2019:1134 Furukawa Electric v Commission

Court Court of Justice
Date of ruling 19 December 2019
Case name (short version) Furukawa Electric v Commission
Case Citation C- 589/18 P

ECLI:EU:C:2019:1134

Key words 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
Basic context 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.
Points arising – admissibility The first ground of appeal

34      Inasmuch as, by its first ground of appeal, the appellant claims that the General Court erred in law in confirming the merits of the Commission’s decision to take into account the sales of Fujikura for the purposes of calculating the fine to be imposed on the appellant on account of its participation in the cartel during the first period, it must be recalled that, according to settled case-law of the Court of Justice, an appellant cannot rely, for the first time before the Court of Justice, on grounds of appeal and arguments it did not raise before the General Court. Indeed, to allow a party to put forward for the first time before the Court of Justice such grounds and arguments would be to authorise it to bring before the Court of Justice, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the General Court. In an appeal, the jurisdiction of the Court of Justice is thus confined to review of the findings of law on the pleas and arguments debated before the General Court (judgment of 29 November 2018, Alcohol Countermeasure Systems (International) v EUIPO, C340/17 P, not published, EU:C:2018:965, paragraph 77 and the case-law cited).

35      The arguments on which the appellant relies in its appeal in support of that ground differ from those it put forward before the General Court. It is apparent from point 131 of the application that the first of the arguments mentioned in paragraph 32 above refers only to the period beginning on 1 October 2001, namely the second period. In other words, before the General Court the appellant challenged the calculation of the fines in respect of its participation in the cartel as made by the Commission in the contested decision on the ground that, during the second period, it did not constitute a single economic entity with Fujikura.

36      In its appeal, the appellant submits that it did not constitute any such single economic entity with Fujikura during the first period. Since that argument was not submitted to the General Court, it must be regarded as new and on that basis declared inadmissible, in accordance with the consistent case-law of the Court referred to in paragraph 34 above.

Points arising – substance The second ground of appeal

Findings of the Court

51      As to the substance, it must be recalled that the principle of equal treatment is a general principle of EU law, enshrined in Articles 20 and 21 of the Charter of Fundamental Rights of the European Union. According to settled case-law of the Court of Justice, that principle requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (see, inter alia, judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission, C580/12 P, EU:C:2014:2363, paragraph 51).

52      In the present case, it is apparent from the appellant’s pleadings that it takes the view that, by calculating the basic amounts of all the fines imposed in the contested decision on the basis of the method provided for in point 18 of the 2006 Guidelines, the Commission treated different situations in the same way, without the uniform nature of that treatment being objectively justified.

53      It is therefore necessary to examine, in the first place, whether the appellant and the other Japanese and South Korean participants in the cartel were in a situation different to that of the European producers.

54      That was indeed the case.

55      As the General Court held in paragraph 18 of the judgment under appeal, the Commission found in recitals 997 to 1010 of the contested decision that the conduct of the European undertakings had been more detrimental to free competition than that of the other undertakings inasmuch as, in addition to their participation in the A/R configuration, the European undertakings had shared power cable projects among themselves in the EEA in the context of the European configuration. More specifically, in recital 999 of the contested decision, the Commission found that the latter configuration ‘[had been] carried out exclusively by the European producers’. It follows that the Commission itself took the view that there was a difference between, on the one hand, the situation of the appellant and the other Japanese and South Korean participants in the A/R configuration and, on the other hand, that of the European producers which participated both in that configuration and in the European configuration.

56      That consideration is not affected by the fact that recital 999 of the contested decision is in the section of that decision dedicated to the examination of the gravity of the conduct of the undertakings at issue, given that it is apparent from that section that, to justify the application to the European producers of a gravity multiplier increased by two percentage points, the Commission relied on a difference between the situation of the latter and that of the Japanese and South Korean participants in the cartel. Nor is that consideration called into question by the Commission’s argument that, by guaranteeing that it would stay out of the European market, the appellant was a silent but necessary partner of the European producers in the more specific European market-sharing agreements, given that the contested decision does not show that, in the present case, the Commission relied on such a consideration to justify its approach as regards the calculation of the fines to be imposed on the participants in the infringement at issue.

57      It follows that the appellant was not in the same situation as the European producers as regards its participation in the infringement at issue.

