UPM-Kymmene v Commission (Competition) [2012] EUECJ T-53/06 (06 March 2012)

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(Competition - Agreements, decisions and concerted practices - Plastic industrial bags sector - Decision finding an infringement of Article 81 EC - Duration of the infringement - Single and continuous infringement - Fines - Gravity of the infringement - Mitigating circumstances - Undertaking playing a passive role - Proportionality)

1 The company Saint Frères Emballages was formed in 1989 and was purchased in its entirety, in December 1989, by the Finnish company W. Rosenlew Ab ('Rosenlew'). Until 1991, Rosenlew was wholly owned by Rauma-Repola Corporation. From 1991 to 1995, Rosenlew was jointly owned by Repola Corporation (75%) and Neste Oy (25%). In 1995 Repola Corporation purchased all the remaining shares. In 1996, following the merger of Repola and Kymmene to form the applicant, UPM-Kymmene Oyj, Rosenlew was merged with UPM-Kymmene. On 25 November 1996, Rosenlew thus became a 99%-owned subsidiary of UPM-Kymmene Groupe, a holding company which is, in turn, a 99%-owned subsidiary of the group's parent company, that is, the applicant.

2 In 1996, the company name Saint Frères Emballages was changed to Rosenlew Saint-Frères Emballage SA ('RSFE'). In December 2000, the applicant sold Rosenlew's industrial bags business to RKW AG Rheinische Kunststoffwerke and JM Gesellschaft für industrielle Beteiligungen mbH. Co. KGaA ('RKW'). RSFE was wound up on 14 May 2004.

3 In November 2001, British Polythene Industries plc informed the Commission of the European Communities of the existence of a cartel in the industrial bags sector. It expressed the wish to cooperate with the Commission under the Commission Notice on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4, 'the Leniency Notice').

4 On 26 and 27 June 2002, the Commission carried out investigations into 13 undertakings pursuant to Article 14(2) and (3) of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition, 1959-62, p. 87).

5 On 29 April 2004, the Commission initiated the administrative procedure and adopted a statement of objections, on which the addressees were given an opportunity to make known their views.

6 The companies concerned were heard by the Commission at hearings held from 26 to 28 July 2004.

7 On 30 November 2005, the Commission adopted Decision C(2005) 4634 final relating to a proceeding pursuant to Article 81 [EC] (Case COMP/F/38.354 - Industrial bags) (the 'contested decision') Since RSFE had been wound up on 14 May 2004, before the end of the administrative procedure, the decision was notified solely to the applicant, on 15 December 2005.

8 Article 1(1)(l) of the contested decision states that, from 18 July 1994 until 31 January 1999, the applicant infringed Article 81 EC by participating in a complex of agreements and concerted practices in the plastic industrial bags sector in Germany, Belgium, Spain, France, Luxembourg and the Netherlands, consisting in the fixing of prices and the establishment of common price calculation models, the sharing of markets and the allocation of sales quotas, the assignment of customers, deals and orders, concerted bidding in response to certain invitations to tender and the exchange of individualised information.

9 Point (j) of the first paragraph of Article 2 of the contested decision imposes a fine of EUR 56.55 million on the applicant.

10 By application lodged at the Court Registry on 21 February 2006, the applicant brought the present action.

11 At the hearing, the applicant clarified the scope of its application, withdrawing a number of its complaints.

14 The applicant puts forward three pleas in law, alleging that errors of fact were made in the application of Article 81 EC, that the fine was excessive and that the rights of the defence were infringed.

15 At the hearing, the applicant withdrew the final plea. It informed the Court that it was also withdrawing the part of its first plea relating to the date of termination of the infringement, that being recorded in the minutes of the hearing.

16 Following consideration of the admissibility of certain of the heads of claim put forward by the applicant, the first and second pleas will be examined in turn.

17 In the context of its third head of claim, the applicant requests that the Court order reimbursement of the unduly paid portion of the fine, together with interest.

18 It is sufficient to note that that request in actual fact relates to enforcement of the judgment and that it is for the Commission to take the necessary steps to comply with the judgment, in accordance with Article 266 TFEU (Joined Cases T-25/95, T-26/95, T-30/95 to T-32/95, T-34/95 to T-39/95, T-42/95 to T-46/95, T-48/95, T-50/95 to T-65/95, T-68/95 to T-71/95, T-87/95, T-88/95, T-103/95 and T-104/95 Cimenteries CBR and Others v Commission [2000] ECR II-491, paragraph 5118). That request is therefore inadmissible.

19 It is stated in recital 443 of the contested decision that the conduct of all of the undertakings to which the decision was addressed, other than Stempher, constitutes a single and continuous infringement, inasmuch as they have all taken part to varying degrees in the meetings of Valveplast or those of one or more of its sub-groups.

20 So far as RSFE is concerned, its participation in that single and continuous infringement concerned three aspects of the cartel.

21 First, the Commission found that RSFE had taken part in Valveplast meetings in 1994, 1997 and 1998. In fact, the Commission found that Mr M., the managing director of RSFE, had attended a Valveplast meeting on 20 December 1994. It relied, in that regard, (i) on the notes taken by Mr H. during that meeting (pp. 17113 and 17114 of the administrative file) and on his statements on that matter (p. 26264 of the administrative file), (ii) on the minutes of the Valveplast meetings of 24 June and 21 September 1994, during which the principle of RSFE's membership was discussed and accepted (see pp. 12285 to 12293 of the administrative file), and (iii) on Mr H.'s handwritten notes referring to RSFE's participation in the quotas (p. 17156 of the administrative file) (see recital 454 of the contested decision).

22 The Commission also stated that Mr M., together with Mr T., the Chairman of Rosenlew, and Mr H., Rosenlew's commercial manager for continental Europe, had attended a number of Valveplast meetings in 1997 and 1998 (see recital 454 of the contested decision). Indeed, it can be seen from Annex 1 to the contested decision that, between 21 November 1997 and 26 November 1998, RSFE attended four Valveplast meetings.

23 Second, the Commission considered that RSFE had been involved in the operation of the 'block bags' sub-group from 18 July 1994. First, Mr H. reported RSFE as having usually attended the meetings of that sub-group. The Commission then found that RSFE was mentioned on customer allocation lists drawn up for the various geographic block-bags markets during and after the meeting on 18 July 1994. Although RSFE did not attend that meeting, the fact that it is included on those customer allocation lists proves, in the Commission's view, that it was impossible for RSFE not to have known the overall scope of the cartel of which the meeting, which it had been invited to attend, formed part. The Commission found that RSFE's participation in the cartel, from 18 July 1994, was evidenced by the notes taken during the Valveplast meeting on 20 December 1994, during which RSFE indicated its agreement to taking part in the cartel (see recitals 400, 456 and 457 of the contested decision).

24 Third, the Commission stated that RSFE had acknowledged that it had participated, from 1995 at least, in the part of the 'France' sub-group concerning open-mouth bags. The Commission also found that it had taken part in the arrangements for allocating customers and fixing prices for open mouth bags, for the coordination of which it was responsible, and that it had participated in the arrangements for the regular exchange of individualised information on sales volumes and market shares of the various members (see recital 455 of the contested decision).

25 In recitals 558 and 571 of the contested decision, the Commission thus held that RSFE had participated in the cartel from 18 July 1994, the date of the first meeting dealing with block bags, until 31 January 1999. The date of termination of the infringement is founded on a document relating to the 'France' sub-group which contains information on prices and orders for January 1999, the Commission having taken the view that, although it was not possible to establish the exact date of the last times contact was made concerning the cartel arrangements, it could not, in any event, have been earlier than 31 January 1999.

