I. Introduction: Commission decisions and their review by the EU courts
1. This paper deals with the readoption by the European Commission of decisions imposing fines on undertakings found to have participated in cartels in violation of Article 101 TFEU (cartel decisions) following the annulment of those decisions by the EU courts (General Court and Court of Justice) on procedural grounds.
2. Article 101 TFEU prohibits agreements between undertakings that may affect trade between EU Member States and restrict competition without redeeming virtue, [1] including in particular cartels. [2]
3. Regulation 1/2003, [3] the main regulation giving effect to Article 101 TFEU, entrusts both the European Commission and the competition authorities of the EU Member States (national competition authorities), forming together the European Competition Network (ECN), with the task of pursuing infringements of Article 101 TFEU. [4] This paper only deals with cartel decisions adopted by the European Commission.
4. The European Commission’s main decisional powers are set out in Articles 7 and 23 of Regulation 1/2003. Article 7 empowers the European Commission to adopt decisions finding infringements of Article 101 TFEU and ordering the termination of such infringements. In cases concerning cartels, decisions pursuant to Article 7 are invariably combined with a decision pursuant to Article 23(2)(a), which empowers the Commission to impose fines to penalise the infringement found.
5. The procedural rules governing the Commission’s administrative proceedings leading to cartel decisions are laid down in the EU treaties and Charter of Fundamental Rights, Council Regulation 1, [5] Council Regulation 1/2003, [6] Commission Regulation 773/2004, [7] various Commission notices or guidelines, and the case law of the EU courts. [8]
6. Pursuant to Article 263 TFEU, the addressees of decisions adopted by the European Commission can bring an action for annulment of the decision before the EU courts, more precisely before the General Court, with the possibility of a further appeal only on points of law before the Court of Justice. [9]
7. According to the case law, “the scope of judicial review provided for in Article 263 TFEU extends to all the elements of Commission decisions relating to proceedings applying Article 101 TFEU (. . .) which are subject to in-depth review by the General Court, in law and in fact, in the light of the pleas raised by the appellants (. . .) and taking into account all the elements submitted by the latter, whether those elements pre-date or post-date the contested decision, whether they were submitted previously in the context of the administrative procedure or, for the first time, in the context of the proceedings before the General Court, in so far as those elements are relevant to the review of the legality of the Commission decision.” [10]
8. One of the grounds for annulment listed in Article 263 TFEU is “infringement of an essential procedural requirement. ” [11] Not every procedural irregularity thus constitutes a ground for annulment. [12] A procedural irregularity in the administrative proceedings resulting in the Commission’s decision will constitute a ground for the annulment of that decision “only if the Court of Justice or the General Court finds that in the absence of the irregularity in question the contested [decision] might have been substantially different, that the irregularity makes judicial review impossible, or that, on account of the irregularity [that] it contains, the [decision] in question breaches a fundamental institutional rule. ” [13]
9. According to the case law, “the EU Courts cannot, in the context of the review of legality referred to in Article 263 TFEU, substitute their own reasoning for that of [the Commission]”. [14] If the application for annulment is well-founded, the court can thus not correct the Commission’s decision, but must declare it void, as required by Article 264 TFEU, to the extent that the action is well founded. [15] It is then for the Commission to draw the necessary consequences, as required by Article 266 TFEU.
10. An important exception to this impossibility for the court to correct the Commission’s decision concerns the determination of the amount of the fine. According to the case law: “The review of legality is supplemented by the unlimited jurisdiction which the Courts of the European Union [are] afforded by (. . .) Article 31 of Regulation No 1/2003, in accordance with Article 261 TFEU. That jurisdiction empowers the Courts, in addition to carrying out a mere review of the lawfulness of the penalty, to substitute their own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or penalty payment imposed.” [16]
11. However, “the scope of that unlimited jurisdiction is strictly limited, unlike the review of legality provided for in Article 263 TFEU, to determining the amount of the fine. ” [17]
