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

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 3 April 2014 (1)

Case C-37/13 P

Nexans SA

and

Nexans France SAS

v

European Commission

(Appeal - Competition - Regulation (EC) No 1/2003 - Administrative procedure - Unannounced inspection - Decision ordering an inspection - Obligation to state reasons - Geographical scope - Suspicion of an infringement of competition law having a global reach - Power of the Commission to inspect business records relating to transactions outside the European Economic Area)

I -  Introduction

1.        It tends to be a frightening experience when - more often than not, early in the morning - European Commission inspectors turn up unannounced at the doors of an undertaking with the intention of searching its premises as part of a dawn raid aimed at determining whether that undertaking is involved in anti-competitive practices.

2.        In order to protect undertakings in such situations from disproportionate or even arbitrary entries onto their premises, to safeguard their rights of defence and at the same time to give them some clarity on the scope of their duty to cooperate, EU law provides for certain procedural guarantees. In particular, the inspection decision on the basis of which the Commission inspectors take such action must be properly reasoned.

3.        The present case offers the Court the opportunity to clarify further the legal requirements applicable to the statement of reasons for such inspection decisions. The focus of interest here is the as yet inadequately clarified aspect of the geographical limits of infringements of competition law requiring investigation by the Commission.

4.        How precisely must the Commission set out its views on the geographically relevant markets at this early stage of the procedure? Does the inspection decision have to say whether and to what extent an undertaking has to grant the Commission inspectors access to its business records relating to transactions outside the European internal market? These are, in essence, the legal questions that must be answered in the present appeal proceedings.

5.        Those questions arise against the background of a suspected cartel involving high voltage cables and the material associated with them, in relation to which the Commission began investigations several years ago and conducted unannounced inspections in early 2009, not least at Nexans’ premises in France. At those premises, the Commission also looked at numerous business records concerning electric cable projects on non-European markets. The essence of the dispute between the parties to the proceedings is now whether the statement of reasons for the inspection decision afforded a sufficient basis for such action.

6.        The importance of the Court’s judgment in this case, from the point of view of the Commission’s future administrative practice, should not be underestimated.

II -  Legal context

7.        The primary law framework applicable to this case consists, on the one hand, of Article 81 EC (now Article 101 TFEU) and, on the other hand, of Article 253 EC (now the second paragraph of Article 296 TFEU). (2) As regards secondary law, Article 20 of Regulation (EC) No 1/2003 (3) is also relevant.

8.        Article 20 of Regulation No 1/2003 reads, in extract, as follows:

‘1.      In order to carry out the duties assigned to it by this Regulation, the Commission may conduct all necessary inspections of undertakings and associations of undertakings.

…

4.      Undertakings and associations of undertakings are required to submit to inspections ordered by decision of the Commission. The decision shall specify the subject matter and purpose of the inspection, appoint the date on which it is to begin and indicate the penalties provided for in Articles 23 and 24 and the right to have the decision reviewed by the Court of Justice. The Commission shall take such decisions after consulting the competition authority of the Member State in whose territory the inspection is to be conducted.’

9.        Also worth mentioning is Article 4 of Regulation No 1/2003, which is worded as follows:

‘For the purpose of applying Articles 81 [EC] and 82 [EC], the Commission shall have the powers provided for by this Regulation.’

III -  Background to the dispute

A -    Facts and administrative procedure

10.      The applicants in the proceedings at first instance and now the appellants, Nexans SA and its wholly-owned subsidiary Nexans France SAS, are two French companies which carry out their activities in the electric cable sector.

11.      By Decision C(2009) 92/1 of 9 January 2009, the Commission ordered Nexans and all companies directly or indirectly controlled by it to submit to an inspection in accordance with Article 20(4) of Regulation No 1/2003 (‘the inspection decision’).

12.      Article 1 of the inspection decision was worded inter alia as follows:

‘… Nexans …, together with all the companies it directly or indirectly controls, including Nexans France …, is obliged to submit to an inspection in relation to its (their) potential participation in anti-competitive agreements and/or concerted practices contrary to Article 81 EC … in relation to the supply of electric cables and material associated with such supply, including, amongst others, high voltage underwater electric cables, and, in certain cases, high voltage underground electric cables. Those agreements and/or concerted practices consist of the offering of concerted bids in public tenders, client allocation, as well as the illegal exchange of commercially-sensitive information relating to the supply of those products.’

13.      The following reasons were given for the inspection decision:

‘The Commission received information that electric cable suppliers, including the companies targeted in this decision, were participating or had participated in agreements and/or concerted practices in relation to the supply of electric cables and material associated with such supply, including, amongst others, high voltage underwater electric cables, and, in certain cases, high voltage underground electric cables. Those agreements and/or concerted practices consist of the offering of concerted bids in public tenders, client attribution, as well as the illegal exchange of commercially-sensitive information relating to the supply of those products.

…

According to the information received by the Commission, th[ose] agreements and/or concerted practices …, which were put in place by 2001 at the latest, still exist today. … [They] probably have a global reach.

Should those allegations prove to be well founded, the agreements and/or concerted practices described above would account for very serious infringements under Article 81 EC.

In order to enable the Commission to check all the facts in relation to the presumed agreements and concerted practices and the context in which they took place, it is necessary to carry out inspections pursuant to Article 20 of Regulation … No 1/2003.

…’

14.      The abovementioned inspection was carried out in the period between 28 and 30 January 2009 and on 3 February 2009 by Commission inspectors, accompanied by representatives of the Autorité de la concurrence (French Competition Authority), on the premises of Nexans France. Following prior notification of the inspection decision, the Commission inspectors examined and copied numerous documents and questioned employees of Nexans France in order to obtain more detailed explanations of certain business records.

B -    Proceedings at first instance before the General Court

15.      In the proceedings at first instance before the General Court, Nexans and Nexans France sought relief, by way of an action for annulment, against the inspection decision and against two acts carried out by the Commission inspectors in the course of the inspection.

