The case follows on from the Commission’s Animal Feed Phosphates cartel decision pursuant to which fines totalling €176 million were imposed on a number of producers of animal feed for price fixing and market sharing throughout the EEA.
During the investigation into the infringement, all the companies involved engaged in settlement discussions with the Commission with a view to obtaining a 10 percent reduction in the fine that would otherwise have been imposed had they not settled with the Commission. However, during the settlement process Timab, a subsidiary of the Roullier Group, decided to withdraw from the settlement procedure. The Commission therefore followed the standard administrative infringement procedure against Timab – despite the fact that it had entered into settlements with the other companies involved in the cartel. This was the first time, therefore, that the Commission rendered a decision in a so-called ‘hybrid’ case i.e. where some parties settle but others do not.
During the initial settlement discussions, several meetings were held between the Commission and Timab, during which evidence of the infringement was discussed. On the basis of the evidence available, the Commission informed Timab that a fine in the range of €41 to €44 million would be imposed on it. However, in its final decision of 20 July 2010, the Commission levied a fine of nearly €60 million on Timab.
Timab challenged the Commission’s decision before the General Court of the European Union (GCEU) in case T-456/10, claiming that the Commission had infringed its legitimate expectations regarding the amount of the fine, on the one hand, and its right not to incriminate itself, on the other. Such challenge was unsuccessful, however.
On appeal to the CJEU, the Commission’s decision and the GCEU’s ruling were upheld in their entirety (judgment of 12 January 2017). The CJEU made it clear that the Commission was not bound by the range of fines it had first proposed to Timab during the settlement procedure since, at that time, the Commission had relied on tools specific to this procedure. The CJEU held that outside of the settlement procedure, the Commission is only bound by the contents of its statement of objections which does not set forth a range of fines. Consequently, Timab could not have a legitimate expectation that the range of fines proposed by the Commission during the settlement process would be imposed on it. In addition, the CJEU stated that once Timab had withdrawn from the settlement procedure, the Commission was free to rely on new elements of evidence unearthed during the standard investigation procedure to set the amount of the fine. This was justified by the fact that the settlement procedure and the standard investigation procedure are independent and separate from one another.
At the same time, however, while the settlement and standard investigation procedures are to be considered as independent of one another, the CJEU ruled that the Commission could refer to admissions made by Timab during the settlement procedure without breaching Timab’s right not to incriminate itself. Specifically, the CJEU recalled that while the Commission cannot compel a company to admit its participation in an infringement, it is not prevented from taking into account, when setting the amount of the fine in the standard procedure, the assistance provided voluntarily by that company to establish the existence of the infringement.
The CJEU therefore confirmed that the Commission has a considerable margin of discretion to revise a proposed fine upwards concerning companies that have withdrawn from a settlement procedure. Therefore, when contemplating whether to engage in settlement talks with the Commission, companies should carefully assess their exposure to fines under both the settlement and standard procedures. They should furthermore take into account the fact that prior admissions made during a settlement procedure may affect their defence in the standard procedure.