Ljupcho Grozdanovski , 6 avril 2011

One of the inherent complexities of EU competition Law is that certain competition infringements occur over extended periods of time. In its judgment from March 29, 2011 (joined cases C-201/09 P and C-216/09 P), the European Court of Justice (ECJ) dealt with such an infringement, in the light of the relevant provisions of the ECSC treaty which is no longer in force.

In the period from July 1988 to January 1991, a number of European producers of beams  participated in agreements and concerted practices regarding the prices, allocation of quotas and exchange of information. In 1994, the European Commission adopted Decision 94/215 by which it sanctioned the series of infringements of Article 65 of the ECSC Treaty. One of the companies involved acted in annulment before the General Court in 1999, but the action was dismissed (ARBED v. Commission, T-137/94). The claimant appealed the General Court’s ruling before the ECJ, which annulled the Commission’s Decision for violation of the rights of the defence (ARBED v. Commission, C-176/99). Following the ECJ’s judgment, the European Commission initiated in 2006 new proceedings for the infringements it had already examined in 1994 and adopted a new Decision, sanctioning the companies involved. The latter reacted by acting in annulment before the General Court. They presented four pleas, namely, the lack of legal basis for the Decision and misuse of power ; the breach of the rules on the attribution of infringements ; the breach of the rules on the limitation period for the proceedings and the violation of the defence rights. The General Court rejected all the pleas save the third. The companies then appealed the General Court’s ruling before the ECJ, alleging errors in judgement for each of the stated pleas.

With regard to the first plea, the parties argue that the European Commission adopted the contested Decision in 2006, sanctioning impediments to Article 65 of the ECSC treaty which had expired in 2002. According to the plaintiffs, neither Articles 101 and 102 of the FEU treaty nor Regulation n° 1/2003 confer powers to the European Commission allowing it to sanction the infringements that would normally fall in the scope of Article 65 of the ECSC treaty. In consequence, the interpretation given by the General Court interferes with the legal identity of each treaty and the rules on the hierarchy of EU norms.

The ECJ held that it was commonly considered by the EU judicature that after the expiration of the ECSC treaty, the infringements presenting the factual elements stated in Article 65 of the latter fall within the scope of Article 101 of the FEU treaty and Article 23(2)(a) of Regulation n° 1/2003. Moreover, it is a common principle in the Laws of the Members States to ensure the continuity of the legal system whenever legislation is amended. In the light of the stated principle, it should be recognised that the European Commission holds the power to penalise competition infringements in the domains  that formerly fell in the scope of the ECSC Treaty. It follows that the General Court did not make an error while concluding the absence of misuse of powers by the European Commission. The plea is therefore rejected.

With regard to the second and third pleas, the claimants argue a breach of the rights of the defence, alleging that the General Court made an error by applying the presumption that a company holding 100% of the shares of its subsidiaries exercises a decisive influence on their conduct. The ECJ stated that according to a constant case-law, if a parent company is the biggest shareholder of its subsidiaries, there is a presumption that such influence is indeed exercised. By sanctioning the parent company, the General Court correctly applied the stated presumption, since at the time when the facts occurred, one of the companies did in fact exercise decisive influence over the others. In consequence, the second and third pleas are also rejected.

Finally, the appellants argue the failure to state reasons and breach of the rights of the defence in the light of the res judicata principle. They consider that the General Court did not take into account the evidence rebutting the presumption of attributability of the infringement to the parent company. They argue that the influence the latter exercised over its subsidiaries diminished with time, and when the proceedings before the General Court took place, the evidence provided by the European Commission did not translate the actual relationship between the parent company and its subsidiaries. Moreover, the General Court  disregarded the prior judgment of the ECJ (case C-176/99) while applying the stated presumption and acted in violation of the res judicata principle.

The ECJ held that the presumption of attributability stands as long as the claimants fail to provide sufficient proof of the contrary. If an element of proof is no longer available, the claimants must sufficiently demonstrate that the lack of evidence is not due to their lack of diligence, but to the excessive length of the administrative procedure engaged by the European Commission. The plaintiffs failed to provide such evidence. In consequence, the examination of the violation of the res judicata principle is ineffective and the fourth plea is also rejected.

Reproduction autorisée avec l’indication: Grozdanovski Ljupcho, "Assuring legal continuity of treaty provisions in EU competition Law", www.ceje.ch, actualité du 06/04/2011