Uralita v Commission (Competition) [2011] EUECJ T-349/08 (25 October 2011)

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(Competition – Agreements, decisions and concerted practices – Sodium chlorate market – Decision finding an infringement of Article 81 EC – Action for annulment – Imputability of unlawful conduct)

Uralita, SA, established in Madrid (Spain), represented by I.S. Forrester QC, and K. Struckmann, P. Lindfelt and J. Garcia-Nieto Esteva, lawyers,

European Commission, represented by F. Castilla Contreras, R. Sauer, A. Biolan and J. Bourke, acting as Agents,

1 Sodium chlorate is a strong oxidising agent manufactured by the electrolysis of a sodium chloride water solution in a diaphragm-less cell. Sodium chlorate can be produced as a crystal product or as a solution product. Its largest application is for the manufacture of chlorine dioxide, which is used in the pulp and paper industry for the bleaching of chemical pulp. Other applications include, to a lesser degree, drinking water purification, textile bleaching, herbicides and uranium refining (recital 2 of the contested decision).

2 The applicant, Uralita, SA, is a public limited company governed by Spanish law which produces construction materials and was one of the first European producers in that sector. In the late 1980s the applicant decided to acquire a shareholding in a chemical business in order to secure the supply of polyvinyl chloride (PVC) for use in pipes manufactured by it. It therefore acquired a shareholding in Grupo Aragonesas in 1986 which, at that time, ran a chemical business related to PVC and inorganic products. In 1992, Aragonesas Industrias y Energia, SA (‘Aragonesas’) was formed and belonged to the chemical products division of the Uralita group, which was in charge of the sodium chlorate business and was headed by the applicant. Until 1994, Aragonesas was a 100% subsidiary of the applicant. In December 1994, the applicant created a holding company called Energía e Industrias Aragonesas EIA, SA (‘EIA’), to which the entire chemical business of the Uralita group was transferred. Aragonesas thus became a wholly-owned subsidiary of EIA. Initially, the applicant held 98.84% of the shares in EIA, then, between 1 January 1995 and 31 December 2000, the applicant’s shareholding in EIA ranged from 49.44% to 50.71%. Between 1 January 2001 and 31 December 2001, that shareholding reached almost 84%. In 2003, following a merger, EIA was absorbed by the applicant and, consequently, ceased to exist in law. At the same time, the applicant acquired the full 100% shareholding which EIA held in Aragonesas. On 2 June 2005, the applicant sold its Chemical Division to Ercros Industrial, SAU, a division which comprised inter alia Aragonesas, Delsa, SA, Saldosa, SA, and Aiscondel, SA. On 22 December 2005, Aiscondel took control of Aragonesas and Delsa with effect from 1 January 2005 and the new legal entity took the name Aragonesas Industrias y Energía, SAU.

3 On 10 September 2004, the Commission of the European Communities (now ‘the European Commission’) sent requests for information concerning the sodium chlorate market in the EEA, pursuant to Article 18(2) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 [EC] and 82 [EC] (OJ 2003 L 1, p. 1), to several undertakings, including Aragonesas, which responded within the prescribed deadline.

4 On 8 February 2007, 20 April 2007 and 11 April 2008, the Commission sent the applicant requests for information pursuant to Article 18(2) of Regulation No 1/2003. The applicant complied with those requests on 21 March 2007, 4 May 2007 and 11 April 2008.

5 On 27 July 2007, the Commission adopted a statement of objections, addressed, inter alia, to Aragonesas Industrias y Energía and the applicant. The latter submitted its observations to the Commission within the prescribed deadline.

6 On 20 November 2007, the applicant exercised its right to be heard orally by the Commission.

7 On 11 June 2008, the Commission adopted Decision C(2008) 2626 final relating to a proceeding under Article 81 [EC] and Article 53 of the Agreement on the European Economic Area (‘EEA’) (Case COMP/38.695 – Sodium chlorate) (‘the contested decision’), and notified it to the applicant on 16 June 2008.

8 In the contested decision, the Commission finds, in substance, that EKA Chemicals AB, Finnish Chemicals Oy, Arkema France and Aragonesas participated in meetings and had contacts with a view to sharing markets by allocating their sales volumes and fixing prices for sodium chlorate in the EEA. In respect of Aragonesas, those anti-competitive practices took place from 16 December 1996 to 9 February 2000.