26 The arguments raised by the applicant in its first plea seek, in essence, to establish that the Commission's finding on the duration of the applicant's involvement in the single and continuous infringement within the framework of Valveplast is incorrect. In the first place, the applicant denies that the Commission has provided sufficient proof to establish that it participated in certain aspects of the cartel. Thus, in the applicant's view, RSFE did not participate in Valveplast prior to officially becoming a member of that association on 21 November 1997, and RSFE never participated in the 'block bags' sub-group. In the second place, the applicant challenges the links established by the Commission between the France sub-group and Valveplast. Thus, merely because it participated in the 'France' sub-group between 10 October 1995 and 31 January 1999 - which it does not dispute - it cannot be held liable with regard to the single and continuous infringement committed within the framework of Valveplast. As a consequence, the applicant acknowledges that it participated in the latter infringement only in respect of its actual participation in Valveplast, that is to say, between 21 November 1997 and 26 November 1998.

2. Whether the Commission has established RSFE's participation in various aspects of the infringement

28 As a preliminary point, the Court recalls that, as regards proof of an infringement of Article 81(1) EC, the Commission must prove the infringements which it has found and adduce evidence capable of demonstrating to the required legal standard the existence of circumstances constituting an infringement (Case C-185/95 P Baustahlgewebe v Commission [1998] ECR I-8417, paragraph 58, and Case C-49/92 P Commission v Anic Partecipazioni [1999] ECR I-4125, paragraph 86). Any doubt in the mind of the Court must operate to the advantage of the undertaking to which the decision finding an infringement was addressed. The Court cannot therefore conclude that the Commission has established the infringement at issue to the required legal standard if it still entertains any doubts on that point, in particular in proceedings for annulment of a decision imposing a fine. The Commission must produce sufficiently precise and consistent evidence to support the firm conviction that the alleged infringement took place (Case T-38/02 Groupe Danone v Commission [2005] ECR II-4407, paragraphs 215 and 217).

29 The applicant denies that RSFE participated in Valveplast before it officially became a member on 21 November 1997. It admits, however, that it participated in Valveplast between 21 November 1997 and 26 November 1998.

30 The hand-written notes taken by Mr H. at the meeting on 26 June 1993 and the minutes of the meeting of 22 September 1993 show that the Valveplast members had foreseen the advantages that would be represented by RSFE's joining the cartel but that RSFE had made it known that it did not wish to join it. The minutes of the meeting of 22 September 1993 include, inter alia, the following: 'Rosenlew/St. Frères: ... Rosenlew has made clear that they do not have the ambition to join Valveplast. They consider joining Valveplast hardly contributes to their business'.

31 Moreover, according to Mr H.'s explanation of his handwritten notes taken during a Valveplast meeting held in Athens (Greece) on 24 June 1994, it was noted by the participants at that meeting that RSFE's prices were in general 15% to 20% lower than the prices of Valveplast members.

32 Next, it can be seen from the minutes of the meeting on 20 December 1994 that RSFE was not included on the list of participants. Under the second heading, entitled 'New Valveplast membership', it is stated that a working group will study 'the Rosenlew case'.

33 On the basis of the handwritten notes taken by Mr H. during that meeting, as they are explained by his statements, the Commission found that RSFE had been represented at that meeting by its managing director, Mr M., who had been invited although RSFE was not at that time a member of Valveplast. According to those handwritten notes, Mr M. on that occasion provided figures concerning RSFE's sales on various national markets and in Europe. Again according to the notes, RSFE also informed the meeting (i) that it would not accept a quota (ii) that it was prepared to negotiate and exchange information on prices, (iii) that it was prepared to sell capacity in valve bags and (iv) that it had production capacity in film of 26 000 to 30 000 tonnes.

34 In that regard, the Court observes that the establishment of a quota system for valve bags was one of the basic features of the cartel implemented within the framework of Valveplast (see recitals 208 and 209 of the contested decision). By refusing to participate in that system, RSFE thus showed that it was not in agreement with one of the fundamental principles of the cartel. It must also be pointed out that RSFE in fact intended to sell its valve-bag business and that it therefore had no interest in joining an association whose activity concerned, in 1994, essentially that type of bag.

35 It can then be seen from Annex 1 to the contested decision that RSFE was neither present at, nor marked as absent from, any of the following 11 Valveplast meetings that preceded the meeting on 21 November 1997, which it is not disputed that RSFE attended. Indeed, it was only from that date that RSFE began to take part, as regards FFS ('Form, Fill and Seal') bags, in the exchange of information on which a large part of the collusion within Valveplast was based, as is clear from the letter of 24 November 1997 from the President of Valveplast to Bureau Haas.

36 It thus follows from the foregoing that there was contact between RSFE and the members of Valveplast on the occasion of the meeting on 20 December 1994. However, it is clear from the documents before the Court that that exchange was exploratory in nature and did not result in RSFE immediately joining Valveplast. In fact, RSFE became a member of Valveplast only on 21 November 1997, that is to say, 2 years and 11 months later.

37 It should none the less be made clear that that conclusion does not mean that RSFE is not liable for the single and continuous infringement committed by the Valveplast members as a result of its involvement in other manifestations of the cartel and, in particular, in the meetings of the France sub-group (see paragraphs 56 to 66 below).

39 In that regard, the Court notes that, according to Annex 6 to the contested decision, RSFE did not attend any meetings of the 'block bags' sub-group.

40 Thus, the minutes of the first meeting dealing with block bags, held on 18 July 1994, show that RSFE's representatives were recorded as absent. According to the minutes, Wavin's representative was to approach the undertakings that were not present at that meeting with a view to them joining the 'block bags' sub-group.

41 The minutes of the meeting of 21 September 1994 also indicate: 'Notable absentee: St. Frères'. The author of that document, Mr D. of Fardem, was also sceptical about the results of the negotiations that Nordenia was supposed to enter into with RSFE ('Nordenia zal met St-Frères moeten onderhandelen. Ik verwacht hier weinig van' 'Nordenia will have to negotiate with St-Frères. I don't expect much from it'). Furthermore, it is clear from point 6 of the handwritten notes taken by Mr H. at the Valveplast meeting on 20 December 1994 that he was supposed to take action in order to secure RSFE's attendance at a meeting of the 'block bags' subgroup that was to take place the following January or February. However, it is clear from Annex 6 to the contested decision that RSFE was not present at the next meeting of the sub-group, which was held on 29 March 1995. Similarly, although RSFE was invited, by a fax of 20 April 1995, to attend the meeting on 26 April 1995, the minutes of that meeting show that it was not present at the meeting. It should also be noted that RSFE is not mentioned on the attendance list in the handwritten notes taken during the meeting of 12 December 1995, found at Fardem's premises, although those notes include the following comment: 'St. Frères also states that it is ready to cooperate to a greater degree' ('Ook St. Frères verklaard zich bereid om mee te werken aan een beter niveau').

42 It is thus clear from those documents that the members of the 'block bags' sub-group had approached RSFE with a view to it taking part in the sub-group's activity. Although RSFE does not seem to have clearly turned down the repeated invitations to attend the sub-group meetings, overall that evidence shows that it refrained from participating in the meetings - something which seems to have caused some disappointment on the part of the sub-group's members, as is shown by the entry 'Notable absentee: St. Frères' in the minutes of the meeting of 21 September 1994.

43 Despite the documentary evidence indicating that RSFE did not attend the meetings, it is clear from recital 400 of the contested decision and footnote 490 thereto that Mr H. had stated that RSFE usually attended meetings dedicated to block bags. However, Mr H.'s statements to that effect are not corroborated by documentary evidence and have not been taken up by the Commission, inasmuch as Annex 6 to the contested decision makes clear that RSFE was not present at any meetings of the 'block bags' sub-group (see paragraph 39 above).

