The European Court of Justice has dismissed the Appeal by Danone against the Judgement of the Court of First Instance of October 2005 by confirming that repeat offences by companies, even when said offences have occurred many years previously, should still be taken into account in setting the level of fine for a breach of the Competition Rules. The Appeal concerned a Commission investigation and subsequent fine on a Belgian Beer Cartel between 1993 and 1998. The ECJ upheld the €42,412,500 fine as set down by the CFI.

Background to the ECJ Judgement

The Belgian Beer Companies Interbrew and Alken-Maes (a subsidiary of Group Danone) had been operating a high-level agreement to fix prices, share customers and refrain from advertising. As a result, the Commission fined Interbrew and Alken-Maes in December 2001. Subsequently, Danone appealed the Commission's decision to the CFI arguing that the Commission was guilty of procedural errors and making mistakes in setting the level of fine imposed upon Alken-Maes. In reducing the level of the fine imposed by the Commission, the CFI stated that the Commission had unduly increased the basic level of the fine imposed and had done so as a result of paying undue attention to aggravating circumstances. The cartel in question was conducted with the knowledge and active participation of the highest level of management within the two respective companies and the Commission considered that the fact that Danone was a repeat offender to be a highly serious matter.

Arguments Before the Court

Danone appealed the CFI's decision with regards to the setting of the level of the fine imposed. Indeed, Danone was of the opinion that the fine should be further reduced. Danone made these submissions in spite of the fact it was a repeat offender, the rationale behind this being that the offences committed in the past were committed 17 and 27 years earlier.

The Judgement of the European Court of Justice

The ECJ held that the Commission was right to consider Danone to be a repeat offender, despite the fact that the offences were committed 17 and 27 years earlier. In doing so, the ECJ confirmed that Article 23 of Regulation number 1/2003 (the Article on fines and the basic anti-trust procedural Regulation) entitled the Commission to increase fines on repeat offenders.

This case is particularly interesting in that it shows that repeated levels of offending are deemed to be aggravating factors in setting the level of the fine imposed by the Commission - even when the previous offences have been committed and dealt with by the courts many years earlier.