58      However, contrary to what is argued by the appellant, it cannot be held that the General Court erred in law in finding that the Commission had not infringed the principle of equal treatment solely on account of the fact that it had applied the method provided for in point 18 of the 2006 Guidelines in order to calculate the fines for all the participants in the cartel.

59      Since the infringement at issue was a single infringement, committed in the context of a single cartel, which the appellant does not dispute, it was for the Commission to calculate the fines appropriate for penalising that infringement, and not fines aimed at one or the other of the configurations of that cartel. As the General Court correctly pointed out in paragraph 268 of the judgment under appeal, the application of the method provided for in point 13 of the 2006 Guidelines to the present case would have led to the weight of the European producers in the cartel being overvalued and to their being penalised in excess of their participation in that cartel, inasmuch as that cartel also included a configuration which extended beyond the EEA, namely the A/R configuration. The application of the method provided for in point 13 of the 2006 Guidelines to all the participants in the cartel would have had the consequence that no fines or only minimal fines would have been imposed on the Japanese and South Korean participants in the A/R configuration.

60      Admittedly, in addition to the A/R configuration, whose geographical scope extended beyond the EEA and for which both the European producers and the Japanese and South Korean producers were held liable under the contested decision, the cartel included the European configuration, which covered in particular the EEA and which, according to the contested decision, had been carried out exclusively by the European producers.

61      However, although the application of the method provided for in point 18 of the 2006 Guidelines did not allow the Commission to take into account the respective weight in the cartel of the European producers, on the one hand, and the Japanese and South Korean producers, on the other hand, there was nothing to prevent the Commission, with a view to ensuring compliance with the principle of equal treatment, from taking this into account at another stage in calculating the fine, in particular when adjusting the basic amount in the light of aggravating and mitigating circumstances, or when determining the proportion of the value of sales used to calculate the basic amount of the fine (see, to that effect, judgment of 26 January 2017, Zucchetti Rubinetteria v Commission, C618/13 P, EU:C:2017:48, paragraph 56). It follows that differences in situation as regards the participation of an undertaking in an infringement of EU competition law may be taken into consideration at various stages in the calculation of the fine, and not necessarily solely at the stage of determining the value of sales.

62      In this connection, in the contested decision the gravity multiplier applied by the Commission to the European producers was increased by two percentage points in relation to that upheld by that institution in respect of the Japanese and South Korean producers. Accordingly, the Commission did not treat the appellant in the same way as the European producers as regards setting the fines. It is true that the appellant has argued that that increase in the gravity multiplier applied to the European producers reduced only marginally the substantial advantage which was allegedly granted to them in the present case. However, that argument is based on the erroneous premiss, as is apparent from paragraph 59 above, that the alleged preferential treatment given to the European producers in the present case should be determined in the light of the hypothetical fines which would have been imposed on them under a calculation based on the method provided for in point 13 of the 2006 Guidelines.

63      That consideration is not called into question by the case-law established by the judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission (C580/12 P, EU:C:2014:2363), cited by the appellant. In the case which gave rise to that judgment, the Commission had calculated the basic amounts of the fines on the basis of the method provided for in point 13 of the 2006 Guidelines. As the Court subsequently held, the judgment under appeal in that case was vitiated by an error of law inasmuch as the General Court had decided that the Commission was correct to have excluded from that calculation the sales made to entities belonging to the same undertaking, thereby misapplying the method that that institution had itself chosen in order to determine the amount of the fine (see, to that effect, judgment of 14 September 2017, LG Electronics and Koninklijke Philips Electronics v Commission, C588/15 P and C622/15 P, EU:C:2017:679, paragraph 95). In the present case, by contrast, the appellant does not allege that the Commission misapplied the method provided for in point 18 of the 2006 Guidelines, but that it erred in applying that method in the same way to all the undertakings which participated in the cartel. It follows that, contrary to what the appellant submits, its objections against the Commission in support of the present appeal are not similar to those which gave rise to the judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission (C580/12 P, EU:C:2014:2363).

Intervention
Interim measures
Order
  1. Dismisses the appeal;
  2. Declares that Furukawa Electric Co. Ltd is to bear its own costs and orders it to pay those incurred by the European Commission;
  3. Declares that Viscas Corp. is to bear its own costs.
Fine changed
Case duration 1 year 3 months
Judge-rapporteur Xuereb
Advocate-general Kokott
Notes on academic writings

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