44 In order to find that RSFE was involved in the 'block bags' sub-group, the Commission relied instead on a customer list containing the 'European Account Leadership - list as per 1 August 1994' (pp. 7830 to 7831 of the administrative file, referred to in footnote 491 to the contested decision). RSFE's name appears on that list after the names of several customers. The same is true of other lists dating from the same period, such as a list dated 16 May 1994, in which the initials of the names of manufacturers are noted in handwriting in the margin (pp. 7841 to 7851 of the administrative file, referred to in footnote 507 to the contested decision), and the lists drawn up by Mr D. of Fardem on 20 and 21 July 1994 (pp. 7832 to 7836 of the administrative file, referred to in footnote 491 to the contested decision).

45 It should be noted, in that regard, that the mere fact that those customer lists show RSFE as a customer supplier or coordinator does not establish that it took part in cartel arrangements intended to share customers in the block bags sector. Those lists must be placed in the context of the time when they were established. The lists in question date from a preparatory period, in which the Valveplast members decided to set up a special group for block bags (see recital 457 of the contested decision) and to approach RSFE with a view to it taking part. It is apparent from the minutes of the meetings at that time (see the minutes of the meetings of the 'block bags' sub-group on 18 July and 21 September 1994, mentioned in paragraphs 40 and 41 above, and of the Valveplast meeting on 20 December 1994, mentioned in paragraph 33 above) that RSFE was hesitant about accepting the invitations it had received and that it has not been established that it attended the said meetings. Since the customer lists on which the Commission has relied must be analysed against the background of the - unsuccessful - attempts of the Valveplast members to persuade RSFE to join the 'block bags' sub-group, it is likely that those documents were prepared when consideration was being given to the possible organisation of a sub-group specifically dealing with block bags, or during a meeting dealing with that product, and that it was done in order to examine the significance of RSFE's participation in the new organisation.

46 In that regard, it should also be pointed out that, according to the applicant, the lists connect RSFE to customers to whom RSFE never sold industrial bags. The Commission has adduced no evidence rebutting the applicant's claim. Nor does the Commission dispute that RSFE had ceased to be active in block-bags production in the countries covered by the cartel in November 1994.

47 Furthermore, as the applicant points out, the tables drawn up, in its view, in 1997 and 1998, giving the volumes of sales of members of the 'block bags' sub-group to the various customers (pp. 6976 to 6987 of the administrative file) display no information concerning RSFE, which tends to bear out the fact that, at least during that period, RSFE was not taking part in those anti-competitive arrangements.

48 Accordingly, it must be concluded that the Commission has not produced precise and consistent evidence to support the firm conviction that RSFE had participated in the activities of the 'block bags' sub-group.

49 It follows from all the foregoing that the Commission erred in holding (i) that RSFE had participated in the cartel, within the framework of Valveplast, during the period between 20 December 1994 and 21 November 1997 and (ii) that it had participated in the 'block bags' sub-group.

50 The Commission was, however, justified in holding that RSFE had participated (i) in the Valveplast meeting on 20 December 1994, in order to discuss the circumstances in which some involvement in Valveplast on its part might be contemplated, (ii) in the France sub-group from 10 October 1995 until 31 January 1999 and (iii) in Valveplast meetings from 21 November 1997.

51 The applicant denies that it participated in a single and continuous infringement and argues in particular that the fact that it participated in the 'France' sub-group does not mean that it participated in the infringement penalised by the Commission in the contested decision.

52 In that regard, the Court recalls, first of all, that an undertaking that has participated in a single complex infringement through conduct of its own which constitutes an agreement or concerted practice having an anti-competitive object for the purposes of Article 81(1) EC and which is intended to help bring about the infringement as a whole may also be liable for conduct put into effect by other undertakings in the context of the same infringement throughout the entire period of its participation in the infringement. That is the case where it is proved that the undertaking in question was aware of the offending conduct of the other participants or that it could reasonably have foreseen it and that it was prepared to take the risk (Commission v Anic Partecipazioni, paragraph 28 above, paragraphs 83 and 203).

53 The agreements and concerted practices referred to in Article 81(1) EC are necessarily the result of collusion on the part of several undertakings, all of whom are co-perpetrators of the infringement but whose participation can take different forms according, in particular, to the characteristics of the market concerned and the position of each undertaking on that market, the aims pursued and the means of implementation chosen or envisaged. However, the mere fact that each undertaking takes part in the infringement in ways particular to it does not suffice to exclude its liability for the entire infringement, including its liability for conduct which, in practical terms, is put into effect by other participating undertakings but which has the same anti-competitive object or effect (Commission v Anic Partecipazioni, paragraph 28 above, paragraphs 79 and 80).

54 However, the existence of a single and continuous infringement does not necessarily mean that an undertaking participating in one or more manifestations of that infringement may be held liable for the infringement as a whole. The Commission still has to establish that that undertaking was aware of the anti-competitive activities at European level of the other undertakings or that it could reasonably have foreseen them. The mere fact that there is identity of object between an agreement in which an undertaking participated and an overall cartel does not suffice to render that undertaking liable for the overall cartel. It is only if the undertaking knew or should have known when it participated in the agreement that in doing so it was joining in the overall cartel that its participation in the agreement concerned can constitute the expression of its accession to that cartel (Case T-28/99 Sigma Tecnologie v Commission [2002] ECR II-1845, paragraphs 44 and 45).

55 In this case, the Commission, in recital 444 of the contested decision, held that, although the cartel was characterised by an overall group (Valveplast) and regional and functional sub-groups (such as the 'block bags' sub-group) that were apparently distinct, as a whole it formed a consistent and coordinated entity. The Commission relied, in that respect on (i) the fact that the members of Valveplast and those of the sub-groups were essentially the same, (ii) the fact that quotas fixed within the framework of Valveplast were reflected in the sub-groups, (iii) the fact that reference was made to Valveplast in the sub-groups and (iv) the statements made by the undertakings' representatives who attended the meetings.

56 More specifically, it is clear from recital 321 of the contested decision that the quotas established within the 'France' sub-group for valve bags were established on the basis of quotas established for the geographical area 'France' within Valveplast, which shows the link that existed between the 'France' sub-group and the overall group, meeting within Valveplast.

57 With regard to RSFE, once sufficient evidence is produced to establish that RSFE had an exchange in the context of the cartel with the participants at the meeting on 20 December 1994, it must be regarded as having been perfectly aware, when it joined the 'France' sub-group on 10 October 1995, of the existence of the overall cartel at Valveplast level and of the collusive arrangements that were current there. Indeed, according to the notes taken by Mr H. at the meeting on 20 December 1994, RSFE specifically indicated that it had no interest in the system of quotas. Such a choice implies that RSFE was in fact aware of the various aspects of the cartel implemented within the framework of Valveplast.

58 The fact, mentioned by the applicant, that RSFE participated in the cartel implemented within the framework of Valveplast only to the extent that it concerned FFS bags and that its involvement in the activity of the 'France' sub-group was limited to open-mouth bags is not such as to invalidate the Commission's finding that RSFE was in a position to grasp fully the scope of the cartel (see recital 515 of the contested decision), of which it was necessarily aware. The fact that RSFE took part only in Valveplast discussions concerning FFS bags is not a ground for concluding that it did not know that there were collusive arrangements in respect of valve bags. On the contrary, the fact that RSFE was able to make a specific choice as to the extent of its involvement means that it was aware of the overall scope of the cartel.

