The fact that antitrust proceedings can take a year or two is not really a surprise. But recently, the General Court of the European Union (i.e. first instance!) had to deal with a case concerning a cartel which had started in 1989 and whose members were already fined (for the first time) in 2002. That alone justifies a deeper dive into the case’s history.
We often blog about cases which show certain policy developments or are essential for practitioners in the antitrust space. Admittedly, this one largely drew my attention by its, at least for outsiders, somewhat stunning history. Not too many cases I know involve three fining decisions by the same regulator concerning the same conduct and, as if that was not enough, three decisions by the General Court.
Chapter I: Being too late
The case kicked-off in a classical manner. In late 2000, the Commission carried out inspections at the premises of eight Italian firms as it suspected a cartel in the concrete reinforcing bar sector in Italy. Turns out the Commission was right: The cartel had started in 1989 and only (and undisputedly) concerned the Italian market. The Commission was still competent as the relevant product was covered by the European Coal and Steel Community (ECSC) Treaty.
Following some regular procedural steps, the Commission adopted its fining decision in December 2002. The decision was based on Article 65 of the European Coal and Steel Community Treaty, which, however, had already expired in October of the very same year. In hindsight unsurprisingly, the alleged cartelists brought the case to the court which annulled the Commission’s decision for those procedural reasons in 2007.
Chapter II: Not asking everyone
There was not too much time for celebration, though. Only a couple of months later, the Commission told the companies involved that it intended to adopt a new decision, this time based on new procedural grounds. In September 2009, the Commission adopted its second fining decision, concerning the same infringement, but this time based on Articles 7 and 23 of Regulation 1/2003.
The companies went to the court again and lost in the first instance. However, some of the alleged cartelists did not give up and succeeded. In September 2017 the European Court of Justice annulled the 2009 decision mainly arguing that the only oral hearing took place already in 2002. According to the ECJ, this hearing, however, had not been in line with the new procedural rules under Regulation 1/2003 as it did not include the competition authorities of the Member States. Before adopting another decision, the Commission should have conducted another oral hearing fulfilling these prerequisites.
Chapter III: The (happy) end?
This time, the Commission only rested for two months after the court decision before it announced it would re-open the proceedings and conduct an oral hearing involving the competition authorities of the Member States (yes, the Commission can be persistent). In its third fining decision, the Commission stressed that the decision was based “on the public interest in pursing an effective and deterrent enforcement against cartels”. By
generously taking the long duration of the proceedings into account, it reduced the fines by 50%.
The companies argued in their appeal to the General Court that the long duration should have led to an even larger reduction. The General Court (T-655/19, not available in English yet) took a different stance and held that the long duration could only have had an effect to the benefit of the cartelists if their rights of defense had actually been impaired.
Whilst this looks like a success for the Commission, some of the companies already filed appeals to the European Court of Justice. It would definitely not be the first time the case got another turn (at the same time the case is heading unerringly towards its 35th birthday).
Picture from Liam McGarry on Unsplash