shell concludes that in the absence of other evidence there is no presumption that a parent company exercises decisive influence over its subsidiary.
46 Shell maintains that an infringement committed by a wholly-owned subsidiary can be imputed to a parent company only where there are specific circumstances showing that the parent company actually exercised its influence on the conduct of the subsidiary. It is for the Commission to demonstrate that that is so and to present the relevant evidence. Shell further maintains that the judgment in Joined Cases T-109/02, T-118/02, T-122/02, T-125/02, T-126/02, T-128/02, T-129/02, T-132/02 and T-136/02 Bolloré and Others v Commission [2007] ECR II-947 confirms that the 100% shareholding in a subsidiary by the parent company does not automatically entail the reversal of the burden of proof but that the attribution to the parent company of the conduct of a wholly-owned subsidiary is justifiable only if certain circumstances prove that the parent company has effectively exercised decisive influence on the conduct of its subsidiary.
47 By imputing the infringement to Shell Petroleum and Shell Nederland on the sole basis of the presumption that, owing to their direct or indirect 100% shareholding in Shell Nederland Chemie, they exercised decisive influence over the latter’s conduct, without relying on factual matters that would establish that influence, the Commission infringed the principles established in the case-law of the Court of Justice and the General Court.
48 The Commission contends that the first part of the first plea should be rejected. It maintains, in essence, that where a parent company has a 100% shareholding in a subsidiary, there is a presumption that the parent company exerts decisive influence over the conduct of its subsidiary.
– Findings of the Court
49 The Commission states in the contested decision that a parent company may be regarded as liable for the unlawful conduct of a subsidiary where the subsidiary does not independently decide on its conduct on the market. The Commission refers in that regard, in particular, to the concept of an undertaking in competition law (recitals 333 and 334 to the contested decision). The Commission states, moreover, that it can 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. It is for the company or subsidiary to rebut this presumption by producing evidence that the subsidiary decided independently on its own conduct on the market rather than carrying out its parent company’s instructions with the result that they fall outside the definition of an undertaking (recital 335 to the contested decision).
50 The Commission goes on to find Shell Nederland Chemie liable for its direct participation in the infringement. It states that, during the period of the infringement, Shell Nederland Chemie was wholly-owned by Shell Nederland, itself wholly-owned by Shell Petroleum. It could therefore be presumed that the parent company exercised decisive influence over the conduct of its subsidiary. That presumption is strengthened, in the present case, by the links connecting those three companies. The Commission concludes that the contested decision must be addressed to Shell Nederland Chemie, Shell Nederland and Shell Petroleum, which must be held jointly and severally liable for the infringement (recitals 402 to 412 to the contested decision).
51 The first part of the first plea raised by Shell is based, in essence, on the legal premiss that there is no presumption that a parent company which has a 100% shareholding in its subsidiary exerts decisive influence over its conduct.
52 It must be observed, in that regard, that Community competition law refers to the activities of undertakings and that the concept of an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed. The Court of Justice has also stated that the concept of an undertaking, in that context, must be understood as designating an economic unit even if in law that economic unit consists of several persons, natural or legal. When such an economic entity infringes the competition rules, it falls, according to the principle of personal responsibility, to that entity to answer for that infringement. The infringement of Community competition law must be imputed unequivocally to a legal person on whom fines may be imposed and the statement of objections must be addressed to that person. It is also necessary that the statement of objections indicate in which capacity a legal person is called on to answer the allegations (see Case C-97/08 P Akzo Nobel and Others v Commission [2009] ECR I-8237, paragraphs 54 to 57 and the case-law cited).
53 Furthermore, it is clear from settled case-law that the conduct of a subsidiary may be imputed to the parent company in particular where, although having a separate legal personality, that subsidiary does not decide independently on its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links between those two legal entities. That is the case because, in such a situation, the parent company and its subsidiary form a single economic unit and therefore form a single undertaking for the purposes of the case-law previously mentioned. Thus, the fact that a parent company and its subsidiary constitute a single undertaking enables the Commission to address a decision imposing fines to the parent company, without having to establish the personal involvement of the parent company in the infringement (see Akzo Nobel and Others v Commission, cited in paragraph 52 above, paragraphs 58 and 59 and the case-law cited).
54 In the specific case where a parent company has a 100% shareholding in a subsidiary which has infringed the Community competition rules, the parent company can exercise a decisive influence over the conduct of the subsidiary and, moreover, there is a rebuttable presumption that the parent company does in fact exercise a decisive influence over the conduct of its subsidiary. In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to presume that the parent exercises a decisive influence over the commercial policy of the subsidiary. The Commission will be able to regard the parent company as jointly and severally liable for the payment of the fine imposed on its subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to show that its subsidiary acts independently on the market. While it is true that in paragraphs 28 and 29 of Stora, cited in paragraph 45 above, the Court of Justice referred not only to the fact that the parent company owned 100% of the capital of the subsidiary, but also to other circumstances, such as the fact that it was not disputed that the parent company exercised influence over the commercial policy of its subsidiary or that both companies were jointly represented during the administrative procedure, the fact remains that those circumstances were mentioned by the Court of Justice for the sole purpose of identifying all the elements on which the General Court had based its reasoning and not to make the application of the above presumption subject to the production of additional indicia relating to the actual exercise of influence by the parent company (see Akzo Nobel and Others v Commission, cited in paragraph 52 above, paragraphs 60 to 62 and the case-law cited).
55 It follows from this that, contrary to Shell’s contention, there is a rebuttable presumption that a parent company which has a 100% shareholding in its subsidiary exercises a decisive influence over the conduct of its subsidiary. Shell’s legal premiss is therefore incorrect.
56 In the light of those considerations, the first part of the first plea in law raised by Shell must be rejected as unfounded.
Second part: rebuttal of the presumption by Shell Petroleum and Shell Nederland
– Arguments of the parties
57 Even if the Court considers that the Commission was correct to impute the infringement to Shell Nederland and Shell Petroleum on the basis of the presumption the existence of which has been disputed under the first part of the present plea, Shell submits that that presumption has been rebutted. The judgment in AEG-Telefunken v Commission, cited in paragraph 45 above, confirms that the decisive criteria for imputing to a parent company liability for the unlawful conduct of a subsidiary are participation in the capital, instructions and awareness of the infringement.
58 Referring to the responses to the first and second statements of objections, which it has produced in an annex, Shell maintains that during the infringement period neither Shell Nederland nor Shell Petroleum did in fact exercise decisive influence over Shell Nederland Chemie’s conduct.
59 Shell Nederland is a sub-holding company which, at the time of the infringement, held shares in more than 20 subsidiaries. It was not materially capable of exercising decisive influence over the commercial operations of all those subsidiaries.
60 Shell Petroleum was, at the time of the infringement, one of the two main group holding companies, holding, directly or indirectly, 95% or more of the shares in more than 500 sub-holding companies. Shell submits, in that regard, a list of the 283 direct participations of Shell Petroleum as at 31 December 1996. The role of Shell Petroleum with regard to its subsidiaries was limited to determining financial targets, creating cost synergies between different activities and outlining a global and general strategy. Shell submits, in that regard, a reference guide to group organisational structure which states, inter alia, that ‘[t]he Group Holding Companies concern themselves primarily with the overall financing and exercise of shareholder rights’ and ‘receive dividends … but do not themselves engage in any operational activities’. No liability can therefore be imputed to the parent company when it merely determined the global, general strategy of the group, without exercising any decisive influence over the activities of the subsidiary present on the market on which the infringement was committed.
61 In Shell’s submission, at the time of the infringement the operating companies belonging to the chemicals business, including Shell Nederland Chemie, operated essentially independently, with support from the service companies of the chemicals business (in this instance Shell Chemicals Europe Ltd and Shell Chemicals Ltd). In that context, the roles of Shell Nederland and Shell Petroleum were very limited.
