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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> The Dow Chemical Company, v European Commission [2013] EUECJ C-179/12 (26 September 2013)
URL: http://www.bailii.org/eu/cases/EUECJ/2013/C17912.html
Cite as: [2014] 4 CMLR 6, [2014] Bus LR 119, ECLI:EU:C:2013:605, [2013] WLR(D) 363, [2013] EUECJ C-179/12, EU:C:2013:605, [2014] BUS LR 119
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JUDGMENT OF THE COURT (Ninth Chamber)
26 September 2013 (*)
(Appeal – Competition – Agreements, decisions and concerted practices – Market for chloroprene rubber – Price-fixing and market-sharing – Infringement of Article 81 EC – Imputability of the unlawful conduct of a subsidiary to its parent company – Joint control by two parent companies – Decisive influence – Rights of defence – Increase in the fine – Deterrent effect)
In Case C-179/12 P,
APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 16 April 2012,
The Dow Chemical Company, established in Midland (United States), represented by D. Schroeder, Rechtsanwalt,
appellant,
the other party to the proceedings being:
European Commission, represented by P. Van Nuffel, V. Bottka and L. Malferrari, acting as Agents, with an address for service in Luxembourg,
defendant at first instance,
THE COURT (Ninth Chamber),
composed of J. Malenovský, President of the Chamber, U. Lõhmus (Rapporteur) and M. Safjan, Judges,
Advocate General: P. Mengozzi,
Registrar: A. Calot Escobar,
having regard to the written procedure,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1 By its appeal, The Dow Chemical Company (‘Dow’) asks the Court of Justice, first, to set aside the judgment of the General Court of the European Union of 2 February 2012 in Case T-77/08 (‘the judgment under appeal’), by which the General Court dismissed Dow’s application for the annulment of Commission Decision C(2007) 5910 final of 5 December 2007, relating to a proceeding under Article [81 EC] and Article 53 of the EEA Agreement (Case COMP/F/38.629 – Chloroprene Rubber) (‘the decision of 5 December 2007’), as amended by Commission Decision C(2008) 2974 final of 23 June 2008 (‘the decision at issue’), and, secondly, to annul that decision in so far as it concerns Dow and to reduce the fine imposed on it by that decision.
The background to the dispute and the decision at issue
2 The facts of the dispute, as set out in paragraphs 2 to 27 of the judgment under appeal, may be summarised as follows.
3 On 1 April 1996, Dow acquired a 50% shareholding in DuPont Dow Elastomers LLC (‘DDE’), a joint venture now held in equal shares with EI du Pont de Nemours and Company (‘EI DuPont’) and which was active on the chloroprene rubber (‘CR’) market. Dow held the stake in DDE until 30 June 2005, when DDE became DuPont Performance Elastomers LLC (‘DPE LLC’), a wholly-owned subsidiary of EI DuPont. DDE’s regional office for Europe, DuPont Dow Elastomers SA, became DuPont Performance Elastomers SA (‘DPE SA’), a wholly-owned subsidiary of DPE LLC.
4 On 27 March 2003 the Commission of the European Communities carried out inspections at the premises of, inter alia, Dow Deutschland Inc. On 21 November 2003, DDE applied for leniency in accordance with the Commission notice on immunity from fines and reduction of fines in cartel cases (OJ 2002 C 45, p. 3).
5 On 13 March 2007, the Commission initiated the procedure in the present dispute and adopted a statement of objections which it sent to 12 undertakings, including Dow. The Commission then adopted the decision of 5 December 2007 in which it found that, between 1993 and 2002, a number of producers of CR had participated in a single and continuous infringement of Article 81 EC and Article 53 of the European Economic Area Agreement of 2 May 1992 (OJ 1994, L 1, p. 3, ‘the EEA Agreement’), covering the entire territory of the European Economic Area (EEA), consisting of agreements and concerted practices aimed at agreeing upon the allocation and the stabilisation of markets, market shares and sales quotas for CR, coordinating and implementing several price increases, agreeing upon minimum prices, allocating customers and exchanging competitively sensitive information. Those producers met on a regular basis several times a year in bilateral, trilateral and multilateral meetings.
