2019:514 Hitachi-LG Data Storage, Inc. and Hitachi-LG Data Storage Korea, Inc. v European Commission

Court General Court
Date of ruling  12 July 2019
Case name (short version) Hitachi-LG Data Storage, Inc. and Hitachi-LG Data Storage Korea, Inc. v European Commission
Case Citation  T-1/16

ECLI:EU:T:2019:514

Key words 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 procurement events organised by two computer manufacturers — Unlimited jurisdiction –– Infringement of the principle of good administration –– Obligation to state reasons –– Point 37 of the 2006 Guidelines on the method of setting fines –– Particular circumstances –– Error of law
Basic context In the judgment in Hitachi-LG Data Storage and Hitachi-LG Data Storage Korea v Commission (T-1/16), delivered on 12 July 2019, the Tribunal dismissed the application of Hitachi-LG Data Storage, Inc. and its subsidiary Hitachi-LG Data Storage Korea Inc. (‚the applicants‘) for a reduction in the amount of the fine imposed on them by Commission Decision C(2015) 7135 final of 21 October 2015{1} on account of an infringement of the competition rules in the sector of production and supply of optical disk drives (‚ODDs‘).
Points arising – admissibility
Points arising – substance Action for annulment – Jurisdiction of the court of the Union – Jurisdiction of full jurisdiction – Judicial review of a Commission decision finding an infringement of the competition rules and imposing a fine – No independent remedy of full jurisdiction

Acts of the institutions – Statement of reasons – Obligation – Scope – Obligation of the Commission to state reasons for its refusal to depart from the Guidelines on the method of setting fines – Absence

Competition – Administrative procedure – Advisory Committee on Restrictive Practices and Dominant Positions – Obligation to consult – Substantial formality – Scope

Following an administrative investigation initiated upon denunciation, the Commission concluded that thirteen companies had participated in a cartel on the LDO market. In the contested decision, the Commission found that, at least from 23 June 2004 to 25 November 2008, the participants in that prohibited cartel had coordinated their conduct in relation to the tendering procedures organised by the computer manufacturers Dell and Hewlett Packard. According to the Commission, the companies involved had sought, through a network of parallel bilateral contacts, to ensure that the prices of ODD products remained at higher levels than they would have been in the absence of these bilateral contacts. Accordingly, the Commission imposed a fine of EUR 37 121 000 on the applicants for infringement of Article 101 TFEU and Article 53 of the EEA Agreement.

The applicants put forward two pleas in law in support of their application for reduction of that fine, alleging, first, breach of the principle of sound administration and of the obligation to state reasons and, second, error of law, in that the Commission did not depart from the general method set out in the Fining Guidelines to reduce the applicants‘ fine in view of the particularities of the case and their role on the ODD market. In response to the measures of organisation of procedure adopted by the Tribunal, the applicants stated that they invited the Tribunal to exercise its unlimited jurisdiction by reviewing the Commission’s implied decision to reject their application for a reduction in the amount of the fine and by examining the substance of that application.

In that regard, the Tribunal began by pointing out that the Treaty does not provide for an ‚action having unlimited jurisdiction‘ as an autonomous remedy, with the result that such unlimited jurisdiction may be exercised by the courts of the Union only in the context of the review of acts of the institutions, and more particularly in the context of actions for annulment. Thus, the Tribunal held, first, that the action included, first, claims for partial annulment of the contested decision, in so far as the Commission had rejected the applicants‘ application for reduction of the amount of the fine imposed and, second, claims for amendment of that decision, seeking that the Tribunal should itself grant that application and reduce that amount accordingly.

Next, with regard to the first plea, the Tribunal, first, rejected the applicants‘ arguments that the Commission had infringed its obligation to state reasons for refusing to rely on the exception provided for in point 37 of the Guidelines on the method of setting fines{2}, which allows the Commission to depart from the methodology of those guidelines and the application of which the applicants had requested. In that regard, the Tribunal held that the Commission was required only to state reasons in the contested decision for the methodology applied for the calculation of the amount of the fine and not for the factors which it had not taken into account in that calculation and, in particular, the reasons why it had not made use of the exception provided for in point 37 of those guidelines.

Second, the Tribunal dismissed the complaints alleging infringement of the principle of sound administration. In that regard, it confirmed, inter alia, that the Commission had been diligent during the administrative procedure in so far as it had, first, heard the applicants and considered their observations before the Advisory Committee on Restrictive Practices and Dominant Positions had delivered a written opinion on the preliminary draft decision and, secondly, provided that committee with the information which was most important for the calculation of the amount of the fine pursuant to Article 14(3) of Regulation No 1/2003{3}.

Finally, as regards the second plea, the Tribunal recalled that a reduction in the amount of a fine may be granted under point 37 of the Guidelines on the method of setting fines only in exceptional circumstances, where the particularities of a particular case or the need to achieve a level of deterrence in a particular case may justify the Commission departing from the general methodology for the calculation of the amount of the fine laid down in those Guidelines. The Tribunal considered in this respect that none of the circumstances alleged by the applicants were relevant to justify such a reduction of the fine under the exception provided for in point 37 of the Guidelines.

{1} Commission Decision C(2015) 7135 final of 21 October 2015 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case AT.39639 – Optical disc drives).

{2} Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003 (OJ 2006 C 210, p. 2).

{3} 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).

Intervention  –
Interim measures  –
Order
  1. Dismisses the action;
  2. Orders Hitachi-LG Data Storage, Inc. and Hitachi-LG Data Storage Korea, Inc. to bear their own costs and pay the costs incurred by the European Commission.
Fine changed  –
Case duration  3 years 7 months
Judge-rapporteur  Ulloa Rubio
Notes on academic writings  Idot, Laurence: Cartels (2), Europe 2019 Mois Comm. nº 10 p.33 (FR)

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