Judgments nº T-371/17 of Tribunal General de la Unión Europea, April 09, 2019

• Resolution Date: April 09, 2019
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-371/17

(Competition - Market for baseband chipsets used in consumer electronic devices - Administrative procedure - Article 18(3) and Article 24(1)(d) of Regulation (EC) No 1/2003 - Decision requesting information - Obligation to state reasons - Necessity of the information requested - Proportionality - Burden of proof - Privilege against self-incrimination - Principle of good administration)

In Case T-371/17,

Qualcomm, Inc., established in San Diego, California (United States),

Qualcomm Europe, Inc., established in Sacramento, California (United States),

represented by M. Pinto de Lemos Fermiano Rato and M. Davilla, lawyers,

applicants,

v

European Commission, represented by H. van Vliet, G. Conte, M. Farley and C. Urraca Caviedes, acting as Agents,

defendant,

APPLICATION pursuant to Article 263 TFEU for annulment of Commission Decision C(2017) 2258 final of 31 March 2017 relating to a proceeding pursuant to Article 18(3) and to Article 24(1)(d) of Council Regulation (EC) No 1/2003 (Case AT.39711 - Qualcomm (predation)),

THE GENERAL COURT (Second Chamber),

composed of M. Prek, President, E. Buttigieg (Rapporteur) and B. Berke, Judges,

Registrar: N. Schall, Administrator,

having regard to the written part of the procedure and further to the hearing on 11 September 2018,

gives the following

Judgment

Background to the dispute

1 Qualcomm, Inc. and Qualcomm Europe, Inc., which has a subsidiary established in the United Kingdom (together referred to as ‘Qualcomm’ or ‘the applicants’), have brought the present action.

2 Following a complaint lodged by Icera Inc. on 8 April 2010, the European Commission initiated proceedings against Qualcomm concerning an alleged abuse of its dominant position in the form of predatory pricing in the market for Universal Mobile Telecommunications System-compliant (UMTS) baseband chipsets (‘UMTS-compliant baseband chipsets’).

3 In that context, between 7 June 2010 and 14 January 2015, the Commission sent Qualcomm a number of requests for information under 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 [101] and [102 TFEU] (OJ 2003 L 1, p. 1), two of which gave rise to additional questions on the part of the Commission. Qualcomm responded to all of those requests for information.

4 On 16 July 2015, the Commission opened formal proceedings against Qualcomm. On 3 September 2015, Qualcomm and the Commission met for a state-of-play meeting (‘the state-of-play meeting of 3 September 2015’).

5 On 8 December 2015, the Commission adopted a statement of objections against Qualcomm (‘the statement of objections’).

6 The Commission’s objections related to an infringement of Article 102 TFEU and Article 54 of the Agreement on the European Economic Area (EEA). The Commission’s provisional view was that, from 3 February 2009 to 16 December 2011, Qualcomm had supplied certain quantities of three of its UMTS-compliant baseband chipsets (the MDM8200, MDM6200 and MDM8200A baseband chipsets) to two of its key customers (Huawei and ZTE) below cost, in order to eliminate Icera, the only competitor in that market segment during that period. Consequently, the Commission reached the preliminary conclusion that Qualcomm had abused its dominant position on the market for UMTS-compliant baseband chipsets.

7 On 15 August 2016, Qualcomm submitted its observations on the statement of objections (‘observations on the statement of objections’).

8 On 10 November 2016 an oral hearing took place pursuant to Article 12 of Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles [101] and [102 TFEU] (OJ 2004 L 123, p. 18).

9 On 30 January 2017, the Commission sent Qualcomm a request for information pursuant to Article 18(1) and (2) of Regulation No 1/2003 (‘the request for information of 30 January 2017’). The deadline for replying to that request was set for 27 February 2017.

10 Between 13 February and 15 March 2017, Qualcomm sent a number of communications to the Commission, asking the latter, inter alia, to revoke the request for information of 30 January 2017, to state the scope or precise subject matter of the investigation and to adopt a new request for information limited to what was, in its view, strictly necessary for the investigation.

11 By letter of 20 February 2017, the Commission informed Qualcomm of its intention to adopt a decision requesting information under Article 18(3) of Regulation No 1/2003 if Qualcomm did not respond to the questions contained in the request for information of 30 January 2017.

