Judgments nº T-384/06 of The General Court, March 24, 2011

• Resolution Date: March 24, 2011
• Issuing Organization: The General Court
• Decision Number: T-384/06

In Case T‑384/06,

IBP Ltd, established in Tipton (United Kingdom),

International Building Products France SA, established in Sartrouville (France),

represented by M. Clough QC and A. Aldred, Solicitor,

applicants,

v

European Commission, represented by F. Castillo de la Torre and V. Bottka, acting as Agents,

defendant,

APPLICATION for annulment in part of Commission Decision C(2006) 4180 of 20 September 2006 relating to a proceeding under Article 81 [EC] and Article 53 of the EEA Agreement (Case COMP/F‑1/38.121 – Fittings), and also, in the alternative, for a reduction in the fine imposed on the applicants in that decision,

THE GENERAL COURT (Eighth Chamber),

composed of M.E. Martins Ribeiro, President, N. Wahl (Rapporteur) and A. Dittrich, Judges,

Registrar: T. Weiler, Administrator,

having regard to the written procedure and further to the hearing on 4 February 2010,

gives the following

Judgment

Background to the dispute

1 By Decision C(2006) 4180 of 20 September 2006 relating to a proceeding under Article 81 [EC] and Article 53 of the EEA Agreement (Case COMP/F‑1/38.121 – Fittings) (summary published in OJ 2007 L 283, p. 63; ‘the contested decision’), the Commission of the European Communities found that a number of undertakings had infringed Article 81(1) EC and Article 53 of the Agreement on the European Economic Area (EEA) by participating, over various periods between 31 December 1988 and 1 April 2004, in a single, complex and continuous infringement of the Community competition rules taking the form of a complex of anti-competitive agreements and concerted practices in the market for copper and copper alloy fittings, which covered the territory of the EEA. The infringement consisted in fixing prices, agreeing on price lists, agreeing on discounts and rebates, agreeing on implementation mechanisms for introducing price increases, allocating national markets, allocating customers and exchanging other commercial information and also in participating in regular meetings and in maintaining other contacts intended to facilitate the infringement.

2 The applicants, IBP Ltd and International Building Products France SA (‘IBP France’), are among the addressees of the contested decision.

3 IBP France is a wholly-owned subsidiary of IBP, which was founded in 2001 by Oystertec plc for the purpose of acquiring, on 23 November 2001, from Delta plc the assets of the former holding company IBP (also called IBP Ltd, then called Aldway Nine Limited) and the shares in its subsidiaries, including IBP France. On 1 June 2005, Oystertec changed its name to Advanced Fluid Connections plc (‘AFC’). On 24 March 2006, AFC was placed in administrative receivership. On 25 March 2006, the administrative receivers sold all the assets of AFC, which included those of the applicants and International Building Products GmbH (‘IBP Germany’), to Celestial Wing Ltd. Celestial Wing was at the time a wholly-owned subsidiary of a private equity fund, Endless LLP. On 15 September 2006, Celestial Wing became Pearl Fittings Ltd (recital 35 to the contested decision). By two orders of 2 March 2007, Mr Justice Richards of the High Court of Justice (England & Wales) ordered the initiation of insolvency proceedings against the applicants and appointed two administrators for the duration of those proceedings.

4 On 9 January 2001, Mueller Industries Inc., another producer of copper fittings, informed the Commission of the existence of a cartel in the fittings sector and in other related industries in the copper tubes market, and expressed its willingness to cooperate with the Commission under the terms of the Commission Notice on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4; ‘the 1996 Leniency Notice’) (recital 114 to the contested decision).

5 On 22 and 23 March 2001, in the framework of an investigation concerning copper tubes and fittings, the Commission, pursuant to Article 14(3) of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition 1959-1962, p. 87), carried out unannounced inspections at the premises of a number of undertakings (recital 119 to the contested decision).

6 Following those first inspections, the Commission, in April 2001, split the investigation relating to copper tubes into three different proceedings, namely the proceedings relating to Case COMP/E‑1/38.069 (Copper Plumbing Tubes), Case COMP/F‑1/38.121 (Fittings) and Case COMP/E‑1/38.240 (Industrial Tubes), respectively (recital 120 to the contested decision).

