Judgments nº T-519/09 of The General Court, May 21, 2014

• Resolution Date: May 21, 2014
• Issuing Organization: The General Court
• Decision Number: T-519/09

(Competition — Agreements, decisions and concerted practices — Power transformers market — Decision finding an infringement of Article 81 EC and Article 53 of the EEA Agreement — Market-sharing agreement — Proof of distancing from the cartel — Restriction of competition — Effect on trade — Barriers to entry — Fines — Basic amount — Reference year — Section 18 of the 2006 Guidelines on the method of setting fines — Use of a notional market share in the EEA market)

In Case T‑519/09,

Toshiba Corp., established in Tokyo (Japan), represented by J. MacLennan, Solicitor, A. Schulz, J. Jourdan and P. Berghe, lawyers,

applicant,

v

European Commission, represented initially by J. Bourke and K. Mojzesowicz, and subsequently by K. Mojzesowicz and F. Ronkes Agerbeek, acting as Agents,

defendant,

APPLICATION for annulment of Commission Decision of 7 October 2009 relating to a proceeding under Article 81 EC and Article 53 of the EEA Agreement (Case COMP/39.129 — Power Transformers), and, in the alternative, for a reduction in the amount of the fine imposed on the applicant in that decision,

THE GENERAL COURT (Third Chamber),

composed of O. Czúcz (Rapporteur), President, I. Labucka and D. Gratsias, Judges,

Registrar: T. Weiler, Administrator,

having regard to the written procedure and further to the hearing on 10 April 2013,

gives the following

Judgment

Background to the case and contested decision

1 The market at issue in the present case is that of power transformers, auto transformers and shunt reactors with a voltage range of 380 kV and above. A power transformer is a major electrical component the function of which is to reduce or increase the voltage in an electrical circuit. The transformers are sold as stand-alone equipment or as part of turnkey power substations.

2 The applicant, Toshiba Corp., is a Japanese company which is primarily active in three key domains: digital products, electronic devices and components and infrastructure systems.

3 In respect of the applicant’s activity in the power transformers sector during the relevant period for the present dispute, namely from 9 June 1999 until 15 May 2003, it is necessary to draw a distinction between two stages: (i) between 9 June 1999 and 30 September 2002, the applicant was active in that sector through its subsidiary, Power Systems Co., specifically through that subsidiary’s ‘Transmission & Distribution Systems’ division; and (ii) from 1 October 2002, the applicant’s activity was carried out by TM T & D, a joint venture between it and Mitsubishi Electric (‘Melco’), into which both those undertakings combined their production of power transformers. From 1 October 2002 until 15 May 2003, TM T & D was therefore responsible for the production and sale of power transformers.

4 From 2004 to 2008, the Commission of the European Communities received successive leniency applications relating to the existence of an unlawful cartel in the power transformers sector. It carried out inspections on the premises of the power transformer producers and sent requests for information to undertakings, including the applicant.

5 On 30 September 2008, the Commission decided to initiate proceedings in relation to the power transformers market.

6 The statement of objections was adopted on 20 November 2008. The applicant responded to it on 19 January 2009. The hearing took place on 17 February 2009.

7 On 7 October 2009, the Commission adopted its decision relating to a proceeding under Article 81 EC and Article 53 of the EEA Agreement (Case COMP/39.129 — Power Transformers) (‘the contested decision’), in which it found that the applicant had infringed Article 81 EC and Article 53 of the Agreement on the European Economic Area (EEA) and imposed on it a fine of EUR 13.2 million.

8 In that decision, the Commission found that the applicant had participated, at least from 9 June 1999 to 15 May 2003, in the ‘Gentlemen’s Agreement (GA)’, an unlawful cartel covering the entire EEA, consisting of an oral agreement between European and Japanese producers of power transformers to respect each other’s home markets and to refrain from selling in those markets.

9 As to the organisation of the Gentlemen’s Agreement, first of all, the Commission found that the undertakings who participated in it were divided into two groups, one European, the other Japanese; that each group had to nominate a secretary undertaking; and that, throughout the infringement, Siemens had acted as secretary of the European group and Hitachi that of the Japanese group. The Commission also stated that the market-sharing agreement had been supplemented by an agreement to notify enquiries (projects) coming from the territory of the other group and that those projects had to be notified to the secretary of the other group in order to be reallocated.