9 In recitals 416 to 426 and 455 to 468 of the contested decision, the Commission also considered, in substance, first, that the applicant had exercised influence over Aragonesas’ strategic orientation and general trading policy directly, and also indirectly via EIA. Second, the Commission concluded that, in the light (i) of the presumption that EIA exercised decisive influence over Aragonesas since it held all of its share capital at the time of the infringement and (ii) of the other factors set out in the contested decision, EIA had, at the very least, exercised decisive influence over Aragonesas’ conduct with the result that, as an entity which, together with Aragonesas, formed part of the undertaking which committed the infringement, EIA was liable for the unlawful conduct of that undertaking. Consequently, in so far as EIA was absorbed by the applicant in 2003 and the latter had become its successor, both in legal and economic terms, the Commission considered that, with that absorption, EIA’s liability for the unlawful conduct of the undertaking at issue had been transferred to the applicant.

10 Consequently, in recitals 469 and 487 to 489 of the contested decision, the Commission held Aragonesas and the applicant jointly and severally liable for the infringement committed from 16 December 1996 to 9 February 2000.

11 The Commission therefore concluded, in Article 1(g) and (h) of the contested decision, that Aragonesas and the applicant had infringed Article 81 EC and Article 53 of the EEA Agreement by participating, from 16 December 1996 to 9 February 2000, in a complex of agreements and concerted practices with a view to allocating sales volumes, fixing prices, exchanging commercially sensitive information on prices and sales volumes and monitoring the execution of the anti-competitive arrangements for sodium chlorate on the EEA market.

12 In Article 2(f) of the contested decision, the Commission imposed a fine of EUR 9 900 000 jointly and severally on Aragonesas and the applicant.

13 In Article 3 of the contested decision, the Commission ordered the undertakings listed in Article 1 of the contested decision, first, to bring to an end the infringement at issue, in so far as they had not already done so, and, second, to refrain from repeating any act or conduct described in Article 1 of the contested decision and from any act or conduct having the same or similar object or effect.

14 Article 4 of the contested decision lists the addressees of the contested decision, among which the applicant.

15 By application lodged at the Court Registry on 26 August 2008, the applicant brought the present action.

16 Acting upon a report of the Judge-Rapporteur, the Court (Second Chamber) decided to open the oral procedure and, by way of measures of organisation of procedure under Article 64 of its Rules of Procedure, requested the parties to lodge several documents. The parties complied with those requests within the prescribed deadline.

19 In support of its application for the annulment of the contested decision, the applicant raises two pleas, alleging, first, an error of law as regards imputing Aragonesas’ conduct to it by way of parent-subsidiary liability, namely by virtue of the decisive influence which it allegedly exercised over Aragonesas directly, or indirectly via EIA, and, second, an error of law as regards imputing Aragonesas’ conduct to it by virtue of the latter’s succession to the rights and obligations of EIA.

20 The Court notes, first of all, that the applicant stated, at the outset, that it did not wish to submit any observations on the accusations against Aragonesas. The applicant states that it does not hold any information on Aragonesas. It adds that its only intention, in the present case, is to challenge the contested decision in so far as the Commission wrongly imputes to it liability for Aragonesas’ unlawful conduct.

21 Next, it is apparent from the grounds of the contested decision (see paragraph 9 above) that the Commission imputed to the applicant liability for the unlawful conduct of the undertaking at issue and ordered it to pay the fine imposed as a result of that conduct on two grounds: (i) for having exercised decisive influence directly or indirectly over Aragonesas and, (ii) because of the legal and economic succession between the applicant and EIA.

22 It is not disputed that it is sufficient for one of the Commission’s grounds for the imputation of liability to the applicant to be founded to be able to conclude that the Commission rightly found, in Article 1(h) of the contested decision, that the applicant participated in the infringement at issue, and decided, in Article 2(g) of that decision, to impose a fine of EUR 9 900 000 jointly and severally on the applicant and Aragonesas Industrias y Energía. In that regard, the Court considers it appropriate, for reasons of economy of pleas and good administration of justice, to examine the merits of the applicant’s second plea first of all.

