Judgment of the Court of First Instance (Third Chamber) of 27 September 2006.

— Arguments of the parties

51 Akzo claims that the Commission infringed the principle of proportionality in classifying the parties to the cartel into two categories by reference to their shares of the sodium gluconate market, without taking precise account of their actual market shares, but rather adopting an overly simplistic approach consisting of classifying those undertakings according to whether their market share was over 20% or under 10% (recitals 379 to 382 of the Decision).

52 Akzo states that the actual ratio of the worldwide turnover of the undertakings concerned is markedly different from the simplistic 1:2 ratio applied by the Commission. The actual ratio between the undertakings holding the weakest market shares (9% respectively for ADM and Glucona) and those holding the greatest market share (36% for Fujisawa) is 1:4 and not 1:2. Thus, according to the calculation method adopted by the Commission, but taking into account the actual ratio between the undertakings concerned, it should have set the basic amount of the fine imposed on Akzo and Avebe at EUR 1.25 million and not EUR 2.5 million.

53 Akzo acknowledges that there does not necessarily have to be a mathematical ratio between the fine ultimately imposed and the turnover of the undertakings concerned. Nevertheless, in its view, the Commission's practice in its decisions is to take the turnover of the parties to a cartel in the market in question as a basis.

54 Akzo infers from the case-law of the Court of Justice and the Court of First Instance that, unless it can rely on specific, objective justifications, the Commission must check that the specific basic amounts reflect the relative economic weight of the undertakings concerned in terms of turnover or market share. That was not so in the present case. In its view, in the specific circumstances of this case, the Commission should have placed the undertakings concerned into three categories. It would have been possible to identify a category of undertakings falling between ADM and Glucona (9% each) and Fujisawa (36%) in terms of market share, namely Roquette (21%) and Jungbunzlauer (25%). Such a classification would have better reflected the relative weight of the undertakings concerned and would have allowed the Commission to achieve its declared objective of taking account of the relative weight of the undertakings concerned in determining the specific basic amount of the fine.

55 The Commission contends that the plea in law should be rejected.

— Findings of the Court

56 Under the Guidelines, where there are infringements involving a number of undertakings, the Commission may, as it did in this case, weight the starting amounts to take account of the specific weight of each undertaking by dividing the members of the cartel into groups ‘particularly where there is considerable disparity between the sizes of the undertakings committing infringements of the same type’ (sixth paragraph of Section 1.A of the Guidelines). The Guidelines further state that ‘the principle of equal punishment for the same conduct may, if the circumstances so warrant, lead to different fines being imposed on the undertakings concerned without this differentiation being governed by arithmetic calculation’ (seventh paragraph of Section 1.A of the Guidelines).

57 It is the settled case-law of the Court of First Instance that, in determining the gravity of the infringement, the Commission is not required to ensure, where fines are imposed on a number of undertakings involved in the same infringement, that the final amounts of the fines resulting from its calculations for the undertakings concerned reflect any distinction between them in terms of their overall turnover, but that it may divide them into groups (see, to that effect, Case T-23/99 LR AF 1998 v Commission [2002] ECR II-1705, paragraph 278; Case T-213/00 CMA CGM and Others v Commission [2003] ECR II-913, paragraphs 385 and 386; and Joined Cases T-191/98, T-212/98 to T-214/98 Atlantic Container Line and Others v Commission [2003] ECR II-3275 (‘TACA’), paragraphs 1519 and 1520, and case-law cited).

58 However, as this Court has also held on a number of occasions, when the Commission divides the undertakings concerned into groups for the purpose of determining the amount of the fines, the determination of the thresholds for each of the groups thus identified must be coherent and objectively justified (see, to that effect, LR AF 1998 v Commission, paragraph 57 above, paragraph 298; CM A CGM and Others v Commission, paragraph 57 above, paragraph 416, et TACA, paragraph 57 above, paragraph 1541, and case-law cited).

59 In the present case, in order to identify the categories in which to place the undertakings concerned, the Commission decided to take account of their importance on the market in question on the basis of a single criterion, namely the shares of the worldwide sodium gluconate market, calculated by reference to the turnover achieved by them in that market in 1995.

60 On that basis, the Commission established two categories of undertaking, the first one comprising ‘the three major producers of sodium gluconate with worldwide market shares above 20%’ and the second comprising the undertakings ‘which had significantly lower market shares in the worldwide sodium gluconate market (below 10%)’ (recital 382 of the Decision).