16.      In response to that action, the General Court, by judgment of 14 November 2012, (4) annulled the inspection decision in so far as it concerned electric cables other than high voltage underwater and underground electric cables and the material associated with those other cables; the General Court dismissed the action as to the remainder. (5)

17.      With regard to the costs of the proceedings, Nexans and Nexans France were ordered to bear their own costs and to pay half of the costs incurred by the Commission. The Commission, on the other hand, was ordered to bear the remaining half of its own costs itself. (6)

IV -  Procedure before the Court of Justice

18.      By document of 24 January 2013, Nexans and Nexans France (‘the appellants’) jointly brought the present appeal against the judgment of the General Court. The appeal is concerned, on the one hand, with that part of the judgment under appeal by which the General Court did not uphold the action for annulment brought by those two companies in relation to the geographical scope of the inspection decision and, on the other hand, with the General Court’s decision on costs.

19.      The appellants claim that the Court should:

-        set aside the judgment under appeal in so far as it dismissed the second branch of the first plea in law to the effect that the geographical scope of the inspection decision was overly broad and insufficiently precise;

-        on the basis of the information at its disposal, annul the inspection decision in so far as its geographical scope was overly broad, insufficiently justified and insufficiently precise, or in the alternative, refer the case back to the General Court for determination in accordance with the judgment of the Court of Justice as to points of law;

-        set aside the judgment under appeal in so far as it orders Nexans to bear its own costs and to pay half of the costs incurred by the Commission in the proceedings before the General Court, and order the Commission to pay Nexans’ costs for the proceedings before the General Court in an amount the Court sees fit;

-        order the Commission to pay all of Nexans’ costs in these proceedings.

20.      The Commission, for its part, contends that the Court should:

-        dismiss the appeal;

-        order the appellants to pay the costs.

21.      The appeal was examined before the Court on the basis of the written pleadings and at the hearing on 26 February 2014.

V -  Assessment of the grounds of appeal

22.      By their appeal, Nexans and Nexans France are not taking forward all of the issues which formed the subject-matter of the proceedings at first instance. The legal debate in the appeal proceedings is confined, rather, to the geographical scope of the inspection decision. The material subject-matter of that decision, that is to say, the nature of the products concerned by the alleged infringements of competition law, on the other hand, is no longer relevant. The other acts carried out by the Commission inspectors in the course of the inspection, against which Nexans and Nexans France had directed their action at first instance, no longer form part of the subject-matter of the proceedings either.

23.      In essence, the appellants accuse the General Court of having wrongly refused to annul the inspection decision with respect to its geographical scope (first ground of appeal). They further claim that the General Court’s decision on the costs of the proceedings at first instance is inappropriate (second ground of appeal).

A -    First ground of appeal: requirements applicable to an inspection decision and the judicial review of such a decision with respect to its geographical scope

24.      The first ground of appeal is directed against paragraphs 95 to 100 of the judgment under appeal and consists of two branches. First, the appellants claim that there has been an infringement of the requirements applicable to the statement of reasons in so far as it relates to the geographical scope of the inspection decision (see in this regard section 1 immediately below). Secondly, they complain that the General Court did not adequately assess whether the Commission had sufficient grounds for its suspicion that there had been an infringement of competition law ‘probably hav[ing] a global’ reach (see section 2 below).

1.      Requirements applicable to the statement of reasons (first branch of the first ground of appeal)

25.      By the first branch of their first ground of appeal, the appellants accuse the General Court, on the one hand, of having provided an insufficient statement of the reasons on which its own judgment was based in relation to the geographical scope of the inspection decision (see in this regard section 1(a)) and, on the other hand, of having applied inadequate requirements to the statement of reasons given by the Commission for the inspection decision (see in this regard section 1(b)).

26.      Although there is necessarily some overlap between those two contentions, they none the less concern different legal issues - complaint of a formal error by the General Court in the first case and complaint of a substantive error by the General Court in the second case - and should therefore be examined separately. In no way does any error of law in relation to the statement of reasons for the inspection decision necessarily lead to the assumption of an error in the statement of the reasons on which the General Court’s judgment is based, or vice versa.

a)      The alleged failure to state reasons in the judgment of the General Court (first complaint)

27.      The appellants complain first that the statement of reasons for the judgment under appeal did not appropriately explain how the General Court came to the conclusion that, by its reference to the ‘probably global reach’ of the suspected agreements and/or concerted practices, the Commission had given a sufficiently detailed representation of the geographical scope of the presumed cartel.

28.      The obligation to give a proper statement of reasons for a judgment at first instance follows from Article 36 in conjunction with Article 53(1) of the Statute of the Court of Justice, and is also set out in Article 81 of the Rules of Procedure of the General Court.

29.      According to settled case-law, the obligation to state reasons does not require the General Court to provide an account which follows exhaustively and one by one all the arguments put forward by the parties to the case, and the reasoning may therefore be implicit, on condition that it enables the persons concerned to know why the General Court has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review. (7) In essence, the question is whether the General Court gave due consideration to all the heads of claim raised by the parties and to all the infringements of rights complained of by them in relation to the contested legal act of the defendant EU institution. (8)

30.      It is true that the findings in the judgment under appeal that deal with the geographical scope of the presumed infringements of competition law investigated by the Commission are comparatively brief. Indeed, the General Court devoted no more than three paragraphs to the substantive assessment of this issue. (9)

31.      It must be borne in mind, however, that Nexans and Nexans France themselves had not in any way made the question of the ‘probably global’ reach of the agreements and practices requiring investigation the focal point of their submissions at first instance. (10) Their attention at first instance was, after all, primarily directed not at the geographical scope of the Commission’s inspections but at their material subject-matter, that is to say the products covered by them. It was towards those products that the main thrust of their submissions before the General Court was directed.

32.      The fact that the General Court focused on similar issues in the statement of reasons for its judgment can hardly be held against it now on appeal to the Court of Justice.