23 In relation to the second plea, the applicant submits, primarily and in the first place, that, in the contested decision, the Commission confused the criteria laid down in the case-law for imputing liability by way of succession with the criteria established for imputing liability to a parent company for the conduct of its subsidiary. It adds that it is wrong to combine those two causes for the imputation of liability as the Commission does in recital 426 of the contested decision. Moreover, it observes that, according to the case-law, the undertaking which must answer for the commission of the infringement is, in principle, the undertaking which committed it and that the imputation of liability by way of succession is possible only where the undertaking which committed the infringement has ceased to exist.

24 In the second place, the applicant submits that, if Aragonesas were to be found to be accountable for the commission of the infringement in question, the applicant cannot be held liable for the conduct of the undertaking at issue. Neither the applicant nor EIA committed the infringement at issue. As the Commission recognises in recital 426 of the contested decision, the infringement was committed solely by Aragonesas.

25 First, the applicant points out that, after EIA ceased to exist in law in 2003, Aragonesas continued to exist as an independent legal entity. The merger which took place in 2003 between the applicant and EIA did not result in the disappearance of Aragonesas. There is therefore no reason to hold the applicant liable, by way of succession to the obligations of EIA, for infringements allegedly committed by Aragonesas. Consequently, it is Aragonesas Industrias y Energía, the legal successor of Aragonesas, which should be held liable for the alleged infringement.

26 Second, the applicant takes the view that there is no reason why it should be subject to deterrence measures. It assumed responsibility for Aragonesas, as the alleged author of the infringement in question, only after that infringement had come to an end. Moreover, it sold Aragonesas to another undertaking. Thus, in so far as the applicant did not form part of the undertaking which committed the infringement and that undertaking has not ceased to exist, there is no room for the application of the succession rules.

27 In the third place, the applicant argues, in the alternative, that, even supposing that EIA was also involved in the commission of the infringement, it cannot be held liable for the unlawful conduct at issue.

28 First, the applicant takes the view that, on the basis of paragraph 237 of the judgment in Case T-6/89 Enichem Anic v Commission [1991] ECR-1623, at the time of the merger between the applicant and EIA in 2003, the physical and human elements which contributed to the commission of the infringement could be found in the independent legal entity Aragonesas. Thus, the applicant simply assumed the position of EIA, as the holding company for Aragonesas. Then, in 2005, the physical and human elements which contributed to the commission of the infringement were attached to the independent legal entity Aragonesas Industrias y Energía which resulted from the merger of the companies in the Aragonesas group. It is therefore Aragonesas Industrias y Energía which should be held liable for the unlawful conduct of Aragonesas and not EIA.

29 Second, the applicant adds that that approach would not bring about a situation in which liability for the infringement could not be imputed to any legal entity. As the entity directly involved in the commission of the infringement, namely Aragonesas, still exists, there is no need to investigate whether the applicant was a co-infringer.

30 Third, the disappearance of EIA did not result in the dilution of the deterrent effect of the sanctions which may be imposed. The business activities and the current turnover of Aragonesas, on which the calculation of the fine is based, are identical to those which EIA would have had if it still existed. Thus, economically speaking, the fine imposed on Aragonesas would be the same as that which EIA would have borne if it had not disappeared. Limiting imposition of the fine to Aragonesas would therefore fulfil the Commission’s policy of fining the entity at the highest level within the undertaking in order to guarantee a deterrent effect.

32 As is apparent from the applicant’s arguments set out in paragraphs 20 to 30 above, the second plea is based primarily on the claim that the applicant was held liable, by virtue of succession, solely for the conduct of Aragonesas that contributed to the commission of the infringement at issue and, in the alternative, on the claim that liability was imputed to the applicant, again by virtue of succession, for the conduct of EIA and Aragonesas which contributed to the commission of that infringement.

33 In the first place, the Court notes that the applicant wrongly claims, as its main plea, that the liability imputed to it by virtue of succession resulted purely from the unlawful conduct of Aragonesas. It is clear from the contested decision (see paragraph 9 above) that liability was imputed on the basis of the conduct of the undertaking, within the meaning of Article 81 EC, which committed the infringement in question, and not on the basis of the conduct of Aragonesas as a legal entity.