6 In that decision the Commission imputed liability for the cartel, in particular, to Dow, DPE SA, DPE LLC and EI DuPont, and ordered those undertakings to bring that infringement immediately to an end in so far as they had not already done so, and to refrain immediately from any restrictive practice having the same or similar object or effect.
7 In determining the basic amount of the fines, the Commission relied on its Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003 (OJ 2006 C 210, p. 2; ‘the Guidelines on the method of setting fines’). It took into account a proportion of the value of the sales of CR made by each undertaking within the EEA during 2001, which is the last full year of participation in the infringement, and multiplied it by the number of years of infringement.
8 In order to determine the proportion of the value of sales to be taken into account, the Commission found that the horizontal market-sharing and price-fixing agreements were by their very nature among the most serious restrictions of competition. In that regard, the Commission also considered that the combined market share of the undertakings participating in the infringement came to 100% within the EEA, that the geographic scope of the infringement was worldwide and that the infringement had been systematically implemented. Consequently, the Commission determined the proportion of the sales volumes of each undertaking involved at 21%.
9 As the participation in the infringement had lasted for nine years for EI DuPont, and six years and one month for DPE LLC, DPE SA and Dow, the Commission, in application of point 24 of the Guidelines on the method of setting fines, multiplied the starting amounts of the fines determined by reference to the value of sales by nine for EI DuPont, and by six and a half for DPE LLC, DPE SA and Dow.
10 In order to deter the undertakings from participating in an agreement relating to market-sharing or horizontal price-fixing agreements such as those in issue in the present case, and taking into account in particular the factors referred to in the two preceding paragraphs, the Commission, in application of point 25 of those Guidelines, included in the basic amount of the fines an additional amount of 20% of the value of sales.
11 Furthermore, the Commission considered that EI DuPont and Dow, as the parent companies of the joint venture DDE, should be held jointly and severally liable for the behaviour of that joint venture during the period from 1 April 1996 to 13 May 2002. In addition, it found that, as the successors to DDE, the entities DPE LLC and DPE SA should also be held jointly and severally liable for DDE’s conduct during that period, because, after the infringement was ended, they took over its activities on the CR market.
12 In the light of those factors, the basic amount of the fine to be imposed on E I DuPont was fixed at EUR 79 million, of which EUR 59 million was to be paid jointly and severally with DPE LLC, DPE SA and Dow.
13 As regards the adjustments to the basic amounts of the fines for aggravating circumstances, no increase was applied to the fine to be imposed on Dow, since no aggravating circumstance was found to exist in its case.
14 The Commission also applied a specific increase to the fines of certain addressees of the decision of 5 December 2007 in order to ensure that the fines would have a sufficiently deterrent effect, taking into account those undertakings’ turnovers beyond the goods and services to which the infringement related. Thus, the basic amount of the fine to be imposed on Dow was multiplied by 1.1. Therefore, the sum to be paid jointly and severally with EI DuPont was increased to EUR 64.9 million.
15 With regard to the application of the Commission’s notice referred to in paragraph 4 above, the Commission granted a reduction in the basic amount of the fine of 25% to EI DuPont, DPE LLC, DPE SA and Dow.
16 The amount of the fine imposed on EI DuPont was therefore set at EUR 59.25 million, of which EUR 44.25 million was to be paid jointly and severally with DPE LLC and DPE SA, and EUR 48.675 million was to be paid jointly and severally with Dow.
17 Finally the Commission adopted the amending decision of 23 June 2008, which was sent to EI DuPont, DPE LLC, DPE SA and Dow. Under that decision, Dow was solely liable for payment of a fine of EUR 4.425 million, while the amount of the fine, for payment of which EI DuPont and Dow were held jointly and severally liable, was reduced to EUR 44.25 million. In that decision, the Commission also corrected a factual error in the calculation of the amount of the fine to be paid by EI DuPont, as that amount was the result of the application of the coefficient multiplier of 10% for deterrence to the fine imposed only on Dow.
The procedure before the General Court and the judgment under appeal
18 By application lodged at the Registry of the General Court on 18 February 2008, Dow brought an action for annulment of the decision of 5 December 2007, in so far as it concerned Dow, and, in the alternative, for a reduction in the amount of the fine imposed on Dow by that decision. In that regard, it must be noted that in its reply Dow reformulated its claims, pleas in law and arguments in the light of the amendments made by the Commission to the decision of 5 December 2007 by its amending decision of 23 June 2008. Therefore, that application was regarded as being directed against the decision of 5 December 2007, as amended; that is to say, the decision at issue.