61 The Commission thus set a starting amount of EUR 10 million for Fujisawa, Jungbunzlauer and Roquette, whose respective market shares were approximately 36%, 25% and 21%, and a starting amount of EUR 5 million for those in the second category, namely Glucona and ADM, which each held market shares of approximately 9%. Since Glucona was held jointly by Akzo and Avebe, the Commission set the starting amounts for each of those two companies at EUR 2.5 million (recital 385 of the Decision).

62 In proceeding in this manner, on the basis of its calculation using the market shares of the undertakings concerned, the Commission chose a coherent method for dividing the members of the cartel into two groups, which is objectively justified by the difference in size between the undertakings belonging to those two categories.

63 In such a situation, contrary to Akzo's assertions, the Commission was not required to differentiate any further between the members of the cartel by reference to their market share. In particular, it is irrelevant whether placing the members of the cartel into three categories would have better reflected the relative weight of the undertakings concerned, as Akzo maintains, because the approach adopted by the Commission is not incoherent or without objective justification. Nor can Akzo rely on the fact that in other cases the Commission has chosen to classify the members of the cartel at issue there differently, because it does not show that in this case the approach adopted by the Commission was not coherent and objectively justified.

64 In any event, even though dividing the members of the cartel into three categories might have been justified in the present case, the Court finds, in the light of the considerations in paragraphs 39 et seq. above, that imposing a starting amount of EUR 5 million on Glucona is not disproportionate. Accordingly, a hypothetical reclassification of the members of the cartel cannot affect Akzo's situation.

65 Accordingly, the plea alleging infringement of the principle of proportionality must be rejected.

— Arguments of the parties

74 Akzo does not deny the Commission's finding in recital 310 of the Decision that ANC, a wholly-owned subsidiary which, at the material time, controlled Glucona jointly with Avebe, is partly responsible for the infringements for which Glucona has been held liable.

75 Akzo states, however, that in recitals 296 to 310 of the Decision, the Commission found incorrectly that, for Glucona's operations, ANC had been guided by Akzo's instructions in its actions, to the point where Akzo could be held liable in its own name for the infringements allegedly committed by Glucona.

76 Akzo observes that, in recital 310 of the Decision, the Commission, in the main, based its finding that Akzo could be held liable for Glucona's actions on the assumption that, because ANC was a wholly-owned subsidiary of Akzo, ANC had carried out, in all material respects, the instructions given to it by its parent company, and relied in that regard on the judgment of the Court of Justice in Case 107/82 AEG v Commission [1983] ECR 3151). Akzo observes next that it was only secondarily (‘furthermore’ in recital 310 of the Decision) that the Commission took into account the fact that at least two of ANC's representatives in Glucona had played an active role in the cartel, in particular through their participation in multilateral meetings, and that they had held simultaneously the positions of Vice-President and General Manager of Akzo.

77 Akzo acknowledges that, in the judgment in Case C-286/98 P Stora Kopparbergs Bergslags v Commission [2000] ECR I-9925, the Court of Justice held, in paragraph 29, that the Commission could reasonably assume that a wholly-owned subsidiary would carry out the instructions of its parent company and that in that case it was for the undertaking concerned to prove the incorrectness of that assumption.

78 Akzo nevertheless expresses doubts as to whether that assumption should hold not only in cases where there is a direct relationship between the parent company and its subsidiary, but also in cases such as the present one, where that relationship is much more distant. First, it observes that, in the present case, ANC is the subsidiary of the national holding company Akzo Nobel Nederland BV (ANN'), which in turn is a subsidiary of the head holding company. Second, it states that both Akzo and ANN were holding companies which did not themselves carry on any commercial activities by either manufacturing or distributing products. Third, it states that it was only through other companies that Akzo held an (indirect) 50% share in Glucona, over which it thus had no direct control.

79 That being so, before the Court, Akzo has emphasised a certain number of facts. It claims that, on the basis thereof, it is in any event able to rebut the abovementioned assumption and prove that, despite the fact that ANC was a wholly-owned subsidiary of Akzo, it was quite unrealistic to assume that Akzo could determine or even only influence Glucona's strategic and commercial conduct and that, moreover, that had not occurred.

80 The Commission contends that the plea in law should be rejected.

— Findings of the Court

81 Akzo does not deny that the infringement committed by Glucona could be attributed to ANC. Accordingly, it is necessary to consider only whether Akzo could be held liable for acts attributed to ANC, its wholly-owned subsidiary.

82 It should be borne in mind that the fact that a subsidiary has separate legal personality is not sufficient to exclude the possibility of its conduct being imputed to the parent company, especially where the subsidiary does not independently decide its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company (see Stora Kopparbergs Bergslags v Commission paragraph 77 above, paragraph 26, and case-law cited).