34 It must be observed in that regard that European Union competition law refers to the activities of undertakings (Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P Aalborg Portland and Others v Commission [2004] ECR I-123, paragraph 59, and Case C-97/08 P Akzo Nobel and Others v Commission [2009] ECR I-8237, paragraph 54) and that the concept of an undertaking covers any entity engaged in an economic activity, irrespective of its legal status and the way in which it is financed (Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I-5425, paragraph 112; Case C-222/04 Cassa di Risparmio di Firenze and Others [2006] ECR I-289, paragraph 107; and Case C-205/03 P FENIN v Commission [2006] ECR I-6295, paragraph 25).

35 The Courts of the European Union have also stated that the term undertaking, within the meaning of Article 81 EC, must be understood as designating an economic unit for the purpose of the subject-matter of the infringement in question (see, to that effect, Case 170/83 Hydrotherm Gerätebau [1984] ECR 2999, paragraph 11; Case T-234/95 DSG v Commission [2000] ECR II-2603, paragraph 124; and Case T-325/01 DaimlerChrysler v Commission [2005] ECR II-3319, paragraph 85). In prohibiting undertakings inter alia from entering into agreements or participating in concerted practices which may affect trade between Member States and have as their object or effect the prevention, restriction or distortion of competition within the common market, Article 81(1) EC is aimed at economic units, each of which consists of a unitary organisation of human, tangible and intangible elements which pursues a specific economic aim on a long-term basis and can contribute to the commission of an infringement of the kind referred to in that provision (see, to that effect, Enichem Anic v Commission, paragraph 28 above, paragraph 235, and Case T-11/89 Shell v Commission [1992] ECR II-757, paragraph 311).

36 In order to be applied and enforced, decisions taken pursuant to Article 81 EC must, however, be addressed to entities possessing legal personality (see, to that effect, Joined Cases T-305/94 to T-307/94, T-313/94 to T-316/94, T-318/94, T-325/94, T-328/94, T-329/94 and T-335/94 Limburgse Vinyl Maatschappij and Others v Commission (‘PVC II’) [1999] ECR II-931, paragraph 978, and Case T-112/05 Akzo Nobel and Others v Commission [2007] ECR II-5049, paragraph 59). Thus, when the Commission adopts a decision pursuant to Article 81(1) EC, it must identify the natural or legal person or persons who can be held responsible for the conduct of the relevant undertaking and can be penalised for that conduct, and the decision will be addressed to them (see, to that effect, Hydrotherm Gerätebau, paragraph 35 above, paragraph 11).

37 In that regard, for the purposes of the application of competition law, the formal separation between two companies, resulting from their separate legal personality is not decisive, since the essential element is whether or not there is unity in their conduct on the market (see, to that effect, Case 48/69 ICI v Commission [1972] ECR 619, paragraph 140). Thus, it may be necessary to establish whether two companies that have distinct legal identities form, or fall within, one and the same undertaking, considered as an economic entity adopting the same course of conduct on the market (DaimlerChrysler v Commission, paragraph 35 above, paragraph 85).

38 It is settled case-law that the conduct of a subsidiary may be imputed to the parent company in particular where, although having a separate legal personality, that subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company (ICI v Commission, paragraph 37 above, paragraphs 132 and 133; Akzo Nobel and Others v Commission, paragraph 34 above, paragraph 58; and PVC II, paragraph 36 above, paragraph 960).

39 In such a situation, the parent company and its subsidiary form a single economic unit and therefore form a single undertaking for the purposes of the case-law mentioned in paragraphs 34 and 35 above. Thus, the fact that a parent company and its subsidiary constitute a single undertaking within the meaning of Article 81 EC enables the Commission to address a decision imposing fines to the parent company, without having to establish the personal involvement of the latter in the infringement (Akzo Nobel and Others v Commission, paragraph 34 above, paragraph 59).

40 In that context, it is, in principle, for the Commission to demonstrate that the parent company in fact exercised a decisive influence over its subsidiary’s conduct on the market on the basis of factual evidence, including, in particular, any management power which the parent company exerted over its subsidiary (see Case T-314/01 Avebe v Commission [2006] ECR II-3085, paragraph 136 and the case-law cited).

