Gascogne Sack Deutschland GmbH, v European Commission [2013] EUECJ C-40/12 (26 November 2013)

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(Appeal – Competition – Cartels – Industrial plastic bags sector –Whether the infringement by a subsidiary may be attributed to the parent company – Excessive length of the proceedings before the General Court – Principle of effective legal protection)

Gascogne Sack Deutschland GmbH, formerly Sachsa Verpackung GmbH, established in Wieda (Germany), represented by F. Puel and L. François-Martin, avocats,

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

composed of V. Skouris, President, K. Lenaerts, Vice-President, R. Silva de Lapuerta, M. Ilešič, L. Bay Larsen, M. Safjan, Presidents of Chambers, J. Malenovský, E. Levits, A. Ó Caoimh, J.-C. Bonichot, A. Arabadjiev, D. Šváby and M. Berger (Rapporteur), Judges,

1 By its appeal, Gascogne Sack Deutschland GmbH, formerly Sachsa Verpackung GmbH (in both cases ‘the appellant’), seeks (i) to have set aside the judgment of the General Court of the European Union of 16 November 2011 in Case T-79/06 Sachsa Verpackung v Commission (‘the judgment under appeal’), by which that court dismissed the appellant’s action for annulment in part and variation of Commission Decision C(2005) 4634 final of 30 November 2005 relating to a proceeding pursuant to Article 81 [EC] (Case COMP/F/38.354 – Industrial bags) (‘the contested decision’) or (ii), in the alternative, reduction of the amount of the fine imposed on it by that decision.

2 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 [EC] and 82 [EC] (OJ 2003, L 1, p. 1), which replaced Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition 1959-1962, p. 87), provides in Article 23(2) and (3), which replaced Article 15(2) of Regulation No 17, as follows:

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

For each undertaking and association of undertakings participating in the infringement, the fine shall not exceed 10 % of its total turnover in the preceding business year.

3 The Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) [CS] (OJ 1998 C 9, p. 3, ‘the 1998 Guidelines’), which were applicable on the date on which the contested decision was adopted, state in Section 1 that ‘[t]he basic amount [of the fine] will be determined according to the gravity and duration of the infringement, which are the only criteria referred to in Article 15(2) of Regulation No 17’.

4 As regards the gravity of the infringement, the first paragraph of Section 1A of those guidelines provides that in assessing that gravity, account must be taken of the nature of the infringement, its actual impact on the market, where this can be measured, and the size of the relevant geographic market.

5 According to the second paragraph of Section 1A of the 1998 Guidelines, infringements are to be put into one of three categories: minor infringements, serious infringements and very serious infringements. Very serious infringements include, in particular, horizontal restrictions such as price cartels and market-sharing quotas.

6 The appellant is a company governed by German law. In 1994, 90% of its share capital was acquired by Gascogne Deutschland GmbH, a wholly-owned subsidiary of Groupe Gascogne SA (‘Groupe Gascogne’), a company governed by French law. The remaining 10% of its share capital was acquired directly by Groupe Gascogne. In 2008, the appellant changed its name to Gascogne Sack Deutschland GmbH.

7 In 2001, British Polythene Industries plc informed the Commission of the existence of a cartel in the industrial bags sector.

8 The Commission carried out inspections in June 2002, and in July 2002 the appellant informed it that it wished to cooperate. On 29 April 2004, the Commission initiated the administrative procedure and adopted a statement of objections against several companies, including the appellant.

9 On 30 November 2005, the Commission adopted the contested decision, Article 1(1)(k) of which states that the appellant and Groupe Gascogne infringed Article 81 EC by participating, in the case of the appellant from 9 February 1988 until 26 June 2002 and in the case of Groupe Gascogne from 1 January 1994 until 26 June 2002, in a complex of agreements and concerted practices in the plastic industrial bags sector in Belgium, Germany, Spain, France, Luxembourg and the Netherlands; this consisted in (i) the fixing of prices and the establishment of common price calculation models, (ii) the sharing of markets and the allocation of sales quotas, (iii) the assignment of customers, deals and orders, (iv) the submission of concerted bids in response to certain invitations to tender and (v) the exchange of individualised information.

10 On that ground, the Commission imposed on the appellant, in subparagraph (i) of the first paragraph of Article 2 of the contested decision, a fine of EUR 13.20 million, specifying that, of this amount, Groupe Gascogne was jointly and severally liable for the sum of EUR 9.90 million.

11 By application lodged at the General Court Registry on 23 February 2006, the appellant brought an action for annulment of the contested decision. It claimed, in essence, that the General Court should annul that decision in so far as it related to the appellant or, in the alternative, to reduce the amount of the fine imposed on it.

12 In support of its action, the appellant relied on eight pleas in law. The first three pleas, raised as primary pleas, sought the annulment of the contested decision, alleging, first, a manifest error of assessment concerning the degree to which the appellant participated in the cartel, second, inadequate reasoning in the contested decision regarding the appellant’s participation in the ‘Germany’ subgroup and, third, infringement of (i) Article 81 EC, inasmuch as the Commission had incorrectly attributed the appellant’s conduct to its parent company, Groupe Gascogne, and (ii) of Article 23(2) of Regulation No 1/2003.

