Judgments nº T-8/16 of Tribunal General de la Unión Europea, July 12, 2019

• Resolution Date: July 12, 2019
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-8/16

(Competition - Agreements, decisions and concerted practices - Market for optical disk drives - Decision finding an infringement of Article 101 TFEU and Article 53 of the EEA Agreement - Collusive agreements relating to procurement events organised by two computer manufacturers - Breach of essential procedural requirements and of the rights of the defence - Jurisdiction of the Commission - Geographic scope of the infringement - Single and continuous infringement - Principle of good administration - 2006 Guidelines on the method of setting fines)

In Case T-8/16,

Toshiba Samsung Storage Technology Corp., established in Tokyo (Japan),

Toshiba Samsung Storage Technology Korea Corp., established in Suwon-si (South Korea),

represented initially by M. Bay, J. Ruiz Calzado, A. Aresu and A. Scordamaglia-Tousis, and subsequently by M. Bay, J. Ruiz Calzado and A. Aresu, lawyers,

applicants,

v

European Commission, represented initially by N. Khan, A. Biolan and M. Farley, and subsequently by A. Biolan, M. Farley and A. Cleenewerck de Crayencour, acting as Agents,

defendant,

ACTION under Article 263 TFEU seeking, principally, annulment in whole or in part of Commission Decision C(2015) 7135 final of 21 October 2015 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case AT.39639 - Optical disk drives), or, in the alternative, a reduction of the amount of the fine imposed on the applicants,

THE GENERAL COURT (Fifth Chamber),

composed of D. Gratsias, President, I. Labucka and I. Ulloa Rubio (Rapporteur), Judges,

Registrar: N. Schall, Administrator,

having regard to the written part of the procedure and further to the hearing on 3 May 2018,

gives the following

Judgment

1. Background to the dispute

   1. The applicants and the market concerned

      1 The applicants, Toshiba Samsung Storage Technology Corp. (‘TSST Japan’) and Toshiba Samsung Storage Technology Korea Corp. (‘TSST KR’), are manufacturers and suppliers of optical disk drives (‘ODDs’). In particular, TSST Japan is a joint venture owned by Toshiba Corporation, established in Japan, and Samsung Electronics Co., Ltd, established in South Korea. During the infringement period, TSST Japan was the parent company of TSST KR.

      2 TSST Japan and TSST KR (together, ‘TSST’) began operations on 1 April 2004 as two separate operating units. In December 2005, TSST Japan exited the market, remaining with reduced transitional sales activities until early 2008. TSST KR gradually assumed the sales activities of TSST Japan and was directly engaged in the development, marketing, sales and after-sales services of ODDs (contested decision, recital 14).

      3 The infringement concerns ODDs used in personal computers (desktops and notebooks) (‘PCs’) produced by Dell Inc. (‘Dell’) and Hewlett Packard (‘HP’). ODDs are also used in a wide range of other consumer appliances such as compact disc (‘CD’) or digital versatile disc (‘DVD’) players, game consoles and other electronic hardware devices (contested decision, recital 28).

      4 ODDs used in PCs differ according to their size, loading mechanisms (slot or tray) and the types of discs that they can read or write. ODDs can be split into two groups: half-height (‘HH’) drives for desktops and slim drives for notebooks. The slim drive group includes drives that vary by size. Both HH and slim drives differ by type depending on their technical functionality (contested decision, recital 29).

      5 Dell and HP are the two most important original equipment manufacturers on the global market for PCs. Those two companies use standard procurement procedures carried out on a global basis which involve, inter alia, quarterly negotiations over a worldwide price and overall purchase volumes with a limited number of pre-qualified ODD suppliers. Generally, regional issues did not play any role in ODD procurement other than that related to forecasted demand from regions affecting overall purchase volumes (contested decision, recital 32).

      6 The procurement procedures included requests for quotations, electronic requests for quotations, internet negotiations, e-auctions and bilateral (offline) negotiations. At the close of a procurement event, customers would allocate volumes to participating ODD suppliers (to all or at least most of them, unless there was an exclusion mechanism in place) depending on their quoted prices. For example, the winning bid would receive 35 to 45% of the total market allocation for the relevant quarter, the second best 25 to 30%, the third 20% and so on. These standardised procurement procedures were used by customers’ procurement teams with the purpose of achieving efficient procurement at competitive prices. To this end, they used all possible practices to stimulate the price competition between the ODD suppliers (contested decision, recital 33).