41 However, it is settled case-law that, in the specific case where a parent company has a 100% shareholding in a subsidiary which has participated in the infringement of the competition rules of the European Union, first, the parent company can exercise a decisive influence over the conduct of the subsidiary and, second, there is a rebuttable presumption that the parent company does in fact exercise such a decisive influence. In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to assume that the parent exercises a decisive influence over the commercial policy of the subsidiary. The Commission will then be able to hold the parent company liable, jointly and severally with its subsidiary, for the conduct of the undertaking which infringed the competition rules and for payment of the fine, unless the parent company, which has the burden of rebutting that presumption, provides sufficient evidence to show that its subsidiary acts autonomously on the market (see, to that effect, Akzo Nobel and Others v Commission, paragraph 34 above, paragraphs 60, 61 and 77 and the case-law cited; see also, to that effect, Akzo Nobel v Commission, paragraph 36 above, paragraphs 82 and 83 and the case-law cited).

42 That case-law is applicable, by analogy, to Article 53(1) of the EEA Agreement.

43 In the present case, it is not disputed that, throughout the period of the infringement, Aragonesas was wholly owned by EIA. It is clear from the contested decision, and in particular recitals 426 and 468 thereof, that, in the light of that fact, the Commission considered, in accordance with the case-law set out in paragraph 40 above, that it could assume that EIA exercised decisive influence over the conduct of Aragonesas and that, consequently, EIA, in its capacity as the parent company of Aragonesas, and Aragonesas in its capacity as a subsidiary of EIA, together formed an economic unit for the purposes of Article 81 EC (see, inter alia, recitals 367 to 371, 425, 426, 434 and 456 of the contested decision).

44 Moreover, the Court notes that the Commission did not rely exclusively on the presumption laid down in the case-law (see paragraphs 40 and 43 above) to show that EIA did in fact exercise decisive influence over Aragonesas’ commercial policy, but that it also, by way of precaution, took account of other facts with a view to confirming that decisive influence was indeed exercised.

45 Accordingly, in recital 425 of the contested decision, it found that, first, EIA was a company with strategic and operational responsibilities, with its own management team, commercial department and chief production officer, as well as its own legal and financial services, human resources and controlling departments. Second, it reiterated the wording of the applicant’s statements, during the administrative procedure, as regards EIA’s board of directors, according to which, that board ‘discuss[ed] commercial and industrial issues when dealing with the management report and strategic plan; these documents required EIA’s final approval “based on the general policy of EIA”’.

46 It follows from the findings made by the Commission in the contested decision, as set out in paragraphs 43 to 45 above, that, as a result of the legal and economic ties between EIA and Aragonesas, which enabled the former to exercise decisive influence over the latter by determining its conduct on the market, it held EIA personally liable for the commission of the infringement at issue.

47 In addition, although, as is apparent from recital 449 of the contested decision, the applicant affirmed in its response to the statement of objections that neither it nor EIA was in a position to exercise control over Aragonesas such as to prevent the infringements committed by the undertaking at issue, the evidence which it furnished in support of that claim primarily concerned the lack of its actual control over Aragonesas or EIA. Thus that evidence served only to show that, inasmuch as the applicant did not exercise direct decisive influence, or indirect influence via EIA, over Aragonesas, the Commission was not able to impute the unlawful conduct of the relevant undertaking to it on that basis.

48 On the other hand, as regards the imputation of that unlawful conduct on the basis of the applicant’s succession to the rights and obligations of EIA, which is essentially what the applicant is challenging in the context of its second plea and which is being examined by the Court at this point, the Court notes that, in its response to the statement of objections (see recitals 452 and 453 of the contested decision), the applicant merely affirmed that neither EIA’s board of directors nor that of Aragonesas was involved in the commercial decision-making process for individual product lines. It also stated that neither EIA’s nor Aragonesas’ senior management controlled the latter’s commercial policy in relation to sodium chlorate, which was determined by Mr A., the sales director of the ‘Oxydants’ division of Aragonesas, in charge of sodium chlorate sales, for which Mr A. enjoyed wide discretion.