62 The limited role of Shell Nederland and Shell Petroleum with respect to Shell Nederland Chemie is also reflected in the minutes of the meetings of the boards of directors of those two companies that were held during the infringement period. Shell produced those minutes before the Court. The activities relating to BR and ESBR are mentioned briefly. Shell further maintains that those minutes are admissible as evidence before the Court, since they are adduced in order to support arguments already put forward during the administrative procedure. Furthermore, the fact that the question of the sale of the business relating to BR and ESBR was discussed by the board of Shell Nederland does not constitute evidence that that company – still less Shell Petroleum – had any involvement in the actual running of the undertakings concerned, in particular Shell Nederland Chemie.
63 Shell further submits that Case T-11/89 Shell v Commission [1992] ECR II-757, paragraph 312, to which the Commission refers in its written submissions, concerned Shell International Chemical Company Ltd, that is to say one of the service companies which supported the group operating companies and not, as in this case, purely a holding company which did not exercise any influence on the market conduct of the operating company involved in the infringement.
64 Last, the Commission’s file contains no evidence that, apart from the two employees of Shell Nederland Chemie involved in the infringement, any member of the staff of the Shell group, still less Shell Nederland and Shell Petroleum, was involved in the infringement or even aware of it. Had anyone within Shell Petroleum or Shell Nederland been aware of the infringement, they would have taken action immediately. Shell adds that it is undeniable that Shell Petroleum and Shell Nederland would have been able to exercise decisive influence on Shell Nederland Chemie in order to bring the infringement to an end had they been aware of it. However, that does not mean that they did in fact influence Shell Nederland Chemie’s conduct on the relevant market during the infringement period.
65 The Commission contends that the second part of the first plea should be rejected. It takes the view, in essence, that the evidence adduced by Shell is insufficient to rebut the presumption that exists in this case.
– Findings of the Court
66 For the reasons set out in the context of the first part of the first plea, the Commission was entitled to presume that, owing to the fact that Shell Petroleum directly or indirectly held 100% of the capital of its subsidiaries, it exercised a decisive influence over their conduct.
67 Consequently it was for Shell to rebut that presumption by demonstrating that those subsidiaries determined their commercial policy autonomously in such a way that they and their parent company did not constitute a single economic entity and, therefore, a single undertaking for the purposes of Article 81 EC.
68 Specifically, it was for Shell to adduce any evidence relating to the organisational, economic and legal links between its subsidiaries and itself which in its view were apt to demonstrate that they did not constitute a single economic entity. When making its assessment the Court must take into account all the evidence adduced, the nature and importance of which may vary according to the specific features of each case (Case T-112/05 Akzo Nobel and Others v Commission [2007] ECR II-5049, paragraph 65).
69 It must be observed in that regard that the evidence put forward by Shell is intended in essence to show that, given the role of Shell Nederland and Shell Petroleum, those two companies would not have been capable of exercising decisive influence over the commercial operations of Shell Nederland Chemie, particularly on the market on which the infringement was committed. More specifically, none of the employees of Shell Nederland or Shell Petroleum was involved in the infringement or even aware of it.
70 However, it is not because of a parent-subsidiary relationship in which the parent company instigates the infringement nor, a fortiori, because of the parent company’s involvement in the infringement, but because they constitute a single undertaking in the sense described above that the Commission is able to address the decision imposing fines to the parent company of a group of companies. Thus, attribution to the parent company of the unlawful conduct of a subsidiary does not require proof that the parent company influences its subsidiary’s policy in the specific area in which the infringement occurred (Case T-112/05 Akzo Nobel and Others v Commission, cited in paragraph 68 above, paragraphs 58 and 83). In particular, the fact that Shell Petroleum is merely a non-operational holding company, which rarely intervenes in the management of its subsidiaries, is not sufficient to rule out the possibility that it exercises decisive influence over the conduct of those subsidiaries by coordinating, inter alia, financial investments within the group. In the context of a group of companies, a holding company that coordinates, inter alia, financial investments within the group is in a position to regroup shareholdings in various companies and has the function of ensuring that they are run as one, including by means of such budgetary control (see, to that effect, judgment of 30 September 2009 in Case T-168/05 Arkema v Commission, not published in the ECR, paragraph 76).
71 For the sake of completeness, it must be noted that the Commission finds in the contested decision that the presumption applicable to the parent companies is strengthened in this instance by the links between Shell Nederland Chemie and, respectively, Shell Nederland and Shell Petroleum. In particular, the Commission observes that certain employees of Shell Nederland Chemie reported to other employees of Shell Nederland and of Shell Petroleum. Shell has not contested those points before the Court.
72 Last, Shell’s assertion that, had anyone within Shell Petroleum or Shell Nederland been aware of the infringement, they would have taken action immediately, does not demonstrate Shell Nederland Chemie’s autonomy. On the contrary, that assertion supports the presumption that the parent companies in the present case exercised decisive influence over the conduct of their subsidiaries.
73 It follows from the foregoing that Shell’s arguments cannot alter the fact that Shell Petroleum and its subsidiaries could be regarded as a single economic entity. The second part of the first plea raised by Shell must therefore be rejected as unfounded.
Third part: the consequences of the error made by the Commission
– Arguments of the parties
74 Shell emphasises that the annulment of the contested decision, in so far as it is addressed to Shell Nederland or to Shell Petroleum, would have an impact on the amount of the fine.
75 If the Court annulled the contested decision in so far as it is addressed to Shell Nederland and Shell Petroleum, or to Shell Petroleum alone, such annulment would have an impact on the application by the Commission of a multiplier for deterrence (based in the contested decision on Shell Petroleum’s turnover) and an increase for a repeated infringement. Consequently, the fine ought to be reduced with respect to Shell Nederland Chemie, or to Shell Nederland Chemie and Shell Nederland, as the case may be.
76 Furthermore, if the Court annulled the contested decision, in so far as it is addressed to Shell Nederland and Shell Petroleum, the amount of the fine to be imposed on Shell Nederland Chemie could not exceed 10% of its turnover during the business year preceding the adoption of the contested decision.
77 The Commission contends that the third part of the first plea must be rejected. In the light of the arguments developed in the context of the first and second parts of this plea, it considers that it did not err in imputing the infringement to Shell Nederland and Shell Petroleum and in determining, in accordance with Article 23(2) of Regulation No 1/2003, the amount of the fine on the basis of the turnover of the undertaking to which the infringement was imputed.
– Findings of the Court
78 The third part of the first plea raised by Shell is based on the premiss that the Court accepts the first or second part of the plea.
79 Since the first and second parts of the first plea raised by Shell have been rejected as unfounded, the Court must reject as unfounded the third part of the first plea.
80 Accordingly, the first plea in law raised by Shell must be rejected in its entirety.
Second plea in law: unjustified increase in the basic amount of the fine for repeated infringement
81 Shell maintains that the Commission infringed Article 81 EC and Article 23(2) and (3) of Regulation No 1/2003 by increasing the basic amount of the fine imposed on it by 50% for repeated infringement.
82 Shell’s second plea consists of two parts. In the context of the first part, Shell contends that the Commission breached the principles of legal certainty and proportionality. In the context of the second part, Shell claims that the Commission failed to fulfil its duty to state reasons under Article 253 EC.
First part: breach of the principles of legal certainty and proportionality
– Arguments of the parties
83 Shell acknowledges that neither Article 23(2) of Regulation No 1/2003 nor the Guidelines specifies a maximum period within which the Commission may find that an undertaking has committed a repeated infringement. However, referring to Case C-3/06 P Groupe Danone v Commission [2007] ECR I-1331 and to the Opinion of Advocate General Poiares Maduro in that case (ECR I-1337), Shell maintains that the Commission ought to have taken all the relevant factors of the present case into account.
84 In that regard, first, Shell observes that the infringements found in Commission Decision 86/398/EEC of 23 April 1986 relating to a proceeding under Article [81 EC] (IV/31.149 – Polypropylene) (OJ 1986 L 230, p. 1; ‘the Polypropylene decision’) and Commission Decision 94/599/EC of 27 July 1994 relating to a proceeding pursuant to Article [81 EC] (IV/31.865 – PVC) (OJ 1994 L 239, p. 14; ‘the PVC II decision’), to which the Commission refers as a basis for its analysis concerning repeated infringement, were committed more than 20 years ago and ended at the end of 1983. Furthermore, the two initial decisions adopted by the Commission in those two cases date back to the second half of the 1980s.
