Judgments nº T-772/15 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-772/15

(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 bidding events concerning optical disk drives for notebook and desktop computers - Rights of the defence - Obligation to state reasons - Principle of good administration - Fines - Single and continuous infringement - 2006 Guidelines on the method of setting fines)

In Case T-772/15,

Quanta Storage, Inc., established in Taoyuan (Taiwan), represented by O. Geiss, lawyer, B. Hartnett, Barrister, and W. Sparks, Solicitor,

applicant,

v

European Commission, represented by C. Giolito and F. van Schaik, acting as Agents, and by C. Thomas, lawyer,

defendant,

ACTION under Article 263 TFEU seeking, principally, annulment in part of Commission Decision C(2015) 7135 final of 21 October 2015 final 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 applicant,

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 2 May 2018,

gives the following

Judgment

Background to the dispute

1 According to Decision C(2015) 7135 final relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case AT.39639 - Optical disk drives) (‘the contested decision’), concerning collusive agreements relating to bidding events concerning optical disk drives for notebook and desktop computers organised by two computer manufacturers, the applicant, Quanta Storage, Inc., operates in the computer storage devices sector and is engaged in the research and development, design, manufacture and supply of optical disk drives (‘ODDs’). It was established in February 1999. It is a public company listed at the Taipei stock exchange in Taiwan (Republic of China) (contested decision, recital 23).

2 The infringement concerns ODDs used in personal computers (desktops and notebooks) (‘PCs’) produced by 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).

3 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 sub-group includes drives that vary by size. Both HH and slim drives differ by type depending on their technical functionality (contested decision, recital 29).

4 Dell and HP are the two most important original equipment manufacturers on the global market for PCs. Dell and HP 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).

5 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).

6 As regards Dell, it mainly carried out bidding events 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, recital 37).

7 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).

Administrative procedure

8 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) (‘the Leniency Notice’) from Philips. On 29 January and 2 March 2009 that request was supplemented to include, alongside Philips, Lite-On and their joint venture Philips & Lite-On Digital Solutions Corporation (‘PLDS’) (contested decision, recital 54).

9 On 29 June 2009, the Commission sent a request for information to undertakings active in the ODD sector (contested decision, recital 55).

10 On 30 June 2009, the Commission granted conditional immunity to Philips, Lite-On and PLDS (contested decision, recital 56).

11 On 18 July 2012, the Commission sent a statement of objections to 13 suppliers of ODDs, including the applicant (‘the statement of objections’). It stated that those companies had infringed Article 101 TFEU and Article 53 of the Agreement on the European Economic Area (EEA Agreement) by participating in a cartel concerning ODDs from 5 February 2004 until 29 June 2009 consisting in orchestrating their behaviour in bidding events organised by two computer manufacturers, Dell and HP.

12 On 26 October 2012, in reply to the statement of objections, the applicant submitted its written comments.

13 On 23 November 2012, Dell replied to the request for information that the Commission had addressed to it (contested decision, recital 61).

14 An oral hearing was held on 29 and 30 November 2012, in which all the addressees of the statement of objections participated (contested decision, recital 60).

15 On 14 December 2012, the Commission requested all the addressees of the statement of objections to provide the relevant documents received from Dell and HP. All those addressees replied to those requests and each was granted access to the replies provided by the other ODD suppliers (contested decision, recital 62).

16 On 13 March 2015, the Commission sent the applicant certain documents received from Dell and HP and requested it to submit its comments, which the applicant did by letter of 27 March 2015.

17 On 9 June 2015, the applicant wrote to the Commission’s hearing officer asking him to confirm that the Commission had requested Dell and HP to provide evidence that those undertakings had provided their suppliers with information concerning their competitors. In his reply of 23 June, the hearing officer stated that the Commission had not submitted such a request to those undertakings.

18 On 3 June 2015, the Commission sent the applicant a statement of facts, explaining the use which it proposed to make of those documents.

19 On 21 October 2015 the Commission adopted the contested decision.

Contested decision

20 In the contested decision, the Commission considered that the cartel participants had coordinated their competitive behaviour, at least between 23 June 2004 and 25 November 2008. It specified that that coordination took place through a network of parallel bilateral contacts. It stated that the cartel participants sought to accommodate their volumes on the market and ensure that the prices remained at levels higher than they would have been in the absence of those bilateral contacts (contested decision, recital 67).

21 The Commission specified, in...