II. Overview of readoption cases
12. By the end of 2020, the European Commission had readopted annulled cartel decisions in eleven cases.
1. PVC
13. The first readoption took place in July 1994 in the PVC case. The Commission had adopted an initial decision in December 1988, fining fourteen PVC producers for their participation in a cartel. [18] In so far as it concerned twelve of these fourteen undertakings, [19] this initial decision was annulled by the Court of Justice in June 1994 for infringement of an essential procedural requirement within the meaning of Article 173 EEC (now Article 263 TFEU) on the ground that the Commission had failed to carry out the authentication of its decision in accordance with the Commission’s own Rules of Procedure. [20] Six weeks after this annulment, without taking any further procedural steps, the Commission adopted the new decision, identical to the initial decision but now duly authenticated, addressed to the twelve undertakings for whom the first decision had been annulled. [21] The twelve undertakings brought actions for annulment against the readopted decision, contesting in particular on various grounds the legality of such readoption. These actions were ultimately rejected by the Court of Justice in the PVC II judgment of October 2002, the leading judgment on readoption of antitrust decisions. [22]
2. Soda ash
14. The Commission readopted in December 2000 three decisions in the Soda ash cases. In December 1990, the Commission had adopted four decisions, imposing fines on Solvay and ICI for an infringement of Article 85 EEC, on Solvay and a German undertaking for another infringement of Article 85 EEC, on Solvay for an infringement of Article 86 EEC, and on ICI for an infringement of Article 86 EEC. [23] Upon applications for annulment brought by Solvay and ICI, the General Court annulled in June 1995 the third and fourth decisions, as well as the second decision in so far as it concerned Solvay, on the same ground as the annulments of the initial decision in PVC—namely, failure of authentication of the decisions. [24] These annulments were confirmed on appeal by the Court of Justice in April 2000. [25] Eight months later, without taking any further procedural steps, the Commission readopted the third and fourth decisions, as well as the second decision in so far as it concerned Solvay. [26] Solvay brought applications for annulment against the two readopted decisions concerning it. After the General Court had upheld these two readopted decisions in December 2009, [27] the Court of Justice annulled these decisions in October 2011, on the ground of infringement of the rights of the defence, in that Solvay had not been granted full access to the file during the administrative proceedings preceding both the initial and the readopted decisions. [28] The Commission did not subsequently attempt to readopt a second time these twice annulled decisions. [29] While the judgments of the Court of Justice in Soda ash do not dwell on the question of the readoption of decisions, the opinions of Advocate General Kokott are of interest in particular on the compatibility of readoptions with the fundamental right to have a matter adjudicated within a reasonable duration. [30]
3. Steel beams (Arbed/Arcelor)
15. The Commission readopted in November 2006 a decision concerning one of the undertakings in the Steel beams case. In February 1994, the Commission had imposed fines on fourteen producers and distributors of steel beams for infringements of Article 65 ECSC, including a fine of ECU 11,200,000 on Arbed SA. [31] Upon an action for annulment brought by Arbed SA, the General Court in March 1999 partially annulled the decision, on the ground that Arbed’s participation in one of the infringements had not been established, and, in the exercise of its unlimited jurisdiction, fixed the amount of the fine at EUR 10,000,000. [32] Upon appeal brought by Arbed SA, the Court of Justice in October 2003 annulled the entire decision in so far as it concerned Arbed SA, on the ground of violation of the rights of the defence, in that the statement of objections had not been addressed to Arbed SA but rather to its daughter company TradeArbed SA and had not indicated that a fine would be imposed on Arbed SA. [33] Following this annulment, the Commission reopened its proceedings as regards Arbed SA. It sent in March 2006 a statement of objections to Arcelor Luxembourg SA, the legal successor of Arbed SA, and two other Arcelor companies. In their responses to this statement of objections, the Arcelor companies did not contest the infringement as upheld by the General Court. The new decision imposed on the Arcelor companies the same fine of EUR 10,000,000 as fixed by the General Court. [34] The Arcelor companies did not bring an application for annulment against this readopted decision.
