The Court of Justice does not often reduce a fine imposed by the Commission on an undertaking for a breach of the competition rules when the amount of the fine has been upheld by the General Court. The judgment of 27 March 2014 in Case C-612/12 P Balast Nedam NV v Commission EU:C:2014:193 is, however, such a case. The Court of Justice reduced the fine on appeal not because the General Court had exercised its unlimited jurisdiction on fines improperly but because the General Court had failed to take sufficient account of a substantive problem with the Commission’s decision relating to the company’s rights of the defence.
Let us see in more detail.
Ballast Nedam NV and its subsidiaries are Dutch construction companies. The group’s road construction activities have been centralised in Ballast Nedam Grond en Wegen BV (‘BNGW’) since 1995, a wholly owned subsidiary of Ballast Nedam Infra BV (‘BN Infra’), itself wholly-owned by Ballast Nedam NV. From 1 October 2000 onwards, the construction activities of the Ballast Nedam Group have been carried out directly by BN Infra.
The Commission imposed fines of €266.71 million by its decision of 13 September 2006 on 14 undertakings for their participation in a cartel involving price-fixing on the road pavement bitumen market in the Netherlands. Ballast Nedam NV, the appellant in this case, was held liable for that infringement in respect of the period from 21 June 1996 to 15 April 2002, as was BN Infra, its subsidiary.
In view of BN Infra’s direct participation in the infringement during the period from 1 October 2000 to 15 April 2002 and the fact that it wholly owned BNGW during the period from 21 June 1996 to 30 September 2000 and in view of Ballast Nedam NV’s 100% direct and indirect shareholding in BN Infra and BNGW, a fine of €4.65 million was imposed jointly and severally on Ballast Nedam NV and BN Infra.
Ballast Nedam NV challenged that decision in the General Court. The General Court dismissed Ballast Nedam NV’s action for annulment by judgment of 27 September 2012 in Case T-361/06 EU:T:2012:491. The General Court held that on the basis of the information contained in the statement of objections, Ballast Nedam NV should have known that it was likely to be the addressee of a final Commission decision in its capacity as BNGW’s parent company.
Ballast Nedam NV then appealed that judgment to the Court of Justice claiming that the General Court infringed its rights of the defence because in the statement of objections, the Commission should have identified BNGW as an offender and should have expressly informed Ballast Nedam NV that it risked being held jointly and severally liable for the fine imposed on BNGW.
The Court of Justice upheld the appeal and reduced the fine imposed jointly and severally on Ballast Nedam by €1.2 million.
The Court of Justice notes that the General Court acknowledged, in the judgment under appeal, that the Commission did not provide in the statement of objections any additional evidence for the existence of a unitary undertaking between Ballast Nedam and BNGW and that, in that respect, the statement of objections could have been clearer. However, the General Court went on that the Commission could still apply the presumption of the actual exercise of decisive influence by Ballast Nedam over the commercial conduct of BN Infra and BNGW.
In so doing, the Court of Justice found that the General Court erred in law with regard to the requirement that the statement of objections be sufficiently clear, in accordance with which it is necessary for the statement of objections to indicate in which capacity an undertaking is called upon to answer the allegations (Joined Cases C-322/07 P, C-327/07 P and C-338/07 P Papierfabrik August Koehler and Others v Commission, EU:C:2009:500, paragraph 39).
Thus, the General Court was wrong in finding that Ballast Nedam could have been aware that it was likely to be the addressee of a final Commission decision in its capacity as BNGW’s parent company, when it is apparent from the General Court’s own findings that the Commission had not indicated that the statement of objections was addressed to Ballast Nedam on the ground that it exercised decisive influence over BNGW’s commercial conduct, and the General Court acknowledged that the statement of objections was unclear in that regard.
Moreover, the ambiguity in the wording of the statement of objections is exacerbated by the fact that no statement of objections was sent to BNGW, the subsidiary.