Alliance One International Inc. and Standard Commercial Tobacco Co. Inc. v European Commission and European Commission v Alliance One International Inc. and Others.

• Jurisdiction: European Union
• Celex Number: 62010CJ0628
• ECLI: ECLI:EU:C:2012:479
• Court: Court of Justice (European Union)
• Date: 19 July 2012
• Docket Number: C-14/11,C-628/10
• Procedure Type: Recurso de anulación

JUDGMENT OF THE COURT (Grand Chamber)

19 July 2012 ( *1 )

‛Appeals — Competition — Agreements, decisions and concerted practices — Spanish market for the purchase and first processing of raw tobacco — Price-fixing and market-sharing — Infringement of Article 81 EC — Attributability of unlawful conduct of subsidiaries to their parent companies — Presumption of innocence — Rights of the defence — Obligation to state the reasons on which the decision is based — Equal treatment’

In Joined Cases C-628/10 P and C-14/11 P,

Two APPEALS under Article 56 of the Statute of the Court of Justice of the European Union, brought on 28 December 2010 and 7 January 2011 respectively,

Alliance One International Inc., formerly Standard Commercial Corp., established in Danville (United States),

Standard Commercial Tobacco Co. Inc., established in Wilson (United States),

represented by M. Odriozola Alén and A. João Vide, abogados,

appellants,

the other parties to the proceedings being:

Trans-Continental Leaf Tobacco Corp. Ltd, established in Vaduz (Liechtenstein),

applicant at first instance,

European Commission, represented by F. Castillo de la Torre, E. Gippini Fournier and R. Sauer, acting as Agents, with an address for service in Luxembourg,

defendant at first instance,

and

European Commission, represented by F. Castillo de la Torre, E. Gippini Fournier and R. Sauer, acting as Agents, with an address for service in Luxembourg,

appellant,

the other parties to the proceedings being:

Alliance One International Inc.,

Standard Commercial Tobacco Co. Inc.,

Trans-Continental Leaf Tobacco Corp. Ltd,

represented by M. Odriozola Alén and A. João Vide, abogados,

applicants at first instance,

THE COURT (Grand Chamber),

composed of V. Skouris, President, A. Tizzano, J.N. Cunha Rodrigues, K. Lenaerts, M. Safjan and A. Prechal, Presidents of Chambers, K. Schiemann, E. Juhász, G. Arestis, A. Arabadjiev (Rapporteur), D. Šváby, M. Berger and E. Jarašiūnas, Judges,

Advocate General: J. Kokott,

Registrar: L. Hewlett, Principal Administrator,

having regard to the written procedure and further to the hearing on 16 November 2011,

after hearing the Opinion of the Advocate General at the sitting on 12 January 2012,

gives the following

Judgment

1 By their appeal (C-628/10 P) Alliance One International Inc. (‘AOI’), formerly Standard Commercial Corp. (‘SCC’), and Standard Commercial Tobacco Co. Inc. (‘SCTC’) seek to have set aside the judgment of 27 October 2010 in Case T-24/05 Alliance One International and Others v Commission [2010] ECR II-5329 (‘the judgment under appeal’), whereby the General Court of the European Union dismissed their action for the annulment of Commission Decision C(2004) 4030 final of 20 October 2004 relating to a proceeding under Article 81(1) [EC] (Case COMP/C.38.238/B.2 ‐ Raw tobacco — Spain) (‘the contested decision’) and, further, the annulment of that decision, in so far as it relates to them, and reduction of the fine imposed on them by that decision.

2 By its appeal (C-14/11 P) the European Commission seeks to have set aside the judgment under appeal to the extent that it annulled the contested decision in so far as it relates to Trans-Continental Leaf Tobacco Corp. Ltd (‘TCLT’) and, further, dismissal of the action brought by TCLT before the General Court.

I – Background to the dispute

3 The facts which gave rise to the dispute in this case, as set out in paragraphs 1 to 40 of the judgment under appeal, can be summarised as follows.

4 World Wide Tobacco España SA (‘WWTE’), Agroexpansión SA (‘Agroexpansión’) and Tabacos Españoles SL (‘Taes’) are three of four undertakings engaged in the first processing of raw tobacco in Spain (the four undertakings being hereinafter referred to as ‘the processors’).

5 Between 1995 and 5 May 1998 two thirds of the capital of WWTE was held by TCLT, a wholly owned subsidiary of SCTC, which is itself a wholly owned subsidiary of SCC (now AOI). The remaining third was held by the chairman of WWTE and two members of his family.

