Judgments nº T-704/14 of Tribunal General de la Unión Europea, October 26, 2017

• Resolution Date: October 26, 2017
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-704/14

In Case T-704/14,

Marine Harvest ASA, established in Bergen (Norway), represented by R. Subiotto QC,

applicant,

v

European Commission, represented by M. Farley, C. Giolito and F. Jimeno Fernández, acting as Agents,

defendant,

APPLICATION based on Article 263 TFEU and seeking, principally, annulment of Commission Decision C(2014) 5089 final of 23 July 2014 imposing a fine for putting into effect a concentration in breach of Article 4(1) and Article 7(1) of Regulation (EC) No 139/2004 (Case COMP/M.7184 - Marine Harvest/Morpol), and, in the alternative, annulment or reduction of the fine imposed on the applicant,

THE GENERAL COURT (Fifth Chamber),

composed of A. Dittrich (Rapporteur), President, J. Schwarcz and V. Tomljenović, Judges,

Registrar: C. Heeren, Administrator,

having regard to the written part of the procedure and further to the hearing on 15 September 2016,

gives the following

Judgment

1. Background to the dispute

   1 The applicant, Marine Harvest ASA, is a company governed by Norwegian law and listed on the Oslo (Norway) Stock Exchange and the New York (United States) Stock Exchange, which carries out salmon farming and primary processing activities in Canada, Chile, the Faroe Islands, Ireland, Norway and Scotland, and white halibut farming and primary processing activities in Norway. The applicant also carries out secondary processing activities in Belgium, Chile, the Czech Republic, France, Ireland, Japan, the Netherlands, Norway, Poland and the United States.

   1. Acquisition of Morpol by the applicant

      2 On 14 December 2012, the applicant entered into a share purchase agreement (‘the SPA’) with Friendmall Ltd. and Bazmonta Holding Ltd. for the sale of the shares which those companies owned in Morpol ASA.

      3 Morpol is a Norwegian producer and processor of salmon. It produces farmed salmon and offers a broad range of value added salmon products. It carries out salmon farming and primary processing activities in Norway and Scotland. It also carries out secondary processing activities in Poland, the United Kingdom and Vietnam. Prior to its acquisition by the applicant, Morpol was listed on the Oslo Stock Exchange.

      4 Friendmall and Bazmonta Holding were private limited liability companies incorporated and registered in Cyprus. Both companies were controlled by a single individual, Mr M., the founder and former chief executive officer (CEO) of Morpol.

      5 Through the SPA, the applicant acquired an interest in Morpol amounting to approximately 48.5% of Morpol’s share capital. The closing of that acquisition (‘the December 2012 Acquisition’) took place on 18 December 2012.

      6 On 17 December 2012, the applicant made a stock exchange announcement of its intention to submit a public offer for the remaining shares in Morpol. On 15 January 2013, pursuant to the Norwegian Law on securities trading, the applicant submitted the mandatory public offer for the remaining shares in Morpol, representing 51.5% of the shares in the company. According to the provisions of Norwegian law, an acquirer of more than one third of the shares in a listed company is obliged to make a mandatory bid for the remaining shares in the company.

      7 On 23 January 2013, the board of directors of Morpol appointed a new CEO to replace Mr M., who had in the meantime resigned with effect from 1 March 2013, following a commitment to that effect which had been included in the SPA.

      8 Following the settlement and completion of the public offer on 12 March 2013, the applicant owned a total of 87.1% of the shares in Morpol. Thus, through the public offer, the applicant acquired shares representing approximately 38.6% of Morpol, in addition to the shares representing 48.5% of Morpol which the applicant had already acquired by means of the December 2012 Acquisition.

      9 The acquisition of the remaining shares in Morpol was completed on 12 November 2013. On 15 November 2013, an extraordinary general meeting resolved to apply for the shares to be de-listed from the Oslo Stock Exchange, to reduce the number of members of the board of directors and to eliminate the nomination committee. On 28 November 2013, Morpol was de-listed from the Oslo Stock Exchange.

   2. Pre-notification phase

      10 On 21 December 2012, the applicant sent a request to the European Commission for the allocation of a case team in respect of the acquisition of sole control over Morpol. In that request, the applicant informed the Commission that the December 2012 Acquisition had been closed and that it would not exercise its voting rights pending the decision of the Commission.

      11 The Commission requested a conference call with the applicant, which took place on 25 January 2013. During the conference call, the Commission requested information on the deal structure and clarification as to whether the December 2012 Acquisition might have already conferred control over Morpol on the applicant.