19 In support of its action, Dow raised two pleas in law alleging, respectively, manifest errors of assessment of the facts and errors of law committed by the Commission in finding that Dow had participated in the infringement committed by DDE, or in holding it liable for that infringement, and in the determination of the amount of the fine imposed on it.
20 The first plea in law was divided into two parts, the first alleging a manifest error of assessment and an error of law, and breach of the rights of the defence with regard to Dow’s knowledge of the existence of the cartel, and the second alleging a manifest error of assessment of the facts and an error of law as concerns the infringement being imputed to Dow because of its involvement in the Members’ Committee responsible for supervising the business of DDE and approving certain matters pertaining to the strategic management of that undertaking.
21 As regards the second part of that plea, Dow claimed inter alia that the Commission did not have any fundamental legal basis for addressing the decision at issue to it in holding it jointly and severally liable with DDE or EI DuPont solely on the ground that it was involved in that Members’ Committee.
22 In the first instance, the General Court, in paragraphs 85 to 88 of the judgment under appeal, examined the criteria used in the decision at issue to demonstrate that the parent companies of DDE did in fact exercise decisive influence over its conduct on the CR market.
23 In paragraph 89 of the judgment under appeal, the General Court found that, having regard to all the economic, legal and organisational links between Dow and DDE, the Commission did not err in finding that Dow, as one of DDE’s parent companies, had exercised decisive influence over DDE’s conduct on the CR market. The Commission did not therefore err in finding that Dow and DDE formed a single undertaking for the purposes of Article 81 EC and in holding Dow jointly and severally liable for DDE’s conduct from 1 April 1996 until 13 May 2002.
24 In paragraphs 91 to 103 of the judgment under appeal, the General Court rejected the arguments raised by Dow challenging that finding. It consequently rejected as unfounded the second part of the first plea in law.
25 By the first part of the first plea in law, Dow maintained that the Commission’s inference that Dow was aware of the existence of the cartel was one of the three factors on which the Commission based its conclusion that DDE did not enjoy an autonomous position on the market, and that Dow and EI DuPont had exercised decisive influence over DDE. That inference was itself based on the assumption that the Members’ Committee referred to the cartel when discussing the closure of DDE’s production plant in Northern Ireland. However, Dow claimed that it had no knowledge of the existence of the cartel before 2003.
26 In paragraph 108 of the judgment under appeal the General Court rejected that argument as invalid. It pointed out that it was clear from the analysis of the second part of the first plea that Dow, as one of the two parent companies of DDE, exercised sufficient decisive influence over DDE to be able to direct DDE’s conduct to such an extent that both companies could be regarded as parts of the same economic unit. The General Court found that it was also clear from that analysis that the Commission was correct to impute inter alia to Dow the infringement committed by DDE during the period from 1 April 1996 until 13 May 2002.
27 Dow further claimed that, by referring to matters concerning its knowledge of the cartel which did not appear in the statement of objections, the Commission breached its right to be heard, thereby depriving it of the possibility of explaining the purpose of the discussions in the Members’ Committee and providing the minutes of the meeting in question.
28 Those arguments were rejected as unfounded in paragraphs 109 to 112 of the judgment under appeal. The General Court held that the Commission had not confronted Dow, in the decision at issue, with elements regarding its awareness of the existence of the cartel of which it had not been informed, and that Dow was able to submit its arguments effectively in that regard in the administrative procedure. In those circumstances, the General Court held that Dow failed to establish the alleged breach of the rights of the defence.
29 By its second plea in law, Dow maintained inter alia that, by increasing the amount of the fine imposed on it by 10%, the Commission had made a manifest error of assessment of the facts and had breached the principle of equal treatment.
30 In dismissing those arguments, the General Court, at paragraph 153 of the judgment under appeal, noted that point 30 of the Guidelines on the method of setting fines provides that ‘[t]he Commission will pay particular attention to the need to ensure that fines have a sufficiently deterrent effect; to that end, it may increase the fine to be imposed on undertakings which have a particularly large turnover beyond the sales of goods or services to which the infringement relates’.
