Judgments nº T-59/02 of Court of First Instance of the European Communities, September 27, 2006 (case Archer Daniels Midland v Commission)

• President: Competition
• Resolution Date: September 27, 2006
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-59/02

In Case T-59/02,

Archer Daniels Midland Co., established in Decatur, Illinois (United States), represented by C.O. Lenz, lawyer, L. Martin Alegi, M. Garcia, and E. Batchelor, Solicitors,

applicant,

v

Commission of the European Communities, represented by P. Oliver, acting as Agent,

defendant,

APPLICATION for annulment of Article 1 of Commission Decision 2002/742/EC of 5 December 2001 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/E-1/36.604 - Citric acid) (OJ 2002 L 239, p. 18) in so far as it finds that the applicant infringed Article 81 EC and Article 53 of the EEA Agreement by agreeing to restrict capacity in the market in question and to designate a producer who was to lead price increases in each national segment of the said market, and for the annulment of Article 3 of the same decision in so far as it pertains to the applicant and, in the alternative, for the reduction of the fine imposed on it,

THE COURT OF FIRST INSTANCE
OF THE EUROPEAN COMMUNITIES (Third Chamber),

composed of J. Azizi, President, M. Jaeger and F. Dehousse, Judges,

Registrar: J. Plingers, Administrator,

having regard to the written procedure and further to the hearing on 9 June 2004,

gives the following

Judgment

Facts

1 The applicant, Archer Daniels Midland Co. (-ADM-), is the parent company of a group of companies which operate in the cereal and oil seed processing industry. It entered the citric acid market in 1991.

2 Citric acid is the most widely used acidulant and preservative in the world. It exists in different types and is used in a variety of applications, mainly in food and beverages, household detergents and cleaners, pharmaceuticals and cosmetics, and in various industrial processes.

3 In 1995 total worldwide sales of citric acid were approximately EUR 894.72 million, those in the European Economic Area (EEA) being approximately EUR 323.69 million. In 1996 approximately 60% of the worldwide citric acid market was in the hands of the five addressees of the Decision, namely, in addition to ADM, Jungbunzlauer AG (-JBL-), F. Hoffmann-La Roche AG (-HLR-), Haarmann & Reimer Corp. (-H&R-), belonging to the Bayer AG Group (-Bayer-), and Cerestar Bioproducts BV (-Cerestar-), together referred to as -the parties concerned-.

4 In August 1995 the United States Department of Justice informed the Commission of an investigation into the citric acid market. Between October 1996 and June 1998 all the parties concerned, including ADM, pleaded guilty to taking part in a cartel. As a result of plea agreements with the Department of Justice, fines were imposed on the companies by the United States authorities. In addition, several individuals charged were fined. Investigations were also carried out in Canada and some of the same companies, including ADM, were fined there.

5 On 6 August 1997 the Commission sent requests for information under Article 11 of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition 1959-1962, p. 87) to the four largest producers of citric acid in the Community. In addition, in January 1998 the Commission sent requests for information to the main purchasers of citric acid in the Community and in June and July 1998 it sent further requests for information to the main producers of citric acid in the Community.

6 Following receipt of the first request for information which had been sent to it in July 1998, Cerestar contacted the Commission and, in the course of a meeting on 29 October 1998, expressed a wish to cooperate with the Commission under 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-). At the meeting Cerestar gave an oral account of the cartel activity in which it had been involved. On 25 March 1999 it sent the Commission a written statement confirming what it had said at the meeting.

7 By letter of 28 July 1998 the Commission sent JBL a further request for information, to which the latter replied by letter of 28 September 1998.

8 At a meeting on 11 December 1998 ADM expressed its willingness to cooperate with the Commission and gave an oral account of the anti-competitive activity in which it had been involved. On 15 January 1999 it sent the Commission a written statement confirming that account.

9 On 3 March 1999 the Commission sent additional requests for information to HLR, JBL and Cerestar.

10 On 28 April, 21 May and 28 July 1999 respectively, Bayer, on behalf of H&R, JBL and HLR made statements on the basis of the Leniency Notice.

11 On 29 March 2000 the Commission, on the basis of the information supplied to it, sent a statement of objections to ADM and the other parties concerned for infringement of Article 81(1) EC and Article 53(1) of the EEA Agreement (-the EEA Agreement-). ADM and the other parties concerned submitted written observations in response to the Commission-s objections. None of the parties requested an oral hearing, nor did they substantially contest the facts as set out in the statement of objections.