12 On 31 March 2017, the Commission adopted Decision C(2017) 2258 final relating to a proceeding pursuant to Article 18(3) and to Article 24(1)(d) of Council Regulation (EC) No 1/2003 (Case AT.39711 - Qualcomm (predation)) (‘the contested decision’).

13 The operative part of the contested decision reads as follows:

‘Article 1

Qualcomm Europe shall supply the information specified in ... Annex I to this Decision, which forms an integral part of this Decision, by 12 May 2017, with the exception of the information sought by Questions 1, 2, 6, 8, 9 and 10, to which Qualcomm shall reply by 26 May 2017.

Article 2

Should Qualcomm fail to supply the complete and correct information requested within the period prescribed in Article 1, it shall incur a periodic penalty payment of EUR 580 000 per day of delay, calculated from the date after the expiry of one of the periods specified in Article 1 of this Decision.

Article 3

This Decision is addressed to Qualcomm Europe ...’

14 By letter of 10 April 2017, Qualcomm requested that the deadline for response be extended until 28 July 2017. On 26 April 2017, Qualcomm was informed that the Commission would not grant its request but agreed to it submitting its replies by 26 May 2017, with the exception of questions 1, 2, 6 and 8 to 10, to which responses were required by 9 June 2017.

15 On 15 May 2017, the Hearing Officer, at Qualcomm’s request, granted a further extension of the deadline for response until 16 June 2017, with the exception of questions 1, 2, 6 and 8 to 10, to which responses were required by 30 June 2017.

16 On 30 May 2017, the Commission and Qualcomm held a meeting concerning the practical difficulties which Qualcomm was having in its attempts to respond to the contested decision.

17 On 16 June 2017, Qualcomm sent the Commission its response to the questions contained in the contested decision, with the exception of questions 1, 2, 6 and 8 to 10, to which a response was sent to the Commission on 30 June 2017.

18 On 18 July, 19 September and 10 November 2017, the Commission put follow-up questions to Qualcomm concerning the responses that Qualcomm had sent it on 16 and 30 June 2017.

Procedure and forms of order sought

19 By application lodged at the Court Registry on 13 June 2017, the applicants brought the present action.

20 By separate document lodged at the Court Registry on the same date, the applicants made an application for interim measures seeking suspension of operation of the contested decision or, in the alternative, of Article 2 of the contested decision, and also requesting that the Commission should be ordered to pay the costs. By order of 12 July 2017, Qualcomm and Qualcomm Europe v Commission (T-371/17 R, not published, EU:T:2017:485), the President of the General Court dismissed the application for interim measures and reserved the costs.

21 The applicants claim that the Court should:

- annul the contested decision;

- order the Commission to pay the costs.

22 The Commission contends that the Court should:

- dismiss the action;

- order the applicants to pay the costs.

23 By document lodged at the Court Registry on 24 August 2018, the applicants lodged further evidence consisting, in particular, of additional explanations that they had provided in response to the Commission’s requests made in November 2017 and May and June 2018 as well as in the supplementary statement of objections adopted by the Commission on 19 July 2018 and notified to Qualcomm on 23 July 2018.

24 By document lodged at the Court Registry on 31 October 2018, the applicants submitted further evidence, pursuant to Article 85(3) of the Rules of Procedure of the General Court. Since that evidence was lodged after the close of the oral part of the procedure, the Court decided not to reopen that part of the procedure, as none of the conditions laid down in Article 113(2) of the Rules of Procedure were met in the present case. That evidence was therefore not placed on the case file.

Law

The admissibility of the new evidence submitted by the applicants

25 In its observations of 5 September 2018, the Commission contends that the evidence lodged on 24 August 2018 is inadmissible as the applicants have not presented any reasoning explaining why that evidence has been provided at a late stage.

26 It should be recalled in that regard that, according to Article 85(1) to (3) of the Rules of Procedure, evidence is to be submitted in the first exchange of pleadings, the main parties exceptionally having the opportunity to produce further evidence before the oral part of the procedure is closed, provided that the delay in the submission of such evidence is justified.

27 In the present case, although the applicants have not put forward anything explaining the delay in the production of the documents concerned, it must nonetheless be stated that those documents post-date the lodging of the reply and that the applicants therefore could not produce them in the exchanges of pleadings between the parties (see, to that effect, judgment of 16 May 2018, Troszczynski v Parliament, T-626/16, not published, under appeal, EU:T:2018:270, paragraph 40). In those circumstances, the evidence concerned must be held to be admissible.

The claim for annulment

28 In support of their action, the applicants put forward six...