59 Furthermore, the Commission was fully entitled to reject, in recital 516 of the contested decision, the argument that the meetings of the 'France' sub-group dealing with valve bags, on the one hand, and with open-mouth bags, on the other, formed two distinct and independent entities. As it has pointed out, those meetings were held on the same day in the same place, one following on from the other. In addition, with the exception of RSFE, all the undertakings participating in the part of the meeting dealing with open-mouth bags also took part in the discussions on valve bags.

60 The fact that the meetings dealing with open-mouth bags allegedly had no operational link with Valveplast does not alter the finding that those meetings took place within the 'France' sub-group, whose activities in relation to valve bags were directly related to the anti-competitive arrangements determined within Valveplast.

61 It is also undisputed that RSFE played a key role in the meetings dealing with open-mouth bags, since it coordinated discussions on prices and allocation among the members of deliveries to listed customers (see recital 328 of the contested decision). According to the statements of Mr L. of Wavin, which the applicant does not dispute, RSFE was the leader of the discussions concerning open-mouth bags, which usually took place in the afternoon, following the discussions relating to valve bags, which used to take place in the morning. Against that background, it must be held that RSFE could not reasonably have been unaware of the existence of meetings concerning valve bags and that it was prepared to accept the risk which participating in the 'France' sub-group entailed.

62 It should be noted that the finding that RSFE participated in a single and continuous infringement does not require it to be shown that it participated, within the various geographic or functional groups of the cartel, in identical or similar collusive arrangements covering the same products. As has been recalled in paragraphs 52 to 54 above, it is sufficient that the undertaking in question was aware of the offending conduct of the other participants or that it could reasonably have foreseen it and that it was prepared to take the risk. The mere fact that each undertaking takes part in the infringement in ways particular to it does not suffice to exclude its liability for the entire infringement, including its liability for conduct which, in practical terms, is put into effect by other participating undertakings but which has the same anti-competitive object or effect.

63 Furthermore, although the cartel implemented within the framework of Valveplast essentially concerned valve bags and FFS bags, it had above all the aim of maintaining the trading margins obtained by its members on the conversion of polyethylene into industrial bags. The undertakings that manufactured all types of industrial bags, such as Wavin, Fardem, Pont Audemer and Silvallac/Trioplast, had an interest in pursuing that objective in relation to all their activities and in organising to that end meetings whose purpose was collusion. Inasmuch as open-mouth bags responded first and foremost to local demand, it was natural that those meetings should be organised at regional level, as is shown by the existence of the 'Teppema' group and of the 'Belgium' and 'France' sub-groups.

64 Thus, in this case, the Commission cannot be regarded as having made an error in holding that both Valveplast and the 'France' sub-group formed part of an overall strategy aimed at distorting the normal development of prices and at restricting competition on the market in plastic industrial bags (see recital 445 of the contested decision).

65 Moreover, the applicant's arguments that RSFE was not a founder member of Valveplast and remained a member of it for less time than other members of the cartel, that it was less regular in its attendance at the Valveplast meetings and that the other cartel members took part in more regional or functional sub-groups do not affect the abovementioned finding that the applicant was aware of the overall cartel implemented in the framework of Valveplast. Those arguments are thus ineffective.

66 For all those reasons, it must be held that RSFE's participation both in the Valveplast meetings and in the activities of the 'France' sub-group proves to the required legal standard that the applicant could reasonably gauge the scope of the cartel's overall collusive plan implemented within the framework of Valveplast, which accordingly means that it participated in the single and continuous infringement penalised by the Commission in the contested decision.

67 It follows from the foregoing that, contrary to the applicant's contention, RSFE's position is not comparable to that of Stempher. In fact, in the contested decision, the Commission found that Stempher had been a member only of the 'Teppema' group, which was concerned solely with the Netherlands market and, from time to time, the Belgian market, and that it was not aware of the overall collusive plan, since it had not attended the Valveplast meetings. By contrast, RSFE became aware of Valveplast's activities on 20 December 1994 and actually attended Valveplast meetings from November 1997, as a result of which it became aware of the overall collusive plan.

68 Consequently, the Commission did not infringe the principle of equal treatment in applying different treatment to Stempher and RSFE.

69 It follows from the foregoing that the Commission was justified in finding that RSFE had committed a single and continuous infringement from 10 October 1995 until 31 January 1999, in so far as the infringement consisted in RSFE's participation in meetings of the 'France' sub-group between those dates and in Valveplast meetings with effect from 21 November 1997.

70 However, the Commission must be held not to have established to the required legal standard that there was a continuous infringement between 20 December 1994, the date on which RSFE attended a Valveplast meeting, and 10 October 1995, the date on which it began to take part in the 'France' sub-group. Indeed, as can be seen from paragraphs 32 to 36 above, the purpose of RSFE's attendance at the meeting on 20 December 1994 was to have exploratory discussions seeking to ascertain the circumstances in which RSFE might, possibly, take part in the cartel within the framework of Valveplast. It is nevertheless clear from the documents before the Court that those discussions came to nothing and that RSFE did not join Valveplast following that meeting. Moreover, nothing put forward by the parties or contained in the documents before the Court permits the inference that RSFE's participation in the 'France' sub-group with effect from 10 October 1995 was consequential upon the discussions that took place at the meeting on 20 December 1994. Thus, RSFE's attendance at the meeting on 20 December 1994 and its participation in the activity of the 'France' sub-group, and then in that of Valveplast, does not form part of a single continuing course of conduct.

71 On those grounds, it must be concluded that RSFE's attendance at the meeting on 20 December 1994 represented an isolated infringement and that it became liable for the single and continuous infringement within the framework of Valveplast only from 10 October 1995, by reason of its participation in the meetings of the 'France' sub-group from that date and its participation in the meetings at Valveplast level from 21 November 1997. The latter infringement terminated on 31 January 1999, at the time of the last exchange of confidential information within the 'France' sub-group.

72 The first plea in law must therefore be accepted in so far as it calls in question RSFE's participation in the single and continuous infringement referred to in Article 1(1) of the contested decision prior to 10 October 1995.

1. First part of the second plea: the objective of deterrence did not justify applying a multiplier of 2 to the starting amount of the fine

73 It is clear from recital 778 of the contested decision that the starting amount used in the calculation of the fine imposed on the applicant was doubled, in order to set the fine at a level which ensured that it had sufficient deterrent effect.

74 The applicant submits that that increase gave rise to a fine that was disproportionate to the gravity of the infringement. It argues that disproportionate significance cannot be attributed to any of the various turnover figures, as compared to other factors of appraisal, such as the proportion of the total turnover of the group represented by sales on the market concerned by the infringement. In the present case, RSFE's turnover in the industrial bags business represented only 0.15% of the applicant's worldwide turnover in the same year, and that proportion steadily declined until RSFE was sold in 2000, when the subsidiary's turnover represented merely 0.07% of the worldwide turnover of the parent company, which had not itself been in any way involved in the infringement. In addition, RSFE's activities were unrelated to the applicant's core business activities, which focused primarily on the paper business. Finally, RSFE only played a minor and passive role in the cartel activities. The applicant was none the less penalised more severely than the other addressees of the contested decision and, as a result, the Commission infringed the principle of equal treatment.

75 The applicant also maintains that 2004 was not the correct reference year for taking into account its size and overall resources for the purpose of increasing the starting amount of the fine. The Commission should have considered the applicant's turnover during the last full year of RSFE's alleged participation in Valveplast, namely 1998. Alternatively, in the event that RSFE's participation in the 'France' sub-group on open mouth bags were to be regarded as forming part of a single and continuous infringement, 1999 would be the reference year, since that year falls within the period of the infringement.