33.      What matters ultimately, however, is whether, despite the brevity of its findings, the General Court adequately addressed the complaints raised by Nexans and Nexans France in relation to the limitation of the geographical scope of the presumed infringements of competition law, and whether the statement of reasons for the judgment makes it clear why the General Court did not consider those criticisms to be valid.

34.      The General Court gives express consideration to that issue in the judgment under appeal. It finds that, by indicating that the agreements and/or practices requiring investigation ‘probably have a global’ reach, the Commission ‘described in sufficient detail the geographical scope of the suspected cartel’. In the view of the General Court, ‘[t]he inspection decision must therefore be regarded as sufficiently precise so far as concerns the geographical scope of the possible infringements of competition law suspected by the Commission’. (11)

35.      The General Court also goes on to examine the argument advanced by Nexans and Nexans France to the effect that the Commission should not have extended its investigative activity to documents which related to local geographic markets outside the internal market, without specifying why conduct on the part of the undertaking at issue on those markets could distort competition in the internal market. (12) In the opinion of the General Court, the Commission may not carry out an inspection at the premises of an undertaking if it suspects that there is an agreement or a concerted practice which produces effects exclusively on one or more markets outside the internal market. However, the General Court takes the view that there is nothing to prevent the Commission from examining documents relating to those markets in order to detect conduct which is liable to affect trade between Member States and which has as its object or effect the prevention, restriction or distortion of competition within the internal market. (13)

36.      Consequently, in the judgment under appeal, the General Court set out clearly and unambiguously its position on the complaint raised by Nexans and Nexans France in relation to the geographical scope of the suspected infringements of competition law, and explained - albeit only briefly - why it did not consider that criticism to be valid.

37.      The appellants’ view on the substance of the decision may be different from that of the General Court. However, that fact in itself cannot vitiate the judgment under appeal for failure to state reasons but is at most a substantive defect. (14)

38.      All in all, therefore, the judgment under appeal is not vitiated by failure to state reasons. The first complaint raised by the appellants under this first branch of the first ground of appeal must be dismissed.

39.      The question of whether the General Court’s findings concerning the geographical scope of the suspected infringements of competition law and the requirements applicable to the reasons given by the inspection decision in this regard are substantively defective will now have to be clarified in the context of the second complaint.

b)      The requirements applicable to the statement of reasons for an inspection decision adopted by the Commission (second complaint)

40.      Secondly, the appellants claim that the requirements applied by the General Court to the statement of reasons for the Commission’s inspection decision were too lax and that it thereby infringed EU law. In their view, the statement made by the Commission in the preamble to the inspection decision to the effect that the agreements and/or concerted practices to be investigated ‘probably have a global reach’ was insufficiently precise and ambiguous. Nexans and Nexans France are of the opinion that the Commission should have, first, clearly defined the geographically relevant market in the inspection decision and, secondly, indicated to what extent electric cable projects outside the European Union and the European Economic Area were relevant to its investigations in this cartel case.

41.      The obligation to state the reasons for a European Union act follows from Article 253 EC and is also enshrined in Article 41(2)(c) of the Charter of Fundamental Rights of the European Union as part of the right to good administration.

42.      In accordance with settled case-law, that statement of reasons must disclose in a clear and unequivocal fashion the reasoning followed by the EU institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent European Union court to exercise its power of review. (15)

43.      Further clarification of the content and scope of the duty to state the reasons for inspection decisions adopted by the Commission is provided in the second sentence of Article 20(4) of Regulation No 1/2003. In accordance with that provision, such decisions are to specify in particular the subject-matter and purpose of the inspection in question. This serves to ensure that the Commission does not carry out inspections on a speculative basis, without having any concrete suspicions, (16) a practice for which the term ‘fishing expeditions’ is often used. (17)

44.      As the Court has already held on many occasions, the special duty to state reasons laid down in the second sentence of Article 20(4) of Regulation No 1/2003 is a fundamental requirement in so far as it is ‘designed not merely to show that the proposed entry onto the premises of the undertakings concerned is justified but also to enable those undertakings to assess the scope of their duty to cooperate whilst at the same time safeguarding their rights of defence’. (18)

45.      In the light of the foregoing, was the General Court entitled to regard the Commission’s reference to the ‘probably global’ reach of the presumed infringements of competition law as having sufficiently specified the subject-matter and purpose of the inspections? Or should the General Court have demanded more specific information on the geographically relevant market and on the relevance of business records relating to electric cable projects outside the European Union or the European Economic Area? This is the nub of the dispute between the parties in the present appeal.

i)      The geographically relevant market

46.      First, the appellants submit that the General Court should have taken issue with the Commission’s failure to provide more specific information about the geographical dimensions of its investigations. They take the view that the inspection decision should have clearly stated whether the geographically relevant market included the European Union or the European Economic Area.

47.      It must be pointed out in this regard that the requirement to state reasons must be assessed in the light of the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. (19)

48.      With regard in particular to unannounced inspections, it must be borne in mind that these normally take place at a very early stage, as a rule during the preliminary investigations into a cartel. Even taking into account the undertakings’ legitimate interest in safeguarding their rights of defence, the Commission cannot be expected at that point to provide precise legal assessments in its inspection decision. At that stage of the procedure, the Commission inevitably still lacks the information necessary to make a specific legal assessment and must first verify the accuracy of its initial suspicions and the scope of the relevant incidents. (20) This cannot be left out of account when it comes to assessing the legal requirements applicable to the statement of reasons for an inspection decision. (21)

49.      For that reason, as the Court has previously held on many occasions, it is not indispensable that the information contained in an inspection decision should precisely define the relevant market, set out the exact legal nature of the presumed infringements or indicate the period during which those infringements are said to have been committed. (22)

50.      The contrary view does not follow from the judgment of the General Court in France Télécom v Commission, on which the appellants crucially rely. It is true that that judgment says rather ambiguously at one point that the Commission must indicate ‘the market thought to be affected’. (23) An attentive reading of that judgment shows, however, that, in so saying, the General Court did not by any means apply more stringent requirements to the statement of reasons for an inspection decision than the Court of Justice does in settled case-law. Indeed, as the General Court itself makes clear in the immediately preceding paragraph of the aforementioned judgment, the Commission is not required to delimit precisely the relevant market. (24)

51.      In the light of the foregoing, the appellants’ allegation that the inspection decision in the present case should have clearly stated whether the European Union or the European Economic Area formed the geographical subject-matter of the Commission’s investigations is unfounded. Taking into account the early stage at which the inspection decision is adopted, the General Court could not and had no reason to demand such a precise definition of the geographically relevant market.

