Judgments nº T-12/03 of Court of First Instance of the European Communities, April 30, 2009
| Resolution Date | April 30, 2009 |
| Issuing Organization | Court of First Instance of the European Communities |
| Decision Number | T-12/03 |
In Case T-12/03,
Itochu Corp., established in Tokyo (Japan), represented by Y. Shibasaki, G. van Gerven and T. Franchoo, lawyers,
applicant,
v
Commission of the European Communities, represented initially by P. Hellström and O. Beynet, and subsequently by F. Castillo de la Torre and O. Beynet, acting as Agents,
defendant,
APPLICATION for the annulment of Articles 1, 3 and 5 of Commission Decision 2003/675/EC of 30 October 2002 relating to a proceeding pursuant to Article 81 [EC] and Article 53 of the EEA Agreement (COMP/35.587 PO Video Games, COMP/35.706 PO Nintendo Distribution and COMP/36.321 Omega - Nintendo) (OJ 2003 L 255, p. 33), in so far as they relate to the applicant, or, in the alternative, reduction of the amount of the fine imposed on it,
THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Eighth Chamber),
composed of M.E. Martins Ribeiro, President, S. Papasavvas and N. Wahl (Rapporteur), Judges,
Registrar: J. Plingers, Administrator,
having regard to the written procedure and further to the hearing on 20 May 2008,
gives the following
Judgment
Background to the dispute
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The undertakings involved
1 Nintendo Co., Ltd (-NCL- or -Nintendo-), a publicly quoted company whose registered office is in Kyoto (Japan), is the head of the Nintendo group of companies, which specialise in the production and distribution of video game consoles and game cartridges for use with those consoles.
2 Nintendo-s business in the European Economic Area (EEA) is conducted, in certain territories, by wholly owned subsidiaries, of which the main one is Nintendo of Europe GmbH (-NOE- or -Nintendo-). At the material time, NOE coordinated certain business activities of Nintendo in Europe and was its exclusive distributor for Germany.
3 In other sales territories, Nintendo appointed exclusive independent distributors. Thus, The Games Ltd, a trading division of John Menzies Distribution Ltd, a wholly owned subsidiary of John Menzies plc, became Nintendo-s exclusive distributor for the United Kingdom and Ireland in August 1995 and remained so until 31 December 1997 at least.
4 Itochu Hellas EPE, a subsidiary wholly owned, directly or indirectly, by the applicant, Itochu Corp. (a company which has its registered office and is established in Japan) or by its subsidiaries (which include Itochu Europe) was, for its part, Nintendo-s exclusive independent distributor for Greece from 14 May 1991 until 28 February 1997.
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Administrative procedure
Investigation into the video games sector (Case IV/35.587 PO Video Games)
5 In March 1995, the Commission opened an investigation into the video games industry (Case IV/35.587 PO Video Games). During that inquiry, on 26 June and 19 September 1995 the Commission sent requests for information to Nintendo under Article 11 of Regulation No 17 of the Council of 6 February 1962, First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition 1971 (III), p. 1035) in order to obtain information relating in particular to its distributors and subsidiaries, the formal distribution agreements with those undertakings and its general sales conditions. NOE replied to those requests by letters dated 31 July and 26 September 1995.
Additional investigation relating specifically to Nintendo-s distribution system (Case IV/35.706 PO Nintendo Distribution)
6 As a result of its preliminary findings, in September 1995 the Commission opened an additional investigation specifically into the distribution system of Nintendo (Case IV/35.706 PO Nintendo Distribution).
7 In the course of that investigation, on 9 October 1995 the Commission sent Nintendo a request for information. A number of meetings relating to Nintendo-s distribution policy were held between Nintendo representatives and the Commission. Nintendo also provided various versions of the agreements concluded by it with certain of its distributors.
Inquiry following the complaint lodged by Omega Electro BV (Case IV/36.321 Omega - Nintendo)
8 On 26 November 1996, Omega Electro, a company active in the import and sale of electronic games, lodged a complaint under Article 3(2)(b) of Regulation No 17 that primarily concerned the distribution of Nintendo game cartridges and consoles, on the ground inter alia that Nintendo was hindering parallel trade and was operating a resale price maintenance policy in the Netherlands. Following that complaint, the Commission extended its investigation (Case IV/36.321 Omega - Nintendo). On 7 March 1997, it sent a request for information to Nintendo and John Menzies. In its reply of 16 May 1997, Nintendo admitted that some of its distribution agreements and some of its general terms had contained certain restrictions on parallel trade within the EEA. In October 1997, the Commission sent John Menzies a fresh request for information, to which the latter replied on 1 December 1997, providing certain information on the restrictive agreements.