85 Second, Shell demonstrated to the Commission that it had altered its conduct following the infringements giving rise to the Polypropylene and PVC II decisions. In particular, Shell introduced an antitrust compliance programme in 1992. Shell refers, in that regard, to a number of documents submitted to the Commission during the administrative procedure which describe the structure, organisation and content of the programme put in place. Shell does not tolerate infringements of the competition rules by its staff and takes serious disciplinary action in the event of such infringements. The introduction of a compliance programme following the previous infringements and the strict enforcement of that programme clearly show that Shell did not ignore the fines previously imposed on it but, on the contrary, employed its best efforts to prevent the occurrence of similar infringements in the future. It emphasises that the present infringement is attributable to the rogue behaviour of two employees who acted independently and who, moreover, had received training on compliance with the competition rules. Shell emphasises in that regard that there is a difference between the liability of an undertaking in the context of an infringement – which Shell does not dispute in the case of Shell Nederland Chemie – and the increase of a fine for repeated infringement. Shell is not arguing, as the Commission contends, that the introduction of antitrust compliance programmes allows parent companies to escape liability.
86 Third, Shell’s sincere commitment to compliance with the competition rules is also illustrated by the fact that it cooperated with the Commission throughout the investigation. Shell exceeded the duty to cooperate which is normally required in proceedings of this type. In particular, although it sold its BR and ESBR business to Dow Chemical in 1999, one of the employees concerned retired in 1997 and the other temporarily left the undertaking, Shell conducted thorough investigations in order to provide the Commission with a significant quantity of evidence. The Commission also made abundant use of Shell’s response to the first statement of objections, in particular to strengthen its case in the second statement of objections. In the contested decision, the Commission also uses large parts of Shell’s statements as evidence of the infringement. Shell’s cooperation was for the most part provided at a time when ‘no legitimate expectation as to the effects of its admission could be acquired by making an application under the terms of the Leniency Notice’ (recital 318 to the contested decision). Shell further submits that, in its written submissions, the Commission attempts to play down its cooperation during the administrative procedure. However, in view of the background to the case, the fact that the activities relating to BR and ESBR were sold to Dow Chemical in 1999 and the belated discovery of the infringement within Shell, Shell contends that it offered full cooperation to the Commission. Likewise, after receiving the first statement of objections, Shell admitted the infringement committed by Shell Nederland Chemie. In addition, Shell emphasises that the question of its cooperation being taken into account in connection with the increase for a repeated infringement is separate from the question relating to the application of the Leniency Notice.
87 The exceptional combination of circumstances in the present case, which distinguishes it, in particular, from Groupe Danone v Commission, cited in paragraph 83 above, ought to have led the Commission to conclude that there were insufficient factors confirming Shell’s tendency towards infringing the competition rules.
88 For all those reasons, Shell contends that an increase of 50% of the basic amount of the fine on the ground of repeated infringement must be considered disproportionate and contrary to the principle of legal certainty. Consequently, the contested decision should be annulled on that point or, in the alternative, the amount of the fine to be imposed on Shell should be reduced.
89 The Commission contends that the first part of the second plea should be rejected. It takes the view, in essence, that the evidence in the present case justifies the application of a 50% increase in the basic amount of the fine for repeated infringement.
– Findings of the Court
90 Section 2 of the Guidelines refers, as an example of aggravating circumstances, to ‘repeated infringement of the same type by the same undertaking(s)’.
91 The concept of repeated infringement, as understood in a number of national legal orders, implies that a person has committed new infringements after being punished for similar infringements (Case T-141/94 Thyssen Stahl v Commission [1999] ECR II-347, paragraph 617, and Case T-203/01 Michelin v Commission [2003] ECR II-4071, paragraph 284).
92 Any repeated infringement is among the factors to be taken into consideration in the analysis of the gravity of the infringement in question (Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P Aalborg Portland and Others v Commission [2004] ECR I-123, paragraph 91, and Groupe Danone v Commission, cited in paragraph 83 above, paragraph 26).
93 The Commission has a discretion as regards the choice of factors to be taken into account for determining the amount of fines, such as, inter alia, the particular circumstances of the case, its context and the deterrent effect of fines, without the need to refer to a binding or exhaustive list of the criteria which must be taken into account. The finding and the appraisal of the specific characteristics of a repeated infringement come within the Commission’s discretion and the Commission cannot be bound by any limitation period when making such a finding (Groupe Danone v Commission, cited in paragraph 83 above, paragraphs 37 and 38).
94 In the present case, the Commission notes in the contested decision that Shell had already been the addressee of previous Commission decisions concerning cartel activities (see the Polypropylene and PVC II decisions, cited in paragraph 84 above). This proved that the first fines were not sufficient for Shell to change its conduct. The Commission concludes that that repeated infringement constitutes an aggravating circumstance that justifies an increase of 50% in the basic amount of Shell’s fine (recital 487 to the contested decision).
95 First of all, it must be observed that the infringement found in the contested decision began a little over 10 years after the adoption of the Polypropylene decision and less than two years after the adoption of the PVC II decision. The fact that Shell repeated its unlawful conduct, particularly shortly after the adoption of the PVC II decision, which itself had been adopted less than 10 years after the Polypropylene decision, shows a propensity on Shell’s part not to draw the appropriate consequences from a finding that it had infringed the Community competition rules (see, to that effect, Case T-38/02 Groupe Danone v Commission [2005] ECR II-4407, paragraph 355, and Case T-410/03 Hoechst v Commission [2008] ECR II-881, paragraph 464). Accordingly, the Commission was entitled to rely on the Polypropylene and PVC II decisions for the purpose of finding that Shell had committed a repeated infringement in the present case and, in so doing, it did not infringe the principle of legal certainty invoked by Shell.
96 Second, the measures adopted by Shell in order to comply with competition law cannot affect the reality of the infringement committed and the repeated infringement found in this instance (see, to that effect, Joined Cases T-101/05 and T-111/05 BASF and UCB v Commission [2007] ECR II-4949, paragraph 52). Thus, the adoption of a compliance programme by the undertaking concerned does not oblige the Commission to grant a reduction in the fine on that account (Case T-15/02 BASF v Commission [2006] ECR II-497, paragraphs 266 and 267, and BASF and UCB v Commission, paragraph 52). Furthermore, it should be noted that it is impossible to determine the effectiveness of internal measures taken by an undertaking to prevent future infringements of competition law (Case T-73/04 Carbone-Lorraine v Commission [2008] ECR II-2661, paragraph 144). In the present case, it must be pointed out that the measures adopted by Shell did not lead it to disclose the cartel, since Shell only agreed to cooperate once it was informed of the existence of objections in its case.
97 Third, in the same way, Shell’s cooperation during the administrative procedure cannot make the repeated infringement any less of an aggravating circumstance. Accordingly, the arguments put forward by Shell in that regard are ineffective.
98 Last, as regards Shell’s argument that the increase applied is disproportionate, it must be borne in mind that the Commission has a discretion when setting the fine and that it is not required to apply a precise mathematical formula. In addition, when determining the amount of the fine the Commission must ensure that its action is deterrent. A repeated infringement is a circumstance that justifies a considerable increase in the basic amount of the fine. Repeated infringement is proof that the penalty previously imposed was not sufficiently deterrent (Michelin v Commission, cited in paragraph 91 above, paragraph 293; Case T-38/02 Groupe Danone v Commission, cited in paragraph 95 above, paragraph 348; and Case T-53/03 BPB v Commission [2008] ECR II-1333, paragraph 398). Furthermore, it should be noted that the Commission may, in determining the amount of the increase for repeated infringement, take account of evidence tending to confirm the propensity of the undertaking concerned to ignore the competition rules, including the time which has elapsed between the infringements in question (Case T-122/04 Outokumpu and Luvata v Commission [2009] ECR II-1135, paragraph 62). In the present case, it must be observed, first of all, that the infringement at issue is the third infringement of the same type for which Shell has been the subject of a Commission decision. In particular, it must be noted that, like the infringement underlying the present case, the infringements at issue in the Polypropylene and PVC II decisions concerned the setting of price targets or the allocation of market shares. Furthermore, as indicated in paragraph 95 above, the infringement at issue began less than two years after the adoption of the PVC II decision. Yet, notwithstanding the adoption of that decision, Shell repeated its unlawful conduct after a short time. In those circumstances, none of the factors relied on supports the conclusion that the 50% increase in the basic amount of the fine for the purposes of guiding Shell’s conduct towards compliance with the competition rules is disproportionate.