52.      In its inspection decisions, the Commission is, however, always obliged to indicate as precisely as possible the evidence sought and the matters to which the investigation must relate. (25) In other words, the statement of reasons for the inspection decision must indicate the presumed facts which the Commission intends to investigate. (26) What is required is thus not so much as precise a description as possible of the markets concerned as, rather, a definition of the infringements of competition law suspected by the Commission which is understandable to the undertakings concerned.

53.      The inspection decision at issue in the present case satisfied those requirements. In the preamble to that decision, the Commission stated that its inspection related to ‘agreements and/or concerted practices’ which ‘probably have a global reach’ and concerned the ‘supply of electric cables and material associated with such supply’. The suspicions on which the Commission relied were therefore defined in a sufficiently clear and understandable way.

54.      In particular, the geographical dimensions of the presumed infringements of competition law requiring investigation by the Commission were unequivocally clarified by the reference to their ‘global’ reach. The fact that that reference to a ‘global reach’ included the European internal market cannot seriously be disputed.

55.      The mere fact that the Commission moderated the formulation it adopted in this regard by using the word ‘probably’ does not detract from the clarity of its statement. The addition of that word is, rather, an expression of the Commission’s inevitably provisional assessment, which, at that point in time, necessarily had to be based on an initial suspicion and could not yet draw on comprehensively investigated facts or on the arguments advanced by all the parties to the proceedings.

56.      Nexans and Nexans France were thus easily able to determine the suspicion with which the unannounced inspection ordered by the Commission would be concerned, and could therefore organise their defence strategy accordingly and gauge their duty to cooperate.

57.      Consequently, the appellants’ argument to the effect that the General Court failed to observe the requirements applicable to the statement of reasons for an inspection decision in relation to the geographically relevant market must be rejected.

ii)    The relevance of business records relating to electric cable projects outside the European internal market

58.      It is necessary now to examine the second complaint raised by the appellants, to the effect that the General Court should have called for the inclusion in the statement of reasons for the inspection decision of more specific information about the business records to be examined by the inspectors. In particular, Nexans and Nexans France are of the view that the Commission should have stated the reasons why business records relating to electric cable projects outside the European Union and the European Economic Area were relevant to its investigation and had to be handed over to the inspectors.

59.      There is no question that it follows from the requirement to protect the undertakings concerned from arbitrary and disproportionate entries (27)onto their premises and from the concern to safeguard their rights of defence that, in the statement of reasons for an inspection decision, the Commission has a duty not only to indicate as precisely as possible the evidence sought and the matters to which the investigation must relate, but also to specify the powers conferred on the European Union investigators in the individual case in question. (28)

60.      In my view, however, none of this means that the Commission must take the precaution, so to speak, of indicating in each individual case which type of business records its inspectors may examine and which they may not. There are two reasons which militate against the assumption of a legal duty to provide such information in the statement of reasons for an inspection decision.

61.      On the one hand, it is settled case-law that, in the context of an unannounced inspection, the Commission does not have to limit itself to examining documents which it is able to identify precisely in advance. For such a limitation would render nugatory its right of access to such documents or files. Rather, the Commission’s right to carry out unannounced inspections also specifically implies the power to search for other sources of information which are not already known or fully identified. (29) Contrary to the view taken by the appellants, the search for such business records cannot be deferred to a later date or made up for by a request for information under Article 18 of Regulation No 1/2003, since, in cartel cases, there is always the possibility that the undertakings involved will dispose of any incriminating evidence once the element of surprise represented by the first unannounced inspection has been lost.

62.      On the other hand, it goes without saying that, when undertaking an unannounced inspection, the Commission may search for business records and also examine them only if they can be of any relevance to the procedure concerned from the point of view of Article 81 EC or Article 82 EC (now Article 101 TFEU or Article 102 TFEU). This is because the powers of investigation provided for in Article 20(4) of Regulation No 1/2003 serve to facilitate the Commission’s task of protecting competition on the internal market from distortion and punishing any infringements of the competition rules applicable to the internal market. (30) The attendant restriction of the Commission inspectors’ powers to the relevant subject-matter of the investigations thus follows not least from the legal context in which each antitrust inspection takes place, and does not therefore need to be expressly specified in the statement of reasons for the inspection decision. Any such specifications could only be declaratory in any event.

63.      Finally, the appellants appear to assume that the Commission’s investigative powers do not generally include the examination of business records relating to projects located outside the European Union or the European Economic Area, and that, for that reason, a separate statement of reasons would be required if - exceptionally? - the Commission intended to order the examination of such business records.

64.      That line of argument does not stand up to closer scrutiny, however. After all, either the Commission has no power to examine such business records under Article 20(4) of Regulation No 1/2003, in which event it is also the case that it cannot acquire that missing power by means of a specification, however worded, in the statement of reasons for its inspection decision, or, on the other hand, the power of inspection enjoyed by the Commission also extends to documents of the kind mentioned above, in which event it is also the case that a separate statement of reasons in the inspection decision explaining why the Commission inspectors may examine them is not required. In neither scenario, therefore, does the statement of reasons represent a problem.