13 The five remaining pleas, raised in the alternative, sought a reduction in the amount of the fine. The fourth plea alleged an error of assessment as regards the gravity of the infringement. The fifth plea alleged an error of assessment as regards the duration of the infringement. The sixth plea, raised in the further alternative, alleged an error of assessment in the present case consisting in the failure to take into account mitigating circumstances. The seventh plea alleged an error of assessment concerning the appellant’s cooperation in the administrative procedure and the eighth plea, put forward in the further alternative, alleged a failure to have regard to the principle of proportionality.

14 By letter of 20 October 2010, the appellant requested the General Court to reopen the written procedure because a new matter of law had arisen in the course of proceedings, namely the entry into force of the Treaty of Lisbon and, specifically, of Article 6 TEU, which elevated the Charter of Fundamental Rights of the European Union (‘the Charter’) to primary law status.

15 At the hearing which took place on 2 February 2011, in addition to the pleas put forward in its application, the appellant argued that there had been an infringement of the presumption of innocence guaranteed by Article 48 of the Charter and Article 6 of the European Convention on the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’). On this point the General Court found as follows at paragraphs 92 to 93 of the judgment under appeal:

‘92 … As regards the [appellant]’s complaint alleging an infringement of the principle of the presumption of innocence, guaranteed by Article 48 of the Charter, this is additional to the arguments put forward in the application and does not present a sufficiently close connection with the arguments put forward initially to be considered as forming part of the normal evolution of debate in proceedings before the Court. This complaint accordingly falls to be considered as a new complaint.

93 It therefore falls to be determined whether the entry into force, on 1 December 2009, of the Treaty on European Union, and in particular of Article 6 thereof, which confers the same legal value on the Charter as the Treaties, constitutes a new fact giving grounds for introducing new pleas in law. In that regard, it must be observed that, as at the date on which the [contested] decision was adopted, the principle of the presumption of innocence came within the scope of the European Union legal order and was guaranteed by it, as a general principle of European Union law, in proceedings relating to infringements of the competition rules …’.

16 The General Court inferred from this that the appellant cannot rely on the amendments made to the European Union legal order as a result of the entry into force of the Treaty of Lisbon in order to plead at the hearing stage that the principle of the presumption of innocence has been disregarded.

17 As regards the three pleas for annulment relied on in the application, the General Court rejected them as unfounded. With regard, in particular, to the first part of the third plea, alleging infringement of Article 81 EC, inasmuch as the Commission incorrectly attributed the appellant’s conduct to its parent company, Groupe Gascogne, the General Court first of all recalled, in paragraph 87 of the judgment under appeal, the case-law of the Court of Justice to the effect that when a parent company has a 100% shareholding in a subsidiary which has infringed the competition rules, there is a simple presumption that the parent company does in fact exercise a decisive influence over the conduct of its subsidiary. The General Court then found, in paragraph 88 of that judgment, that it was common ground that ‘Groupe Gascogne [held] all the shares in the [appellant], so that the Commission was entitled to presume that the parent company exercised a decisive influence over its subsidiary’. The General Court added that the Commission had also stated that ‘Groupe Gascogne received monthly information from the [appellant], that the latter formed part of the group’s “Flexible packagings” division and that the officers of the group sat on the [appellant’s] supervisory and management body (the Beirat).’ After reproducing, in paragraph 89 of the judgment under appeal, the arguments put forward by the appellant in order to rebut those factors, the General Court concluded in paragraph 90 of the judgment under appeal that ‘[it] must however be found that that evidence is not capable of rebutting the presumption that Groupe Gascogne exercised a decisive influence over the [appellant]’.

18 As regards the second part of the third plea, alleging infringement of Article 23(2) of Regulation No 1/2003, in that the Commission failed to observe the upper limit of 10% of the turnover of the undertaking concerned, in calculating the part of the fine imposed for the infringement committed between 9 February 1988 and 31 December 1993, the General Court found as follows at paragraphs 108 and 109 of the judgment under appeal:

‘108 … where a distinction is drawn between an initial period, in respect of which the subsidiary is held to be solely responsible for the infringement, and a second period, in respect of which the parent company is held jointly and severally liable for the infringement with its subsidiary, Article 23(2) of Regulation No 1/2003 does not require the Commission to establish whether the part of the fine in respect of which the parent company is not held to be jointly and severally liable for payment exceeds 10% of the turnover of the subsidiary on its own. The only purpose of the ceiling referred to in that provision is to prevent a fine which is excessive being imposed having regard to the overall size of the economic entity on the date of the decision’s adoption. The turnover of the company which is alone responsible for the infringement, as recorded at the date when the infringement was committed or when the fine was imposed, is of limited relevance in that regard.

109 The fact that, in its previous decision-making practice, the Commission applied Article 23(2) of Regulation No 1/2003 differently, which proved to be to the advantage of the company in question, does not affect that consideration. As the Commission points out, it is sufficient to note, in that regard, that it is not bound by its previous decision-making practice and the latter does not, in any event, constitute a legal framework for the calculation of fines …’.