99 In the light of those considerations, the first part of the second plea in law raised by Shell must be rejected as unfounded.
Second part: failure to state reasons
– Arguments of the parties
100 If the Court finds that the increase of 50% in the basic amount of the fine does not breach the principles of proportionality and legal certainty, Shell submits, in the alternative, that the Commission failed to fulfil its obligation to state reasons under Article 253 EC.
101 Shell observes in that regard that it had indicated in its response to the second statement of objections that an increase in the basic amount of the fine for repeated infringement would be unnecessary and unreasonable in the light of the introduction and strict enforcement of a competition law compliance programme.
102 In the contested decision, the Commission fails to answer the arguments raised by Shell. Instead, in recitals 488 and 489 to the contested decision, the Commission addresses a number of other points not raised by Shell. Shell submits that the Commission in fact answered arguments raised by certain undertakings in the Shell group in connection with a different case. Shell refers in that regard to recitals 337 and 338 to Commission Decision C(2006) 4090 final of 13 October 2006 relating to a proceeding under Article 81 EC (Case COMP/F/38.456 – Bitumen – NL; ‘the Bitumen decision’), attached as an annex to the application. The fact that the Commission is not required, where appropriate, to answer all the arguments of the parties does not alter that conclusion.
103 The fact that the Commission completely ignored the arguments that Shell actually put forward in its responses to the first and second statements of objections and in its submissions prior to the hearing and instead discussed arguments put forward in the context of the case that gave rise to the Bitumen decision amounts to a failure to state reasons in breach of Article 253 EC. Consequently, the contested decision should be annulled on that point.
104 The Commission contends that the second part of the second plea should be rejected. It takes the view, in essence, that the contested decision satisfies the essential procedural requirement to state reasons.
– Findings of the Court
105 The statement of reasons for an individual decision must disclose, clearly and unequivocally, the reasoning of the institution which adopted it, in such a way as to allow those concerned to know the reasons for the measure and the competent court to exercise its power of review. The requirement to state reasons must be assessed by reference to the circumstances of the case. The reasoning is not required to go into all the relevant facts and points of law, since the question whether it meets the requirements of Article 253 EC must be assessed by reference not only to the wording of the measure in question but also to the context in which it was adopted (Case C-367/95 P Commission v Sytraval and Brink’s France [1998] ECR I-1719, paragraph 63).
106 The essential procedural requirement to state reasons is satisfied where the Commission indicates in its decision the factors which enabled it to determine the gravity and duration of the infringement (Case C-291/98 P Sarrió v Commission [2000] ECR I-9991, paragraph 73, and Joined Cases C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C-252/99 P and C-254/99 P Limburgse Vinyl Maatschappij and Others v Commission [2002] ECR I-8375, paragraph 463).
107 In the present case, it is sufficient to observe that the Commission clearly identified, in recital 487 to the contested decision, the factors which enabled it to find that there was an aggravating circumstance of repeated infringement with respect to Shell. Furthermore, the measures adopted by Shell in order to comply with competition law are not relevant for the purposes of determining the existence of the infringement and of the repeated infringement (see paragraph 96 above). Consequently, the fact that the Commission did not answer the arguments raised by Shell in that regard during the administrative procedure does not mean that the contested decision is vitiated by a failure to state reasons. In addition, it must be borne in mind that the Commission is not obliged to adopt a position on all the arguments relied on by the parties concerned; rather, it is sufficient if it sets out the facts and the legal considerations having decisive importance in the context of the decision (see Arkema v Commission, cited in paragraph 70 above, paragraph 127 and the case-law cited). Last, as regards the fact that the Commission mentioned reasons unrelated to the BR and ESBR cartel, it is sufficient to note that, assuming that to be the case, it does not affect the legality of the contested decision since, as has just been held, that decision was supported by a statement of reasons of the requisite legal standard.
108 In the light of those considerations, the second part of the second plea in law raised by Shell must be rejected as unfounded, as, therefore, must the second plea in its entirety.
Third plea in law: incorrect application of a multiplier for deterrence
109 Shell maintains that the Commission infringed Article 81 EC and Article 23(2) and (3) of Regulation No 1/2003 by applying a multiplier in order to determine the starting amount of the fine.
110 Shell’s third plea consists of two parts. In the context of the first part, Shell contends that the Commission breached the principles of equal treatment and proportionality. In the context of the second part, Shell claims that the Commission failed to fulfil its obligation to state reasons.
First part: breach of the principles of equal treatment and proportionality
– Arguments of the parties
111 Shell observes that the Commission applied a multiplier of three in order to determine the starting amount of its fine (recital 474 to the contested decision). For that purpose, the Commission used Shell Petroleum’s turnover for 2005, namely EUR 246.549 billion.
112 Yet in the Bitumen decision, the Commission relied essentially on the same turnover of Shell Petroleum for 2005, but decided to apply a multiplier of two.
113 That difference amounts to a breach of the principles of equal treatment and proportionality. Shell submits, in that regard, that the situations in the present case and in the case leading to the adoption of the Bitumen decision are comparable, since both decisions were adopted in 2006, within a period of two and a half months, since the infringement was imputed to Shell Petroleum and since the multiplier was based on Shell Petroleum’s worldwide turnover in order to ensure that, given the size of that undertaking, the fine would be sufficiently deterrent. Inasmuch as in both cases the choice of multiplier to be applied should be based on the size of the undertaking and the undertaking to be fined is the same, such difference in treatment is not objectively justified. Shell further submits that the principle of equal treatment must be applied, even in a situation where the Commission has correctly applied its Guidelines. In addition, the situation in the present case is exceptional and for that reason has not yet been addressed by the Courts of the European Union.
114 The Commission’s brief reference to the ‘circumstances of the case’ cannot justify a difference in treatment. Where the Commission decides to increase the level of the fine, as a separate step in the calculation of the basic amount of the fine, the choice of multiplier should be based exclusively on the size of the undertaking which it proposes to fine. The underlying reason is that an undertaking with considerable financial resources can more readily raise the necessary funds to pay its fine. In that regard, contrary to the Commission’s contention in its written submissions, Shell was also, as stated in the Bitumen decision, the largest undertaking to have committed an infringement. Furthermore, the ‘relative differences in overall size’ between the undertakings which participated in the infringement in both cases cannot justify the application of different multipliers to Shell. In both cases, the undertakings in respect of which a multiplier of one was applied had a turnover of below EUR 10 billion. In both cases, the largest undertaking found to have participated in the infringement is Shell, with a turnover of EUR 246.549 billion.
115 For those reasons, the contested decision should be annulled or, in the alternative, the amount of the fine to be imposed on Shell should be reduced by applying a multiplier of two instead of three.
116 Furthermore, referring to the first plea, Shell adds that the application of a multiplier of three to the fine to be imposed on Shell Nederland Chemie is disproportionate and breaches the principle of legal certainty, if the infringement cannot be imputed to Shell Nederland or Shell Petroleum. In such a case, the choice of multiplier should be based on Shell Nederland’s worldwide turnover for 2005 (EUR 25.041 billion) or on that of Shell Nederland Chemie for the same year (EUR 1.186 billion). That means that no multiplier should be applied to the fine to be imposed on Shell Nederland Chemie, or on Shell Nederland Chemie and Shell Nederland, or that, at the very most, a multiplier of 1.5 should be applied.
117 The Commission contends that the first part of the third plea should be rejected. It maintains, in essence, that multipliers are used to take account of the relative differences in overall size and that the multiplier applied in respect of Shell in the present case is not disproportionate.