10 The Commission also held that, throughout the infringement referred to in the contested decision, the members met once or twice a year, the meetings having taken place in Europe and in Asia, more precisely in Malaga (Spain) from 9 to 11 June 1999, in Singapore (Singapore) on 29 May 2000, in Barcelona (Spain) from 29 October to 1 November 2000, in Lisbon (Portugal) from 29 to 30 May 2001, in Tokyo (Japan) from 18 to 19 February 2002, in Vienna (Austria) from 26 to 27 September 2002 and in Zurich (Switzerland) from 15 to 16 May 2003. According to the Commission, those meetings were used in particular to confirm the Gentlemen’s Agreement.

11 Furthermore, in the contested decision, the Commission distinguished the Gentlemen’s Agreement from two other agreements between the undertakings concerned. First, it mentioned the Aero Club Agreement (AC), an agreement which had already ended in 1996 but on which the basic organisation of the Gentlemen’s Agreement was founded. Secondly, the Commission referred to an agreement on ‘In-house Business’ (or ‘In-house business arrangement’). That agreement sought to preclude a legal person or a division belonging to one of the undertakings participating in that agreement from buying power transformers from a legal person or a division belonging to another undertaking participating in that agreement but to have them do so only from a division or from a company belonging to its own undertaking. The infringement established and the fine imputed by the contested decision concern neither the Aero Club Agreement nor the In-house Business.

12 Pursuant to its 2002 Notice on immunity from fines and reduction of fines in cartel cases (OJ 2002 C 45, p. 3; ‘the Leniency Notice’), the Commission granted Siemens AG and Siemens Aktiengesellschaft Österreich immunity from fines, and Fuji Electronics Holdings Co., Ltd a 40% reduction in the fine.

13 Furthermore, the Commission granted an 18% reduction, outside the scope of the Leniency Notice, both to Hitachi Ltd and to Areva T & D SA.

14 Neither Melco nor TM T & D were penalised by the Commission for their participation in the Gentlemen’s Agreement.

Procedure and forms of order sought

15 By application lodged at the Registry of the Court on 23 December 2009, the applicant brought the present action.

16 Since the Judge-Rapporteur was prevented from sitting, the present case was reassigned to a new Judge-Rapporteur sitting in the Third Chamber.

17 Upon hearing the report of the Judge-Rapporteur, the Court (Third Chamber) decided to open the oral procedure and, by way of measures of organisation of procedure under Article 64 of its Rules of Procedure, to request the Commission to produce a document. The Commission complied with that request within the prescribed period.

18 The parties presented oral argument and replied to the questions put by the Court at the hearing which took place on 10 April 2013.

19 By letter of 19 April 2013, the applicant requested the reopening of the oral procedure on the ground that an element had been addressed for the first time during the hearing.

20 By order of 8 May 2013, the Court (Third Chamber) decided to order the reopening of the oral procedure, in accordance with Article 62 of the Rules of Procedure.

21 By letter of 17 June 2013, the applicant submitted a document mentioned in its letter of 19 April 2013.

22 By letter of 4 July 2013, the Commission submitted its observations on the applicant’s letter of 19 April 2013 and on the document submitted by the applicant on 17 June 2013.

23 By decision of 9 July 2013, the Court again closed the oral procedure.

24 The applicant claims that the Court should:

– annul the contested decision in so far as it relates to the applicant;

– cancel the fine imposed on it;

– in the alternative, in the event that the contested decision is upheld in whole or in part, reduce the amount of the fine imposed on it;

– order the Commission to pay the costs;

– grant such other order as may be necessary to give effect to the judgment of the Court.

25 The Commission contends that the Court should:

– dismiss the action;

– order the applicant to pay the costs.

Law

26 The applicant puts forward four pleas in law in support of its application. In its first plea, the applicant contends that the Commission has failed to establish to the requisite legal standard the existence of an unlawful cartel and its participation in it. In its second plea, the applicant claims that the Commission has not shown that any cartel had an immediate and substantial effect on competition in the European Union and an appreciable influence, direct or indirect, actual or potential on the pattern of trade between Member States. The third plea relates to the Commission’s findings on the duration of the cartel and the applicant’s participation in it. The fourth plea relates to errors of law and of fact concerning the calculation of the amount of the fine.

27 It is appropriate first to examine the first and third pleas, relating to the Commission’s findings on the existence and the duration of an unlawful cartel, then the second plea, relating to its findings on the...