European Commission v Alrosa Company Ltd.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Writing for the Court: Schiemann
• ECLI: ECLI:EU:C:2010:377
• Docket Number: C-441/07
• Date: 29 June 2010
• Procedure Type: Recurso de anulación

Case C-441/07 P

European Commission

v

Alrosa Company Ltd

(Appeals – Dominant position – Regulation (EC) No 1/2003 – World market in rough diamonds – Individual commitments by a company to cease purchasing rough diamonds from another company – Decision making a company’s individual commitments binding and terminating the proceedings)

Summary of the Judgment

1. Competition – Administrative procedure – Bringing infringements to an end – Powers of the Commission – Remedies and commitments – Observance of the principle of proportionality – Judicial review – Scope

(Council Regulation No 1/2003, Arts 7 and 9)

2. Competition – Administrative procedure – Bringing infringements to an end – Powers of the Commission – Commitments – Discretion – Observance of the principle of proportionality – Judicial review – Scope

(Council Regulation No 1/2003, Art. 9)

3. Competition – Administrative procedure – Bringing infringements to an end – Powers of the Commission – Remedies and commitments – Concept of undertaking concerned – Rights of undertakings concerned and interested third parties

(Arts 81 EC and 82 EC; Council Regulation No 1/2003, Arts 7(9) and 27(2))

1. Articles 7 and 9 of Regulation No 1/2003 pursue two different objectives, one of them aiming to put an end to the infringement that has been found to exist and the other aiming to address the Commission’s concerns following its preliminary assessment. The specific characteristics of the mechanisms provided for in those provisions and the means of action available under each of those provisions are different, which means that the obligation on the Commission to ensure that the principle of proportionality is observed has a different extent and content, depending on whether it is considered in relation to the former or the latter article.

Article 7 of Regulation No 1/2003 expressly indicates the extent to which the principle of proportionality applies in situations covered by that article. In accordance with Article 7(1) of the regulation, the Commission may impose on the undertakings concerned any behavioural or structural remedies which are proportionate to the infringement committed and necessary to bring the infringement effectively to an end.

Article 9 of Regulation No 1/2003, by contrast, provides merely that in proceedings under that provision, as follows from recital 13 in the preamble to the regulation, the Commission is not required to make a finding of an infringement, its task being confined to examining, and possibly accepting, the commitments offered by the undertakings concerned in the light of the problems identified by it in its preliminary assessment and having regard to the aims pursued.

Application of the principle of proportionality by the Commission in the context of Article 9 of Regulation No 1/2003 is confined to verifying that the commitments in question address the concerns it expressed to the undertakings concerned and that they have not offered less onerous commitments that also address those concerns adequately. When carrying out that assessment, the Commission must, however, take into consideration the interests of third parties.

Judicial review for its part relates solely to whether the Commission’s assessment is manifestly incorrect.

There is therefore no reason why the measure which could possibly be imposed in the context of Article 7 of Regulation No 1/2003 should have to serve as a reference for the purpose of assessing the extent of the commitments accepted under Article 9 of the regulation, or why anything going beyond that measure should automatically be regarded as disproportionate. Even though decisions adopted under each of those provisions are subject to the principle of proportionality, the application of that principle none the less differs according to which of those provisions is concerned.

Undertakings which offer commitments on the basis of Article 9 of Regulation No 1/2003 consciously accept that the concessions they make may go beyond what the Commission could itself impose on them in a decision adopted under Article 7 of the regulation after a thorough examination. On the other hand, the closure of the infringement proceedings brought against those undertakings allows them to avoid a finding of an infringement of competition law and a possible fine.

Moreover, the fact that the individual commitments offered by an undertaking have been made binding by the Commission does not mean that other undertakings are deprived of the possibility of protecting the rights they may have in connection with their relations with that undertaking.

(see paras 38-42, 46-49)

2. In connection with accepting commitments under Article 9 of Regulation No 1/2003, the Commission is not required itself to seek out less onerous or more moderate solutions than the commitments offered to it. Its only obligation in relation to the proportionality of the commitments is to ascertain whether the commitments are sufficient to address the concerns it has identified in the course of the proceedings.