31 As regards Dow’s argument that it was the victim of a breach of the principle of equal treatment, because it was treated differently from another undertaking referred to in an earlier Commission decision, and of a manifest error of assessment by the Commission in that regard, the General Court, in paragraph 156 of the judgment under appeal, stated that, in the context of calculating fines imposed under Article 23(2) and (3) 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), the European Union Courts have recognised that, in order to attain the aim of deterrence, a certain difference in the treatment of the undertakings concerned by a Commission decision is inherent in the application of the method chosen by those guidelines. Furthermore, given the Commission’s broad discretion when setting fines, the General Court found that the manifest error of assessment alleged had not been established either.
32 Since neither of the two pleas in law relied on by Dow in support of its action before the General Court could succeed, the action was therefore dismissed.
Forms of order sought
33 Dow claims that the Court should:
– set aside the judgment under appeal and annul the decision at issue in so far as it concerns Dow;
– in the alternative, set aside the judgment under appeal in so far as it rejects the application for a reduction in the fine imposed on Dow, and accordingly reduce the amount of that fine; and
– order the Commission to pay the costs.
34 The Commission contends that the Court of Justice should:
– dismiss the appeal and the application for annulment of the decision at issue; and
– order Dow to pay the costs of both these proceedings and those before the General Court.
The appeal
35 Dow puts forward two grounds in support of its appeal. By the first ground of appeal, it claims that the General Court erred in law in imputing to it the infringement committed by DDE. By the second ground of appeal, it alleges an error of law concerning the increase in the amount of the fine imposed on it by 10%.
The first ground of appeal: error of law in imputing the infringement to Dow
Arguments of the parties
36 By the first part of the first ground of appeal, Dow criticises the General Court for having stated, in paragraph 89 of the judgment under appeal, that ‘as one of DDE’s parent companies’ Dow had exercised decisive influence over DDE’s conduct on the CR market. In doing so, the General Court erred in law in misconstruing the terms ‘single economic unit’, ‘single undertaking’ and the ‘existence of … decisive influence’.
37 First, Dow states that, where two parent companies jointly exercise an influence over a joint venture, a finding that they, along with that joint venture, constitute a single economic unit and a single undertaking is incompatible with the notions of ‘single economic unit’ and ‘single undertaking’ referred to in paragraph 59 of the judgment in Case C-97/08 P Akzo Nobel and Others v Commission [2009] ECR I-8237. That, according to Dow, would lead to the fundamental paradox that it is simultaneously part of a number of undertakings all of which comprise joint ventures and their parent companies.
38 In that regard, Dow claims that the General Court was wrong in stating in paragraphs 98 and 99 of the judgment under appeal that it formed ‘a single economic unit for the purpose of the subject-matter of the agreement in question’ with EI DuPont and DDE. Dow claims that the General Court developed an approach already adopted, in particular, in its judgment in Case T-314/01 Avebe v Commission [2006] ECR II-3085, paragraphs 136 to 141, according to which two parent companies, which held respectively 50% of their subsidiary, and their joint enterprise formed a single economic unit for the purpose of the subject-matter of the agreement in question in the context of which the unlawful conduct of the subsidiary might be imputed to its parent companies who become liable by virtue of the fact that they, in fact, control the subsidiary’s marketing policy. According to Dow, the issue whether a joint enterprise and its parent companies form ‘a single economic unit’, contrary to what the General Court states, does not fall within the Commission’s discretion or a review of the facts which the Commission may vary on a case-by-case basis.
39 Secondly, Dow considers that it is impossible for the parent companies of a joint venture to exercise ‘decisive influence’ since their joint control gives them only the negative power to reject the strategic decisions proposed by the shareholders of the jointly owned undertaking. Thus the condition laid down by the case-law of the Court of Justice that the conduct of a subsidiary may be imputed to its parent company, in particular where, although it has 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’, is not fulfilled in a case where only negative control is exercised over a joint venture.
40 Furthermore, Dow criticises the General Court for having held, in paragraph 101 of the judgment under appeal, that the parent company’s power of supervision gives rise to a responsibility to ensure that its subsidiary complies with the rules of competition law of the European Union (‘competition law’). In that regard, it states that there is no presumption that a shareholder which exercised only joint control would have the power to impose a policy of compliance with that law.
