Competition: Court of Justice of the European Union confirms the fine imposed on Toshiba and Panasonic/MTPD for participating in the cathode ray tubes cartel
On 18 January 2017, the Court of Justice of the European Union ("CJEU") dismissed Toshiba's appeal against a General Court ("GC") ruling fining Toshiba, Panasonic and their joint subsidiary MTPD more than EUR 82 million for their participation in the cartel on the market for color picture tubes for television sets ("CPTs") between 1996/1997 and 2006.
In 2012, the Commission imposed fines of approximately EUR 1.57 billion on seven undertakings which had participated in one or two separate cartels on the market for cathode ray tubes ("CRTs") between 1996/1997 and 2006. A CRT is an evacuated glass envelope containing an electron gun and a fluorescent screen. At the material time, there were two different types of CRT: color display tubes for computer monitors ("CDTs") and color picture tubes for television sets ("CPTs"). They were essential components for the production of computer monitors or color televisions and came in a number of different sizes. In the context of the CPT cartel, the Commission imposed a fine of EUR 28 048 000 on Toshiba individually, and a fine of EUR 86 738 000 on Toshiba jointly and severally with Panasonic and their joint subsidiary, MTPD.
The GC annulled the fine of approximately EUR 28 million imposed on Toshiba individually and reduced the fine imposed on Toshiba jointly and severally with Panasonic/MTPD to approximately EUR 82 million. Dissatisfied with the decision, Toshiba asked the CJEU to annul the fine imposed jointly and severally arguing that it was not in a position to exercise decisive influence over MTPD throughout the duration of the infringement and that it therefore could not be held liable for the infringement committed by MTPD.
The CJEU upheld the GC's view that the fact that Toshiba had a right of veto over MTPD's business plan for the entire duration of its existence was in itself sufficient to consider that Toshiba, together with Panasonic, had exercised decisive influence over MTPD. The CJEU confirmed the GC's analysis that the possibility for a parent company to prohibit its subsidiary from taking decisions, as well as the parent company's appointment of the directors entitled to represent the subsidiary constituted an indication of decisive influence over the subsidiary's conduct. In addition, the CJEU noted that where it follows from statutory provisions or contractual stipulations that the commercial conduct of a joint subsidiary must be determined jointly by several parent companies, it can be concluded, in the absence of evidence to the contrary, that the parent companies must be regarded as having exercised decisive influence over their subsidiaries. Consequently, the CJEU dismissed the appeal and upheld the fine.
Source: Court of Justice of the European Union Press Release, 18/1/2017 and Case C-623/15 P – Toshiba Corp. v. Commission, Judgment of the Court of Justice of the European Union, 18 January 2017 Back to top
Competition: Court of Justice of the European Union fines Roullier for participation in the phosphates cartel
On 12 January 2017, the Court of Justice of the European Union ("CJEU") dismissed an appeal by Timab Industries and its parent company, Cie financière et de participations Roullier ("CFPR"), (together "Roullier") against the ruling of the General Court ("GC") upholding the Commission's fine of almost EUR 60 million. According to the Commission, Roullier and five other producers participated in a price-fixing and market-sharing cartel on the market for animal feed phosphates for more than 30 years.
In 2010, Roullier was fined under the Commission's standard infringement decision procedure. Unlike the other cartel participants, Roullier did not engage in settlement discussions with the Commission. Subsequently, Roullier appealed the Commission's decision to the GC. Roullier argued that under the standard procedure the Commission applied a higher fine level in setting the fine to be imposed on Roullier than the maximum fine level applied in the settlement procedure. The GC dismissed the action in 2015, noting that the Commission had not penalized Roullier on account of its withdrawal from the settlement procedure, and the Commission was not in the standard procedure bound by the range of fines communicated during the settlement procedure. Dissatisfied with the GC's reasoning, Roullier appealed the GC's judgment to the CJEU.
The CJEU concluded that the GC had duly verified the analysis made by the Commission during the standard procedure, as well as the factors the Commission used to calculate the amount of the fine. The CJEU also agreed, as did the GC, that in the course of the standard procedure, the Commission had to consider new information that obliged it to review the file, to redefine the duration of the cartel, and to adjust the fine accordingly by not applying reductions it had proposed during the settlement procedure. Consequently the CJEU dismissed the appeal in its entirety and upheld the fine.
Source: Court of Justice of the European Union Press Release, 12/1/2017 and Case C-411/15 P – Timab Industries and Cie financière et de participations Roullier v. Commission, Judgement of the Court of Justice of the European Union, 12 January 2017 Back to top
Competition: Reference from Portuguese court on the application of Article 102 to discriminatory pricing practices
On 16 January 2017, the Official Journal published details of a request for a preliminary ruling by the Court of Justice of the European Union ("CJEU") from a Portuguese court concerning the application of Article 102 TFEU on discriminatory pricing by a dominant company.
The questions posed by the Portuguese court to the CJEU concern the following issues. First, the court asks if, when establishing whether a dominant company has used discriminatory prices against retail companies, the court must assess the gravity, relevance or importance of those effects on the affected company's competitive position and/or ability to compete (in particular the retail company's capacity to absorb the cost differences incurred). Second, the court queries whether a finding of abuse should be made in the situation where the discriminatory prices in question are of significantly reduced importance for the costs incurred, income obtained and profitability achieved by the affected retail company. Finally, the court seeks the CJEU's guidance on how to assess whether a competitor of the allegedly dominant company has been placed in a competitive disadvantage.