83 Moreover, as Akzo itself acknowledges, the case-law of the Court of Justice and the Court of First Instance is to the effect that the Commission may, in that context, reasonably assume that a wholly-owned subsidiary carries out, in all material respects, the instructions given to it by its parent company and that that assumption implies that the Commission is not required to check whether the parent company has actually exercised that power. In such a situation, when, in the statement of objections, the Commission relies on that assumption and declares its intention to hold a parent company liable for an infringement committed by its wholly-owned subsidiary, it is for the parties concerned, when they consider that, despite the shareholdings at issue, the subsidiary determines its conduct independently on the market, to rebut that assumption by providing the Commission with sufficient evidence during the administrative procedure (see, to that effect, Case T-354/94 Stora Kopparbergs Bergslags v Commission [1998] ECR II-2111, paragraph 80, upheld on this point by Stora Kopparbergs Bergslags v Commission, paragraph 77 above, paragraphs 27 to 29; AEG v Commission, paragraph 76 above, paragraph 50, Case T-65/89 BPB Industries and British Gypsum v Commission [1993] ECR II-389, paragraph 149).

84 In the present case, it is common ground that, during the period covered by the Decision, ANC was a wholly-owned subsidiary of Akzo.

85 Moreover, as regards the conduct of the administrative procedure, the Court notes that, as observed by the Commission in recital 300 of the Decision, it had, in paragraphs 324 to 330 of the statement of objections, analysed the links between Glucona and its parent companies and declared its intention to hold ANC and Avebe jointly liable for the infringement. As to the links between ANC and Akzo, the Commission considered that, since ANC was a wholly-owned subsidiary of Akzo, the statement of objections should be addressed to Akzo. As noted by the Commission in recital 301 of the Decision, Akzo, in its reply to the statement of objections, explicitly confirmed that it should be held jointly liable with Avebe for the infringement.

86 In such a situation, Akzo cannot criticise the Commission for having held it liable, in its own name, for the infringements committed by its wholly-owned subsidiary, ANC, as co-owner of Glucona.

87 Akzo is incorrect in maintaining, in that context, that the purpose of the statement of objections is primarily to restrict the scope of the infringements alleged by the Commission to the factors which are expressly referred to therein, so as to enable the undertaking concerned to defend itself by putting forward its arguments on all of those factors during the administrative procedure and to enable the Commission to take account of those arguments in its decision-making process, but that the statement of objections does not concern the issue of identification of the undertaking (or undertakings) which might be held liable for such an infringement. The statement of objections addressed by the Commission to an undertaking against which it is contemplating imposing a fine for infringement of the competition rules must contain the essential findings against that undertaking, such as the acts complained of, their classification and the evidence on which the Commission relies, in order to enable that undertaking to put forward its arguments effectively during the administrative procedure opened concerning it (see, to that effect, Case 41/69 ACF Chemiefarma v Commission [1970] ECR 661, paragraph 26; Case C-62/86 AKZO v Commission [1991] ECR I-3359, paragraph 29; and Joined Cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85 Ahlström Osakeyhtiö and Others v Commission [1993] ECR I-1307, paragraph 135). Likewise, according to settled case-law, given its importance, the statement of objections must specify unequivocally the legal person on whom fines may be imposed and be addressed to that person (see Joined Cases C-395/96 P and C-396/96 P Compagnie maritime belge transports and Others v Commission [2000] ECR I-1365, paragraphs 143 and 146, and Case C-176/99 P ARBED v Commission [2003] ECR I-10687, paragraph 21).

88 Accordingly, on the basis of the information contained in the statement of objections, Akzo could not be unaware that it was likely to be the addressee of a final decision of the Commission. In such a situation, the onus was on it to react during the administrative procedure, or be faced with the prospect of no longer being able to do so, by demonstrating that, despite the factors relied on by the Commission, it could not be held liable for the infringement committed by Glucona.

89 Accordingly, in keeping with the principles and rules governing the administrative procedure, in particular the requirement that the statement of objections have practical effect, it is not necessary to consider whether the different matters relied on for the first time before the Court are well founded, namely those by which Akzo seeks to prove that, despite the fact that ANC was a wholly-owned subsidiary of Akzo, it had not been able to determine or even only influence Glucona's strategic and commercial conduct.

90 Accordingly, the plea alleging infringement of Article 81 EC must be rejected.

— Arguments of the parties

99 First, Akzo claims that, by applying a multiplier of 2.5 to the starting amount in order to take account of its size and overall resources, the Commission infringed Article 15(2) of Regulation No 17 in determining the fines not by reference to the gravity and duration of the infringement, as provided for by that provision, but reference to the type of undertaking having committed that infringement.