– Findings of the Court
118 The Guidelines provide that, in addition to the nature of the infringement, its actual impact on the market and the size of the relevant geographic market, it is necessary to take account of the effective economic capacity of offenders to cause significant damage to other operators, in particular consumers, and to set the fine at a level which ensures that it has a sufficiently deterrent effect (fourth paragraph of Section 1A of the Guidelines).
119 The Commission’s power to impose fines on undertakings which, intentionally or negligently, commit an infringement of Article 81 EC is one of the means given to it with which to carry out the task of supervision conferred on it by Community law. That task encompasses the duty to pursue a general policy designed to apply, in competition matters, the principles laid down by the Treaty and to guide the conduct of undertakings in the light of those principles. It follows that, in assessing the gravity of an infringement for the purpose of setting the amount of the fine, the Commission must ensure that its action has the necessary deterrent effect, especially as regards those types of infringement which are particularly harmful to the attainment of the objectives of the Community (Joined Cases 100/80 to 103/80 Musique Diffusion française and Others v Commission [1983] ECR 1825, paragraphs 105 and 106; ABB Asea Brown Boveri v Commission, cited in paragraph 44 above, paragraph 166; and Case T-38/02 Groupe Danone v Commission, cited in paragraph 95 above, paragraph 169).
120 This requires that the amount of the fine be adjusted in order to take account of the desired impact on the undertaking on which it is imposed. This is so that the fine is not rendered negligible or excessive, notably by reference to the financial capacity of the undertaking in question, in accordance with the requirements resulting from, first, the need to ensure that the fine is effective and, second, respect for the principle of proportionality. A large undertaking, owing to its considerable financial resources by comparison with those of the other members of a cartel, can more readily raise the necessary funds to pay its fine, which, if the fine is to have a sufficiently deterrent effect, justifies the imposition, in particular by the application of a multiplier, of a fine proportionately higher than that punishing the same infringement committed by an undertaking without such resources (see, to that effect, Joined Cases T-236/01, T-239/01, T-244/01 to T-246/01, T-251/01 and T-252/01 Tokai Carbon and Others v Commission [2004] ECR II-1181, paragraphs 241 and 243; see also ABB Asea Brown Boveri v Commission, cited in paragraph 44 above, paragraph 170; and BASF v Commission, cited in paragraph 96 above, paragraph 235).
121 It should be added that the Court of Justice has recognised in particular the relevance of taking into account the overall turnover of each undertaking participating in a cartel in setting the amount of the fine (see, to that effect, Sarrió v Commission, cited in paragraph 106 above, paragraphs 85 and 86; Case C-57/02 P Acerinox v Commission [2005] ECR I-6689, paragraphs 74 and 75; see also Case C-289/04 P Showa Denko v Commission [2006] ECR I-5859, paragraph 17).
122 Last, it must be observed that the objective of deterrence which the Commission is entitled to pursue when setting fines is intended to ensure that undertakings comply with the competition rules laid down by the Treaty in respect of the conduct of their activities within the Community or the EEA. It follows that the deterrence factor which may be included in the calculation of the fine is assessed by taking into account a large number of factors and not merely the particular situation of the undertaking concerned. That principle applies, in particular, where the Commission has determined a ‘deterrence multiplier’ with which the fine imposed on an undertaking is adjusted (see, to that effect, Showa Denko v Commission, cited in paragraph 121 above, paragraphs 23 and 24).
123 In the present case the Commission found, first of all, in the contested decision that, within the category of very serious infringements, the scale of fines made it possible to set the fines at a level which would ensure that they had a sufficiently deterrent effect, taking into account the size of each undertaking. Next, on the basis of the worldwide turnover of the undertakings concerned in 2005, the Commission noted that there was a considerable difference in size between, on the one hand, Kaučuk (turnover: EUR 2.718 billion) and Stomil (turnover: EUR 38 million) and, on the other, the other undertakings concerned, particularly Bayer (turnover: EUR 27.383 billion), the first of the large undertakings covered by the contested decision. On that basis, and taking the circumstances of the present case into account, the Commission concluded that no multiplier for deterrence should be applied in respect of Kaučuk and Stomil, and that a multiplier of 1.5 was appropriate in respect of Bayer. Last, still on that basis, and taking the circumstances of the present case into account, the Commission applied multipliers of 1.75 in relation to Dow (turnover: EUR 37.221 billion), 2 in relation to EniChem (turnover: EUR 73.738 billion) and 3 in relation to Shell (turnover: EUR 246.549 billion) (recital 474 to the contested decision).
124 Shell’s arguments are based in essence on the fact that the multiplier applied in this instance should not have exceeded that applied in the Bitumen decision if the principle of equal treatment is to be observed.
125 In that regard it must be borne in mind that the Commission enjoys a wide discretion in the area of setting fines and is not bound by assessments which it has made in the past (Case C-510/06 P Archer Daniels Midland v Commission [2009] ECR I-1843, paragraph 82). It follows that Shell cannot invoke the Commission’s decision-making policy as an argument before the Courts of the European Union (see, to that effect, Joined Cases C-125/07 P, C-133/07 P, C-135/07 P and C-137/07 P Erste Bank der österreichischen Sparkassen v Commission [2009] ECR I-8681, paragraph 123).
126 In any event, it will be recalled that the principle of equal treatment is breached only where comparable situations are treated differently or different situations are treated in the same way and such treatment is not objectively justified (Case 106/83 Sermide [1984] ECR 4209, paragraph 28; Case C-174/89 Hoche [1990] ECR I-2681, paragraph 25; and Case T-303/02 Westfalen Gassen Nederland v Commission [2006] ECR II-4567, paragraph 152).
127 In the present case, Shell is not justified in claiming that the situations at issue are the same. It is indeed the case that the overall turnover of each undertaking is relevant to the application of a multiplier for deterrence and that, in that regard, Shell’s turnover as established in the Bitumen decision is the same as that established in the contested decision. However, it must also be noted that, in the contested decision, the Commission began by determining the multipliers for deterrence applicable to Kaučuk and Stomil, taking the view that, given the circumstances of the case, no multiplier should be applied to them. On that basis the Commission went on to compare the relative sizes of the undertakings concerned and determined the multiplier for deterrence applicable to the other undertakings and, in particular, to Shell. It follows that the multipliers for deterrence in the present case were set taking into account the overall turnover but also the relative size of each undertaking. However, the relative size of the undertakings concerned by the contested decision differs from that of the undertakings concerned by the Bitumen decision. Furthermore, it is apparent from the contested decision that the multipliers were set in respect of the smallest undertakings first. Shell has not put forward any specific arguments to challenge the method chosen by the Commission or the multipliers established in that regard. Last, as regards Shell’s argument that it was the largest undertaking, with regard both to the contested decision and the Bitumen decision, it must be noted, first, that the difference in overall turnover between Shell and the undertaking preceding it was much greater in the present case, as the contested decision shows, and that the multipliers which served as the basis for a comparison of the undertakings concerned was different in the two decisions.
128 For the sake of completeness, it must be noted that in the case giving rise to the Bitumen decision, the Commission found, as in the present case, that the infringement at issue was very serious (recital 316 to the Bitumen decision). However, the Commission also noted in the Bitumen decision that the infringement at issue was limited to a single Member State, that the market value was relatively low (EUR 62 million for 2001, the last full year of the infringement) and that the number of cartel participants was high (14 undertakings) (recital 317 to the Bitumen decision). These are not the circumstances of the present case.
129 Accordingly, the complaint alleging breach of the principle of equal treatment cannot be upheld.
130 In so far as Shell’s complaint regarding the proportionality of the multiplier imposed is also based on a comparison with the Bitumen decision, and in the absence of more detailed arguments, it must be rejected on the same grounds.
131 In the light of those considerations, the first part of the third plea in law raised by Shell must be rejected as unfounded.
Second part: failure to state reasons
– Arguments of the parties
132 If the Court finds that the application of a multiplier of three does not breach the principles of equal treatment and proportionality, Shell claims, in the alternative, that the Commission failed to fulfil its obligation to state reasons under Article 253 EC. In referring to the ‘circumstances of the case’ as a ground for applying that multiplier, the Commission fails to explain what those circumstances are, how they can justify the application of a multiplier of three and to what extent they differ from the circumstances of the case giving rise to the Bitumen decision, in such a way that the two cases merit different treatment from the point of view of deterrence. Shell concludes that the contested decision should be annulled.