65.      Particularly in a situation such as that at issue here, in which the Commission was on the trail of a globally-operated cartel, it was under no obligation at all to confine itself exclusively to examining business records relating to electric cable projects within the European Union or the European Economic Area. In view of the initial suspicions of a cartel of this type, the Commission was in this case entitled to focus its attention immediately on electric cable projects located in third countries too. It goes without saying, after all, that documents concerning such projects may also shed light on the modus operandi of such a cartel, even if those projects themselves do not have any impact on the internal market. For example, if the business records relating to a project to be conducted outside the European Union or the European Economic Area show that the cartel members divide up the global markets among themselves and do not compete with each other on their respective home markets (under ‘stay-at-home agreements’), this may well be an indication that the cartel was capable of prejudicing effective competition on the internal market.

66.      In the case of globally-operated cartels, it may be that the much-invoked ‘smoking gun’, that is to say, for example, a document in which the undertakings involved have set out the anti-competitive agreements they apply to the entirety of their projects worldwide, including their planned conduct on the European internal market, is to be found only in the records relating to certain business transactions carried out by those undertakings outside Europe. It cannot seriously be maintained that the Commission is not permitted to place such evidence in the case-file. The Commission cannot logically be denied the right to search for such evidence when conducting an unannounced inspection, even if it is to be found in business records relating to non-European projects involving the products allegedly covered by the cartel. The appellants’ counsel conceded as much when questioned by me at the hearing.

67.      Furthermore, the fact that, in the present case, the Commission was also looking, amongst other things, for the abovementioned evidence of global market sharing as part of the suspected cartel was made perfectly clear in the statement of reasons for the inspection decision, that decision having made reference to the suspicion of ‘client allocation’ among the parties involved in the allegedly anti-competitive agreements and practices ‘probably hav[ing] a global’ reach. Moreover, it was apparent from the preamble to the inspection decision that the Commission intended to check ‘all the facts in relation to the presumed agreements and concerted practices and the context in which they took place’.

68.      Against that background, the complaint raised by Nexans and Nexans France to the effect that the General Court should in this regard have insisted on a more detailed statement of reasons in the inspection decision strikes me as particularly absurd in the light of all the circumstances of the present case considered as a whole.

69.      Contrary to the appellants’ view, there is nothing in international law either to preclude investigations of this kind. (31) In particular, there can be no question of any infringement of the principle of territoriality. The premises searched by the Commission and the business records examined by it were after all located within the territory of the European Union.

70.      Furthermore, it is true that, in accordance with the principle of territoriality, the Commission must confine its investigations exclusively to those practices which, in view of the effects they can be expected to have, are capable of affecting competition on the internal market. (32) This does not mean, however, that it must confine its inspections exclusively to business records which relate to the cartel members’ projects within the European Union or the European Economic Area.

71.      After all, as I have already said, conclusions as to the existence of anti-competitive practices with potentially adverse effects on competition on the internal market may quite conceivably be drawn also from business records relating to local projects in third countries, for example in circumstances where those documents shed light on the modus operandi of a globally-operated cartel or where, because of their links to transactions within the European Union, the projects concerned may themselves have an impact on the internal market. From the point of view of international law, that connection is sufficient to justify the examination of such business records by the Commission in the course of a preliminary investigation.

72.      The General Court was therefore entirely justified in finding that there is nothing to prevent the Commission from examining documents relating to non-European markets ‘in order to detect conduct which is liable to affect trade between Member States and which has as its object or effect the prevention, restriction or distortion of competition within the [internal market]’. (33)

c)      Interim conclusion

73.      All things considered, the first branch of the first ground of appeal is therefore unfounded.

2.      The judicial review of the suspicions underlying an inspection decision (second branch of the first ground of appeal)

74.      By the second branch of their first ground of appeal, Nexans and Nexans France complain that the General Court infringed EU law by failing to consider whether the Commission had reasonable grounds to suspect an infringement of competition law of global reach.

a)      Admissibility

75.      The question that arises first of all is whether the complaint put forward by way of this second branch of the first ground of appeal is even admissible. It must be considered whether, by the criticism they have raised before the Court with respect to the extent of the judicial review of the inspection decision, the appellants have elected to make a submission in support of the assumption of an infringement of rights which is entirely new and was not advanced at first instance. Were this the case, this branch of the first ground of appeal would have to be dismissed as inadmissible ex officio, even though the issue has not been raised by any of the parties in the proceedings before the Court. (34)

76.      For, in accordance with settled case-law, to allow a party to put forward for the first time before the Court of Justice a plea in law which it has not raised before the General Court would in effect allow that party to bring before the Court a wider case than it presented to the General Court for judgment. In an appeal, the Court’s jurisdiction is, as a general rule, confined to a review of the assessment by the General Court of the pleas argued before it. (35)

77.      In line with the foregoing, Article 127(1) in conjunction with Article 190(1) of the Rules of Procedure of the Court of Justice also provides that the introduction of a new plea in law in the course of proceedings is precluded in so far as it cannot be based on matters of law or of fact which have come to light only in the course of the procedure.

78.      At first instance, Nexans and Nexans France raised the issue of the geographical scope of the subject-matter of the investigations only from the point of view of the statement of reasons for the inspection decision, that is to say in terms of a formal error made by the Commission. (36) In essence, their criticism was that the Commission’s reference to the ‘probably global’ reach of the presumed infringement of competition law was too vague and did not enable them to assess the exact extent of the inspections or the precise scope of their duty to cooperate. (37) In addition, the inspection decision did not contain any specific information about the markets on which and the manner in which any anti-competitive agreements or practices outside the European Union may have had an impact on the internal market. (38)

79.      At no point in their submissions before the General Court, however, did Nexans and Nexans France express any substantive doubts about the existence of sufficient grounds for the suspicion of an infringement of competition law having a global reach. Not even in response to a specific written question from the Court could they furnish evidence to show that such an argument had been raised by them at first instance. Rather, their counsel had to concede at the hearing that Nexans and Nexans France had not expressly raised such a complaint in the proceedings at first instance.