4. Alloy surcharge (ThyssenKrupp)
16. The Commission readopted in December 2006 a decision concerning one of the undertakings in the Alloy surcharge case. In January 1998, the Commission had adopted an initial decision imposing fines on six stainless steel producers, including ThyssenKrupp Stainless, for an infringement of Article 65 ECSC. [35] Upon an application for annulment brought by ThyssenKrupp Stainless, the General Court partially annulled the initial decision in so far as it held ThyssenKrupp Stainless responsible for the participation of Thyssen Stahl in the cartel infringement, on the ground of violation of the rights of the defence, because the statement of objections preceding the initial decision had not indicated that ThyssenKrupp Stainless would also be held liable for Thyssen Stahl’s participation in the cartel. The General Court, furthermore, in the exercise of its unlimited jurisdiction, reduced by 20% (the remainder of) the fine imposed on ThyssenKrupp Stainless because of its cooperation with the Commission’s investigation. [36] Following this partial annulment, the Commission sent in April 2006 a new statement of objections to ThyssenKrupp Stainless and, after ThyssenKrupp Stainless had responded in writing and at an oral hearing, adopted in December 2006 a new decision, fining ThyssenKrupp Stainless for Thyssen Stahl’s participation in the cartel. In this new decision, the Commission applied a 20% fine reduction identical to the reduction which the General Court had granted for the other part of ThyssenKrupp Stainless’s fine. [37] The application for annulment brought against this new decision was rejected by the EU courts. [38]
5. Reinforcing bars
17. The Reinforcing bars case is unique in that it has led to two successive readoptions, in September 2009 and in July 2019. In December 2002, the Commission had adopted an initial decision imposing fines on eight undertakings for taking part in a concrete reinforcing bar cartel in Italy, in violation of Article 65 ECSC. [39] Upon applications for annulment by the eight undertakings, the General Court annulled in October 2007 this initial decision because the legal basis used in it—namely, Article 65 ECSC—was no longer in force at the time of its adoption. [40] Following this annulment, the Commission adopted in September 2009 a new, second decision, largely identical to the initial decision, but now with Articles 7 and 23(2) of Regulation 1/2003 as legal basis. [41] All eight undertakings brought again applications for annulment against this second decision before the General Court, which in December 2014 upheld the second decision, with only small fine reductions for two undertakings. [42] Five of the eight undertakings brought a further appeal to the Court of Justice, which in September 2017 annulled the second decision in so far as it concerned those five undertakings, on the ground of infringement of an essential procedural requirement flowing from Regulation 773/2004, in that no oral hearing had been held on the substance of the case to which the competition authorities of the Member States had been invited. [43] Following this second annulment, and after a new oral hearing in April 2018, to which the competition authorities of the Member States were invited, [44] the Commission adopted in July 2019 a new, third decision re-imposing fines on the five undertakings for whom the second decision had been annulled. [45] The new fines are, however, significantly lower than the fines imposed in the first and second decisions. Indeed, in recognition of the long duration of the overall proceedings before the Commission and the courts, the Commission reduced the fines by 50%. The Commission also copied the two small fine reductions granted by the General Court. [46] Finally, as one of the undertakings was in the meantime in liquidation, and had no longer any turnover, its fine was set at zero, in application of Article 23(2), second subparagraph, of Regulation 1/2003, which limits fines to 10% of the overall turnover of the undertaking concerned in the business year preceding the Commission’s decision. [47] The four undertakings on whom an above-zero fine was imposed have brought applications for annulment of this third decision before the General Court. [48]
6. Carbonless paper (Bolloré)
18. The Commission readopted in June 2010 a decision concerning one of the undertakings in the Carbonless paper case. In December 2001, the Commission had imposed fines on eleven undertakings for an infringement of Article 81 EC in the carbonless paper sector, including a fine of EUR 22.68 million on Bolloré. [49] Upon the application for annulment before the General Court and the subsequent appeal before the Court of Justice brought by Bolloré, the Court of Justice in September 2009 annulled this initial decision in so far as it concerned Bolloré, on the ground of violation of the rights of the defence, in that the initial decision held Bolloré liable both for its own direct participation in the cartel and, as parent company, for the participation of one its subsidiaries in the cartel, whereas the statement of objections preceding the initial decision had only mentioned Bolloré’s liability as parent company. [50] Following this annulment, the Commission sent in December 2009 a new statement of objections to Bolloré, now also covering its direct participation in the cartel. After Bolloré had responded to the statement of objections in writing and at an oral hearing, the Commission adopted in June 2010 a new decision addressed to Bolloré, finding the same infringement as in the initial decision but imposing a slightly lower fine of EUR 21.26 million, in recognition of Bolloré’s cooperation in that Bolloré during the readoption proceedings no longer contested the participation of its subsidiary in the cartel. [51] Bolloré’s application for annulment against this new decision was rejected by the courts. [52]
