Furukawa Electric Co. Ltd v European Commission.

JurisdictionEuropean Union
ECLIECLI:EU:C:2019:1134
Procedure TypePourvoi
Date19 December 2019
Docket NumberC-589/18
Celex Number62018CJ0589
CourtCourt of Justice (European Union)

JUDGMENT OF THE COURT (Seventh Chamber)

19 December 2019 (*)

(Appeal — Competition — Agreements, decisions and concerted practices — European market for underground and submarine power cables — Market allocation in connection with projects — Fines — 2006 Guidelines on the method of setting fines — Determination of the value of sales — Principle of equal treatment)

In Case C‑589/18 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 20 September 2018,

Furukawa Electric Co. Ltd, established in Tokyo (Japan), represented initially by A. Luke and C. Pouncey, Solicitors, then by A. Luke and K. Fountoukakos, Solicitors,

appellant,

the other parties to the proceedings being:

European Commission, represented by H. van Vliet, A. Biolan and I. Zaloguin, acting as Agents,

defendant at first instance,

Viscas Corp., established in Tokyo, represented by J.-F. Bellis, avocat,

intervener at first instance,

THE COURT (Seventh Chamber),

composed of P.G. Xuereb (Rapporteur), President of the Chamber, T. von Danwitz and A. Kumin, Judges,

Advocate General: J. Kokott,

Registrar: M. Longar, Administrator,

having regard to the written procedure and further to the hearing on 11 July 2019,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 By its appeal, Furukawa Electric Co. Ltd seeks to have set aside in part the judgment of the General Court of the European Union of 12 July 2018, Furukawa Electric v Commission (T‑444/14, not published, EU:T:2018:454) (‘the judgment under appeal’), by which the General Court dismissed its action for the annulment in part of Commission Decision C(2014) 2139 final of 2 April 2014 relating to a proceeding under Article 101 [TFEU] and Article 53 of the EEA Agreement (Case AT.39610 — Power cables) (‘the contested decision’) in so far as it concerns the appellant and, in the alternative, an application for a reduction in the amount of the fine imposed on the appellant in that decision.

Legal context

Regulation (EC) No 1/2003

2 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 and 102 TFEU] (OJ 2003 L 1, p. 1) provides as follows, in Article 23(2) and (3) thereof:

‘2. The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:

(a) they infringe Article [101 or 102 TFEU] …

3. In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’

The 2006 Guidelines

3 The Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ 2006 C 210, p. 2) (‘the 2006 Guidelines’) state, in points 2 and 4 thereof, that, so far as concerns the setting of fines, ‘the Commission must have regard both to the gravity and to the duration of the infringement’ and that ‘fines should have a sufficiently deterrent effect’.

4 It is apparent from points 9 to 11 of those guidelines that, without prejudice to point 37 thereof, the method used by the European Commission when setting fines has two steps to it, namely, first, the determination of a basic amount and, secondly, potential adjustments of that amount upwards or downwards. In the determination of the basic amount of the fine, the Commission first, in accordance with points 13 to 18 of those guidelines, determines the value of the sales to be taken into account. Pursuant to point 19 of the 2006 Guidelines, the basic amount of the fine is related to a proportion of the value of sales, depending on the degree of gravity of the infringement, multiplied by the number of years of infringement. In addition, under point 25 of those guidelines, the Commission may include in the basic amount a sum known as the ‘entry fee’ in order to deter undertakings from participating in infringements of EU competition law.

5 Point 13 of the 2006 Guidelines is worded as follows:

‘In determining the basic amount of the fine to be imposed, the Commission will take the value of the undertaking’s sales of goods or services to which the infringement directly or indirectly … relates in the relevant geographic area within the [European Economic Area (EEA)]. It will normally take the sales made by the undertaking during the last full business year of its participation in the infringement …’

6 Point 18 of those guidelines states:

‘Where the geographic scope of an infringement extends beyond the EEA (e.g. worldwide cartels), the relevant sales of the undertakings within the EEA may not properly reflect the weight of each undertaking in the infringement. This may be the case in particular with worldwide market-sharing arrangements.