80.      Furthermore, the argument presented by the appellants at the hearing, to the effect that their submissions before the General Court had in any event implicitly contained a complaint that the Commission may not have had sufficient grounds to support the suspicion of an infringement of competition law having a global reach, is unconvincing. It is very unlikely that the highly specialised lawyers representing Nexans and Nexans France in the present proceedings would have concealed a substantive complaint relating to the accuracy of the content of the inspection decision in the middle of submissions concerning the formal legality of that decision, rather than raising that complaint explicitly. (39) This is particularly true given that, in another context, that is to say in relation to the material scope of the inspection decision, Nexans and Nexans France had expressly relied on just such a substantive complaint. (40)

81.      In the light of the foregoing, it must be assumed that the second branch of the first ground of appeal contains a new plea in law. That plea is not based on matters of law or of fact which have come to light only in the course of the procedure, and, moreover, cannot be regarded as a mere development of the arguments exchanged at first instance. Rather, it represents an extension of the subject-matter of the proceedings as presented at first instance and is therefore inadmissible.

b)      Merits

82.      I shall now turn briefly, and only in the alternative, to the merits of this second branch of the first ground of appeal.

83.      By their complaint, Nexans and Nexans France criticise the General Court’s failure to examine whether, at the time when the inspection decision was adopted, the Commission had reasonable grounds to suspect an infringement of competition law having a global reach.

84.      That argument must be rejected.

85.      Undoubtedly, every inspection decision is subject to ex post judicial review to determine whether the Commission had sufficient grounds to support the initial suspicion of a serious infringement of competition law and thus to justify the investigative measures ordered in its inspection decision. (41) Such an ex post judicial review is in principle sufficient to ensure appropriate protection for the fundamental rights of the undertakings concerned. (42)

86.      It is in the nature of such ex post review that it is only in the proceedings before the competent courts, and not, for example, before then in the statement of reasons for its inspection decision, (43) that the Commission must specifically disclose the information on the basis of which it considers a search of the premises of the undertakings concerned to be justified. (44)

87.      Moreover, in competition cases, the procedure before the courts of the European Union is based on the principle that the parties determine the facts and evidence forming the basis for a decision. (45) Since Nexans and Nexans France did not call into question at first instance the assumption that the Commission had reasonable grounds for its initial suspicion of an infringement of competition law of global reach, (46) the General Court had no reason to address that issue. There was in any event nothing to compel it to treat the extremely vague reference made by Nexans and Nexans France to the exclusively local nature of isolated non-European electric cable projects as reasons for doubting the existence of sufficient grounds generally, and to conduct of its own motion an investigation into the nature of the presumed cartel as an infringement having a global reach.

88.      Contrary to the view taken by the appellants, the foregoing conclusion is not altered even by the fact that unannounced inspections involve deep intrusions into the premises of undertakings and thus interference in a sphere protected by fundamental rights. Nexans and Nexans France were after all represented by highly specialised lawyers who could be expected to raise all necessary complaints before the General Court. In those circumstances, there could be an obligation on the General Court to examine the evidential position of its own motion at most if it gives judgment without hearing the opposing party (47) or if there are serious grounds for believing that an unannounced inspection is being or was conducted unlawfully. However, neither of those two situations arose in the present case.

89.      Finally, I should point out that the proceedings before the Court have in effect confirmed the existence of grounds on which the Commission could reasonably base its initial suspicion of an infringement of competition law having a global reach in the present case. After all, as the Commission submitted without contradiction and by reference to citations in its response, at the time when the inspection decision was adopted, it had in its possession oral statements made by a leniency applicant which contained specific indications as to the existence of a globally-operated cartel the members of which, among other things, divided up the markets among themselves and restricted their activities to their respective home markets. (48) Furthermore, the Commission was able to draw on its recent specific experience of the practices of other cartels, in which some of the same undertakings had been involved.

90.      In those circumstances, the Commission was entitled, when conducting its unannounced inspection, to search for evidence of the existence and modus operandi of such a cartel having a global reach. (49)

c)      Interim conclusion

91.      All things considered, the second branch of the first ground of appeal must therefore be dismissed as inadmissible, or in any event as unfounded. The first ground of appeal is thus entirely devoid of any prospect of success.

B -    Second ground of appeal: the General Court’s decision as to costs

92.      By its second ground of appeal, which is directed against paragraphs 138 and 139 of the judgment under appeal, the appellants claim finally that the General Court’s decision on the costs of the proceedings at first instance is ‘manifestly unreasonable’.

93.      Pursuant to the second paragraph of Article 58 of the Statute of the Court of Justice, an appeal does not lie regarding only the decision of the General Court as to the costs. That provision is interpreted broadly in settled case-law. According to this, that provision also covers cases in which an appellant not only directs its appeal against the decision on costs but also contests other aspects of the judgment at first instance, but is ultimately unsuccessful in all of its grounds of appeal. (50)

94.      That is the situation here. Since, in keeping with the foregoing, (51) the arguments advanced by the appellants have no prospect of success, the challenge they have directed against the General Court’s decision on costs requires no further examination.

95.      Purely for the sake of completeness, I would add that, in accordance with the first subparagraph of Article 87(3) of its Rules of Procedure, the General Court has in relation to decisions on costs a broad discretion which it has not exceeded in the present case. At first instance, Nexans and Nexans France contested three acts adopted by the Commission from the perspective of numerous points of law. They were partly successful in relation to only one of those acts, the inspection decision. In those circumstances, it seems to me to have been entirely appropriate that the General Court ordered Nexans and Nexans France to bear their own costs and to pay half of the costs incurred by the Commission.

96.      The second ground of appeal must therefore be dismissed as inadmissible, or in any event as unfounded.

VI -  Costs

97.      Under Article 184(2) of its Rules of Procedure, the Court is to make a decision as to costs where it dismisses an appeal.