7. Gas insulated switchgear (Mitsubishi and Toshiba)
19. The Commission readopted in June 2012 a decision concerning two of the undertakings in the Gas insulated switchgear case. In January 2007, the Commission had imposed fines on eleven European and Japanese undertakings for their participation in a cartel for gas-insulated switchgear projects, in violation of Article 81 EC, including a fine of EUR 113,925,000 on Mitsubishi, a fine of EUR 86,250,000 on Toshiba, and a fine of EUR 4,650,000 on Mitsubishi and Toshiba jointly and severally. [53] Upon applications for annulment by Mitsubishi and by Toshiba, the General Court in July 2011 confirmed the finding of the infringement of Article 81 EC but annulled the fines imposed on those two undertakings, on the ground of infringement of the principle of equal treatment, in that the Commission had used a different reference year for the calculation of the fines imposed on the Japanese undertakings than the one used for the calculation of the fines imposed on the European producers. The General Court did not use its unlimited jurisdiction to set new fines. [54] Following these annulments, the Commission sent in February 2012 letters to Mitsubishi and to Toshiba expressing its intention to re-impose fines and setting out the parameters of the new calculation. After having received Mitsubishi’s and Toshiba’s written comments, the Commission adopted in June 2012 a new decision imposing a fine of EUR 74,817,000 on Mitsubishi, a fine of EUR 56,793,000 on Toshiba (both lower than the initial fines), and a fine of EUR 4,650,000 on Mitsubishi and Toshiba jointly and severally (identical to the initial fine). [55] Mitsubishi’s and Toshiba’s applications for annulment against this new decision were rejected by the EU courts. [56] The courts rejected in particular Toshiba’s plea that the Commission should have sent a new statement of objections before imposing the new fine. [57]
8. Heat stabilisers (GEA and Akzo)
20. The Commission readopted in June 2016 two decisions concerning two of the undertakings in the Heat stabilisers case. In November 2009, the Commission had imposed fines on eleven undertakings, including GEA and Akzo, for participation in one or two cartel infringements in violation of Article 81 EC relating to two categories of heat stabilisers. [58] GEA and Akzo both brought applications for annulment of this initial decision. The General Court rejected GEA’s application, [59] and, in the exercise of its unlimited jurisdiction, reduced the fines imposed on Akzo by 1%. [60] In the initial decision, another company, ACW, was held jointly and severally liable with GEA for part of the fines imposed on GEA. Similarly, another company, Elementis, was held jointly and severally liable with Akzo for part of the fines imposed on Akzo. In February 2010, the Commission adopted a decision amending the initial decision, reducing the amount of the fines for which ACW was held jointly and severally liable with GEA, because the higher amount in the initial decision exceeded the ceiling of 10% of ACW’s turnover in the business year preceding the initial decision, in violation of Article 23(2) of Regulation 1/2003. [61] In June 2011, the Commission adopted a second decision amending the initial decision, removing the joint and several liability of Elementis for parts of the fines imposed on Akzo, on the ground that the Commission’s powers to impose fines on Elementis had been time-barred at the time of the initial decision. [62] Upon applications for annulment brought by GEA and Akzo respectively, the General Court in July 2015 annulled the two decisions amending the initial decision, on the ground of violation of the right to be heard, in that GEA had not been heard before the adoption of the first amending decision and Akzo had only been granted a few days to provide its views on the second amending decision. [63] Following these two annulments, and after having heard GEA and Akzo in writing, the Commission in June 2006 adopted two new decisions amending the initial decision, identical to the two annulled amending decisions, while also taking into account the 1% fine reduction which the General Court had granted to Akzo. [64] GEA brought an application for annulment against the first of these new amending decisions, which, following a first judgment of the General Court in October 2018 that was annulled by the Court of Justice in November 2020, [65] is currently pending before the General Court. [66]
9. Airfreight