19 The General Court also rejected the five remaining pleas, put forward in the alternative, seeking a reduction in the amount of the fine. As regards in particular the first part of the fourth plea, alleging that the Commission took into account, for the purposes of calculating the fine, the actual impact of the infringement on the market, whereas that impact was not capable of being measured, the General Court held, in paragraph 117 of the judgment under appeal that ‘as is apparent from the wording of the [1998] Guidelines, the actual impact of the infringement on the market falls to be taken into account for the purposes of assessing the gravity of the infringement only when it is capable of being measured’. In paragraph 118 of that judgment, the Court rejected, on that ground, the appellant’s argument that it had to reduce the amount of the fine imposed by the Commission when the impact of the infringement on the market is not capable of being measured. In that context, it sought to distinguish the present case from Case T-279/02 Degussa v Commission [2006] ECR II-897, relied on by the appellant. To that end, the General Court found, in paragraph 119 of the judgment under appeal, that, ‘[i]n the present case, the Commission does not claim to be able to measure the impact of the infringement on the market nor has the [appellant] put forward any argument or presented any material that would tend to show that the cartel had not, in fact, had any effect and that, as a result, it had not had any impact on the market’.

20 After examining each of the pleas raised by the appellant in support of its action, the General Court dismissed the action in its entirety.

– principally, set aside the judgment under appeal and refer the case back to the General Court for an adjudication on the financial consequences for the appellant as a result of the General Court’s failure to adjudicate within a reasonable time;

– in the alternative, reduce the amount of the fine imposed on the appellant by the Commission in order to take account of those financial consequences;

23 By letter of 11 September 2012, the appellant, relying on the first subparagraph of Article 42(2) of the Rules of Procedure of the Court, in the version applicable at that time, requested that the written procedure be reopened on the ground that a new matter had arisen, namely the severe deficit in its financial position.

24 In accordance with Article 24 of the Statute of the Court of Justice of the European Union and Article 61 of its Rules of Procedure, the Court invited the parties, the European Parliament, the Council of the European Union and the Member States to answer questions concerning (i) the criteria allowing the reasonableness of the length of proceedings before the General Court to be assessed and (ii) the measures capable of remedying the consequences of the excessive length of such proceedings.

25 By its first ground, the appellant submits that the General Court erred in law by failing to draw the appropriate conclusions from the entry into force of the Treaty of Lisbon on 1 December 2009, and in particular of Article 6 TEU, which confers the same legal value on the Charter as the Treaties. The General Court failed to recognise that this involved a new matter for the purpose of the first subparagraph of Article 48(2) of its Rules of Procedure and that it enabled the appellant to rely, in the course of the proceedings, on a new plea in law based on the presumption of innocence guaranteed by Article 48 of the Charter. The appellant submits that the presumption allowing the parent company to be held responsible for the anti-competitive conduct of its wholly-owned subsidiary constitutes a presumption of guilt incompatible with the Charter.

26 The Commission replies that the present ground of appeal is too general, in that it fails to explain why the entry into force of the Treaty of Lisbon constitutes a new matter of law, and is therefore unfounded.

27 First of all, it must be noted that, in its appeal, the appellant does not argue that it had in any way referred to the Charter in its originating application.

28 As to the question of whether the entry into force of the Lisbon Treaty ought to have been regarded, as the appellant submits, as a matter which came to light in the course of the proceedings and, on that basis, gave good grounds, in accordance with the first subparagraph of Article 48(2) of the Rules of Procedure of the General Court, for introducing new pleas in law, the Court of Justice has held that the entry into force of that treaty, incorporating the Charter into European Union primary law, cannot be considered a new matter of law within the meaning of the first subparagraph of Article 42(2) of its Rules of Procedure. In that context, the Court has noted that, even before that treaty entered into force, it had found on several occasions that the right to a fair trial, which derives inter alia from Article 6 ECHR, constitutes a fundamental right which the European Union respects as a general principle under Article 6(2) EU (see, in particular, Case C-289/11 P Legris Industries v Commission, paragraph 36).

29 That interpretation provided by the Court for the purposes of applying its Rules of Procedure is also true mutatis mutandis for applying the corresponding provisions of the Rules of Procedure of the General Court.

30 In any event, the case-law since the entry into force of the Lisbon Treaty has confirmed that the presumption that a parent company owning all or virtually all the shares in its subsidiary actually exercises decisive influence over the latter is not incompatible with the principle of the presumption of innocence (see, to that effect, Joined Cases C-628/10 P and C-14/11 P Alliance One International and Standard Commercial Tobacco v Commission and Commission v Alliance One International and Others [2012] ECR I-0000, paragraphs 46, 47, 108 and 113, and Case C-501/11 P Schindler Holding and Others v Commission [2013] ECR I-0000, paragraphs 108 to 111 and the case-law cited).

31 In those circumstances, the first ground relied on by the appellant in support of its appeal must be rejected as unfounded.

