The EC has released its latest statistics on cartel enforcement and the most notable feature may be what is not mentioned.
On 4 July 2013, the European Court of Justice quashed fines of over €100 million in respect of a copper cartel that were originally imposed in 2006. In doing so, the Court rejected the European Commission’s appeal from the earlier decision of the General Court, which had concluded that the fines should be overturned on two bases:
- that one company’s participation in the alleged conduct was not proved to the requisite legal standard; and
- that the EC had not established that a further alleged participant was aware of the fact that it had, through its conduct, joined a cartel of the nature alleged.
The appeal was based on matters of civil procedure (such as rules on the burden of proof and procedural rules on evidence), with the Court of Justice concluding that while there had been errors of law in the General Court’s reasoning, it was not sufficient to justify setting aside the judgment.
Both judgments are interesting for their focus on the cartel conduct as alleged by the regulator. The EC had based its fines on a single, complex and continuous infringement covering the entire ‘pan-European’ market. The Court concluded that, while there may have been sufficient evidence to establish the involvement of each company (and thereby the parent companies) in narrower cartels based on bilateral contacts, contacts at a trade fair and contacts in the context of industry meetings to coordinate pricing, the EC failed to establish participation in the overarching arrangement.
The case is therefore illustrative of the difficulties faced by both regulators when investigating conduct and private claimants when bringing actions for damages, in which the desire to capture the broadest range of conduct (and potentially higher penalties or damages) has to be weighed against additional difficulties of proof.
The latest EC statistics also show that, at the half way point for 2013, fines imposed are significantly behind the level for previous years with only one set of fines imposed thus far (€141 million in fines on five wire harness manufacturers). This compares with 2012, in which €1.9 billion in fines were imposed on 37 undertakings. 2012 was however a notable year with €1.5 billion in fines imposed in respect of the TV and computer monitor tubes cartel.