9 By letter of 23 December 1997, Nintendo indicated to the Commission that it had become aware of -a serious issue in relation to parallel trade within the Community- and expressed the wish to cooperate with the Commission.
10 On 13 January 1998, John Menzies provided further information. On 21 January, 1 April and 15 May 1998, Nintendo forwarded several hundred documents to the Commission. On 15 December 1998, a meeting was held between the Commission and Nintendo representatives at which the question of possibly granting compensation to third parties injured by the restrictive agreements was discussed.
11 Following its admission, Nintendo also took measures designed to ensure future compliance with Community law and offered financial compensation to the third parties which had suffered financial harm as a result of its activities.
12 By letter of 9 June 1999, the Commission asked Itochu Hellas to inform it whether the documents in the Commission files concerning it contained confidential data. In that letter, it was also stated that the Commission was considering opening formal proceedings against certain companies, including Itochu Hellas.
13 On 26 April 2000, the Commission sent a statement of objections to Nintendo and the other undertakings concerned, in particular to Itochu with a copy to Itochu Hellas, for infringement of Article 81(1) EC and Article 53(1) of the EEA Agreement (-the EEA Agreement-). Nintendo and the other undertakings concerned submitted written observations in response to the Commission-s statement of objections, in which Nintendo and a number of those undertakings requested the application of the Commission Notice of 18 July 1996 on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4; -the Leniency Notice-). None of the parties asked for a formal hearing to be held. Nintendo did not substantially contest the facts set out in the statement of objections.
14 A reply to the statement of objections was sent to the Commission on behalf of Itochu and Itochu Hellas on 28 July 2000. It was stated in particular that, since Itochu did not exercise any control over the activities of Itochu Hellas, Itochu should be disregarded for the purposes of the procedure.
15 On 31 October 2001, the Commission sent to Itochu Europe a request for information concerning in particular the articles of incorporation and internal functioning of Itochu Hellas and Itochu Europe. A reply was sent on behalf of those companies by letter dated 26 November 2001. By letter dated 9 September 2002, the Commission sent Itochu a request relating in particular to the latter-s annual report. A reply was sent by letter of 27 September 2002.
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The contested decision
16 On 30 October 2002, the Commission adopted Decision 2003/675/EC relating to a proceeding pursuant to Article 81 [EC] and Article 53 of the EEA Agreement (COMP/35.587 PO Video Games, COMP/35.706 PO Nintendo Distribution and COMP/36.321 Omega - Nintendo) (OJ 2003 L 255, p. 33) (-the Decision-). The Decision was notified to Itochu on 11 November 2002.
17 The Decision includes in particular the following provisions:
-Article 1
The following undertakings have infringed Article 81(1) [EC] and Article 53(1) of the EEA Agreement by participating, for the periods indicated, in a complex of agreements and concerted practices in the markets for game consoles and game cartridges compatible with Nintendo manufactured game consoles with the object and effect of restricting parallel exports in Nintendo game consoles and cartridges:
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- Itochu ..., from 16 December 1991 to 28 February 1997,
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Article 3
The following fines are imposed on the undertakings listed in Article 1 in respect of the infringement referred to therein:
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- Itochu -, a fine of EUR 4.5 million,
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Article 5
This Decision is addressed to:
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- Itochu ...
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18 For the purpose of calculating the fines, the Commission applied in its 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 Guidelines-). On the other hand, it decided not to apply the Leniency Notice because of the vertical nature of the infringement.
19 First, the Commission determined the basic amount of the fines according to the gravity and duration of the infringement.
20 In that connection, the Commission took the view that the undertakings concerned had committed a very serious infringement, in view of its nature, its actual impact on the market and the size of the relevant geographical market.
21 Next, the Commission considered that because the single and continuous infringement concerned several undertakings of extremely different sizes it was necessary to treat the undertakings concerned differently in order to take account of the specific weight of each undertaking and, consequently, the real impact of its offending conduct on competition. To that end, the undertakings concerned were divided into three groups according to...
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