21. The Commission readopted in March 2017 a decision in the Airfreight case. In November 2010, the Commission had adopted an initial decision imposing fines for an infringement of Article 101 TFEU, Article 53 EEA and Article 8 of the EU/Switzerland Agreement on Air Transport committed by twelve air cargo carriers. [67] All but one of the air cargo carriers brought an application for annulment of this initial decision. In December 2015, the General Court held that the initial decision was vitiated by a defective statement of reasons. Depending on the forms of order sought before the General Court, that vice entailed the annulment in full or in part in respect of the various parties that had challenged the initial decision. [68] Following these annulments, and after having heard the parties concerned on its intention to adopt a new decision, the Commission adopted in March 2017 a new decision in respect of the parties for whom the initial decision had been annulled. [69] For one of the air carriers, Martinair, the fine imposed by the new decision is lower than the initial fine, in application of Article 23(2), second subparagraph, of Regulation 1/2003, which limits fines to 10% of the overall turnover of the undertaking concerned in the business year preceding the Commission’s decision, as Martinair’s turnover was lower in 2016 than in 2009. [70] On the other hand, for those air carriers for whom the fine had been capped at 10% of their turnover in the initial decision but whose turnover had since increased, the Commission did not impose a higher fine in the new decision but rather imposed again the same fine as in the initial decision. [71] Applications for annulment against this new decision are currently pending before the General Court. [72]
10. Envelopes (Printeos/Tompla)
22. The Commission readopted in June 2017 a decision concerning one of the undertakings in the Envelopes case. In December 2014, the Commission had imposed fines on five envelopes producers. Under the Commission’s cartel settlement procedure, [73] all five undertakings had recognised their liability for the infringement, and received a 10% fine reduction on this ground. [74] One of the five undertakings, Printeos/Tompla, brought an action against this initial decision before the General Court, seeking annulment only of the fine, not of the finding of infringement. In December 2016, the General Court annulled the fine imposed on Printeos/Tompla, on the ground of failure to state adequate reasons as to the relative amounts of the fines imposed on the five undertakings. [75] Following this annulment, and after having heard Printeos/Tompla on its intention to adopt a new decision, the Commission adopted in June 2017 a new decision, reimposing the same fine on Printeos/Tompla, with additional reasoning. [76] Printeos/Tompla’s application for annulment of this new, second decision was rejected by the General Court. [77] Following the initial decision, and while its application for annulment was pending before the General Court, Printeos/Tompla had in March 2015 provisionally paid the fine. Following the annulment of the initial fine, the Commission repaid in February 2017 the fine, while rejecting Printeos/Tompla’s claim for payment of interest. Upon an action brought by Printeos/Tompla against this refusal to pay interest, the General Court and the Court of Justice in February 2019 and January 2021 ordered the Commission to pay Printeos/Tompla default interest calculated from the day of the provisional payment at a standard rate. [78]
11. Retail food packaging (CCPL/Coopbox)
23. The Commission readopted in December 2020 a decision concerning one of the undertakings in the Retail food packaging case. In June 2015, the Commission had imposed fines on ten undertakings for cartels in the retail food packaging sector, including fines of EUR 33,694,000 on CCPL/Coopbox for participation in three cartels. [79] In July 2019, the General Court annulled this initial decision in so far as it imposed these fines on CCPL/Coopbox, on the ground of insufficient reasoning as to the percentage of reduction of the fine on account of inability to pay. [80] Following this annulment, and after having heard CCPL/Coopbox on the new fine calculation, the Commission adopted in December 2020 a new decision, imposing new fines of EUR 9,441,000 on CCPL/Coopbox. The much lower amount of the new fine results from the application of Article 23(2), second subparagraph, of Regulation 1/2003, which limits fines to 10% of the overall turnover of the undertaking concerned in the business year preceding the Commission’s decision, as CCPL/Coopbox’s turnover in 2019 was much lower than in 2014. [81] CCPL/Coopbox have brought an application for annulment of this new decision. [82]
III. Analysis
1. A natural consequence of Articles 263, 264 and 266 TFEU...
24. The phenomenon of readoption by the European Commission of decisions annulled by the EU courts is, at first analysis, a natural consequence of Articles 263, 264 and 266 TFEU. As already mentioned above, [83] the EU courts cannot, in the context of the review of legality under Article 263 TFEU, substitute their own reasoning for that of the Commission. [84] If an application for annulment is well-founded, the court can thus not correct the Commission’s decision, but must declare it void, as required by Article 264 TFEU, to the extent that the action is well-founded. [85] It is then for the Commission to draw the necessary consequences, as required by Article 266 TFEU.