49 However, the Court notes first of all that the applicant did not produce any evidence, either in its observations in response to the statement of objections or in its pleadings lodged in the context of this action, to support that claim. Next, the Court finds that, as is apparent from paragraph 2 above, EIA, when created in 1994, had the whole of the Uralita group’s chemical business transferred to it and, in particular, the sodium chlorate business, grouped together within its subsidiary Aragonesas, in which it held all the share capital. Finally, as the Commission rightly stated in the contested decision (see paragraph 45 above), which the applicant has not succeeded in disproving, EIA had an organisational structure in place (see paragraph 45 above) which enabled it to ensure performance of the strategic and operational responsibilities for the business of which it was in charge.

50 Consequently, in spite of the applicant’s claims set out in paragraph 48 above, and in the light of the findings in paragraph 49 above, the applicant has not shown that Aragonesas determined its strategy on the sodium chlorate market independently of EIA. Consequently, it has not rebutted the presumption relied on by the Commission in the statement of objections and maintained in the contested decision that EIA exercised decisive influence over Aragonesas.

51 The Court therefore concludes, in the light of the case-law cited in paragraphs 34 and 36 above, that the Commission was right, first, to consider that the human, tangible and intangible elements of EIA and Aragonesas together constituted a single economic entity and, thus, an undertaking within the meaning of Article 81 EC and, second, identified EIA and Aragonesas as two legal persons which (i) had to be held liable for the conduct of the undertaking which committed the infringement at issue and (ii) could be held jointly and severally liable in that regard. Therefore, as noted in paragraph 33 above, the applicant wrongly bases its second plea primarily on the claim that it was held liable solely on the basis of Aragonesas’ conduct which contributed to the commission of the infringement at issue. It is thus only necessary to examine the second plea in so far as the applicant submits, in the alternative, that, even supposing that EIA was also involved in the commission of the infringement, it cannot be held liable for the unlawful conduct at issue on the basis of liability by way of succession.

52 In the second place, it must be examined whether the Commission was entitled, after EIA had been absorbed by the applicant, to impute to the applicant the liability of EIA, as the legal person stated in the decision to be responsible, together with Aragonesas, for the conduct of the undertaking which committed the infringement at issue.

53 The Court notes, at the outset, that, contrary to what the applicant claims in its pleadings, it is not apparent from the contested decision that, in order to impute liability to the applicant for EIA’s conduct after it had been absorbed by the applicant, the Commission held the applicant liable just for Aragonesas’ conduct which contributed to the commission of the infringement at issue (see paragraph 24 above) and that only Aragonesas was regarded as the perpetrator of that infringement (see paragraph 26 above). First, as noted in paragraph 51 above, in the contested decision the Commission identified EIA and Aragonesas as the two legal persons which had to be held liable for the conduct of the undertaking, within the meaning of Article 81 EC, which committed the infringement at issue. Second, it is apparent from that decision (see paragraph 9 above) that the Commission considered only that, since EIA had been absorbed by the applicant in 2003, as a result of which EIA ceased to exist in law, and since the applicant had become its legal successor, EIA’s liability for the unlawful conduct of the relevant undertaking was transferred to the applicant.

54 In accordance with the case-law cited in paragraph 36 above, when the Commission adopts a decision pursuant to Article 81(1) EC, it must identify the natural or legal person or persons who can be held responsible for the conduct of the relevant undertaking.

55 In that regard, the Court notes, first, that when such an entity infringes the competition rules, it falls, according to the principle of personal responsibility, to that entity to answer for that infringement (see, to that effect, Case C-49/92 P Commission v Anic Partecipazioni [1999] ECR I-4125, paragraph 145, and Case C-279/98 P Cascades v Commission [2000] ECR I-9693, paragraph 78).

56 As to the circumstances in which an entity that has not participated in the commission of the infringement can nevertheless be penalised for that infringement, it must be noted that they include a situation in which the entity that has committed the infringement has ceased to exist in law (see, to that effect, Commission v Anic Partecipazioni, paragraph 55 above, paragraph 145).