76 The Court recalls, as a preliminary point, that the requirement that the fine should have a sufficient deterrent effect may entail the amount of the fine being adjusted in order to take account of the desired impact on the undertaking on which it is imposed, so that the fine is not rendered negligible, or on the other hand, excessive, notably in the light of the financial capacity of the undertaking in question, in accordance with the requirements arising from, first, the need to ensure that the fine is effective and, second, compliance with the principle of proportionality. Thus, a worldwide turnover that is far higher than the turnovers of the other members of the cartel, which means that one of the undertakings concerned is more readily able to raise the necessary funds to pay its fine, justifies applying a multiplier intended to ensure that the fine has sufficient deterrent effect. In that context, the financial resources of the undertaking must be assessed, in order to achieve properly the objective of deterrence, while observing the principle of proportionality, on the date on which the fine is imposed (Case T-279/02 Degussa v Commission [2006] ECR II-897, paragraphs 283 to 285, and Case T-410/03 Hoechst v Commission [2008] ECR II-881 paragraph 379).

77 Next, it must be recalled that the guidelines on the method of setting fines allow the Commission to take account of the fact that large undertakings usually have legal and economic knowledge and infrastructures which enable them more easily to recognise that their conduct constitutes an infringement and be aware of the consequences stemming from it under competition law, as is apparent from the Commission's Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) [CS] (OJ 1998 C 9, p. 3, 'the Guidelines').

78 In the present case, it is undisputed that in 2004, the business year immediately preceding adoption of the contested decision, the applicant generated turnover of EUR 9.820 billion and that it was therefore in a position to spread the risks connected with commission of the infringement over a broad financial base. Thus, the application to the starting amount of the fine of a multiplier of 2 ensured that the fine had a deterrent effect which it otherwise would not have had.

79 As the Commission submits, since the basis of the multiplier is the size of the undertaking, there is no need to balance the worldwide size of the group of companies concerned against other factors, such as RSFE's position on the market in question or its role within the cartel. Those factors are taken into account at, respectively, the stage of differentiating the starting amounts of the fines on the basis of market shares and the stage of assessing any mitigating circumstances. Thus, the fact that the applicant's worldwide turnover was taken into account for the purpose of ensuring that the fine had a deterrent effect did not result in other relevant factors being disregarded.

80 Consequently, since the application of the multiplier resulted solely from taking the applicant's high worldwide turnover into account, the applicant cannot claim that the Commission infringed the principle of equal treatment in imposing that multiplier on it, although other members of the cartel to which no multiplier was applied had stronger market positions and a more prominent role within the cartel than RSFE. The last two factors are, in fact, of no relevance at the stage of deciding whether or not to apply a multiplier in order to ensure that the fine has a sufficient deterrent effect.

81 For that reason, the fact that the turnover generated on the product market concerned by the infringement represented only a very small proportion of the parent company's worldwide turnover can in no way justify reducing the fine. On the contrary, it is precisely because that proportion was small that the deterrent effect sought by European Union ('EU') competition policy had to relate to worldwide turnover in order to penalise the group formed by the applicant and to deter it from committing similar infringements in the future.

82 As regards the fact that the applicant was held liable only in its capacity as parent company, that does not prevent a multiplier from being applied for the purpose of ensuring that the penalty imposed has deterrent effect.

83 Finally, nor can the applicant argue that the Commission should have taken into account the turnover generated in 1998 or 1999, the last years in which it participated in the cartel. As has been stated in paragraph 76 above, the financial resources of the undertaking must be assessed, in order to achieve properly the objective of deterrence while observing the principle of proportionality, on the date on which the fine is imposed.

2. Second part of the second plea: the wrong market shares were taken into account in determining the starting amount of the fine

85 The applicant maintains that the Commission erroneously took 1996 as the reference year for comparing the respective market shares of the undertakings concerned for the purpose of determining the starting amount of the fine. According to the applicant, the Commission should have used 1999 as the reference year for calculating the starting amount of its fine and should have had regard only to RSFE's turnover on the French market. It draws attention, in that regard, to the fact that that the majority of the undertakings which participated in the cartel had participated in the infringement for over two decades. A proper comparison of the undertakings concerned in terms of their importance on the market required each of their respective turnovers in the last full year of their participation in the infringement to be taken into account, which, in RSFE's case, should have led the Commission to use 1999 as the reference year. Moreover, in 1996 the applicant was not yet a member of Valveplast.

86 The applicant argues that, if 1996 were to be taken as the reference year, the Commission should have taken account of the turnover achieved by RSFE in the open mouth bags sector on the French market. Furthermore, RSFE's turnover in 1996 did not reflect its true economic power on the industrial bags market throughout the period of the infringement, since its turnover consistently declined from 1996 until it left the market in December 2000.

87 In the contested decision, the Commission applied differential treatment to the undertakings in order to take account of their effective economic capacity to cause significant damage to competition. In order to compare the relative size of the undertakings, the Commission referred to the market shares achieved by each undertaking in 1996 for the products forming the subject-matter of the cartel. According to the Commission, 1996 represented the most recent full year of the infringement in which all the undertakings to which the contested decision was addressed were still present on the industrial bags market (see recitals 766 and 767 of the contested decision).

88 In that regard, to the extent to which the Commission relies on the turnover of undertakings involved in the same infringement for the purpose of determining the proportions between the fines to be imposed, the period to be taken into consideration must be ascertained in such a way that the resulting turnovers are as comparable as possible (Joined Cases 100/80 to 103/80 Musique Diffusion Française and Others v Commission [1983] ECR 1825, paragraph 122). Consequently, an individual undertaking cannot compel the Commission to rely, in its case, upon a period different from that used for the other undertakings, unless it proves that, for reasons peculiar to it, its turnover in the latter period does not reflect its true size and economic power or the scale of the infringement which it committed (Case T-319/94 Fiskeby Board v Commission [1998] ECR II-1331, paragraph 42).

89 In this case, the applicant puts forward various arguments challenging the Commission's choice of 1996 as reference year. None of those arguments gives grounds, however, for finding that the Commission went beyond the bounds of its margin of assessment.

90 First of all, the fact that the market shares of the undertakings that were still participating in the cartel in 2001 either increased or were maintained from 1996 to 2001 does not permit the inference that market shares, in 1996, manifestly did not reflect the relative economic influence of those undertakings on the market.

91 It is common ground that 1996 was the last full year of participation for all the undertakings to have taken part in the cartel. The use of a reference year common to all the undertakings involved in the same infringement generally allows penalties to be determined in a uniform manner in compliance with the principle of equal treatment, while the scale of the infringement is assessed in the light of the economic reality as it appeared during the relevant period (Case C-196/99 P Aristrain v Commission [2003] ECR I-11005, paragraph 129).

92 In this case, the applicant argues that RSFE left the market in December 2000 and that the decline in its turnover was the result of its decision to withdraw from the market. However, as the Commission rightly points out, if it had taken into account market shares as they appeared in 1999, when the applicant was preparing to leave the market, there was a risk that RSFE's true position on the market in the course of the cartel would not have been reflected. Thus, the Commission did not make a manifest error of assessment in holding that the mere fact that, after 1996, RSFE's market share fell while the other cartel members either maintained or increased their shares was not a sufficient reason to depart from the reference year selected for the other members of the cartel (Case T-309/94 KNP BT v Commission [1998] ECR II-1007, paragraph 108).

93 Next, the Court must reject the argument that 1996 was not an appropriate reference year because, at that time, RSFE had not yet become a member of Valveplast. It is clear, in fact, from paragraphs 69 to 71 above that RSFE, in participating in the 'France' sub-group from 10 October 1995 and in Valveplast from 21 November 1997, was involved in a single and continuous infringement. Thus, the reference year 1996 is covered by the single and continuous infringement committed by RSFE. On that ground, the applicant cannot maintain, in the alternative, that the Commission should have taken account only of RSFE's market share on the French market for open mouth bags.