41 In addition, Dow claims that the General Court was wrong to find, in paragraph 101, that, since any gains resulting from illegal activities accrue to the shareholders, it is only fair that that those who have the power of supervision should assume liability for the illegal business activities of their subsidiaries. In that regard, Dow states that the gains generated by a joint venture involved in a cartel benefit, not the shareholders, but that joint venture. Likewise, the losses arising from a cartel are allocated to the joint venture. Making the shareholders jointly liable to pay the fines would expose them to a loss that does not correspond to those benefits. Moreover, the parent companies’ indirect share in those benefits cannot form the legal basis for liability in the absence of decisive influence.
42 Thirdly, Dow claims that the General Court’s finding, in paragraph 93 of the judgment under appeal, that the fact that DDE was created as an autonomous economic unit within the meaning of Article 3(4) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (‘the EC Merger Regulation’) (OJ 2004 L 24, p. 1) does not mean that it cannot be under the decisive influence of its parent companies for the purposes of Article 81 EC. Dow states that, since decisive influence can be extended to the day-to-day management of a subsidiary and a full-function joint venture has autonomy as regards its day-to-day management, it is less likely that a parent company of that joint venture will exercise decisive influence.
43 In that regard, Dow claims that the fact that a joint venture and its parent companies are deemed to form a single economic unit is contrary to the legal framework established by the EC Merger Regulation, according to which the change from joint to sole control must be treated as a notifiable concentration, and expressly states that any element of cooperation between the parent companies of a joint venture must be examined in the light of Article 81 EC.
44 Fourthly, Dow claims that the General Court imputed liability to Dow for DDE’s conduct without verifying whether it had actually exercised decisive influence over DDE. Dow considers that in paragraphs 77, 87, 107 and 155 of the judgment under appeal, the General Court did not make a distinction between the capacity to exercise decisive influence and the actual exercise of decisive influence, an error which undermined the General Court’s examination of the facts.
45 Dow criticises the General Court for not examining the arguments that the three former senior executives appointed to DDE did not occupy posts with significant responsibility, that they were not required to provide Dow with a report, that following the creation of DDE its senior executives were no longer part of Dow’s staff, and that they never resumed their former posts within Dow when DDE was dissolved.
46 Dow also considers that, contrary to what the General Court states in paragraphs 86 to 88 of the judgment under appeal, the decision to close the Maydown factory, the implementation of the agreement creating a limited liability company concluded between Dow, EI DuPont Wenben Inc. and DuPont Elastomers Inc. and the instruction to open an internal investigation do not amount to evidence capable of establishing that the parent companies exercised decisive influence over DDE’s conduct on the CR market.
47 The Commission considers that the first part of that ground of appeal is partly inadmissible and must, in any event, be rejected as unfounded.
48 By the second part of its first ground of appeal, Dow alleges a breach of the rights of the defence in that the General Court held, in paragraph 112 of the judgment under appeal, that the Commission did not infringe those rights in considering that Dow was aware of the existence of the cartel without having been informed of that suspicion so that it could respond to the suspicion before the decision at issue was adopted.
49 The Commission contends that the ground of appeal should be dismissed.
Findings of the Court
50 As regards the first part of the first ground of appeal relating to the imputation of the infringement to Dow, Dow considers, in essence, that by confirming in paragraph 89 of the judgment under appeal that it had exercised decisive influence over DDE’s conduct on the CR market, the General Court misconstrued the terms ‘single economic unit’, ‘single undertaking’ and the ‘existence of … decisive influence’.
51 In that regard, it is clear from paragraphs 89, 98 and 99 of the judgment under appeal that the General Court considered that Dow formed a single economic unit with DDE by reason of the decisive influence which it had over the latter’s conduct on that market.