12 On 27 July 2001 the Commission sent additional requests for information to ADM and the other parties concerned.

13 On 5 December 2001 the Commission adopted Decision C(2001) 3923 final relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/E-l/36.604 - Citric acid) (-the Decision-). The Decision was notified to ADM by letter of 17 December 2001.

14 The Decision includes the following provisions:

-Article 1

[ADM], [Cerestar], [H&R], [HLR] and [JBL] have infringed Article 81(1) of the Treaty and Article 53(1) of the EEA Agreement by participating in a continuing agreement and/or concerted practice in the sector of citric acid.

The duration of the infringement was as follows:

- in the case of [ADM], [H&R], [HLR] and [JBL]: from March 1991 to May 1995;

- in the case of [Cerestar]: from May 1992 to May 1995.

-

Article 3

For the infringement referred to in Article 1, the following fines are imposed:

(a) [ADM]: EUR 39.69 million

(b) [Cerestar]: EUR 170 000

(c) [HLR]: EUR 63.5 million

(d) [H&R]: EUR 14.22 million

(e) [JBL]: EUR 17.64 million.-

15 At recitals 80 to 84 of the Decision, the Commission stated that the cartel involved the allocation of specific sales quotas to each member and their adherence to those quotas, the fixing of target and/or floor prices, the elimination of price discounts and the exchange of specific information on customers.

16 For calculating the fines, the Commission used in the Decision the method described in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty (OJ 1998 C 9, p. 3; -the Guidelines-) and the Leniency Notice.

17 First, the Commission determined the basic amount of the fine by reference to the gravity and duration of the infringement.

18 In that context, as regards the gravity of the infringement, the Commission found, first, that, taking into account the nature of the infringement, its actual impact on the EEA citric acid market and the scope of the relevant geographic market, the parties concerned had committed a very serious infringement (recital 230 of the Decision).

19 Next, the Commission considered that it was necessary to take account of the actual economic capacity of the offenders to cause significant damage to competition, and to set the fine at a level which ensured that it had sufficient deterrent effect. Consequently, taking as its basis the worldwide turnover of the parties concerned from the sale of citric acid in the last year of the infringement, namely 1995, the Commission divided them into three categories as follows: in the first category, H&R with a worldwide market share of 22%, in the second, ADM and JBL with worldwide market shares of [confidential] ( 1 ) and HLR with a market share of 9%, and in the third category Cerestar, with a worldwide market share of 2.5%. On this basis the starting amounts fixed by the Commission were EUR 35 million for the company in the first category, EUR 21 million for those in the second and EUR 3.5 million for that in the third category (recital 239 of the Decision).

20 In addition, the starting amount was adjusted to ensure that the fine had a sufficient deterrent effect. The Commission thus found that, taking account of the size and overall resources of the parties concerned, as expressed by their total worldwide turnover, the starting point for the fines on ADM and HLR should be multiplied by 2 and that for the fine on H&R by 2.5 (recitals 50 and 246 of the Decision).

21 As regards the duration of the infringement committed by each undertaking, the resulting starting amount was increased by 10% per year, giving an increase of 40% for ADM, H&R, HLR and JBL, and 30% for Cerestar (recitals 249 and 250 of the Decision).

22 Accordingly, the Commission set the basic amounts of the fines at EUR 58.8 million for ADM, while those for Cerestar, HLR, H&R and JBL were set at EUR 4.55 million, EUR 58.8 million, EUR 122.5 million and EUR 29.4 million respectively (recital 254 of the Decision).

23 Second, the basic amounts for ADM and HLR were increased by 35% to take account of aggravating factors on the ground that they had acted as ringleaders of the cartel (recital 273 of the Decision).

24 Third, the Commission examined and rejected the arguments of certain undertakings with regard to attenuating circumstances (recitals 274 to 291 of the Decision).

25 Fourth, pursuant to Article 15(2) of Regulation No 17, the Commission adjusted the resulting amounts for Cerestar and H&R so that they did not exceed the 10% limit of their worldwide turnover (recital 293 of the Decision).

26 Fifth, under Section B of the Leniency Notice, the Commission allowed Cerestar a -very substantial reduction- (namely 90%) in the fine which...