32 The second ground is divided into two parts. The first alleges that the General Court breached its obligation to state reasons, in its judgment, for rejecting the arguments put forward by the appellant in order to prove that it was commercially independent. The second part of the ground alleges that the General Court erred in law in so far as it failed to penalise a failure to state the grounds, in the contested decision, regarding the calculation of the upper limit of the fine imposed.

33 The appellant observes that, in paragraph 89 of the judgment under appeal, the General Court refers to various factors which the appellant had relied on in order to show that Groupe Gascogne did not exercise effective control over its commercial policy. However, in paragraph 90 of that judgment, the General Court simply dismissed those factors tersely, using the stereotypical formula ‘It must, however, be stated ...’, without checking each of the factors or stating the reasons why they were not sufficiently conclusive. In so doing, the General Court was in breach of the obligation to state reasons in accordance with settled case-law.

34 The Commission contends that the obligation on the General Court to give reasons for its decisions cannot be interpreted as meaning that it is required to respond in detail to every single argument advanced by a party, particularly if the argument is not sufficiently clear and precise, which was the case of the arguments put forward by the appellant before the General Court.

35 In accordance with the Court’s settled case-law, the duty of the General Court under Article 36 and the first paragraph of Article 53 of the Statute of the Court of Justice to state reasons for its judgments does not require the General Court to provide an account that follows exhaustively and one by one all the arguments articulated by the parties to the case. The reasoning may therefore be implicit, on condition that it enables the persons concerned to know the grounds on which the judgment under appeal is based and provides the Court of Justice with sufficient material for it to exercise its powers of review on appeal (see, in particular, Alliance One International and Standard Commercial Tobacco v Commission and Commission v Alliance One International and Others, paragraph 64).

36 In the present case, the General Court reproduced, in paragraphs 78 to 82 of the judgment under appeal, the appellant’s arguments according to which, in order to attribute the conduct of a subsidiary to its parent company, the Commission had to prove that the parent company actually determined the subsidiary’s conduct on the market, which, it is alleged, the Commission failed to do in this instance.

37 In response to those arguments, the General Court recalled first of all, in paragraph 87 of the judgment under appeal, the settled case-law of the Court of Justice to the effect that where a parent company has a 100% shareholding in a subsidiary which has infringed the competition rules, there is a rebuttable presumption that the parent company does in fact exercise a decisive influence over the conduct of its subsidiary.

38 The General Court then noted that the appellant was a wholly owned subsidiary of Groupe Gascogne, which was sufficient for the abovementioned presumption to apply. The General Court also mentioned certain additional evidence on which the Commission had relied in that context.

39 After listing, in paragraph 89 of the judgment under appeal, the specific factors on which the appellant had relied in order to prove its independence, the General Court expressly found, in paragraph 90 of that judgment, that they were not capable of rebutting the presumption that Groupe Gascogne exercised a decisive influence over the appellant. The General Court pointed out that in that regard the appellant limited itself to mere assertions and did not provide any evidence in support of them.

40 As the Advocate General observed at point 63 of her Opinion, although the General Court did not state expressly that the appellant was under an obligation to rebut the presumption referred to in paragraph 87 of the judgment under appeal, the sequence of paragraphs 88 to 90 thereof reproduces clearly and unequivocally the stages of the reasoning followed by the General Court in order to disregard the evidence adduced by the appellant.

41 In those circumstances, the reasoning of the General Court, in paragraphs 87 to 90 of the judgment under appeal, is sufficient to enable the appellant to know the grounds on which the judgment under appeal is based and provides the Court of Justice with sufficient material for it to exercise its powers of review on appeal.

43 The appellant states that, before the General Court, it challenged the amount of EUR 3.3 million which it alone must pay by way of fine, in respect of the period from 9 February 1988 to 31 December 1993, during which it was not owned by Groupe Gascogne, and submitted that that amount exceeds the upper limit of 10% of the turnover of the undertaking concerned in the preceding business year, as laid down in Article 23(2) of Regulation No 1/2003. The appellant relied in that regard on Commission Decision C(2003) 4570 final of 10 December 2003 relating to a proceeding under Article [81 EC] and Article 53 of the EEA Agreement (Case COMP/E-2/37.857 – Organic peroxides), a summary of which was published in the Official Journal of the European Union of 30 April 2005 (OJ 2005 L 110, p. 44, ‘the Organic peroxides decision’). It is apparent from that decision that, when the Commission draws a distinction between the period for which a company is solely liable for its conduct and the period for which the parent company which has acquired control of that company becomes liable for the conduct of its subsidiary, the upper limit of 10% of turnover in the preceding business year must be assessed separately for the two companies.

44 In its appeal, the appellant submits that, by simply finding, in paragraph 109 of the judgment under appeal, that the Commission is not bound by its earlier decision-making practice, the General Court erred in law. The General Court ought to have penalised the Commission for having changed its practice without providing detailed and unambiguous reasons for such a change in approach. The appellant relies in that regard on Case C-521/09 P Elf Aquitaine v Commission [2011] ECR I-8947, paragraph 167.