94 It should be made clear, in that regard, that the differential treatment applied by the Commission in recitals 766 to 777 of the contested decision does not seek to reflect the damage which each undertaking caused individually to competition but to reflect their economic capacity to cause such damage, in the light of the market shares achieved by the undertakings in respect of the products forming the subject-matter of the overall cartel. The Commission thus focussed more on RSFE's economic capacity on the market affected by the cartel than on the turnover it had generated for the products specifically covered by the collusive arrangements in which it had taken part.

95 Furthermore, for the reasons given in paragraphs 67 and 68 above, the applicant's situation is not comparable to that of Stempher; thus the Commission was not required to treat the applicant in the same way.

3. Third part of the second plea: lack of correlation between the fine and the duration of the infringement

97 By the third part of the second plea, the applicant reiterates the arguments it developed in its first plea concerning the classification of RSFE's conduct as a single and continuous infringement. It argues that that conduct can, at the very most, give rise only to an infringement of short duration within the meaning of the Guidelines. Even if the Court were to consider that RSFE's involvement in the 'France' sub-group and its participation in Valveplast constituted a single and continuous infringement, it would have to be found that the infringement lasted three years and three months. The Commission therefore could not impose an increase of more than 30% on the basis of duration.

98 It follows from paragraphs 69 to 71 above that RSFE committed a single infringement, which was continuous throughout the period from 10 October 1995 to 31 January 1999, namely 3 years, 3 months and 21 days.

99 Since, in recital 780 of the contested decision, the Commission decided to increase the starting amounts of the fines by 10% for each full year of the infringement and by 5% for any additional period of six months or more but less than one year, it should, in the applicant's case, have applied an increase of 30% of the starting amount, instead of an increase of 45%.

100 The third part of this plea must therefore be accepted in so far as it challenges the application of an increase for the duration of the infringement of 45%, instead of 30%, of the starting amount of the fine. The consequences of that finding for the calculation of the fine imposed on the applicant will be examined in paragraph 153 below.

101 The applicant maintains that the Commission has infringed the principle of fairness by failing to take account of the fact that the applicant was held liable only in its capacity as a parent company. The applicant did not participate in the cartel activities. It points out that the statement of objections was addressed to both RSFE and to itself and that it became the sole addressee after RSFE was wound up. According to the applicant, if RSFE had still been in existence when the contested decision was adopted, the Commission would have taken account of its small size and would not have applied a deterrent multiplier.

102 It should first of all be noted that the fact that a parent company is penalised where a subsidiary infringes the competition rules does not prevent a multiplier being applied in order to ensure that the penalty imposed has deterrent effect.

103 Moreover, it is incorrect to state that a multiplier would not have been applied to the applicant if RSFE had still been in existence at the date on which the contested decision was adopted. Indeed, it is clear from the decision that the Commission determined the level of fines on the basis of the individual characteristics of the addressees of the contested decision. Thus, the fine imposed on the applicant was determined by reference to matters specific to it, the question as to whether or not RSFE existed at the date of adoption of the contested decision being of no relevance in that regard.

5. Fifth part of the second plea: incorrect assessment of the mitigating and aggravating circumstances

105 The applicant submits that RSFE's limited role in the cartel justifies a substantial reduction in the fine, in accordance with the first indent of Section 3 of the Guidelines. RSFE became a member of Valveplast later than the other cartel participants, in November 1997, and only in relation to the FFS bags section, and ceased to participate in November 1998. During that period, it attended only three out of the five Valveplast meetings that were held. Moreover, there is no indication that RSFE played a more significant role than the other members of the cartel in the 'France' sub-group, since those meetings did not require a chairman and none of the statements indicated RSFE as coordinator of that sub-group on open mouth bags (see recitals 328 and 455 of the contested decision).

106 It is claimed, moreover, that the Commission created a legitimate expectation on the part of the applicant that RSFE's limited involvement in the cartel would be taken into account in the setting of the fine, since that possibility was expressly provided for in point 306 of the statement of objections.

107 The Court observes, first of all, that, in accordance with Section 3, first indent, of the Guidelines, a passive role on the part of an undertaking will, where it is established, constitute a mitigating circumstance. A passive role implies that the undertaking adopts a 'low profile', that is to say, does not actively participate in the creation of any anti-competitive agreements.

108 The factors capable of revealing the passive role of an undertaking within a cartel include the significantly more sporadic nature of its participation in the meetings by comparison with the 'ordinary' members of the cartel and likewise its late entry on the market where the infringement occurred, regardless of the duration of its participation in the infringement, and also the existence of express declarations to that effect made by representatives of other undertakings which participated in the infringement (Case T-220/00 Cheil Jedang v Commission [2003] ECR II-2473, paragraph 168 and the case-law cited, and Case T-48/02 Brouwerij Haacht v Commission [2005] ECR II-5259, paragraph 75).

109 In this case, the applicant's claim that it was only an occasional participant in the Valveplast meetings must be rejected. In fact, it can be seen from Annex 1 to the contested decision that it attended four of the five meetings which took place between 21 November 1997 and 26 November 1998.

110 Next, it should be made clear that, at the stage of the statement of objections, which is in any event only a preparatory measure and not a measure adversely affecting a person's interests or conferring any rights, the Commission did not announce that it intended to recognise that there were mitigating circumstances in the applicant's case. In fact, point 306 of the statement of objections merely states that the fact that RSFE's participation was not as frequent was a factor that the Commission could take into account in appraising the gravity of the infringement. The Commission did not state that it was required to do so or was going to do so.

111 With regard to the 'France' sub-group, it is apparent from Annex 2 to the contested decision that RSFE attended all the meetings between 10 October 1995 and 14 April 2000. Moreover, it can be seen from the customer allocation tables within the 'France' sub-group that RSFE, designated by the number 9, generally coordinated eight customers, five of whom were among the most important customers. RSFE is also frequently referred to in the handwritten notes taken during the meetings of the 'France' sub-group. It can thus be seen from notes taken by Cofira during the meeting on 2 July 1998 (footnote 390 to the contested decision) that RSFE actively took part in the discussions on prices and allocation between the members of deliveries to listed customers. Likewise, Cofira's handwritten notes taken during the meeting on 8 October 1996 (footnote 391 to the contested decision) show that RSFE actively took part in the discussions concerning the arrangements on shielding bids. That document contains, inter alia, the following passage: '[customer name]: Cofira leader ... SF to shield Cofira following slippage on previous order'. Finally, it should be noted that RSFE was appointed to coordinate the meetings of the 'France' sub-group in relation to open mouth bags (see paragraph 61 above).

112 In view of all the material available to the Commission, the latter must therefore be held not to have made an error of assessment in refusing to recognise that the applicant had played a passive or 'follow-my-leader' role.

114 The applicant submits that it should have been granted a reduction in the fine on the ground that it did not contest the essential factual allegations relied upon by the Commission against RSFE. It states that, because of the sale of RSFE's industrial bags business in 2000 to RKW, all documents and accounts concerning this business were transferred to RKW, and the applicant retained no material archives in that regard. Similarly, very few employees who worked in this line of business were still working for the applicant. In addition, no senior executive of the applicant was involved in the infringement. Since the applicant was not aware of the facts that had been established by the Commission, it could not cooperate more actively with the Commission during the administrative procedure.

115 In the Leniency Notice the Commission has set out the conditions under which undertakings cooperating with it during its investigation into a cartel may be exempted from fines or may be granted reductions in the fines which would otherwise have been imposed upon them (Section A.3 of the Leniency Notice).