52 As a preliminary point, it must be observed that, according to settled case-law, the behaviour of a subsidiary can be imputed to the parent company, in particular where, despite having separate legal personality, that subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, regard being had in particular to the economic, organisational and legal links between those two legal entities (Akzo Nobel and Others v Commission , paragraphs 58 and 72, and Joined Cases C-628/10 P and C-14/11 P Alliance One International and Standard Commercial Tobacco v Commission and Commission v Alliance One International and Others [2012] ECR I-0000, paragraph 43)
53 In such a situation, because the parent company and its subsidiary form a single economic unit and therefore form a single undertaking for the purposes of Article 81 EC, the Commission may address a decision imposing fines to the parent company, without having to establish the personal involvement of the latter in the infringement (see Akzo Nobel and Others v Commission, paragraph 59, and Alliance One International and Standard Commercial Tobacco v Commission and Commission v Alliance One International and Others, paragraph 44).
54 The Court of Justice has stipulated that account must be taken of all the relevant factors relating to the economic, organisational and legal links which tie the subsidiary to the parent company, which may vary from case to case and cannot therefore be set out in an exhaustive list (see, to that effect, Akzo Nobel and Others v Commission, paragraph 74, and Case C-521/09 P Elf Aquitaine v Commission [2011] ECR I-8947, paragraph 58).
55 In paragraphs 73 and 75 of the judgment under appeal, the General Court therefore cited the case-law setting out the test for imputing to a parent company the competition infringement committed by its subsidiary. It rightly held that, in order to be able to impute the conduct of a subsidiary to the parent company, the Commission cannot merely find that the parent company is in a position to exercise decisive influence over the conduct of its subsidiary, but must also check whether that influence was actually exercised (see, to that effect, Case 107/82 AEG-Telefunken v Commission [1983] 3151, paragraph 50).
56 It should be noted in that regard that the principle that it is necessary to check whether the parent company actually exercised decisive influence over its subsidiary applies only where the subsidiary is not wholly owned by its parent company. According to settled case-law of the Court of Justice, where the entire capital of the subsidiary is owned, there is no longer any requirement to carry out such a check since, in those circumstances, there is a presumption of decisive influence on the part of the parent company which has the burden of rebutting that presumption (see Alliance One International and Standard Commercial Tobacco v Commission and Commission v Alliance One International and Others, paragraphs 46 and 47 and the case-law cited).
57 More specifically, with regard to the claim that the General Court misconstrued the terms ‘single economic unit’ and ‘single undertaking’, it must be stated that, in paragraph 73 of the judgment under appeal, the General Court pointed out that, according to the settled case-law of the Court of Justice, in competition law the term undertaking must be understood as designating an economic unit for the purposes of the subject-matter of the agreement in question, even if in law that economic unit consists of several persons, natural or legal (Case 170/83 Hydrotherm Gerätebau [1984] ECR 2999, paragraph 11; Case C-217/05 Confederación Española de Empresarios de Estaciones de Servicio [2006] ECR I-11987, paragraph 40; and Akzo Nobel and Others v Commission, paragraph 55).
58 Where two parent companies each have a 50% shareholding in the joint venture which committed an infringement of the rules of competition law, it is only for the purposes of establishing liability for participation in the infringement of that law and only in so far as the Commission has demonstrated, on the basis of factual evidence, that both parent companies did in fact exercise decisive influence over the joint venture, that those three entities can be considered to form a single economic unit and therefore form a single undertaking for the purposes of Article 81 EC.
59 It must therefore be held that, as part of the verification process of the assessment carried out by the Commission, the General Court did not misconstrue the terms ‘single economic unit’, ‘single undertaking’ and the ‘existence of … decisive influence’.
60 Dow, in support of the first part of its first ground of appeal, also relies on other arguments: first, that, since the joint control exercised by parent companies over their joint venture gives them only a negative power to block the latter’s strategic decisions, that control cannot imply the existence of the parent company’s decisive influence over the subsidiary; and, secondly, that there is no presumption that a shareholder which exercises only joint control has the power to impose a policy of compliance with the rules of competition law. In that regard, it must be pointed out, as is clear from the previous paragraph, that the General Court did not find the existence of Dow’s decisive influence over the subsidiary solely on the basis of the possibility that the parent companies could exercise joint control over that subsidiary, but that it relied on its own assessment of the economic, organisational and legal factors which tied DDE to its two parent companies, as determined by the Commission in its decision of 5 December 2007.