45 The Commission contends that the mere fact that, in an earlier decision, it followed another approach is not tantamount to ‘establishing a usual practice’. The situation from which the present dispute has arisen has nothing to do with that which gave rise to the judgment relied on by the appellant, in which the Court based its decision on exceptional circumstances (Elf Aquitaine v Commission, paragraphs 165 and 167).

46 First of all, it should be borne in mind that the obligation laid down in the second paragraph of Article 296 TFEU to state adequate reasons is an essential procedural requirement that must be distinguished from the question whether the reasoning is well founded, which goes to the substantive legality of the measure at issue (see, in particular, Elf Aquitaine v Commission, paragraph 146 and the case-law cited).

47 In the present case, the appellant challenged, before the General Court, the validity of the method used by the Commission in the contested decision for calculating the amount of the fine which the appellant alone had to pay. In order to substantiate its arguments, the appellant referred to the Organic peroxides decision, without calling in question the adequacy of the statement of reasons in the contested decision on that point.

48 In paragraphs 107 and 108 of the judgment under appeal, the General Court examined, in the light of Article 23(2) of Regulation No 1/2003, whether the method used by the Commission was valid and rejected the appellant’s arguments on the substance.

49 It was merely as a supplementary point that the General Court stated, in paragraph 109 of the judgment under appeal, that the fact that the Commission applied Article 23(2) of Regulation No 1/2003 differently in its previous decision-making practice – which proved to be to the advantage of the company in question – did not affect the interpretation which the Court considered should be given to that provision.

50 The second part of the second ground of appeal contains no criticism of the General Court’s legal analysis in paragraphs 107 and 108 of the judgment under appeal, but is directed at an error of law which the General Court is alleged to have made in paragraph 109 of the judgment under appeal in not penalising the inadequate reasoning in the contested decision for its divergence from the Organic peroxides decision.

51 The second part of the ground therefore introduces a new plea in law, which consists in disputing the adequacy of the statement of reasons in the contested decision regarding the method of calculation used by the Commission in order to determine the upper limit of 10%.

52 It follows that the argument in question must be declared inadmissible, since in an appeal the jurisdiction of the Court of Justice is, as a rule, confined to review of the findings of law on the pleas argued before the General Court.

53 Further, the appellant cannot claim, as it did at the hearing, that the second part of the second ground of appeal concerns an alleged error of law by the General Court in its interpretation of Article 23(2) of Regulation No 1/2003.

54 In the appeal, the second part of the ground expressly alleges a ‘failure to state the grounds’. In addition, in its arguments, the appellant refers only to paragraph 109 of the judgment under appeal, which simply notes that the Commission is not bound by its previous decision-making practice and contains no interpretation of Article 23(2) of Regulation No 1/2003.

55 Consequently, the second part of the second ground of appeal cannot be upheld. This ground must therefore be rejected in its entirety.

56 By the first part of its third ground, the appellant submits that the General Court failed to find that – as alleged by the appellant – the Commission breached its obligation to provide a statement of reasons in the contested decision with regard to the actual impact of the infringement on the market.

57 The appellant acknowledges that, in accordance with the 1998 Guidelines, as interpreted by the Court of Justice, the Commission is not required to show an actual impact on the market, provided that the infringement is classified, as in the present case, as very serious. The appellant notes that taking into account such an additional factor, however, enables the Commission to increase the basic amount of the fine.

58 The statement of reasons in the contested decision is ambiguous in that regard. In devoting an entire passage to the impact of the infringement, while under no obligation to do so, the Commission created doubt as to whether or not that criterion had been taken into account in order to increase the basic amount of the fine. In addition, the confusion was exacerbated by the fact that the Commission considered, first, that the impact on the market could not be measured and, second, that that impact could necessarily be inferred from the implementation of the collusive agreements. The appellant was therefore prevented from preparing its defence effectively. The General Court, without having reviewed the statement of reasons in the contested decision, itself provided an illogical and inadequate statement of reasons.

59 By the second part of the third ground, the appellant complains that the General Court failed to penalise the error of law by the Commission in inferring from the implementation of the collusive arrangements alone that there was an actual impact on the market, without putting forward, as required by the case-law, specific, credible and adequate criteria.

60 The Commission considers that both parts of the present ground are inadmissible, inasmuch as that ground was not raised at first instance. Before the General Court, the appellant simply argued that, as its participation in the infringement was limited, the impact of its participation was also reduced.

61 In order to assess whether the third ground of appeal is admissible, it is necessary to refer to the arguments put forward by the appellant at first instance concerning the issue of the actual impact of the infringement on the market.

62 That issue was addressed before the General Court in the fourth plea in law, which sought a reduction in the fine, alleging that the Commission incorrectly assessed the gravity of the infringement. As is apparent from paragraphs 113 to 115 of the judgment under appeal, the appellant first of all complained that the Commission took the view, in breach of the 1998 Guidelines, that it was not necessary, in order to ascertain the gravity of the infringement, that the impact of the infringement was capable of being measured. Secondly, the appellant observed that the Commission had none the less sought to show the actual effects of the cartel by referring to a number of practices in which the appellant claimed it was not involved, which, in the latter’s view, ought to be taken into account in assessing the gravity of the infringement attributed to it. Thirdly, the appellant submitted that the Commission had itself acknowledged that it was not possible to measure precisely the actual impact of the infringement, which, in the appellant’s view, gave grounds for a reduction in the fine.