57 Next, it must be noted that if no possibility of imposing a penalty on an entity other than the one which committed the infringement were foreseen, undertakings could escape penalties by simply changing their identity through restructurings, sales or other legal or organisational changes. This would jeopardise the objective of suppressing conduct that infringes the competition rules and preventing its reoccurrence by means of deterrent penalties (see, to that effect, Case 41/69 ACF Chemiefarma v Commission [1970] ECR 661, paragraph 173; Case C-289/04 P Showa Denko v Commission [2006] ECR I-5859, paragraph 61; and Case C-76/06 P Britannia Alloys & Chemicals v Commission [2007] ECR I-4405, paragraph 22).

58 Second, according to settled case-law, the conduct of a subsidiary with a separate legal personality may be imputed to the parent company in particular where that subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company (see, to that effect, ICI v Commission, paragraph 37 above, paragraphs 132 and 133; Case C-294/98 P Metsä-Serla and Others v Commission [2000] ECR I-10065, paragraph 27; Case C-196/99 P Aristrain v Commission [2003] ECR I-11005, paragraph 96; and PVC II, paragraph 36 above, paragraph 960).

59 That possibility of imputing a subsidiary’s unlawful conduct to its parent company and of imposing a penalty on the parent company for that conduct does not in itself, however, preclude that the subsidiary itself will have its own conduct imputed to it and itself be penalised for that conduct on that basis (see, to that effect, Joined Cases T-259/02 to T-264/02 and T-271/02 Raiffeisen Zentralbank Österreich AG and Others v Commission [2006] ECR II-5169, paragraph 331). That choice is also available to the Commission where there is a change in control of the parent company at the time the infringement is committed, but also thereafter (see, to that effect, Raiffeisen Zentralbank Österreich and Others v Commission, paragraph 332).

60 It is apparent from that case-law that, where there are several natural or legal persons, such as, in this case, a parent company and a subsidiary, which may be held liable for the unlawful conduct of the relevant undertaking, the Commission is free to choose to impute the conduct to one of them or each of them at the same time.

61 Third, it must indeed be held that, given the nature of the infringements in question and the nature and degree of severity of the ensuing penalties, responsibility for committing those infringements is personal in nature, and a person, whether natural or legal, must be penalised only for acts imputed to it individually. In accordance with that principle, the Commission may not impute to the purchaser of a legal entity liability for that entity’s conduct prior to the purchase, such liability having to be imputed to the company itself where that company still exists (see Raiffeisen Zentralbank Österreich and Others v Commission, paragraph 59 above, paragraph 333 and the case-law cited).

62 It is not, however, incompatible with that principle to impute to a former parent company liability for its own conduct even if that means, where that parent company has ceased to exist as a legal person after the infringement was committed, that the penalty is imposed on the purchaser, who is unconnected with the infringement (see, to that effect, Raiffeisen Zentralbank Österreich and Others v Commission, paragraph 59 above, paragraph 334).

63 In the present case, it is not disputed, first, that, with the merger by way of absorption in 2003, the applicant acquired all of EIA’s share capital and that, second, that transaction took place after the undertaking terminated its participation in the infringement at issue. It is also not disputed that (i) following that merger by way of absorption EIA ceased to exist as a legal person and the applicant was its legal successor and (ii) that succession occurred prior to the adoption of the contested decision on 11 June 2008.

64 As has been concluded in paragraph 51 above, EIA was responsible, as legal person and on the same basis as Aragonesas, for the unlawful conduct of the undertaking at issue and, therefore, was held personally liable for the actions of that undertaking which infringed European Union law.

65 Consequently, in so far as EIA, as the former parent company of Aragonesas, ceased to exist in law, the Court finds that, following the merger by way of absorption which took place in 2003, the applicant, as EIA’s legal successor, assumed EIA’s liability for the conduct of the undertaking (within the meaning of Article 81 EC) which committed the infringement at issue.

66 As a result, contrary to what the applicant submits, the fact that, on 2 June 2005, the applicant sold to Ercros Industrial its chemical products division, which included Aragonesas, cannot discharge its obligation to answer for the conduct of EIA, and, in particular, its liability for the actions of the undertaking (within the meaning of Article 81 EC) which committed the infringement at issue, an obligation which it acquired from the moment it absorbed EIA. The applicant’s claim in that regard is, first, based on a purely economic classification of the succession which took place on its acquisition of EIA’s shares and, second, disregards the principle of personal responsibility which, as is apparent from the case-law set out in paragraph 55 above, prevails when the Commission adopts a decision pursuant to Article 81(1) EC.