      7 As regards Dell, it carried out bidding events mainly by internet negotiation. That negotiation could last for a specific period of time or end after a defined period, for example 10 minutes after the last bid, when no ODD supplier continued bidding. In certain circumstances, internet negotiations could last several hours if the bidding was more active or if the duration of the internet negotiation was extended in order to incentivise ODD suppliers to continue bidding. Conversely, even where the length of the internet negotiation was indefinite and depended on the final bid, Dell could announce at some point that the internet negotiation had closed. Dell could decide to change from a ‘rank only’ to a ‘blind’ procedure. Dell could cancel the internet negotiation if the bidding or its result were found to be unsatisfactory and run a bilateral negotiation instead. The internet negotiation process was monitored by Dell’s responsible Global Commodity Managers (contested decision, recitals 34 and 37).

      8 With respect to HP, the main procurement procedures used were requests for quotations and electronic requests for quotations. Both procedures were carried out online using the same platform. As regards (i) the requests for quotations, they were quarterly. They combined online and bilateral offline negotiations spread over a period of time, usually 2 weeks. ODD suppliers were invited to a round of open bidding for a specified period of time to submit their quote to the online platform or by email. Once the first round of bidding had elapsed, HP would meet with each participant and start negotiations based on the ODD supplier’s bid to obtain a better bid from each supplier without disclosing the identity or the bid submitted by any other ODD supplier. As regards (ii) the electronic requests for quotations, they were normally run in the format of a reverse auction. In that format, bidders would log onto the online platform at the specified time and the auction would start at a price set by HP. Bidders entering progressively lower bids would be informed of their own rank each time a new bid was submitted. At the end of the allotted time, the ODD supplier having entered the lowest bid would win the auction and other suppliers would be ranked second and third according to their bids (contested decision, recitals 41 to 44).

   2. Administrative procedure

      9 On 14 January 2009, the European Commission received a request for immunity under its Notice on Immunity from fines and reduction of fines in cartel cases (OJ 2006 C 298, p. 17) from Koninklijke Philips NV (‘Philips’). On 29 January and 2 March 2009, that request was supplemented in order to include, alongside Philips, Lite-On IT Corporation (‘Lite-On’) and their joint venture Philips & Lite-On Digital Solutions Corporation (‘PLDS’).

      10 On 29 June 2009, the Commission sent a request for information to undertakings active in the ODD sector.

      11 On 30 June 2009, the Commission granted conditional immunity to Philips, Lite-On and PLDS.

      12 On 4 and 6 August 2009, Hitachi-LG Data Storage, Inc. and Hitachi-LG Data Storage Korea, Inc. (together ‘HLDS’) submitted an application to the Commission for a reduction of the amount of the fine under the Commission Notice on immunity from fines and reduction of fines in cartel cases.

      13 On 18 July 2012, the Commission initiated a proceeding and adopted a statement of objections against 13 ODD suppliers, including the applicants. In that statement of objections, the Commission stated, in essence, that those companies had infringed Article 101 TFEU and Article 53 of the Agreement on the European Economic Area (EEA) by participating in a cartel on ODDs from 5 February 2004 until 29 June 2009, consisting in orchestrating their conduct with respect to invitations to tender organised by two computer manufacturers, Dell and HP.

      14 On 29 October 2012, the applicants sent the Commission their comments on the statement of objections.

      15 On 29 and 30 November 2012, all the addressees of the statement of objections took part in a hearing before the Commission.

      16 On 14 December 2012, the Commission requested all the parties to provide the relevant documents received from Dell and HP during the infringement period. All the parties, including the applicants, replied to those requests. In addition, each of the parties was granted access to the non-confidential version of the replies provided by the other ODD suppliers.

      17 On 27 November 2013, the applicants filed supplementary comments on the other parties’ replies.

      18 On 18 February 2014, the Commission adopted two supplementary statements of objections in order, as it stated, to supplement, amend and clarify the objections addressed to certain addressees of the statement of objections as regards their liability for the alleged infringement.

      19 On 1 June 2015, the Commission adopted another supplementary statement of objections. The purpose of this new statement of objections was to supplement the earlier statements of objections by addressing the objections set out in those statements to additional legal entities belonging to the groups of...