133 The Commission contends that the second part of the third plea should be rejected. It indicates, in particular, that there are objective differences between the present case and that giving rise to the Bitumen decision. The Commission was therefore not obliged to state why the amount chosen for the calculation of the fine was not the same in the present case.
– Findings of the Court
134 In the light of the case-law referred to in paragraphs 105 and 106 above, it must be observed that, in the present case, the Commission indicated that in order to ensure that the fine would be sufficiently deterrent, it would take into consideration the size of each undertaking. On that basis, the Commission used the overall turnover in 2005 of the undertakings concerned. Furthermore, the Commission compared the respective sizes of the various undertakings for the purposes of setting multipliers for deterrence. More particularly, with regard to Shell, the Commission indicated that the overall turnover of that undertaking was several times that of any of the other undertakings concerned. It follows that the factors which enabled the Commission to fix the multiplier of the fine imposed on Shell are clear from the contested decision.
135 The fact that the Commission referred, moreover, to the ‘circumstances of the case’ cannot alter that conclusion. It is not apparent from the contested decision that the Commission referred explicitly to factors other than the overall turnover and relative size of the undertakings concerned in order to fix the multipliers for deterrence, a point confirmed, moreover, by the Commission at the hearing. Furthermore, the expression ‘circumstances of the case’ can readily be understood as referring precisely to the overall turnover and relative size of the undertakings concerned.
136 Last, with regard to the reference to the case giving rise to the Bitumen decision, since the facts underlying that case and the present case are different, particularly as regards the relative size of the undertakings concerned (see paragraphs 127 and 128 above), it must be held that the Commission had no obligation to explain why the multiplier for deterrence was not the same.
137 In the light of those considerations, the second part of the third plea in law raised by Shell must be rejected as unfounded, as, therefore, must the third plea in its entirety.
Fourth plea in law: incorrect determination of the starting amount of the fine
138 Shell maintains that the Commission infringed Article 81 EC and Article 23(2) and (3) of Regulation No 1/2003 by incorrectly determining the starting amount of its fine.
139 Shell’s fourth plea consists of four parts. In the context of the first part, Shell maintains that the Commission applied unjustified differential treatment to the starting amounts of the fines. In the context of the second part, Shell claims that the starting amounts of the fines chosen by the Commission are incorrect. In the context of the third part, Shell observes that the starting amount chosen in its case disregards the principles of proportionality and equal treatment. In the context of the fourth part, Shell contends that the Commission failed to fulfil its obligation to state reasons.
First part: unjustified application of differential treatment to the starting amounts of the fine
– Arguments of the parties
140 Shell submits that, according to recital 466 to the contested decision, the Commission applied differential treatment to the starting amounts of the fines ‘to take account of the specific weight, and therefore the real impact on competition, of each undertaking’s offending conduct’. However, the Commission contradicts its view, expressed in recital 462 to the contested decision, that ‘it is not possible to measure the actual impact on the EEA market of the complex of arrangements of which the infringement consists’ and that, accordingly, it ‘will not take into account the impact on the market in determining the applicable fines in this case’. As the Commission acknowledges in its written submissions, differential treatment as to the starting amounts of the fines is based on the fact that the ‘effective economic capacity’ to ‘cause significant damage to competition’ is higher when sales volumes (and the corresponding market share) of a given undertaking on the relevant market are higher.
141 Shell refers, in that regard, to the information which it communicated to the Commission during the administrative procedure and which showed that there was no impact on the market. Neither in the second statement of objections nor in the contested decision did the Commission produce any specific evidence showing that the agreements or concerted practices had had an impact on the market.
142 Moreover, the assertion that ‘the cartel arrangements were implemented by the European producers and that such implementation did have an impact on the market’ (recital 462 to the contested decision) remains substantially unfounded. There is no specific evidence in the contested decision or in the case-file that the agreements or concerted practices were implemented and had an impact on the market.
143 The Commission could not therefore establish a difference between the starting amounts of the fines, in order to take account of the real impact on competition of the infringement. The Commission was, on the contrary, required to choose the same starting amount for all the addressees of the contested decision, on the basis of the objective nature of the infringement. In the present case, Shell observes that the Commission set a starting amount of the fine for Stomil of EUR 5.5 million. There are no grounds for setting a higher starting amount of the fine for Shell.
144 In any event, in setting the starting amounts of the fines, the Commission gave too much weight to the presumed – but unfounded – impact of each cartel participant in the infringement. As the Commission itself recognises in recital 461 to the contested decision, the objective gravity of the infringement is the most important factor to be taken into account when establishing the starting amount of the fine. Yet in the present case the Commission chose a starting amount of the fine for Shell that was five times higher than the starting amount which it chose for the fine imposed on Stomil. For all those reasons, the fine imposed on Shell should be reduced substantially.
145 The Commission contends that the first part of the fourth plea should be rejected. It observes, in particular, that Shell appears to confuse differential treatment with the finding of the impact of the infringement.
– Findings of the Court
146 The Guidelines distinguish between minor infringements, serious infringements and very serious infringements (first and second paragraphs of Section 1A of the Guidelines). Furthermore, the differentiation between undertakings consists in determining, in accordance with the third, fourth and sixth paragraphs of Section 1A of the Guidelines, the individual contribution of each undertaking, in terms of actual economic capacity, to the success of the cartel for the purpose of its classification in the appropriate category (see, to that effect, judgment of 15 June 2005 in Joined Cases T-71/03, T-74/03, T-87/03 and T-91/03 Tokai Carbon and Others v Commission, not published in the ECR, paragraph 225; see also Hoechst v Commission, cited in paragraph 95 above, paragraph 360).
147 In the present case, having found that the infringement at issue was very serious (recital 464 to the contested decision), the Commission applied differential treatment to the undertakings concerned on the basis of their aggregate turnover in relation to BR and ESBR for 2001, the last full year of the infringement, except for Shell (1998) and Stomil (1999). The Commission placed the undertakings concerned into five categories, Shell being placed in the third category (starting amount of the fine: EUR 27.5 million) (recitals 465 to 473 to the contested decision).
148 Shell submits, principally, in essence, that the Commission erred in taking account of the specific weight of each undertaking and therefore the real impact on competition of its offending conduct, while at the same time indicating that it was not possible to measure the actual impact of the infringement.
149 However, the individual contribution of each undertaking, in terms of actual economic capacity, to the success of the cartel must be distinguished from the actual impact of the infringement referred to in the first paragraph of Section 1A of the Guidelines. In the latter case, account is taken of the actual impact of the infringement, where this can be measured, in order to classify the infringement as a minor, serious or very serious infringement. The individual contribution of each undertaking, on the other hand, is taken into consideration in order to apply weightings to the amounts determined on the basis of the gravity of the infringement.
150 Accordingly, even if there is no measurable actual impact of the infringement, the Commission can decide, in accordance with the third, fourth and sixth paragraphs of Section 1A of the Guidelines, and after having classified the infringement as minor, serious or very serious, to differentiate between the undertakings concerned.
151 Shell’s argument in that regard must therefore be rejected.
152 With regard to the arguments raised in the alternative, Shell maintains, in essence, that the Commission attached too much importance to the ‘specific weight’ of the undertakings belonging to the cartel, by comparison with the gravity of the infringement. Consequently, the Commission’s differentiation between the undertakings concerned, when the gravity of the infringement was the same in all cases, is not justified.
153 By its arguments, Shell is in fact alleging breach of the principle of equal treatment. Yet Shell does not deny that there are differences – which, in some cases, are considerable – between the undertakings with regard to their respective turnover for BR and ESBR for the years referred to by the Commission. Furthermore, it is clear from the sixth paragraph of Section 1A of the Guidelines that the Commission can apply weightings to the amount of the fine to take account of the specific weight of the offending conduct of each undertaking.