      12 On 12 February 2013, the Commission sent a request for information to the applicant relating to the possible acquisition of de facto control over Morpol as a result of the December 2012 Acquisition. It also asked to be provided with the agenda and minutes of the general meetings of Morpol and the meetings of the board of directors of Morpol for the last three years. The applicant submitted a partial response to that request on 19 February 2013 and produced a full response on 25 February 2013.

      13 On 5 March 2013, the applicant submitted a first draft notification form as contained in Annex I to Commission Regulation (EC) No 802/2004 of 21 April 2004 implementing Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings (OJ 2004 L 133, p. 1) (‘the First Draft Form CO’). The First Draft Form CO focused on an overall market for farming, primary processing and secondary processing of salmon of all origins.

      14 On 14 March 2013, the Commission sent the applicant a request for additional information concerning the First Draft Form CO. On 16 April 2013, the applicant responded to that request for information. The Commission considered that response to be incomplete and sent further requests for information on 3 May, 14 June and 10 July 2013. The applicant replied to those requests on 6 June, 3 July and 26 July 2013 respectively.

   3. Notification and decision authorising the concentration subject to compliance with certain commitments

      15 On 9 August 2013, the transaction was formally notified to the Commission.

      16 At a state of play meeting on 3 September 2013, the Commission informed the applicant and Morpol that it had serious doubts as to the compatibility of the transaction with the internal market as regards a possible market for Scottish salmon.

      17 In order to eliminate the serious doubts identified by the Commission, the applicant proposed commitments under Article 6(2) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ 2004 L 24, p. 1) on 9 September 2013. Those initial commitments were market-tested by the Commission. Following certain modifications, a final set of commitments was submitted on 25 September 2013. The applicant committed itself to divesting approximately three quarters of the overlap between the Scottish salmon farming capacity of the parties to the concentration, thereby dispelling the serious doubts identified by the Commission.

      18 On 30 September 2013, the Commission adopted Decision C(2013) 6449 (Case COMP/M.6850 - Marine Harvest/Morpol) (‘the Clearance Decision’) pursuant to Article 6(1)(b) and 6(2) of Regulation No 139/2004, approving the concentration subject to full compliance with the proposed commitments.

      19 The Commission concluded in the Clearance Decision that the December 2012 Acquisition had already conferred upon the applicant de facto sole control over Morpol. It stated that an infringement of the standstill obligation in Article 7(1) of Regulation No 139/2004 and of the notification requirement in Article 4(1) of that regulation could not be excluded. It also stated that it might examine in a separate procedure whether a penalty under Article 14(2) of Regulation No 139/2004 would be appropriate.

   4. Contested decision and procedure leading to its adoption

      20 In a letter dated 30 January 2014, the Commission informed the applicant of an ongoing investigation concerning possible infringements of Article 7(1) and Article 4(1) of Regulation No 139/2004.

      21 On 31 March 2014, the Commission issued a statement of objections to the applicant pursuant to Article 18 of Regulation No 139/2004 (‘the Statement of Objections’). In the Statement of Objections, the Commission reached the preliminary conclusion that the applicant had intentionally or at least negligently infringed Article 4(1) and Article 7(1) of Regulation No 139/2004.

      22 On 30 April 2014, the applicant submitted its response to the Statement of Objections. On 6 May 2014, the applicant presented the arguments set out in its response in the course of an oral hearing. On 7 July 2014, a meeting of the Advisory Committee on Concentrations was held.

      23 On 23 July 2014, the Commission adopted Decision C(2014) 5089 final imposing a fine for putting into effect a concentration in breach of Article 4(1) and Article 7(1) of Regulation No 139/2004 (Case COMP/M.7184 - Marine Harvest/Morpol) (‘the Contested Decision’).

      24 The first three articles in the operative part of the Contested Decision are worded as follows:

      ‘Article 1

      By putting into effect a concentration with a Union dimension in the period from 18 December 2012 to 30 September 2013, before it was notified and before it was declared compatible with the internal market, [the applicant] has infringed Article 4(1) and Article 7(1) of Regulation (EC) No 139/2004.

      Article 2

      A fine of EUR 10 000 000 is hereby imposed on [the applicant] for the infringement of Article 4(1) of Regulation (EC) No 139/2004 referred to in Article 1.

      Article 3

      A fine of EUR 10 000 000...