116 In that regard, the Court recalls that a reduction in the fine on grounds of cooperation during the administrative procedure is justified only if the conduct of the undertaking concerned enabled the Commission to establish the infringement more easily and, where relevant, to bring it to an end (Case T-327/94 SCA Holding v Commission [1998] ECR II-1373, paragraph 156; Joined Cases T-45/98 and T-47/98 Krupp Thyssen Stainless and Acciai speciali Terni v Commission [2001] ECR II-3757, paragraph 270; and Groupe Danone v Commission, paragraph 28 above, paragraph 449).

117 It is established that the applicant did not provide the Commission with information enabling the infringement to be established more easily. In that connection, the fact that the applicant was prevented from providing any such information because the relevant documents had not been retained following the sale, in 2000, of RSFE is not a ground on which the Commission may grant a reduction of the fine for cooperation which was not forthcoming.

118 Furthermore, it is clear from the applicant's reply to the statement of objections that it did substantially contest the facts on which the Commission had based its allegations. So far as a number of those allegations are concerned, the applicant disputed facts other than those in respect of which the Commission's findings were inaccurate.

120 The applicant submits that the depressed state of the industrial bags market since the late 1980s justifies a substantial reduction in the fine. The Commission recognised that the market had been in structural crisis since the end of the 1980s (see recital 20 of the contested decision). The sole purpose of the cartel was to stabilise the market in order to enable the industrial bags manufacturers to remain active without having to leave the market. The applicant asserts that the margins of the cartel members have remained low. It has been the practice of the Commission in previous decisions to hold this factor to be a mitigating circumstance. The Commission should also have taken account of the difficult market conditions when assessing the impact on the infringement on the market.

121 In that regard, it is sufficient to note that the Commission is not required to take into account the difficult economic situation of the market in question and that the fact that the Commission may, in previous cases, have taken that into account as a mitigating circumstance does not oblige it to continue to follow that practice (Case T-13/89 ICI v Commission [1992] ECR II-1021, paragraph 372, and Joined Cases T-236/01, T-239/01, T-244/01 to T-246/01, T-251/01 and T-252/01 Tokai Carbon and Others v Commission [2004] ECR II-1181, paragraph 345).

123 The applicant considers that the competition compliance programme is a mitigating circumstance that should give rise to a reduction in its fine. It states that this programme is applied to the whole of the group, which has led the applicant to disclose to the Commission any actions which might constitute infringements of the competition rules, and that it is cooperating fully with the Commission in several administrative procedures.

124 The fact remains, however, that that situation does not alter the reality of the infringement and does not oblige the Commission to grant a reduction in the amount of the fine (Tokai Carbon and Others v Commission, paragraph 121 above, paragraph 343, and Joined Cases T-101/05 and T-111/05 BASF and UCB v Commission [2007] ECR II-4949, paragraph 52). Furthermore, the fact that the applicant is cooperating with the Commission in other cases concerning infringements of the EU competition rules is irrelevant to any reduction in the fine that might be granted in respect of cooperation in this case.

126 In recitals 785 to 789 of the contested decision, the Commission held that the applicant had committed a repeat infringement since it had been involved in an earlier cartel forming the subject-matter of Commission Decision 94/601/CE of 13 July 1994 relating to a proceeding under Article 81 [EC] (Case IV/C/33.833 - Cartonboard) (OJ 1994 L 243, p. 1, the 'decision of 13 July 1994' or the 'Cartonboard case'), concerning, inter alia, price fixing, the determination of market share quotas and the exchange of information on prices and deliveries. As a consequence, the Commission applied an increase of 50% of the basic amount of the fine on the grounds of aggravating circumstances.

127 The applicant denies that there is any proper foundation for that increase. It submits that it is liable for the infringement only in its capacity as RSFE's parent company and that RSFE participated in the cartel in its own right without the applicant's knowledge. The links between the subsidiary involved in the Cartonboard case and RSFE were very remote. The mere fact that companies belong to the same group is not sufficient to justify an increase of the fine on grounds of repeated infringement, the decisive factor in that regard being whether the undertakings concerned pursued the same market strategy. In this case, RSFE determined its course of action on the market independently, without following any instructions from its parent company.

128 The applicant further submits that the Commission infringed the principles of fairness and proportionality by increasing the basic amount of its fine by 50% on the ground of repeated infringement, in order to ensure effective deterrence. In fact, the need for deterrence had already been taken into account when the starting amount was set, by the taking into consideration of the applicant's global size and the subsequent doubling of the starting amount, which was raised to EUR 13 million. In that regard, the applicant claims that the concepts of repeated infringement and deterrence are complementary, as they both seek to prevent the occurrence of new infringements.

129 With regard to the link between the undertakings that committed the different infringements, the Court points out, first of all, that the Commission is entitled to conclude that the same undertaking has previously been censured for an infringement of the same type when the perpetrators of repeated unlawful conduct are different subsidiaries forming part of a single economic entity (see, to that effect, Case T-203/01 Michelin v Commission [2003] ECR II-4071, paragraph 290). Therefore, the Court must reject the argument that a finding of repeated infringement can be made only when the company concerned is a direct participant. Since an economic entity is the only relevant criterion for the purpose of defining an 'undertaking' within the meaning of the EU competition rules, it is sufficient that it be involved in a number of infringements for a finding of repeated infringement to be made.

130 In this case, it is not disputed that the applicant was involved in the cartel with which the decision of 13 July 1994 was concerned. The applicant none the less denies that there can be a finding of repeated infringement in this case on the ground that RSFE determined its market conduct independently.

131 In that regard, it is, however, established that RSFE was, directly or indirectly, wholly owned by the applicant or its predecessor from 1995 (see recitals 116 and 117 of the contested decision and paragraph 1 above). It must also be recalled that, where a parent company holds 100% of the capital of a subsidiary which has infringed the competition rules, there is a rebuttable presumption that the parent company has exercised decisive influence over the conduct of its subsidiary and it is for the parent company to rebut that presumption (see Case C-97/08 P Akzo Nobel and Others v Commission [2009] ECR I-8237, paragraphs 60 and 61 and the case-law cited).

132 In this case, the applicant has adduced no evidence capable of rebutting that presumption. The fact that RSFE's management structure was not affected by the merger of Rosenlew and the applicant does not amount to evidence that may rebut the presumption.

133 Furthermore, a finding of repeated infringement does not require the subsequent infringement to have been committed on the same market as that on which a previous infringement was committed (see Case T-161/05 Hoechst v Commission [2009] ECR II-3555, paragraph 147).

134 As regards the alleged infringement of the so-called 'principle of fairness' and of the principle of proportionality, the Commission submits that (i) the increase in the starting amount of the fine on the basis of the large size of the undertaking and (ii) repeated infringement each play a specific role in ensuring that the fine has deterrent effect.

135 The factor relating to size is intended, inter alia, to adjust the amount of the fine according to the economic strength of the undertaking censured and to prevent undertakings from establishing strategies to spread the risk of a fine over their activities as a whole. An increase for repeated infringement, on the other hand, addresses the need to counter repetition of illegal activity.

136 It is clear from the case-law that deterrence is an objective of the fine and is to be taken into account generally as a reference point for the Commission throughout the calculation of the fine. Thus, the objective of deterrence does not necessarily require that there be a specific step in that calculation in which an overall assessment is made of all the relevant circumstances for the purposes of attaining that objective (Case T-15/02 BASF v Commission [2006] ECR II-497, paragraph 226, and Case T-73/04 Carbone Lorraine v Commission [2008] ECR II-2661, paragraph 131).