61 In that regard, suffice it to state that, since the Commission found that Dow exercises a decisive influence over DDE’s conduct on the basis of factors which, unless they have been distorted, cannot be called into question on appeal, those claims must be held to be unfounded.
62 As regards the criticism of paragraph 101 of the judgment under appeal, as set out in paragraph 41 above, relating to possible gains resulting from the illegal activities of the joint venture, suffice it to state that, since Dow’s liability is based on the actual exercise of decisive influence, the General Court’s explanation in paragraph 101 constitutes a ground that was included in the judgment purely for the sake of completeness.
63 According to settled case-law of the Court of Justice, complaints directed against grounds included in a judgment of the General Court purely for the sake of completeness cannot lead to the judgment being set aside and are therefore ineffective (see, inter alia, the order of 20 January 2009 in Case C-374/07 P Mebrom v Commission, paragraph 57, and Case C-96/09 P Anheuser-Busch v Budějovický Budvar [2011] ECR I-2131, paragraph 211)
64 As regards Dow’s argument, set out in paragraph 42 above, that the General Court’s approach is incompatible with the EC Merger Regulation, it must be stated, first, that decisive influence of one or more parent companies is not necessarily tied in with the day-to-day running of a subsidiary and, secondly, as is clear from the case-law cited in paragraph 54 above, evidence of such influence must be assessed having regard to all the economic, organisational and legal links between the subsidiary and the parent company.
65 In this case the General Court concluded from all the evidence, in particular the control exercised by DDE’s two parent companies over its strategic business decisions, that those companies did in fact exercise decisive influence. Accordingly, it rightly pointed out in paragraph 93 of the judgment under appeal that the autonomy which a joint venture enjoys within the meaning of Article 3(4) of the EC Merger Regulation does not mean that that joint venture also enjoys autonomy in relation to adopting strategic decisions, and that it is therefore not under the decisive influence of its parent companies for the purposes of Article 81 EC.
66 Consequently, it must be stated that, contrary to what Dow claims, the General Court’s finding in paragraph 93 of the judgment under appeal is not incompatible with the EC Merger Regulation.
67 As for the claim relating to the General Court’s failure to check whether decisive influence was actually exercised, it is in principle for the Commission, as the General Court pointed out in paragraph 76 of the judgment under appeal, to demonstrate, on the basis of factual evidence, including inter alia any management power one of the entities may have over the other, that the parent company does in fact exercise decisive control over its subsidiary.
68 In paragraphs 86 to 89 of the judgment under appeal, the General Court found that it was clear from the decision at issue that the Commission did not rely on any presumption of decisive influence in order to assess whether such influence was actually exercised by the parent companies over the joint venture. Contrary to what Dow claims, the General Court did consider carefully the factual evidence on which the Commission based its conclusion with regard to Dow’s decision-making power over DDE’s commercial policy, more particularly in paragraphs 81, 82 and 85 to 88 of the judgment under appeal.
69 Therefore, the General Court examined the specific circumstances of the case and concluded in paragraphs 95, 98 and 100 of the judgment under appeal that the Commission had not erred in law in finding that Dow, as one of DDE’s two parent companies, had in fact exercised decisive influence over its conduct on the CR market.
70 As regards the arguments relating to the General Court’s examination, in paragraphs 85 to 88 of the judgment under appeal, of the appointment of DDE’s senior executives, of the decision to close the Maydown factory, of the implementation of the agreement referred to in paragraph 46 above and of the instruction to open an internal investigation, suffice it to state that they seek to have the Court of Justice re-examine the General Court’s assessment of the evidence which the Commission relied upon.
71 In that regard, it should be recalled that it is clear from Article 256 TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union that the General Court has exclusive jurisdiction, first, to find the facts, except where the substantive inaccuracy of its findings is apparent from the documents submitted to it and, second, to assess those facts. When the General Court has found or assessed the facts, the Court of Justice has jurisdiction under Article 256 TFEU to review the legal characterisation of those facts by the General Court and the legal conclusions it has drawn from them (Case C-551/03 P General Motors v Commission [2006] ECR I-3173, paragraph 51; Case C-352/09 P ThyssenKrupp Nirosta v Commission [2011] ECR I-2359 paragraph 179; and judgment of 28 July 2011 in Joined Cases C-471/09 P to C-473/09 P Diputación Foral de Vizcaya and Others v Commission, paragraphs 54 and 55).