6 On 5 May 1998 TCLT increased its holding in WWTE to 86.94%, the remainder of the shares being held as own shares by WWTE (9.73%) and by a natural person (3.33%). In October 1998 WWTE acquired that person’s shares and SCC acquired a direct holding of 0.04% in WWTE’s share capital. In May 1999 TCLT and SCC increased their holding in WWTE to 89.64% and 0.05% respectively, the remainder being held as own shares by WWTE.

7 Agroexpansión is a member of a group of companies of which Dimon Inc. is the ultimate holding company. Dimon holds, through its wholly owned subsidiary Intabex Netherlands BV (‘Intabex’), all the shares in Agroexpansión.

8 All shares in Taes and in Deltafina SpA (‘Deltafina’), which is an Italian company whose main activities are the first processing of raw tobacco in Italy and the marketing of processed tobacco, are held by Universal Leaf Tobacco Co. Inc. (‘Universal Leaf’). The latter is itself a 100% owned subsidiary of the United States company Universal Corp. (‘Universal’).

9 On 3 and 4 October 2001 the Commission carried out inspections pursuant to Article 14 of Council Regulation No 17 of 6 February 1962, First regulation implementing Articles [81 EC] and [82 EC] (OJ 1962, English Special Edition, Series I, 1959-1962, p. 87) at the premises of, among others, WWTE, in order to check information that the Spanish processors and producers of raw tobacco had infringed Article 81 EC.

10 On 11 December 2003 the Commission adopted a statement of objections which it addressed to 20 undertakings or associations, including SCTC and SCC.

11 On 20 October 2004 the Commission adopted the contested decision which relates to, inter alia, a horizontal cartel entered into and implemented on the Spanish raw tobacco market by the processors and Deltafina.

12 According to the Commission’s findings, the object of that cartel was to fix each year, in the period from 1996 to 2001, the average delivery price for each variety and grade of raw tobacco and to share out the quantities of each variety of raw tobacco that each of the processors could purchase from the producers. Between 1999 and 2001 the processors and Deltafina also agreed price brackets per quality grade for each raw tobacco variety as well as average minimum prices per producer and producer group.

13 In the contested decision, the Commission held that that cartel was a single and continuous infringement of Article 81(1) EC, attributed liability for the cartel to, among others, Deltafina and the processors, ordered those undertakings to bring immediately to an end that infringement, and to refrain immediately from any restrictive practice having the same or similar object or effect, and further imposed the following fines, namely EUR 108 000 on Taes, EUR 1 822 500 on WWTE, EUR 2 592 000 on Agroexpansión and EUR 11 880 000 on Deltafina.

14 The contested decision also provides that the three parent companies of WWTE are jointly and severally liable for payment of the fine imposed on WWTE, as is Dimon Inc. for payment of the fine imposed on Agroexpansión. On the other hand, Intabex was not held liable for the fine imposed on Agroexpansión, and Universal and Universal Leaf are also not identified as jointly and severally liable for the fines imposed on Taes and Deltafina.

15 As regards the persons to whom the contested decision was addressed, the Commission stated, in recitals 375 and 376 of the contested decision: ‘(375) In the present case, three of the four Spanish processors of raw tobacco are controlled (to the extent of 100% or 90%) by US multinationals. There are other factual elements that confirm the presumption that the conduct of Agroexpansión and WWTE has to be ascribed to their respective parent companies. In these cases, the two companies — the parent company and the subsidiary — must be regarded as being jointly responsible for the infringements established in this decision. (376) [On the other hand], following the issuing of the Statement of Objections and the hearing of the parties, it has become apparent that the evidence in the file could not warrant a similar conclusion in respect of Universal[’s] … and Universal Leaf [Tobacco Co. Inc.’s] shareholdings in Taes and Deltafina. In fact, apart from the corporate link between the parents and their subsidiaries, there is no indication in the file of any material involvement of Universal … and Universal Leaf in the facts which are being considered in this decision. It would therefore not be appropriate to address them a decision in this case. The same conclusion would apply, a fortiori, to Intabex … in so far as its 100% shareholding in Agroexpansión was purely financial.’

16 As regards more particularly WWTE, the Commission distinguished two periods, in the light of the circumstances set out in paragraphs 5 and 6 of this judgment. The first period is from 1995 until 4 May 1998 inclusive (‘the first period’) and the second from 5 May 1998 until the date of adoption of the contested decision (‘the second period’).

17 As regards the first period, the Commission concluded, in recitals 391 and 392 of the contested decision and on the basis of a number of factors set out in, inter alia, recitals 388 to 390 of that decision, that WWTE was jointly controlled by SCC, through SCTC and TCLT, and the chairman of WWTE and his family, that SCC and/or its subsidiaries exercised effective influence over the conduct of WWTE and that SCC had put in place certain mechanisms which, considered...