25. Furthermore, according to well-established case law, annulment of a decision does not necessarily affect the preparatory acts, and the procedure for replacing an annulled decision may, in principle, be resumed at the very point at which the illegality occurred. [86]
26. In the PVC and Soda ash cases, in which the illegality consisted in the failure to authenticate the decision in accordance with the Commission’s own Rules of Procedure, [87] the Commission could thus, without taking any further procedural steps, literally “readopt” its decision, with proper authentication. [88]
27. In those cases where the illegality occurred at an earlier stage, what the Commission did was not simply “readopt” the initial decision, but rather resume its administrative proceedings at the point where the illegality occurred. For instance, in the Steel beams (Arbed/Arcelor), Alloy surcharge (ThyssenKrupp) and Carbonless paper (Bolloré) cases, where the illegality had occurred at the point of the statement of objections, the Commission resumed its proceedings with a new statement of objections. [89] The fact that the term “readoption” is commonly used to describe such resumption of the proceedings should not deflect from the reality of what happens. [90]
2. …but also a matter of discretion
28. While the Commission may, in principle, following an annulment, resume its proceedings at the point where the illegality occurred, with a view to adopting a new decision, it is, however, under no obligation to do so.
29. Indeed, according to well-established case law, in order to perform effectively its task of ensuring application of the principles laid down in Article 101 TFEU, the Commission has a broad discretion to select the cases that it investigates and in which it continues the proceedings up to the stage of a final decision. [91]
30. Following the annulment of its initial decision, the Commission has thus also, in principle, a discretion whether or not to resume proceedings and whether or not to adopt a new decision. [92]
31. In its press statements at the occasion of the adoption of new decisions following the annulment of the initial decision, the Commission has stated that “the Commission will correct any procedural mistake made so that companies rest assured that they will not escape cartel fines for procedural reasons,” [93] that “the decision confirms that the Commission will not let cartels go unpunished” because “[c]artels are illegal and cause consumers and business[es] to suffer,” [94] or that “[t]he re-adoption of this decision is based on the public interest in pursuing an effective and deterrent enforcement against cartels.” [95]
32. In this respect, the General Court has held that “the Commission’s assertion that it is determined that the members of anti-competitive cartels should not escape, on procedural grounds, the penalties applicable under EU law, is not a manifestation of bias but merely the assertion of a clear intention, wholly consistent with the task entrusted to the Commission, of making good, on a case-by-case basis, the procedural irregularities found, in order not to undermine the effectiveness of EU competition law.” [96]
33. The Commission has however not always resumed proceedings in cases where it could in principle have done so. As already mentioned above, the Commission did not attempt to readopt a second time the twice annulled decisions in Soda ash. [97]
3. The principle of ne bis in idem
34. The main limitation on the possibility to readopt a decision or resume proceedings after the annulment of an initial decision results from the principle of ne bis in idem. [98] This general principle of EU law is enshrined in Article 50 of the Charter of Fundamental Rights of the European Union, which reads as follows: “No one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law.”
35. According to the explanations to the Charter, to which according to Article 6(1) TEU due regard must be given, this provision “corresponds to Article 4 of Protocol No 7 to the ECHR, but its scope is extended to European Union level between the Courts of the Member States.” [99]
36. Article 4 of Protocol No. 7 to the Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR) reads as follows:
“1.No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State.