98.      It follows from Article 138(1) and (2) in conjunction with Article 184(1) of the Rules of Procedure that the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings; where there is more than one unsuccessful party, the Court is to decide how the costs are to be shared. Since the Commission has applied for costs against the appellants and the latter have been unsuccessful in their pleas, they must be ordered to pay the costs. Since they brought the appeal jointly, they must bear the costs jointly and severally. (52)

VII -  Conclusion

99.      On the basis of the above considerations, I propose that the Court should:

(1)      dismiss the appeal;

(2)      order the appellants to pay the costs of the proceedings jointly and severally.

1 - Original language: German.

2 - The legal position prior to the entry into force of the Treaty of Lisbon is alone material here, since the inspection decision at issue was adopted and executed before 1 December 2009.

3 - 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, ‘Regulation No 1/2003’).

4 - Nexans France and Nexans v Commission, T-135/09, EU:T:2012:596, ‘the judgment under appeal’ or ‘the judgment of the General Court’.

5 - See paragraphs 1 and 2 of the operative part of the judgment under appeal.

6 - See paragraphs 3 and 4 of the operative part of the judgment under appeal.

7 - FIAMM and Others v Council and Commission, C-120/06 P and C-121/06 P, EU:C:2008:476, paragraph 96; Edwin v OHIM, C-263/09 P, EU:C:2011:452, paragraph 64; and Inuit Tapiriit Kanatami and Others v Parliament and Council, C-583/11 P, EU:C:2013:625, paragraph 82.

8 - See to that effect Moritz v Commission, C-68/91 P, EU:C:1992:531, paragraphs 26 and 37 to 39; Acerinox v Commission, C-57/02 P, EU:C:2005:453, paragraphs 36 and 37; Commission v Greencore, C-123/03 P, EU:C:2004:783, paragraphs 40 and 41; France Télécom v Commission, C-202/07 P, EU:C:2009:214, paragraph 41; Komninou and Others v Commission, C-167/06 P, EU:C:2007:633, paragraph 22; and Mindo v Commission, C-652/11 P, EU:C:2013:229, paragraph 41.

9 - Paragraphs 97 to 99 of the judgment under appeal.

10 - At first instance, only 4 of the 73 paragraphs of the application submitted by Nexans and Nexans France (paragraphs 37 to 40) and 2 of the 41 paragraphs of their reply (paragraphs 19 and 20) were devoted to this issue.

11 - Paragraph 97 of the judgment under appeal.

12 - Paragraphs 98 and 99 of the judgment under appeal.

13 - Paragraph 99 of the judgment under appeal.

14 - Wunenburger v Commission, C-362/05 P, EU:C:2007:322, paragraph 80; and Gogos v Commission, C-583/08 P, EU:C:2010:287, paragraph 35.

15 - Commission v Sytraval and Brink’s France, C-367/95 P, EU:C:1998:154, paragraph 63; Bertelsmann and Sony Corporation of America v Impala, C-413/06 P, EU:C:2008:392, paragraph 166; and Ziegler v Commission, C-439/11 P, EU:C:2013:513, paragraph 115.

16 - See in this regard the Opinion of Advocate General Mischo in Hoechst v Commission, 46/87 and 227/88, EU:C:1989:73, point 206; and my Opinion in Solvay v Commission, C-109/10 P, EU:C:2011:256, point 138.

17 - This is the purport of the appellants’ allegation that, in the present case, the Commission took a ‘global dragnet approach’.

18 - Hoechst v Commission, 46/87 and 227/88, EU:C:1989:337, paragraph 29; Dow Benelux v Commission, 85/87, EU:C:1989:379, paragraphs 8 and 40; Dow Chemical Ibérica and Others v Commission, 97/87 to 99/87, EU:C:1989:380, paragraphs 26 and 45; and Roquette Frères, C-94/00, EU:C:2002:603, paragraph 47. Similarly, Limburgse Vinyl Maatschappij and Others v Commission, 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, EU:C:2002:582, paragraph 299. Although this case-law relates to the predecessor provision to Article 20(4) of Regulation No 1/2003, it is, however, readily transposable to the latter provision.

19 - Commission v Sytraval and Brink’s France, EU:C:1998:154, paragraph 63; Bertelsmann and Sony Corporation of America v Impala, EU:C:2008:392, paragraph 166; and Ziegler v Commission, EU:C:2013:513, paragraph 116.

20 - See to this effect National Panasonic v Commission, 136/79, EU:C:1980:169, paragraph 21, as well as the Opinion of Advocate General Mischo in Hoechst v Commission, EU:C:1989:73, point 174; and my Opinion in Solvay v Commission, EU:C:2011:256, point 143.

21 - See also to this effect, with regard to the determination of whether an infringement of Article 81 EC or Article 82 EC has been committed, the Opinion of Advocate General Mischo in Hoechst v Commission, EU:C:1989:73, point 176; and my Opinion in Solvay v Commission, EU:C:2011:256, point 144.

22 - Hoechst v Commission, EU:C:1989:337, paragraph 41; Dow Benelux v Commission, EU:C:1989:379, paragraph 10; Dow Chemical Ibérica and Others v Commission, EU:C:1989:380, paragraph 45; and Roquette Frères, EU:C:2002:603, paragraph 82.

23 - France Télécom v Commission, T-340/04, EU:T:2007:81, paragraph 52.

24 - France Télécom v Commission, EU:T:2007:81, paragraph 51.

25 - Roquette Frères, EU:C:2002:603, paragraph 83.

26 - Hoechst v Commission, EU:C:1989:337, paragraph 41; Dow Benelux v Commission, EU:C:1989:379, paragraph 9; and Dow Chemical Ibérica and Others v Commission, EU:C:1989:380, paragraph 45. See also my Opinion in Solvay v Commission, EU:C:2011:256, point 138.

27 - See in this regard Hoechst v Commission, EU:C:1989:337, paragraph 19; Dow Benelux v Commission, EU:C:1989:379, paragraph 30; and Dow Chemical Ibérica and Others v Commission, EU:C:1989:380, paragraph 16.

28 - Roquette Frères, EU:C:2002:603, paragraph 83.

