The Commission welcomes judgment by the European Court of Justice (case C-76/06 P) dismissing the action by Britannia Alloys & Chemicals Ltd against the judgment of the European Court of First Instance of 29 November 2005 (case T-33/02). In the latter judgement, the Court of First Instance had dismissed the action brought by Britannia Alloys & Chemicals Ltd against the Commission decision of 11 December 2001 fining the company €3.37 million for participating in a cartel in zinc phosphate.
The Court of Justice has now confirmed the original findings of the Court of First Instance, and dismissed the appeal in its entirety. The fines imposed by the Commission in the original decision have now been definitively upheld.
On 11 December 2001, the Commission fined six European companies a total of €11.95 million for participating in a Europe-wide cartel between 1994 and 1998, through which they fixed the price and shared out the market for zinc phosphate, an anti-corrosion mineral pigment widely used for the manufacture of industrial paints. The companies fined were the UK companies Britannia Alloys & Chemicals Ltd (€3.37 million), James Brown Ltd (€0.94 million) and Trident Alloys Ltd (€1.98), Germany’s Heubach GmbH & Co. KG (€3.78 million), France's Société Nouvelle des Couleurs Zinciques S.A. (€1.53 million) and the Norwegian company Waardals Kjemiske Fabrikker A/S (€0.35 million). Part of the evidence on the cartel was provided to the Commission by the companies involved, under EU rules providing for full or partial immunity from fines for companies that co-operate with the Commission in cartel cases (1996 Leniency Notice).
In its judgment of 29 November 2005 (case T-33/02), the Court of First Instance dismissed in its entirety the appeal by Britannia Alloys & Chemicals Ltd., who alleged that the Commission had infringed the general principles of proportionality, equal treatment and legal certainty as well as the legislative provisions on fines. Britannia Alloys & Chemicals Ltd argued, in particular, that, for the purpose of determining the upper limit on the fine imposed on the company, the Commission had taken account of its turnover for a business year other than the one preceding the adoption of the contested decision. On the same day, the Court of First Instance also dismissed the appeals brought by Heubach GmbH & Co. KG (T-64/02), Société Nouvelle des Couleurs Zinciques S.A. (T-52/02) and Union Pigments AS (formerly Waardals AS in T-62/02).
In February 2006, Britannia Alloys & Chemicals Ltd brought an appeal against the judgment of the Court of First Instance claiming in essence that the Court of First Instance committed various errors in law by holding that the Commission could apply such a method of calculation. It asked the Court of Justice to rule that, in so doing, the Court of First Instance infringed Article 15(2) of Regulation No 17 and the principles of equal treatment and legal certainty in the judgment under appeal. In its judgment of 7 June 2007, the Court of Justice rejected all the applicant's arguments.
First, the Court held that in the present case, the company concerned had not achieved any turnover for the business year preceding the adoption of the Commission decision. Therefore, the Commission was entitled to refer to another business year – the year ending 30 June 1996 - in order to be able to make a correct assessment of the financial resources of that company and to ensure that the fine has a sufficient deterrent effect.
Secondly, as regards the principle of equal treatment, the ECJ held that when calculating fines on companies which participated in a cartel, the Commission has the discretion to use differential treatment of the companies in this area. The ECJ also concluded that the CFI correctly held that Britannia was not in a comparable situation to that of the companies referred to in previous Commission decisions since it had not achieved any turnover in the business year preceding the adoption of the contested decision. In those circumstances, the Commission was justified in treating Britannia differently from those undertakings.
Finally, as regards the principle of legal certainty, the ECJ supported the finding that cessation of the company's commercial activities in the zinc sector would not result in its escaping a fine for the infringement committed.
The ECJ has now confirmed the original findings of the Commission as already upheld by the CFI. The fines imposed by the Commission in the original decision have now been definitively upheld. [7 June 2007]