63 It is therefore apparent that the appellant’s line of argument in the first part of its third ground of appeal, based on an alleged failure to state the reasons in the contested decision, is new, since the appellant had not relied at first instance on difficulties in relation to understanding that decision or to the presentation of its defence.

64 For the reasons set out in paragraph 52 above, the first part of the ground must be rejected as inadmissible.

65 As regards the second part of the third ground of appeal, alleging that the General Court failed to find an alleged error by the Commission in the assessment of whether there was an impact on the market, it is sufficient to note that, in the light of the appellant’s arguments at first instance as recalled in paragraph 62 above, the second part of the third ground must also be considered new. On that basis, for the same reasons as those set out in paragraph 52 above, that part of the third ground of appeal is inadmissible.

66 Since neither part of the third ground of appeal may be upheld, that ground must be rejected.

67 By the present ground, the appellant submits that its fundamental right to a hearing within a reasonable time, as guaranteed by Article 6 ECHR, has been infringed in the present case.

68 The appellant notes that the proceedings before the General Court started on 23 February 2006 and ended on 16 November 2011. It states that, between the end of the written procedure and the first information that it received concerning the state of the proceedings, there was a long period of inactivity at the General Court.

69 In the appellant’s submission, neither the complexity or volume of the file nor the number of undertakings or number of languages of the case in question can justify the General Court’s complete failure to deal with the case during that period.

70 The appellant submits that, when it brought its action before the General Court against the contested decision, it decided not to pay the fine immediately and had, in return, to agree to pay interest on the amount of the fine and provide a bank guarantee. The excessive length of the proceedings had the effect of increasing the costs associated with those steps.

71 Consequently, the appellant requests the Court to set aside the judgment under appeal or alternatively to reduce the amount of the fine imposed in order to take into account the financial consequences in question, having regard to the financial burden that it had to suffer as result of the breach its right to have the case dealt with within a reasonable time.

72 As a preliminary point, the Commission contends that the present ground is inadmissible because it was not raised at the hearing before the General Court.

73 As to the substance, the Commission contends that, if a reasonable period has been exceeded in a legal action against a decision imposing a fine on an undertaking for infringing the competition rules, the appropriate remedy should not be a reduction in the fine imposed, but rather take the form of an action for damages. In the alternative, the Commission considers that, if the Court were to find that the reasonable time principle had not been observed and that this called for a remedy consisting in a reduction in the fine, that reduction should be symbolic.

74 As is apparent from the first paragraph of Article 58 of the Statute of the Court and from its case-law, the Court has jurisdiction, in an appeal, to verify whether a breach of procedure adversely affecting the appellant’s interests was committed by the General Court (see, in particular, Case C-385/07 P Der Grüne Punkt – Duales System Deutschland v Commission [2009] ECR I-6155, paragraph 176).

75 As regards the breach of procedure relied on in the present ground, it should be borne in mind that, notwithstanding the fact that the appellant refers to Article 6(1) ECHR, the second paragraph of Article 47 of the Charter, which corresponds to that provision of the ECHR, provides that ‘[e]veryone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law’. As the Court of Justice has held on several occasions, that article relates to the principle of effective judicial protection (see, in particular, Der Grüne Punkt – Duales System Deutschland v Commission, paragraph 179 and the case-law cited).

76 On that basis, such a right is applicable in the context of proceedings brought against a Commission decision (see, in particular, Der Grüne Punkt – Duales System Deutschland v Commission, paragraph 178 and the case-law cited).

77 Although the appellant focusses its criticisms mainly on the period of procedural inactivity of the General Court between the end of the written procedure and the beginning of the oral procedure, it did not argue at the hearing before the General Court that the right in question had been breached.

78 Contrary to the Commission’s claims, such a failure to adjudicate cannot render inadmissible the fourth ground of appeal on the ground that it was raised for the first time in the context of the appeal. Although a party must be able to raise a breach of procedure where it considers that a breach of the rules applicable is established, it cannot be required to do so at a stage where the full effects of that breach are not yet known. As regards, in particular, a failure by the General Court to adjudicate within a reasonable time, an appellant which considers that such a failure before the General Court prejudices its interests is not required to assert that prejudice immediately. Where appropriate, it may wait until the end of proceedings in order to ascertain the total duration of the prejudice and therefore to have all the information necessary to identify that which it has, in its view, sustained.

79 The fourth ground of appeal relied on by the appellant is therefore admissible.

80 First of all, it should be pointed out that, according to the European Court of Human Rights, a failure to adjudicate within a reasonable time must, as a procedural irregularity constituting the breach of a fundamental right, give rise to an entitlement of the party concerned to an effective remedy granting him appropriate relief (see, Kudla v. Poland, no. 30210/96, § 156 and 157, ECHR 2000-XI).