29 - Roquette Frères, EU:C:2002:603, paragraph 84. See also Hoechst v Commission, EU:C:1989:337, paragraph 27; Dow Benelux v Commission, EU:C:1989:379, paragraph 38; and Dow Chemical Ibérica and Others v Commission, EU:C:1989:380, paragraph 24.

30 - See in this regard recital 24 in the preamble to, and Article 4 of, Regulation No 1/2003. See also National Panasonic v Commission, EU:C:1980:169, paragraph 20; AM & S v Commission, 155/79, EU:C:1982:157, paragraph 15; Hoechst v Commission, EU:C:1989:337, paragraph 25; Dow Benelux v Commission, EU:C:1989:379, paragraph 36; Dow Chemical Ibérica and Others v Commission, EU:C:1989:380, paragraph 22; and Roquette Frères, EU:C:2002:603, paragraph 42.

31 - Although the appellants refer to matters of international law only in the second branch of the first ground of appeal, I consider it more appropriate to address their arguments in this regard in the context of this first branch of the first ground of appeal.

32 - The leading precedent in this regard is the ‘wood pulp’ judgment, Ahlström Osakeyhtiö and Others v Commission, 89/85, 104/85, 114/85, 116/85, 117/85 and 125/85 to 129/85, EU:C:1988:447, paragraphs 15 to 17.

33 - Last sentence of paragraph 99 of the judgment under appeal.

34 - In the present case, it was not until the hearing that the Commission contended that the Court should declare this second branch of the first ground of appeal to be inadmissible.

35 - Dansk Rørindustri and Others v Commission, C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P, EU:C:2005:408, paragraph 165; Alliance One International and Standard Commercial Tobacco v Commission, C-628/10 P and C-14/11 P, EU:C:2012:479, paragraph 111; and Groupe Gascogne v Commission, C-58/12 P, EU:C:2013:770, paragraph 35.

36 - See section 3.2.3 (paragraphs 37 to 40) of the application at first instance, which is entitled ‘Overly broad geographic scope’.

37 - Paragraphs 39 and 40 of the application at first instance.

38 - Paragraphs 37 and 38 of the application at first instance.

39 - On the settled case-law to the effect that, in the context of the judicial review of acts of the European Union, a distinction must be drawn between formal and substantive legality, see Commission v Sytraval and Brink’s France, EU:C:1998:154, paragraph 67; Bertelsmann and Sony Corporation of America v Impala, EU:C:2008:392, paragraph 181; and Gascogne Sack Deutschland v Commission, C-40/12 P, EU:C:2013:768, paragraph 46.

40 - See in this regard paragraphs 60 to 94 of the judgment under appeal.

41 - Roquette Frères, EU:C:2002:603, paragraphs 49 and 50, and - implicitly - Dow Chemical Ibérica and Others v Commission, EU:C:1989:380, paragraph 52.

42 - European Court of Human Rights (‘ECtHR’): judgment in Smirnov v. Russia, no. 71362/01, § 45, 7 June 2007, as well as in Harju v. Finland, no. 56716/09, §§ 40 and 44, 15 February 2011, and Heino v. Finland, no. 56720/09, § 45, 15 February 2011.

43 - See also in this regard Dalmine v Commission, C-407/04 P, EU:C:2007:53, paragraph 60, in which the Court recognises the risk that the undertakings concerned might conceal evidence if they were to discover during the first stage of the investigation what information the Commission has in its possession at that time.

44 - See to that effect Hoechst v Commission, EU:C:1989:337, paragraph 41; Dow Benelux v Commission, EU:C:1989:379, paragraphs 9 and 15; Dow Chemical Ibérica and Others v Commission, EU:C:1989:380, paragraphs 45 and 51; and Roquette Frères, EU:C:2002:603, paragraphs 60 to 62.

45 - On the specific subject of the principle that the parties determine the facts and evidence forming the basis for a decision, see Dow Chemical Ibérica and Others v Commission, EU:C:1989:380, paragraph 52. On that principle in competition law generally, see Chalkor v Commission, C-386/10 P, EU:C:2011:815, paragraphs 64 and 65; and Otis and Others, C-199/11, EU:C:2012:684, first sentence of paragraph 61; as well as my Opinion in Alliance One International and Standard Commercial Tobacco v Commission, C-628/10 P and C-14/11 P, EU:C:2012:11, point 99; and my Opinion in Schindler Holding and Others v Commission, C-501/11 P, EU:C:2013:248, point 47.

46 - See points 78 and 79 of this Opinion.

47 - This will generally be the case where a national court is called upon to authorise the use of precautionary coercive measures ahead of an unannounced inspection (Article 20(7) and (8) of Regulation No 1/2003).

48 - Some of these statements by the leniency applicant had already been the subject of an exchange of argument in the proceedings at first instance before the General Court.

49 - I have already addressed the arguments relating to international law which the appellants raised under this second branch of the first ground of appeal in points 69 to 72 of this Opinion.

50 - See Roujanski v Council, C-253/94 P, EU:C:1995:4, paragraphs 12 to 14. See also Heinrichs v Commission, C-396/93 P, EU:C:1995:280, paragraphs 65 and 66; Commission and France v TF1, C-302/99 P and C-308/99 P, EU:C:2001:408, paragraph 31; Tralli v ECB, C-301/02 P, EU:C:2005:306, paragraph 88; and Gualteri v Commission, C-485/08 P, EU:C:2010:188, paragraph 111.

51 - See in this regard my observations on the first ground of appeal in points 24 to 91 of this Opinion.

52 - Akzo Nobel Chemicals and Akcros Chemicals v Commission and Others, C-550/07 P, EU:C:2010:512, paragraph 123. See to the same effect D and Sweden v Council, C-122/99 P and C-125/99 P, EU:C:2001:304, paragraph 65. In the latter case, D and the Kingdom of Sweden were ordered to bear the costs jointly and severally even though they had brought two separate appeals.