137 It follows that the Commission was entitled to take the objective of deterrence into account not only at the stage of increasing the fine on the basis of the undertaking's large size but also in the context of repeated infringement. In that regard, the Guidelines specify the large size of the undertaking and repeated infringement as two different factors which the Commission may take into account at different stages in its assessment.

138 It should also be recalled that the Commission has a broad discretion so far as the setting of fines is concerned. The need to prevent new infringements is an important factor which the Commission must take into account when exercising that discretion. Indeed, repeated infringement is proof that the sanction previously imposed was not sufficiently deterrent (Michelin v Commission, paragraph 128 above, paragraph 293).

139 In this case, the Commission found, in recitals 786 to 789 of the contested decision, that the applicant had already committed an infringement of the same type as that censured by the contested decision and that the fine imposed by the decision of 13 July 1994 had not had sufficient deterrent effect to prevent the applicant from once again becoming involved in unlawful conduct. It therefore applied an increase of 50%, even though, under the Guidelines, it could have applied a higher percentage. According to the explanations provided by the Commission at the hearing, it increased the fine by 50% in order to take account of the fact that it had already increased the starting amount of the fine on the basis of the undertaking's large size.

140 In those circumstances, there can be no objection that the Commission went beyond the bounds of its discretion or that it infringed the principle of proportionality.

141 The conclusion is therefore that the fifth part of the second plea must be rejected in its entirety.

6. Sixth part of the second plea: improper characterisation of the cartel as a 'very serious infringement'

142 The applicant maintains that the Commission erred in its assessment of the cartel's effect on the market for the purposes of evaluating the gravity of the infringement. It points out that the infringement was characterised as very serious, even though its impact on the market could not be measured, on the basis that the collusive practices had been implemented. The Commission thus failed to rely on the actual impact of the cartels, as required under Section 1.A of the Guidelines. In particular, the Commission failed to adduce evidence that the cartel resulted in a price increase and to consider evidence and explanations brought to its attention. According to the applicant, the industrial bags market remained fiercely competitive, especially in the FFS bags sector, as is apparent from the statements of Trioplast Wittenheim, Combipac and the applicant itself. If the adverse economic context of the cartel and its limited geographic scope had been taken into account, the infringement should have been qualified as serious at most.

143 It is clear from the Guidelines that in assessing the gravity of the infringement, account must be taken of its nature, its actual impact on the market, where this can be measured, and the size of the relevant geographic market. Thus, horizontal restrictions such as price cartels and market-sharing quotas will be classified as very serious infringements.

144 In this case, after finding that the cartel in question concerned horizontal restrictions which are, by their very nature, among the most serious infringements of Article 81 EC, the Commission stated that it was not possible to measure precisely the practical impact on the territories concerned of all the arrangements and practices constituting the infringement. It considered nevertheless that those collusive arrangements had been implemented so far as the fundamental features of the cartel were concerned, namely prices, the allocation of customers and deals, as well as monitoring of the respective market shares of the cartel members. The Commission thus concluded that those collusive arrangements had necessarily had an impact on the market, although it was not possible to gauge the extent of that impact precisely (see recitals 756 to 763 of the contested decision). The Commission went on to state that the infringement covered the territories of Germany, the Benelux countries, Spain and France (see recital 764 of the contested decision). It finally concluded that the infringement was very serious (see recital 765 of the contested decision).

145 It should be noted that, contrary to the applicant's contention, the Commission is not required to base the classification of an infringement as very serious under the Guidelines on the actual impact of a cartel on the market. Thus, the actual impact of a cartel on the market does not have to be taken into account, for that purpose, when it cannot be measured.

146 Nevertheless, conversely, the Commission - as it points out - is bound, under the Guidelines, to take that impact on the market into account when the impact can be measured, subject to review, should the case arise, by the Courts of the European Union. In this case, the Court notes that the applicant, first, has not put forward any evidence showing that it was possible to measure the impact of the cartel on the market and, second, has not produced any evidence tending to show that the cartel had no effect on that market. On that point, it should be made clear that the statements of other members of the cartel, put forward by the applicant, are clearly insufficient to establish that there was no impact on the market, since it is not disputed that arrangements for allocating customers and deals, entailing higher prices than those which would have resulted from normal market functioning, quota allocation and price fixing were implemented and, therefore, necessarily affected the interests of customers and, ultimately, of consumers.

147 Furthermore, the Commission cannot be held to have made an error of assessment as regards the conclusions that should have been drawn from the allegedly difficult market context. The fact that a market is experiencing economic difficulties at a given time in no way means that the infringement cannot be classified as very serious. Furthermore, the question whether the Commission must take account of those difficulties as mitigating circumstances (see paragraphs 120 and 121 above) must be distinguished from the question concerning whether the infringement should be classified as serious or very serious.

148 Finally, the Court also rejects the argument that the infringement cannot be classed as very serious because it did not cover the whole of the European Union. The cartel censured by the contested decision in fact concerned no fewer than six Member States. Its geographic scope cannot therefore be described as limited.

149 In view of all the foregoing, the Commission cannot be held to have made a manifest error of assessment in classifying the infringement as very serious. Furthermore, in the exercise of its unlimited jurisdiction, the Court does not intend to alter that classification, which it considers appropriate having regard to the circumstances of the present case.

151 The second plea, with the exception of the third part thereof, must therefore be rejected.

152 It follows from all the foregoing considerations that the contested decision must be annulled in so far as it holds the applicant liable for the single and continuous infringement referred to in Article 1(l) of the contested decision, before 10 October 1995.

153 It is thus for the Court, in the exercise of its unlimited jurisdiction, to adjust the level of the fine to take account of that partial annulment. That adjustment consists in applying an increase of 30% to the starting amount of the fine, instead of an increase of 45%. Thus, if an increase of 30% is applied to the figure of EUR 26 million (corresponding to the starting amount of the fine set for the applicant (see recital 777 of the contested decision)), and a multiplier of 2 is applied to ensure that the fine has sufficient deterrent effect (see recital 778 of the contested decision), that gives an amount of EUR 33.80 million, to which a final increase of 50% must be applied for repeated infringement (see recital 789 of the contested decision). That results in a total of EUR 50.7 million.

154 Under Article 87(3) of the Rules of Procedure, the Court may order that the costs be shared or that each party bear its own costs where each party succeeds on some and fails on other heads.

155 As the action has been partially successful, the Court considers it fair in the circumstances of the case to order each party to bear its own costs.

1. Annuls Commission Decision C(2005) 4634 final of 30 November 2005 relating to a proceeding pursuant to Article 81 [EC] (Case COMP/F/38.354 - Industrial bags) in so far as it holds UPM-Kymmene Oyj liable for the single and continuous infringement referred to in Article 1(1) thereof, in respect of the period prior to 10 October 1995;

2. Sets the amount of the fine imposed by Article 2(j) of that decision at EUR 50.7 million;

4. Orders the European Commission and UPM-Kymmene each to bear their own costs.

2. Whether the Commission has established RSFE's participation in various aspects of the infringement

1. First part of the second plea: the objective of deterrence did not justify applying a multiplier of 2 to the starting amount of the fine

2. Second part of the second plea: the wrong market shares were taken into account in determining the starting amount of the fine

3. Third part of the second plea: lack of correlation between the fine and the duration of the infringement

5. Fifth part of the second plea: incorrect assessment of the mitigating and aggravating circumstances

6. Sixth part of the second plea: improper characterisation of the cartel as a 'very serious infringement'

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> UPM-Kymmene v Commission (Competition) [2012] EUECJ T-53/06 (06 March 2012) URL: http://www.bailii.org/eu/cases/EUECJ/2012/T5306.html Cite as: [2012] EUECJ T-53/06, [2012] EUECJ T-53/6

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