81 Although the appellant seeks to have the judgment under appeal set aside and, in the alternative, a reduction of the fine imposed on it, the Court notes that it has held that, where there are no indications that the excessive length of the proceedings before the General Court affected their outcome, failure to deliver judgment within a reasonable time cannot lead to the setting aside of the judgment under appeal (see, to that effect, Der Grüne Punkt – Duales System Deutschland v Commission, paragraphs 190 and 196 and the case-law cited).

82 That case-law is based, in particular, on the consideration that, where the failure to adjudicate within a reasonable time has no effect on the outcome of the dispute, the setting aside of the judgment under appeal would not remedy the infringement of the principle of effective legal protection committed by the General Court (Der Grüne Punkt – Duales System Deutschland v Commission, paragraph 193).

83 In the present case, the appellant has not provided any evidence to the Court from which it may be inferred that a failure by the General Court to adjudicate within a reasonable time could have affected the outcome of the dispute before it.

84 In addition, having regard to the need to ensure that the competition rules of European Union law are complied with, the Court of Justice cannot allow an appellant to reopen the question of the validity or amount of a fine, on the sole ground that there was a failure to adjudicate within a reasonable time, where all of its pleas directed against the findings made by the General Court concerning the amount of that fine and the conduct that it penalises have been rejected (see, to that effect, Der Grüne Punkt – Duales System Deutschland v Commission, paragraph 194).

85 It follows that, contrary to the appellant’s claims, the fourth ground of appeal cannot lead, as such, to the setting aside of the judgment under appeal.

86 In so far as the appellant seeks a reduction in the fine imposed on it in order to take into account the financial consequences arising for it from the excessive duration of the proceedings before the General Court, it must be borne in mind that, when first faced with a similar situation, the Court of Justice granted such an application, for reasons of economy of procedure and in order to ensure an immediate and effective remedy regarding a procedural irregularity of that kind and, accordingly, reduced the amount of the fine (Case C-185/95 P Baustahlgewebe v Commission [1998] ECR I-8417, paragraph 48).

87 In a later case concerning a Commission decision finding that there had been abuse of a dominant position yet not imposing a fine, the Court held that the failure on the part of the General Court to adjudicate within a reasonable time can give rise to a claim for damages (Der Grüne Punkt – Duales System Deutschland v Commission, paragraph 195).

88 Admittedly, the present case concerns a situation analogous to that giving rise to the judgment in Baustahlgewebe v Commission. However, a claim for damages brought against the European Union pursuant to Article 268 TFEU and the second paragraph of Article 340 TFEU constitutes an effective remedy of general application for asserting and penalising such a breach, since such a claim can cover all the situations where a reasonable period of time has been exceeded in proceedings.

89 It is therefore appropriate for the Court of Justice to rule that the sanction for a breach, by a Court of the European Union, of its obligation under the second paragraph of Article 47 of the Charter to adjudicate on the cases before it within a reasonable time must be an action for damages brought before the General Court, since such an action constitutes an effective remedy.

90 It follows that a claim for compensation for the damage caused by the failure by the General Court to adjudicate within a reasonable time may not be made directly to the Court of Justice in the context of an appeal, but must be brought before the General Court itself.

91 As regards the criteria for assessing whether the General Court has observed the reasonable time principle, it must be borne in mind that the reasonableness of the period for delivering judgment is to be appraised in the light of the circumstances specific to each case, such as the complexity of the case and the conduct of the parties (see, in particular, Der Grüne Punkt – Duales System Deutschland v Commission, paragraph 181 and the case-law cited).

92 The Court has held in that regard that the list of relevant criteria is not exhaustive and that the assessment of the reasonableness of a period does not require a systematic examination of the circumstances of the case in the light of each of them, where the duration of the proceedings appears justified in the light of one of them. Thus, the complexity of the case or the dilatory conduct of the applicant may be deemed to justify a duration which is prima facie too long (see, in particular, Der Grüne Punkt – Duales System Deutschland v Commission, paragraph 182 and the case-law cited).

93 In examining those criteria, it must be borne in mind that, in the case of proceedings concerning infringement of competition rules, the fundamental requirement of legal certainty on which economic operators must be able to rely and the aim of ensuring that competition is not distorted in the internal market are of considerable importance not only for an applicant itself and its competitors but also for third parties, in view of the large number of persons concerned and the financial interests involved (see, in particular, Der Grüne Punkt – Duales System Deutschland v Commission, paragraph 186 and the case-law cited).

94 It will also be for the General Court to assess both the actual existence of the harm alleged and the causal connection between that harm and the excessive length of the legal proceedings in dispute by examining the evidence submitted for that purpose.

95 In that regard, it should be noted that, in an action for damages based on a breach by the General Court of the second paragraph of Article 47 of the Charter, in so far as it failed to have regard to the requirement that the case be dealt with within a reasonable time, the General Court must, in accordance with the second paragraph of Article 340 TFEU, take into consideration the general principles applicable in the legal systems of the Member States for actions based on similar breaches. In that context, the General Court must, in particular, ascertain whether it is possible to identify, in addition to any material loss, any other type of harm sustained by the party affected by the excessive period, which should, where appropriate, be suitably compensated.