100 Akzo contends that, although the Court of Justice and the Court of First Instance have held that, in order to assess the gravity of the infringement, the Commission must take account of many factors, including the need for the fine to have a deterrent effect, the fact remains that that reasoning relates directly to the criterion of the gravity of the infringement and not the type of undertaking concerned. It states that the latter criterion has no basis in Article 15(2) of Regulation No 17 and that, in imposing a ceiling of 10% of turnover on the ultimate fine, the Council has already taken account of the different impact of fines on undertakings owing to their size.

101 Referring to LR AF 1998 v Commission, paragraph 57 above (paragraph 280), Akzo adds that, in fixing the multiplier on the basis of a single factor, namely the turnover of the Akzo Nobel group, the Commission accorded disproportionate weight to that factor in comparison with the importance it gave to other factors on the basis of which it assessed the gravity of the infringement.

102 Akzo further claims that, if the last three paragraphs of Section A ‘Gravity’ of the Guidelines are to be interpreted as allowing the Commission to apply a multiplier such as the one used in the present case, then they infringe Article 15(2) of Regulation No 17 and cannot be used against it.

103 Second, Akzo claims that the Commission infringed Article 15(2) of Regulation No 17 in applying a multiplier of 2.5 to the starting amount of the fine imposed on it, a multiplier which was based on the size of the Akzo Nobel group as a whole.

104 Akzo observes that, under Article 15(2) of Regulation No 17, the Commission is to determine the amount by reference to the gravity and duration of the infringement and not by reference to the economic impact thereof.

105 Akzo acknowledges that, in Musique diffusion française and Others v Commission, paragraph 37 above, the Court of Justice held that the overall turnover of the undertakings concerned gives an indication, albeit approximate and imperfect, of the size of the undertakings and of their economic power.

106 It argues, however, first of all, that the concept of ‘undertakings’ as used by the Court of Justice in that judgment cannot easily be applied to the present case.

107 Second, Akzo contends that, in Musique diffusion française and Others v Commission, paragraph 37 above, the Court of Justice stated that it was necessary to take account also of the proportion of that turnover accounted for by the goods in respect of which the infringement was committed, which gives an indication of the scale of the infringement. In the Decision, the Commission disregarded the fact that that criterion was of more direct interest than the one referred to in paragraph 104 above, in that it relates directly to the criteria laid down in Article 15(2) of Regulation No 17. Those considerations are all the more important where, as in the present case, the proportion of that turnover accounted for by the goods in respect of which the infringement was committed in relation to the overall turnover is 0.05%.

108 As regards the judgment of the Court of First Instance in Case T-31/99 ABB Asea Brown Boveri v Commission [2002] ECR II-1881), Akzo observes that the multiplier applied in this case was not determined on the basis of the group's overall turnover. Paragraphs 164 and 165 of that judgment are to the effect, however, that the multiplier must be based on the size of the undertaking which has committed the alleged infringement as found by the Commission. It adds that, in that case, the Court held, in response to the argument put forward by ABB that the Commission should have calculated the fine (and applied the multiplier) solely on the basis of the turnover achieved by the group's district heating division, that the Commission seemed to have calculated the fine correctly, basing the multiplier on the overall size of the ABB group and not only on that of the ‘undertaking’ allegedly constituted by ABB's district heating division, on the ground that the Commission had, on the basis of a number of factors, correctly found that the ABB group should be held liable for the infringement (paragraph 163 of that judgment).

109 The Commission contends that the plea in law should be rejected.

— Findings of the Court

110 First of all, regarding Akzo's argument that the Commission fixed the fine by reference to the type of undertaking which committed the infringement, the Court finds that, in recitals 334 to 371 of the Decision, the Commission, in a first stage of its analysis, found that the undertakings concerned had committed a very serious infringement, in the light of its nature, its actual impact on the sodium gluconate market in the EEA and the scope of the geographic market concerned, an infringement which had affected the EEA as a whole.

111 Next, the Commission applied differential treatment to the undertakings concerned so as to take account of the specific weight of their conduct on competition, basing itself on the turnover achieved by the undertakings concerned in worldwide sodium gluconate sales during the last year of the infringement, namely 1995 (see, inter alia, recital 381 of the Decision). Therefore, and contrary to Akzo's assertion, during this stage of fixing the amount of the fine by reference to the gravity of the infringement, the Commission did not take account of the type of undertaking which committed the infringement, but rather of the importance of those undertakings on the specific market.