The General Court can hold that the Commission has committed a manifest error of assessment only if it finds that the Commission’s conclusion is obviously unfounded, having regard to the facts established by it. In contrast, by examining other less onerous solutions for the purpose of applying the principle of proportionality, including possible adjustments of the commitments offered, by expressing its own differing assessment of the capability of the commitments to eliminate the competition problems identified by the Commission, and by concluding that alternative solutions exist that are less onerous for the undertakings concerned, the General Court puts forward its own assessment of complex economic circumstances and thus substitutes its own assessment for that of the Commission, thereby encroaching on the discretion enjoyed by the Commission instead of reviewing the lawfulness of its assessment.

(see paras 60-61, 63, 65-67)

3. An undertaking which considers itself to be affected by a decision taken under Article 7 or 9 of Regulation No 1/2003 can protect its rights by bringing an action against that decision. It does not follow, however, that such an undertaking acquires the status of a ‘party concerned’ within the meaning of Article 27(2) of Regulation No 1/2003.

In a case in which two sets of proceedings are started by the Commission, one under Article 81 EC concerning the conduct of two contracting partners in a market and the other under Article 82 EC concerning the unilateral practices of one of those undertakings in the same market, and in which the proceedings brought under Article 82 EC lead to a decision by which commitments offered by the undertaking in a dominant position are made binding, the undertaking which is ‘concerned’ only by the proceedings brought under Article 81 EC cannot claim the procedural rights reserved to the parties to the proceedings concerning the commitments. It enjoys only the less extensive rights of an interested third party.

Only if it could be shown that the Commission without an objective reason made a single factual situation the subject of two separate sets of proceedings would the latter undertaking have to be accorded the rights enjoyed by an undertaking concerned in relation to the proceedings brought under Article 82 EC.

Moreover, the Commission’s acceptance of the commitments offered by the first undertaking does not depend on the position of the second undertaking or any other undertaking in respect of those commitments. It follows from Article 9(1) of Regulation No 1/2003 that the Commission has a wide discretion to make a proposed commitment binding or to reject it. The Commission is not therefore required to justify its rejection of the commitments offered jointly by the two undertakings and to suggest to the second undertaking that it submit new joint commitments.

(see paras 88-94)

JUDGMENT OF THE COURT (Grand Chamber)

29 June 2010 (*)

(Appeals – Dominant position – Regulation (EC) No 1/2003 – World market in rough diamonds – Individual commitments by a company to cease purchasing rough diamonds from another company – Decision making a company’s individual commitments binding and terminating the proceedings)

In Case C‑441/07 P,

APPEAL under Article 56 of the Statute of the Court of Justice, brought on 24 September 2007,

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

appellant,

the other party to the proceedings being:

Alrosa Company Ltd, established in Mirny (Russia), represented by R. Subiotto QC, K. Jones, solicitor-advocate, and S. Mobley, solicitor,

applicant at first instance,

THE COURT (Grand Chamber),

composed of V. Skouris, President, A. Tizzano, J.N. Cunha Rodrigues, K. Lenaerts, R. Silva de Lapuerta, E. Levits and C. Toader, Presidents of Chambers, A. Rosas, K. Schiemann (Rapporteur), M. Ilešič and U. Lõhmus, Judges,

Advocate General: J. Kokott,

Registrar: L. Hewlett, Principal Administrator,

having regard to the written procedure and further to the hearing on 3 June 2009,

after hearing the Opinion of the Advocate General at the sitting on 17 September 2009,

gives the following

Judgment

1 By its appeal the Commission of the European Communities asks the Court to set aside the judgment of the Court of First Instance of the European Communities (now ‘the General Court’) of 11 July 2007 in Case T‑170/06 Alrosa v Commission [2006] ECR II‑2601 (‘the judgment under appeal’) annulling Commission Decision 2006/520/EC of 22 February 2006 relating to a proceeding pursuant to Article 82 of the EC Treaty and Article 54 of the EEA Agreement (Case COMP/B-2/38.381 – De Beers) (OJ 2006 L 205, p. 24, ‘the contested decision’) making binding the commitments given by De Beers SA (‘De Beers’) to bring to an end its purchases of rough diamonds...