In such circumstances, in order to reflect both the aggregate size of the relevant sales within the EEA and the relative weight of each undertaking in the infringement, the Commission may assess the total value of the sales of goods or services to which the infringement relates in the relevant geographic area (wider than the EEA), may determine the share of the sales of each undertaking party to the infringement on that market and may apply this share to the aggregate sales within the EEA of the undertakings concerned. The result will be taken as the value of sales for the purpose of setting the basic amount of the fine.’

7 Under point 37 of the Guidelines:

‘Although these Guidelines present the general methodology for the setting of fines, the particularities of a given case or the need to achieve deterrence in a particular case may justify departing from such methodology or from the limits specified in point 21.’

Background to the dispute and the contested decision

8 The background to the dispute, as set out in paragraphs 1 to 20 of the judgment under appeal, may, for the purposes of the present proceedings, be summarised as follows.

9 The appellant, Furukawa Electric, is a Japanese company active in the underground and submarine power cable production and sales sector. With effect from 1 October 2001, it transferred part of its activities in the power cable sector to a joint venture named Viscas Corp., which it owned in equal shares with another Japanese company in the same sector, Fujikura Ltd.

10 In Article 1 of the contested decision, the Commission found that the appellant and 25 other companies, including Viscas and Fujikura, had participated in a cartel (‘the cartel’), constituting a single and continuous infringement of Article 101 TFEU and Article 53 of the EEA Agreement in the (extra) high voltage underground and/or submarine power cables sector (‘the infringement at issue’).

11 According to the contested decision, the cartel took the form of a composite whole composed of two main configurations, namely

– a configuration which included the European undertakings, generally referred to as the ‘R’ members, the Japanese undertakings, referred to as the ‘A’ members, and lastly the South Korean undertakings, referred to as the ‘K’ members and which made it possible to achieve the objective of allocating territories and customers among the European, Japanese and South Korean producers (‘the A/R configuration’). That allocation followed an agreement relating to the ‘home territory’, under which the Japanese and South Korean producers would refrain from competing for projects in the European producers’ ‘home territory’ and the European producers would undertake to stay out of the Japanese and South Korean markets. In addition, the parties allocated projects in the ‘export territories’, namely the rest of the world with the notable exception of the United States;

– a configuration which involved the allocation of territories and customers by the European producers for projects to be implemented within the European ‘home’ territory or allocated to the European producers (‘the European configuration’).

12 According to the contested decision, the appellant participated in the cartel from 18 February 1999 to 28 January 2009, initially directly, during the period from 18 February 1999 to 30 September 2001 (‘the first period’) and, secondly, indirectly, during the period from 1 October 2001 to 28 January 2009 (‘the second period’), through Viscas, over which it exercised a decisive influence.

13 Having regard to the role played by the various participants in the cartel in its implementation, the Commission classified them into three groups, namely, first, the undertakings which formed the core group of the cartel, secondly, the undertakings which were not part of the core group of the cartel but which nevertheless could not be regarded as fringe players in it and, thirdly, the fringe players in the cartel. According to the Commission, the appellant belonged to the first of those groups.

14 For the purposes of calculating the amount of the fines, the Commission applied the methodology set out in the 2006 Guidelines.

15 In the first place, as regards the basic amount of the fines, the Commission established the value of sales using the method provided for in point 18 of those guidelines. It then selected the proportion of the value of sales which would reflect the gravity of the infringement at issue. In that regard, the Commission considered that that infringement by its nature constituted one of the most harmful restrictions of competition, which justified a ‘gravity percentage’ of 15%. The Commission also increased the gravity multiplier by 2% for all addressees of the contested decision on account of their combined market share and the almost worldwide reach of the cartel, which included, inter alia, all of the EEA. The Commission also considered that the conduct of the European undertakings had been more detrimental to competition than that of the other undertakings, inasmuch as, in addition to their participation in the A/R configuration, the European undertakings had shared...

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