112 It was only at the final stage of calculating the fine by reference to the gravity of the infringement that, in keeping with the possible differentiation provided for by the Guidelines, the Commission took account of a certain typology of the undertakings in question. That typology flows directly from taking account of the size and resources of the undertakings in question, which are criteria which must be taken into account in order to ensure that fines have a deterrent effect. In fact, the Commission did, at that stage, take account of the size and overall resources of the groups of undertakings to which the members of the cartel belonged by applying a multiplier of 2.5 to the starting amount used for some of them, including Akzo (recital 388 of the Decision).

113 In so doing, contrary to Akzo's assertions, it did not determine the fine by reference to the type of undertaking which committed the infringement, but by reference to the gravity and duration of the infringement, even though, when assessing the gravity of the infringement, it took account of the size and overall resources of the undertakings concerned in order to ensure that the fines to be imposed would have a deterrent effect. Accordingly, Akzo's line of argument is inaccurate.

114 Second, as to Akzo's criticism of the Commission for having committed errors of law when taking account of the size and overall resources of the undertakings concerned, the Court notes that Akzo itself acknowledges that, in order to assess the gravity of an infringement, the Commission must take account of a large number of factors, including the requirement that the fine must have a deterrent effect. The Commission is, moreover, fully entitled to fix the amount of the fine by reference to the specific characteristics of the undertaking which is liable for the infringement, in order to achieve that deterrent effect.

115 In fixing the starting amount of the fine at a level higher for those undertakings holding a relatively larger market share than others on the relevant market, the Commission took account of the undertaking's specific responsibility, in the light of the requirement of maintaining free competition and found that it was an individual factor from which an assessment could be made of the gravity of the conduct of the undertakings concerned. That factor reflects the higher level of responsibility, in a cartel situation, for undertakings which hold a relatively larger share of the relevant market in terms of the damage caused to competition.

116 In that context, moreover, the Commission could also reasonably take account of legal and economic knowledge and infrastructures in very large undertakings such as Akzo which enable them more easily to recognise that their conduct constitutes an infringement and be aware of the consequences stemming from it under competition law.

117 As regards the application of a multiplier by reference to the size and overall resources of the undertakings concerned, the Court notes that, according to settled case-law, where the Commission calculates the fine of an undertaking it may take account, amongst other things, of its size and its economic strength (Musique diffusion française and Others v Commission, paragraph 37 above, paragraph 120, and Case T-48/98 Acerinox v Commission [2001] ECR II-3859, paragraphs 89 and 90). In addition, concerning measurement of the financial capacity of members of a cartel, the case-law has recognised the relevance of overall turnover (Sarrió v Commission, paragraph 68 above, paragraphs 85 and 86). Accordingly, the Commission was entitled to take account of the economic strength of the undertaking concerned.

118 Accordingly, the Commission was entitled to take Akzo's overall turnover as a basis to fix the fine at a level which would have a sufficiently deterrent effect and would take account of the importance of the infrastructures, in terms of legal and economic expertise, which groups of undertakings of such a size have at their disposal. Akzo's line of argument is therefore incorrect in law.

119 Third, as regards Akzo's assertion that the Guidelines are unlawful in so far as they allow the Commission to apply a multiplier such as that used in the present case, it should be borne in mind that the Court has already held that, according to the method laid down in the Guidelines, the calculation of the amount of the fines is carried out by reference to the two criteria referred to in Article 15(2) of Regulation No 17, namely the gravity and the duration of the infringement, whilst respecting the maximum limit in relation to the turnover of each undertaking established by the same provision and that, consequently, the Guidelines do not go beyond the legal framework for fines set out in that provision, as interpreted in the case-law of the Court of First Instance (LR AF 1998 v Commission, paragraph 57 above, paragraphs 219 to 232; Case T-224/00 Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission [2003] ECR II-2597, paragraphs 39 to 52, and TACA, paragraph 57 above, paragraph 1527). Akzo has not put forward any new factors, other than those already rejected in that case-law (see the abovementioned paragraphs in those judgments).

120 Fourth, as to Akzo's assertion that, in any event, when applying a multiplier such as that used in the present case, the Commission could not take account of the size and overall resources of the Akzo Nobel NV group, to which ANC, the undertaking which committed the infringement, belonged, but at most the size of the turnover achieved by the sale of the product in respect of which the infringement was committed, Akzo disregards the fact that the Commission applied that multiplier in order to ensure that the fines would have a deterrent effect. In considering that, in the present case, it was only by taking the size of the resources of the group of undertakings as a whole as a basis that the objective of having deterrent fines would be achieved, the Commission did not commit an error of assessment giving rise to infringement of Article 15(2) of Regulation No 17.

121 In the light of all the foregoing, the plea alleging infringement of Article 15(2) of Regulation No 17 must be dismissed as unfounded.