154 Accordingly, by setting the starting amount of the fine at a higher level for those undertakings with a relatively larger market share than the others in the relevant market, the Commission took account of the actual influence of the undertaking on that market. That factor is the expression of the higher degree of responsibility of the undertakings with a relatively larger market share than the others in the relevant market for the damage caused to competition and, in the final analysis, to consumers by forming a secret cartel (Case T-43/02 Jungbunzlauer v Commission [2006] ECR II-3435, paragraph 230).
155 In those circumstances, the arguments raised by Shell in the alternative must be rejected.
156 In the light of those considerations, the first part of the fourth plea in law raised by Shell must be rejected as unfounded.
Second part: incorrect determination of the starting amounts of the fines
– Arguments of the parties
157 If the Court finds that the Commission was correct to apply differential treatment to the starting amounts of the fines, Shell claims that, in any event, the amounts chosen by the Commission and, in particular, the starting amount chosen for Shell are contrary to the Guidelines. Specifically, Shell maintains that the Commission ought to have classified the present infringement as serious, within the meaning of the Guidelines, and not as very serious.
158 Thus, Shell submits that the infringement concerned did not, strictly speaking, constitute an organised cartel whereby competitors agree on sales prices and market allocation, monitor each other’s subsequent price and sales policy, implement a compensation mechanism to ensure compliance with the cartel and punish deviations from the target prices. On the contrary, the agreements at issue were reached in an informal setting, usually on the occasion of bilateral or trilateral exchanges rather than in a formal meeting of the entire group of participants. In addition, the infringement had no impact on the market. In that regard, Shell observes that recitals 134 to 159 to the contested decision, to which the Commission refers in its written submissions, do not prove that the cartel was implemented. On the contrary, the absence of a sanction and the fact that the undertakings concerned criticised each other for not having complied with the agreements at issue merely reinforce the conclusion that the agreements were not in fact implemented.
159 Furthermore, Shell contends, referring to three earlier decisions of the Commission in other cases, that the Commission classified as ‘serious’ infringements of a degree of sophistication at least equivalent to that of the infringement at issue.
160 Shell concludes that, in the case of serious infringements, the starting amount of the fine cannot exceed EUR 20 million. In setting the starting amount of the fine imposed on Shell at EUR 27.5 million, the Commission was thus in breach of the Guidelines.
161 The Commission contends that the second part of the fourth plea should be rejected. It maintains, in particular, that secret cartels, such as the cartel in the present case, are the worst types of infringement, and that the present infringement can therefore be correctly classified as a very serious infringement. There is, moreover, no need to assess the implementation or the impact of a cartel in order to find a very serious infringement.
– Findings of the Court
162 The gravity of infringements must be determined in the light of numerous factors, such as the particular circumstances of the case, its context and the deterrent effect of fines, although no binding or exhaustive list of criteria to be applied has been drawn up (Limburgse Vinyl Maatschappij and Others v Commission, cited in paragraph 106 above, paragraph 465, and Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I-5425, paragraph 241).
163 The factors capable of affecting the assessment of the gravity of the infringements include the conduct of each of the undertakings, the role played by each of them in the establishment of the cartel, the profit which they were able to derive from it, their size, the value of the goods concerned and the threat that infringements of that type pose to the objectives of the Community (see Case C-407/04 P Dalmine v Commission [2007] ECR I-829, paragraph 130 and the case-law cited).
164 Furthermore, the Guidelines state, inter alia, that in assessing the gravity of the infringement account must be taken of its nature, its actual impact on the market, where this can be measured, and the size of the relevant geographic market. Infringements are thus put into one of three categories: minor infringements, serious infringements and very serious infringements (first and second paragraphs of Section 1A of the Guidelines).
165 In the present case, the Commission finds, first of all, in the contested decision that the undertakings concerned concluded agreements on price targets and market sharing, and exchanged commercially sensitive information. For the Commission, these practices are, by their very nature, very serious infringements (recital 461 to and Article 1 of the operative part of the contested decision). Next, the Commission states that it is not possible to measure the actual impact of the cartel on the EEA market. The Commission further contends that, even if it is not possible to measure the actual impact of the cartel, the agreements in question were implemented by the undertakings concerned and, therefore, had an effect on the market. The Commission concludes by stating that it will not take into account the impact on the market in determining the amounts of the fines (recital 462 to the contested decision). Last, the Commission notes that the infringement covers the whole of the EEA (recital 463 to the contested decision). For those reasons, the Commission takes the view that the infringement at issue can be described as very serious (recital 464 to the contested decision).
166 First, it must be observed that, in its action, Shell does not call in question the unlawful nature of the cartel, as set out in the contested decision, particularly in Article 1 of the operative part. In that regard, it follows from the description of very serious infringements in the Guidelines that agreements or concerted practices aimed in particular, as in this case, at setting target prices or the allocation of market shares may entail, solely on the basis of their very nature, the characterisation as ‘very serious’, without the Commission being required to demonstrate an actual impact of the infringement on the market (see, to that effect, Case C-534/07 P Prym and Prym Consumer v Commission [2009] ECR I-7415, paragraph 75; see also Joined Cases T-49/02 to T-51/02 Brasserie nationale and Others v Commission [2005] ECR II-3033, paragraph 178; and Hoechst v Commission, cited in paragraph 95 above, paragraph 345). Similarly, it is settled case-law that horizontal price agreements are particularly injurious under Community competition law and may, by reason of that fact alone, be classified as very serious (see, to that effect, Joined Cases T-202/98, T-204/98 and T-207/98 Tate & Lyle and Others v Commission [2001] ECR II-2035, paragraph 103, and Case T-38/02 Groupe Danone v Commission, cited in paragraph 95 above, paragraph 147).
167 The Commission did not therefore err in finding that the practices at issue were, by their nature, very serious infringements.
168 Second, contrary to Shell’s essential contention, it must be concluded that, in view of the multiplicity and the simultaneity of the objectives pursued by the cartel, and even if the cartel was relatively informal, it was none the less highly structured (see, to that effect, Case T-38/02 Groupe Danone v Commission, cited in paragraph 95 above, paragraph 149).
169 Third, with regard to the Commission’s earlier practice in taking decisions, on which Shell relies, it is sufficient to note that Shell has not demonstrated in what respect the factual and legal situation giving rise to the adoption of the contested decision is comparable to that of the previous decisions on which it relies. Moreover, it must be noted that the circumstances of the cases, particularly the anti-competitive practices concerned, are not the same.
170 In the light of those considerations, the second part of the fourth plea in law raised by Shell must be rejected as unfounded.
Third part: breach of the principles of proportionality and equal treatment
– Arguments of the parties
171 On the assumption that the infringement must be classified as very serious, within the meaning of the Guidelines, Shell submits that the starting amount of the fine of EUR 27.5 million is disproportionate and contrary to the principle of equal treatment. Given the unstructured nature of the cartel and the lack of impact on the market, Shell maintains that the starting amounts set for Enichem (EUR 55 million), the market leader, and for Shell (EUR 27.5 million) cannot be justified merely by reference to the classification of the infringement as very serious and to the size of the relevant geographic market (Shell refers, in that regard, to recitals 465 to 473 to the contested decision).
172 The disproportionate nature of the starting amount of the fine of EUR 55 million imposed on Enichem is even more obvious when it is compared with the starting amounts set by the Commission in similar cases involving Article 81 EC in which the infringement was much more systematic and structured or in which there was clear evidence that the infringement had had an impact on the market. Shell refers in that regard to three decisions issued by the Commission.
173 Having regard to those factors, the starting amounts of the fines of EUR 55 million for Enichem and EUR 27.5 million for Shell are manifestly disproportionate and contrary to the principle of equal treatment.
174 The Commission contends that the third part of the fourth plea should be rejected. It observes that the starting amounts of the fines imposed in the cases to which Shell refers are the result of factors specific to each case. The fact that in the past the Commission applied fines of a certain level to certain types of infringement does not mean that it may not raise that level, within the limits set by Regulation No 1/2003, as noted in the case-law (Musique Diffusion française and Others v Commission, cited in paragraph 119 above; Case T-38/02 Groupe Danone v Commission, cited in paragraph 95 above; BASF and UCB v Commission, cited in paragraph 96 above; and Case T-279/02 Degussa v Commission [2006] ECR II-897). In the present case, the Commission maintains that the setting of the starting amount of Shell’s fine was proportionate.