67 Inasmuch as the succession between the applicant and EIA led to the total absorption of EIA’s assets and liabilities by the applicant and to the disappearance of EIA, the applicant, as legal person, ensured legal continuity of the rights and obligations of EIA.

68 Therefore, the applicant wrongly relies, inter alia, on the arguments set out in paragraph 237 of Enichem Anic v Commission, cited in paragraph 28 above, to argue that the Commission should have, first, found the combination of physical and personal elements which contributed to the commission of the infringement in order then to identify the person who had become responsible for their operation. As is clear from paragraph 145 of Commission v Anic Partecipazioni, cited paragraph 55 above, delivered in the context of an appeal brought against the judgment in Enichem Anic v Commission, cited in paragraph 28 above, such a two-stage examination is required only where the test of economic continuity between two persons is applied and not, as in this case, that of personal responsibility, to which the principle of legal continuity is closely linked.

69 For the sake of completeness, even supposing that, as the applicant submits, it is necessary to find the combination of elements which led to the commission of the infringement and then to identify, following the disappearance of EIA, the person who had become responsible for their operation, it would have to be found that the applicant remains liable for EIA’s conduct on the basis of the infringement committed by the relevant undertaking.

70 First, as the Court has noted in paragraph 51 above, that undertaking grouped together the personal, tangible and intangible elements of two separate legal entities, namely EIA and Aragonesas.

71 Second, EIA’s means, at least its personal and intangible resources, and, in particular, as the Commission found in the contested decision (see paragraph 44 above), EIA’s administrative and commercial managerial structure (board of directors, audit committee etc), which enabled it, as a parent company holding the entire share capital of Aragonesas, to contribute to the commission of the infringement at issue, in particular, by determining the commercial policies and taking the strategic decisions of Aragonesas, were transferred to the applicant when it acquired EIA’s entire share capital in 2003. In that regard, the Court finds that there is no evidence, either in the file or the contested decision, of the transfer alleged by the applicant of tangible, intangible and human elements from EIA to Aragonesas when EIA ceased to exist following its absorption by the applicant.

72 By contrast, as the applicant itself submits, the tangible, human and intangible elements of Aragonesas which enabled it to contribute to the commission of the infringement at issue remained within Aragonesas.

73 Consequently, even supposing that, as the applicant submits, the sale, in 2005, of all the shares which it held in Aragonesas to a third person could have led to a transfer of tangible, intangible and human elements which contributed to the commission of the infringement at issue, not all of the tangible, human and intangible elements which had contributed to the commission of the infringement by the relevant undertaking could have been transferred, but only those which remained within Aragonesas once EIA had ceased to exist.

74 Moreover, the Court points out that the applicant’s claim is even less tenable inasmuch as it amounts to considering that, following the absorption of EIA by the applicant and prior to being fully sold by the applicant to a third person, Aragonesas recovered all of the tangible, human and intangible elements of its former parent company, EIA, with the result that Aragonesas could, from that point on, be held liable for the unlawful conduct of the undertaking at issue.

75 Even if that proposition were accepted, it would enable the legal successor of EIA, and thus of the entity which actually exercised decisive influence over Aragonesas at the time the infringement was committed, to escape penalty merely because EIA ceased to exist in law following its absorption by the applicant. As noted in paragraph 57 above, that would jeopardise the objective of suppressing conduct contrary to the European Union competition rules and preventing its reoccurrence by means of deterrent penalties.

76 Consequently, the Commission was right to impute to the applicant, as the successor of EIA, liability for the unlawful conduct of EIA in the commission of the infringement at issue.

77 It follows from all of the foregoing considerations that the applicant’s second plea must be rejected as unfounded and, therefore, there being no need to examine the first plea, the action must be dismissed in its entirety.

78 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the applicant has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the Commission.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Uralita v Commission (Competition) [2011] EUECJ T-349/08 (25 October 2011) URL: http://www.bailii.org/eu/cases/EUECJ/2011/T34908.html Cite as: [2011] EUECJ T-349/08, [2011] EUECJ T-349/8

Court of Justice of the European Communities (including Court of First Instance Decisions)