7 On 24 and 25 April 2001, the Commission carried out further unannounced inspections at the premises of Delta, a company at the head of an international engineering group whose ‘Engineering’ division encompassed a number of fittings manufacturers. Those inspections related solely to fittings (recital 121 to the contested decision).

8 From February/March 2002, the Commission sent the parties concerned a number of requests for information pursuant to Article 11 of Regulation No 17, and then pursuant to Article 18 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 [EC] and 82 [EC] (OJ 2003 L 1, p. 1) (recital 122 to the contested decision).

9 In September 2003, IMI plc submitted an application for leniency under the 1996 Leniency Notice. That application was followed by applications from the Delta group (March 2004) and FRA.BO SpA (July 2004). The final leniency application was submitted in May 2005 by AFC (recitals 115 to 118 to the contested decision).

10 On 22 September 2005, the Commission initiated an infringement proceeding in the framework of Case COMP/F‑1/38.121 (Fittings) and adopted a statement of objections, which was then notified to the applicants (recitals 123 and 124 to the contested decision).

11 On 20 September 2006 the Commission adopted the contested decision.

12 In Article 1 of the contested decision the Commission found that the applicants had infringed Article 81 EC and Article 53 of the EEA Agreement, in the case of IBP, between 23 November 2001 and 1 April 2004 and, in the case of IBP France, between 4 April 1998 and 23 November 2001 (whilst under Delta) and between 23 November 2001 and 1 April 2004 (whilst under AFC).

13 For that infringement, the Commission imposed on AFC a fine of EUR 18.08 million, for the payment of which IBP was held jointly and severally liable as to EUR 11.26 million (Article 2(c)(i) of the contested decision) and IBP France as to EUR 5.63 million (Article 2(c)(ii) of the contested decision). The Commission also imposed on Delta a fine of EUR 28.31 million for that infringement, for which IBP France was held jointly and severally liable as to EUR 5.63 million (Article 2(d)(iii) of the contested decision).

14 For the purposes of setting the amount of the fine imposed on each undertaking, the Commission applied, in the contested decision, the method set out in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) [CS] (OJ 1998 C 9, p. 3; ‘the 1998 Guidelines’).

15 As regards, first of all, the fixing of the starting amount of the fine by reference to the gravity of the infringement, the Commission characterised the infringement as very serious, on account of its nature and its geographic scope (recital 755 to the contested decision).

16 Taking the view, next, that there was considerable disparity between the undertakings concerned, the Commission applied differentiated treatment, taking as its basis their relative importance on the relevant market as determined by their market shares. On that basis, the Commission divided the undertakings concerned into six categories (recital 758 to the contested decision).

17 Delta was placed in the second category, for which the starting amount of the fine was set at EUR 46 million, while AFC was placed in the third category, for which the starting amount of the fine was set at EUR 36 million (recital 765 to the contested decision).

18 On account of the duration of the applicants’ participation in the infringement, the first part of the starting amount of the fine imposed on IBP France for its participation in the infringement whilst under Delta was increased by 35%, and the second part, for its participation in the infringement whilst under AFC, by 20%. The starting amount of the fine imposed on IBP was increased by 20%.

19 Next, the continued participation in the infringement after the Commission’s inspections was considered to be an aggravating circumstance justifying an increase of 60% in the basic amount of the fine imposed on all the undertakings of Delta and AFC (recital 785 to the contested decision). Likewise, AFC’s basic amount was increased by 50% because of the misleading information it had supplied to the Commission (recital 790 to the contested decision).

20 In the case of IBP, the 10% ceiling referred to in Article 23(2) of Regulation No 1/2003, that is to say, EUR 11.26 million, was calculated on the basis of its total world-wide turnover. In the case of IBP France, that 10% ceiling was applied to both parts of the fine for which it was held jointly and severally liable with its two consecutive parent companies. Since those two parts exceeded the 10% ceiling, IBP France was held to be jointly and severally liable for payment of half the amount of the fine corresponding to the 10% ceiling of each of its consecutive parent companies.

21 AFC and its subsidiaries were not granted any reduction in the amount of the fine under the provisions set out in the first and second indents of Section D.2 of the 1996 Leniency Notice (recitals 861 to 865 to the contested decision).

Procedure and forms of order sought by the parties

22 By application lodged at the Registry of the Court on 13 December 2006, the applicants brought the present action.

23 By order of 28 March...