– Findings of the Court
175 It must be borne in mind that the principle of proportionality requires that the measures adopted by Community institutions must not exceed what is appropriate and necessary for attaining the objective pursued (see Case T-260/94 Air Inter v Commission [1997] ECR II-997, paragraph 144 and the case-law cited, and Case T-65/98 Van den Bergh Foods v Commission [2003] ECR II-4653, paragraph 201). In the context of the calculation of fines, the principle of proportionality requires the Commission to set the fine proportionately to the factors taken into account for the purposes of assessing the gravity of the infringement and also to apply those factors in a way which is consistent and objectively justified (see, to that effect, Tate & Lyle and Others v Commission, cited in paragraph 166 above, paragraph 106; Case T-213/00 CMA CGM and Others v Commission [2003] ECR II-913, paragraphs 416 to 418; and Joined Cases T-191/98, T-212/98 to T-214/98 Atlantic Container Line and Others v Commission [2003] ECR II-3275, paragraph 1541).
176 In the present case, first of all, it will be recalled that the infringement at issue was, correctly, deemed by the Commission to be very serious (see paragraphs 162 to 170 above). In that regard, it must be pointed out that the undertakings concerned agreed on price targets, shared customers by non-aggression agreements and exchanged sensitive information on prices, competitors and customers. Furthermore, the cartel in question covered the whole of the EEA.
177 Second, it must be borne in mind that, under Section 1A of the Guidelines, the likely fine for a very serious infringement is more than EUR 20 million and that the starting amount of the fine imposed on Shell is the product of a certain number of factors, in particular, the volume of its sales of BR and ESBR in the EEA in 1998 (EUR 86.66 million) (recital 470 to the contested decision).
178 Third, it must be noted that the amount of the fine set for Shell does not exceed the cap of 10% of its turnover during the preceding business year laid down by Article 23(2) of Regulation No 1/2003, a limit which is designed to prevent the undertaking concerned from being unable to pay the fine in question (see, to that effect, Musique Diffusion française and Others v Commission, cited in paragraph 119 above, paragraph 119).
179 Fourth, as regards the unstructured nature of the cartel and the lack of impact on the market, it must be observed that those factors do not call into question the Commission’s conclusion that the infringement at issue was very serious (see paragraphs 162 to 170 above). In addition, it will be recalled that the gravity of the infringement must be assessed as a whole, taking all the relevant factors of the case into account. In the present case, taking into account the factors put forward by the Commission in the contested decision and those set out in paragraphs 176 to 178 above, the Court considers that the circumstances alleged by Shell, assuming they were established, do not support the conclusion that the starting amount of the fine imposed by the Commission is disproportionate.
180 In those circumstances, and in the absence of more detailed arguments, there is nothing to support the conclusion that the starting amount of the fine of EUR 27.5 million imposed on Shell is contrary to the principle of proportionality.
181 As to the fact that the starting amounts of the fines imposed in the present case are higher than those imposed in other cases relating to the application of Article 81 EC and the claim that the principle of equal treatment has accordingly been breached, it will be recalled that the Commission enjoys a wide discretion in the area of setting fines and is not bound by assessments which it has made in the past. It follows that Shell cannot invoke the Commission’s decision-making policy before the Courts of the European Union (see, to that effect, the case-law cited in paragraph 125 above). Furthermore and for the sake of completeness, Shell has not demonstrated in what respect the factual and legal situation giving rise to the adoption of the contested decision is comparable to that of the previous decisions on which it relies.
182 In the light of those considerations, the third part of the fourth plea in law raised by Shell must be rejected as unfounded.
Fourth part: failure to state reasons
– Arguments of the parties
183 Even if the Commission did not breach the principles of proportionality and equal treatment in setting the starting amount of the fine, Shell submits that the Commission’s brief reference to the classification of the infringement as very serious and to the size of the relevant geographic market does not suffice to explain the choice of a starting amount which is much higher than those chosen in the other recent comparable cases.
184 Consequently, the contested decision should be annulled on that point or, in the alternative, the amount of the fine to be imposed on Shell should be reduced in such a way as to take into account the unstructured nature of the infringement and the lack of impact on the market.
185 The Commission contends that the fourth part of the fourth plea should be rejected. It recalls that the essential procedural requirement to state reasons is satisfied where it indicates in its decision the factors which enabled it to determine the gravity and duration of the infringement. The Commission maintains that it satisfied that requirement in recitals 465 to 473 to the contested decision. Nor is the Commission required to justify its decision by reference to other previous decisions.
– Findings of the Court
186 In the light of the case-law referred to in paragraphs 105 and 106 above, it is sufficient to observe, in this instance, that recitals 461 to 464 to the contested decision contain the factors which enabled the Commission to conclude that the infringement at issue was very serious. Furthermore, for the reasons set out in the context of the third part of the present plea, the previous decisions on which Shell relies in support of its claims do not call into question the legality of the contested decision. Consequently, on the same grounds, the Commission was not obliged to state reasons for the fact that the fines imposed in the present case were higher than those imposed in the cases giving rise to previous decisions.
187 In the light of those considerations, the fourth part of the fourth plea in law raised by Shell must be rejected as unfounded, as, therefore, must the fourth plea in its entirety.
188 Accordingly, the pleas in law in support of annulment in part of the contested decision must be rejected in their entirety.
2. Claim for adjustment of the amount of the fine
189 In so far as the pleas in law on which Shell relies are advanced in support of its claims for an adjustment of the amount of the fine, it is sufficient to note that, as is apparent from the foregoing, those pleas are unfounded and cannot, therefore, result in a reduction of the fine. Those claims must therefore be rejected.
190 Accordingly, the action must be dismissed in its entirety.
Costs
191 Under Article 87(2) of the Rules of Procedure of the General Court, the unsuccessful party must be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicants have been unsuccessful, they must be ordered to pay the costs in accordance with the form of order sought by the Commission.
On those grounds,
THE GENERAL COURT (First Chamber)
hereby:
1. Dismisses the action;
2. Orders Shell Petroleum NV, Shell Nederland BV and Shell Nederland Chemie BV to pay the costs.
|
Dehousse |
Wiszniewska-Białecka |
Wahl |
Delivered in open court in Luxembourg on 13 July 2011.
[Signatures]
Table of contents
Background to the dispute
Procedure and forms of order sought by the parties
Law
1. Claim for annulment in part of the contested decision
First plea in law: unlawful imputation of the infringement to Shell Petroleum and Shell Nederland
First part: incorrect application of the conditions for the imputability of the infringement
– Arguments of the parties
– Findings of the Court
Second part: rebuttal of the presumption by Shell Petroleum and Shell Nederland
– Arguments of the parties
– Findings of the Court
Third part: the consequences of the error made by the Commission
– Arguments of the parties
– Findings of the Court
Second plea in law: unjustified increase in the basic amount of the fine for repeated infringement
First part: breach of the principles of legal certainty and proportionality
– Arguments of the parties
– Findings of the Court
Second part: failure to state reasons
– Arguments of the parties
– Findings of the Court
Third plea in law: incorrect application of a multiplier for deterrence
First part: breach of the principles of equal treatment and proportionality
– Arguments of the parties
– Findings of the Court
Second part: failure to state reasons
– Arguments of the parties
– Findings of the Court
Fourth plea in law: incorrect determination of the starting amount of the fine
First part: unjustified application of differential treatment to the starting amounts of the fine
– Arguments of the parties
– Findings of the Court
Second part: incorrect determination of the starting amounts of the fines
– Arguments of the parties
– Findings of the Court
Third part: breach of the principles of proportionality and equal treatment
– Arguments of the parties
– Findings of the Court
Fourth part: failure to state reasons
– Arguments of the parties
– Findings of the Court
2. Claim for adjustment of the amount of the fine
Costs
* Language of the case: English.