On 22 November 2012, the European Court of Justice ("ECJ") handed down its judgment in the broken seal case (Case C-89/11) in which the Commission had imposed a €38 million fine on the German energy company E.ON Energie ("E.ON"). The ECJ upheld the General Court judgment, in which E.ON's appeal against the Commission's decision was rejected.
E.ON had claimed in the proceedings with the General Court that the seal might have been defective, but it failed to adduce evidence substantiating this claim. This allegation was insufficient to rebut the evidence put forward by the Commission. The ECJ concluded that the General Court had not unduly reversed the burden of proof or set aside the principle of the presumption of innocence.
Advocate General Bot concluded in his opinion that the General Court had not exercised its unlimited jurisdiction when considering the proportionality of the fine. The ECJ did not follow the AG's opinion and held that the General Court gave sufficient reasons for its decision, adopted in the exercise of its unlimited jurisdiction, on the proportionality of the fine. In doing so, the ECJ applies the judgments in the cases Chalkor and KME (Cases C-272/09, C-386/10 and C-389/10). In these cases the ECJ held that the principle of effective judicial protection does not require that the General Court should be obliged to undertake of its own motion a new and comprehensive investigation of the file.
As to the level of the fine, E.ON argued that the fine should have been reduced because the Commission failed to demonstrate any evidence that the door of the sealed room had been opened or that documents had been removed. However, the ECJ held that the question whether someone had actually entered the room or not was irrelevant and dismissed E.ON's argument. The ECJ went on to assess the three reasons given by the General Court to explain its decision on the setting of the amount of the fine at €38 million namely: (i) the particularly serious nature of a breach of seal; (ii) the size of E.ON; and (iii) the need to ensure that the fine has a sufficient deterrent effect. The ECJ concluded that the General Court did not err in law with respect to any of the three reasons and rejected all of E.ON's arguments.
The District Court Rotterdam in its judgment of 21 June 2012 (LJN: BW9126, previously reported in Stibbe's Competition Law Newsletter of September 2012) held that in setting the level of the fine not only was the fact that the seal was broken relevant, but also the question of who had broken the seal, or to whom could the breach of seal be attributed to. In this case the undertaking had, within an hour after the breach of seal was discovered, informed the Dutch competition authority on who was responsible for breaking the seal. Subsequently, the Court concluded that the undertaking had provided more information than it was obliged to do. This led to a reduction of the fine by 10%.
In the case of Suez Environnement and Lyonnaise des Eaux, which dealt with a breach of seal, the Commission also took into account the immediate and constructive cooperation provided by the parties. The fine in this case amounted to €8 million.
The decisions in the E.ON case and the Suez Environnement case demonstrate a wider trend by the Commission to pursue procedural infringements during inspections using standalone procedures (see also the Competition Policy Newsletter, number 3 – 2011). This means that the procedural infringement is separated from the procedure regarding potential breaches of Articles 101 or 102 TFEU. At the same time, the General Court in the Nexans/Prysmian case (reported here in this newsletter) confirmed that objections against the way in which an inspection was conducted should be raised in the procedure concerning the infringement of Articles 101 or 102 TFEU.