96 It is therefore for the General Court, which has jurisdiction under Article 256(1) TFEU, to determine such claims for damages, sitting in a different composition from that which heard the dispute giving rise to the procedure whose duration is criticised and applying the criteria set out in paragraphs 91 to 95 above.

97 That said, it must be stated that the length of the proceedings before the General Court, which amounted to approximately 5 years and 9 months, cannot be justified by any of the particular circumstances of the present case.

98 It is apparent, in particular, that the period between the end of the written procedure, when the Commission’s rejoinder was lodged in February 2007, and the opening, in December 2010, of the oral procedure lasted for approximately 3 years and 10 months. The length of that period cannot be explained by the circumstances of the case, whether it be the complexity of the dispute, the conduct of the parties or supervening procedural matters.

99 As regards the complexity of the dispute, it is apparent from examining the action brought by the appellant, as summarised in paragraphs 12 and 13 above, that, while requiring a detailed examination, the pleas relied on did not present any particular difficulties. Although it is true that around 15 addressees of the contested decision brought actions for its annulment before the General Court, that fact could not prevent it from scrutinising the documents in the case and preparing for the oral procedure within a period of less than 3 years and 10 months.

100 It must be pointed out that, during that period, the procedure was not interrupted or delayed by the adoption of any measures of organisation of procedure by the General Court.

101 As regards the conduct of the parties and supervening procedural matters, the fact that the appellant requested, in October 2010, the reopening of the written procedure cannot justify the period of 3 years and 8 months which had already elapsed since it was closed. In addition, as the Advocate General observed in point 134 of her Opinion, the fact that the appellant was notified in December 2010 that there would be a hearing in February 2011 shows that that procedural matter had only a minimal effect on the overall length of proceedings, or even no effect at all.

102 In the light of the foregoing, it must be found that the procedure in the General Court breached the second paragraph of Article 47 of the Charter in that it failed to comply with the requirement that it adjudicate within a reasonable time, which constitutes a sufficiently serious breach of a rule of law that is intended to confer rights on individuals (Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I-5291, paragraph 42).

103 It is, however, clear from the considerations set out at paragraphs 81 to 90 above that the fourth ground of appeal must be rejected.

104 At the hearing, the appellant made submissions to the Court concerning its current financial position, which, it claims, show that it is unable to pay the fine imposed by the contested decision. The appellant claims that those arguments are admissible since they are linked to the appearance of a new fact as provided for in Article 127 of the Rules of Procedure, and amplify the fourth ground of appeal concerning the failure to observe the reasonable time principle.

105 The Commission contends that those arguments are inadmissible since they are new and, in any event unfounded, because unsupported by evidence.

106 In that regard, it must be recalled that appeals brought before the Court of Justice can only relate to questions of law. However, in order to assess the appellant’s ability to pay the fine imposed on it by the Commission, the Court would have to examine questions of fact which are not within its jurisdiction in an appeal.

107 Furthermore, it is not open to the Court, when determining an appeal, to substitute, on grounds of fairness, its own assessment for that of the General Court exercising its unlimited jurisdiction to rule on the amount of fine imposed on an undertaking for infringements of European Union law (see, in particular, Case C-328/05 P SGL Carbon v Commission [2007] ECR I-3921, paragraph 98 and the case-law cited). In addition, it is settled case-law that the Commission is not required, when determining the amount of the fine, to take into account the financial situation of an undertaking, since recognition of such an obligation would be tantamount to giving unjustified competitive advantages to undertakings least well adapted to the market conditions (see, in particular, SGL Carbon v Commission, paragraph 100 and the case-law cited).

108 The appellant’s arguments based on its financial situation must therefore be rejected as inadmissible and, in any event, unfounded.

109 It must, however, be added that, in so far as the appellant considers that its financial difficulties are causally linked to the failure by the General Court to adjudicate within a reasonable time, it is open to it to plead this in an action before the General Court under Article 268 TFEU and the second paragraph of Article 340 TFEU (see paragraphs 94 to 96 above).

110 It follows from the foregoing considerations that none of the grounds relied on by the appellant in support of its appeal can be upheld and, accordingly, the appeal must be dismissed in its entirety.

111 In accordance with Article 184(2) of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to the costs.

112 Under Article 138(1) of those Rules, which applies to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs to be awarded against the appellant and the latter has been unsuccessful, the appellant must be ordered to bear its own costs and to pay those incurred by the Commission.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Gascogne Sack Deutschland GmbH, v European Commission [2013] EUECJ C-40/12 (26 November 2013) URL: http://www.bailii.org/eu/cases/EUECJ/2013/C4012.html Cite as: EU:C:2013:768, [2013] EUECJ C-40/12, ECLI:EU:C:2013:768

Court of Justice of the European Communities (including Court of First Instance Decisions)