72 The Court has also stated that the appraisal of the facts by the General Court does not constitute, save where the clear sense of the evidence produced before it is distorted, a question of law which is subject, as such, to review by the Court of Justice (Case C-397/03 P Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission [2006] ECR I-4429, paragraph 85, and ThyssenKrupp Nirosta v Commission, paragraph 180).
73 Since no distortion has been alleged by Dow in this case, that argument must therefore be considered inadmissible.
74 It follows that the first part of the first ground of appeal must be rejected as being in part unfounded, in part ineffective and in part inadmissible.
75 As regards the second part of the first ground of appeal, alleging breach of the rights of the defence, suffice it to say that, as the General Court rightly held in paragraphs 105 to 108 of the judgment under appeal that the Commission had established to a sufficient legal standard that Dow had exercised decisive influence over DDE’s conduct, it follows that the argument that Dow was aware of the infringement is just one additional element which, even if it were admissible, could not be such as to invalidate that finding. Consequently, the considerations put forward by the General Court in that regard were included in the judgment purely for the sake of completeness.
76 According to settled case-law of the Court of Justice, cited in paragraph 63 above, complaints directed against grounds included in a judgment of the General Court purely for the sake of completeness cannot lead to the judgment being set aside and are therefore ineffective.
77 Consequently, the second part of the first ground of appeal must be rejected as being ineffective.
78 It follows from all of the foregoing that the first ground of appeal relied on by Dow in support of its appeal must be rejected as being in part unfounded, in part inadmissible and in part ineffective.
The second ground of appeal: error of law regarding the increase of the fine by 10% for deterrence purposes
Arguments of the parties
79 Dow claims that the General Court erred in law in finding that the Commission did not infringe the principle of equal treatment with regard to the increase of the fine by 10% for deterrence purposes, an increase that was not applied either to EI DuPont or to DDE. If, as the General Court pointed out, EI DuPont and DDE formed a single undertaking with Dow, the same multiplier should have been applied to all the legal entities which made up that undertaking.
80 The Commission submits that, since this ground was not raised at first instance, it is inadmissible, and it is, in any event, ineffective.
Findings of the Court
81 By its arguments, Dow in essence criticises the increase in the fine imposed on it by 10% for deterrence purposes. Yet it did not submit to the General Court any arguments such as the one summarised in paragraph 79 above. At first instance, it contested the legality of the coefficient multiplier applied to it under point 30 of the Guidelines on the method of setting fines. To that end, Dow relied on a number of arguments, none of which however was connected with alleged discrimination based on the fact that the multiplier for the fine imposed on it is not the same as the one applied to either EI DuPont or DDE. On the contrary, Dow did claim before the General Court that it was treated differently from undertakings targeted by another Commission decision, namely Decision C(2007) 5469 final, of 20 November 2007 relating to a proceeding under Article [81 EC] and Article 53 of the EEA Agreement (Case COMP/38.432 – Professional videotapes).
82 As the Commission rightly points out, to allow a party to put forward for the first time before the Court of Justice a plea and arguments which it did not raise before the General Court would be to authorise it to bring before the Court of Justice, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the General Court. In an appeal, the jurisdiction of the Court of Justice is thus confined to a review of the findings of law on the pleas argued before the General Court (Alliance One International and Standard Commercial Tobacco v Commission and Commission v Alliance One International and Others, paragraph 111 and the case-law cited).
83 It follows from the foregoing that the second ground of appeal must be dismissed as inadmissible.
84 Since neither of the grounds of appeal relied on by Dow can be upheld, the appeal must be dismissed in its entirety.
Costs
85 In accordance with the first paragraph of Article 184(2) of the Rules of Procedure, where the appeal is unfounded, the Court of Justice shall make a decision as to costs. Under Article 138(1) of those Rules, which apply to the procedure on appeal by virtue of Article 184(1) of those Rules, the unsuccessful party shall be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs against Dow, and the latter has been unsuccessful, Dow must be ordered to pay the costs.
On those grounds, the Court hereby:
1. Dismisses the appeal;
2. Orders The Dow Chemical Company to pay the costs.
[Signatures]
* Language of the case: English.
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