2.The provisions of the preceding paragraph shall not prevent the re-opening of the case in accordance with the law and penal procedure of the State concerned, if there is evidence of new or newly discovered facts, or if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the case. ” [100]
37. As the Court of Justice held in the PVC II judgment, the principle of ne bis in idem thus “precludes, in competition matters, an undertaking from being found guilty or proceedings from being brought against it a second time on the grounds of anti-competitive conduct in respect of which it has been penalised or declared not liable by a previous unappealable decision. (. . .) On the other hand, it does not in itself preclude the resumption of proceedings in respect of the same anti-competitive conduct where the first decision was annulled for procedural reasons without any ruling having been given on the substance of the facts alleged, since the annulment decision cannot in such circumstances be regarded as an ‘acquittal’ within the meaning given to that expression in penal matters. In such a case, the penalties imposed by the new decision are not added to those imposed by the annulled decision but replace them. ” [101]
38. The Commission can thus not resume proceedings and adopt a new decision if the initial decision has been annulled on substantive grounds, in that the EU courts found that the Commission had failed to establish, in law or in fact, the alleged infringement of Article 101 TFEU in the initial decision. [102]
39. Resumption of proceedings and adoption of a new decision is also precluded by the principle of ne bis in idem if the EU courts have annulled the fine, including for procedural reasons, but have then exercised their unlimited jurisdiction under Article 261 TFEU to set a new amount of the fine. Indeed, once the EU courts have actually exercised their unlimited jurisdiction, the Commission definitively loses its power. [103]
40. The Butadiene rubber (Eni/Polimeri/Versalis) case provides an illustration of this last point. In November 2006, the Commission had imposed fines on five undertakings for an infringement of Article 81 EC and Article 53 EEA, including a fine of EUR 272,250,000 on Eni/Polimeri/Versalis. [104] The latter fine included a 50% increase of the basic amount of the fine on account of recidivism. [105] In July 2011, the General Court confirmed the finding of infringement but annulled the initial decision in so far as it imposed the fine on Eni/Polimeri/Versalis, on the ground that the Commission had not provided sufficient detailed and precise evidence in the initial decision that the same “undertaking” within the meaning of Article 81 EC had repeatedly infringed the cartel prohibition. In the exercise of its unlimited jurisdiction, the General Court set the amount of the fine at EUR 181,500,000. [106] In March 2013, the Commission sent a new statement of objections to Eni/Polimeri/Versalis with a view to re-imposing the 50% uplift for recidivism, [107] in apparent breach of the principle of ne bis in idem. Eni/Polimeri/Versalis immediately brought actions before the General Court to stop this reopening of proceedings. The Commission later withdrew the new statement of objections and closed the case, with the result that the actions before the General Court became without object. [108]
4. Prescription
41. In some cases, resumption of proceedings and adoption of a new decision following the annulment of the initial decision may be impossible because of prescription.
42. Article 25 of Regulation 1/2003 lays down the limitation periods for the imposition of fines.
43. It follows from Article 25(1)(b), (2) and (5) that the limitation period for imposing fines for an infringement of Article 101 TFEU expires at the latest ten years after the infringement ceases. This time limit is extended by the time during which the decision of the Commission is the subject of proceedings pending before the EU courts.
44. The length of the proceedings before the EU courts against the initial decision does thus not affect the possibility for the Commission to reopen proceedings and adopt a second decision after the annulment of the initial decision. [109]
45. However, if the initial decision had been adopted close to the end of the limitation period, not enough time may remain after the annulment to adopt a new decision, in particular in cases where the illegality occurred at a relatively early stage of the proceedings, for instance at the stage of the statement of objections, and many procedural steps thus need to be taken before a new decision can be adopted. [110]
5. The fundamental right to have a matter adjudicated within a reasonable duration
46. Undertakings targeted by cartel investigations have a fundamental right to have their case dealt with within a reasonable time, a right recognised in the case law of the Court of Justice as a general principle of European Union law and enshrined in Article 41(1) and the second paragraph of Article 47 of the Charter of Fundamental Rights.
47. The Court of Justice has held that the reasonableness of the duration of proceedings must be appraised in the light of the circumstances specific to each case and, in particular, the importance of the case for the parties concerned, its complexity and the conduct of the parties and of the competent authorities, the list of relevant criteria not being exhaustive. [111] It follows that the fact that the limitation period for the imposition of penalties as laid down in Article 25 of Regulation 1/2003 has not yet expired is not decisive. [112]
48. The unreasonableness of the duration of the proceedings can result not only from the excessive duration of one or several individual stages of the proceedings but also from the overall length of the administrative and judicial proceedings taken together. [113] In some readoption cases, the absolute length of the proceedings, taking into account all stages of the administrative and judicial proceedings, becomes particularly long.
49. The Reinforcing bars case, [114] for instance, started with inspections by the Commission between October and December 2000. By the time the Commission adopted its third decision in July 2019, more than 18 years had already passed. Given that in the judgments of September 2017, the Court of Justice has not dealt with a number of grounds of appeal raised against the judgments of the General Court to the extent that the latter judgments confirmed the Commission’s second decision, it could be expected that at least some of the undertakings concerned will exercise their right to have the third Commission decision again reviewed by the General Court and the Court of Justice. [115] Assuming that this third round of judicial review will put a definitive end to the administrative and judicial proceedings, it is foreseeable that 22 or 23 years could easily have passed by then. [116] There is undeniably a real risk in this case that the Court of Justice may consider that the overall duration of the proceedings, including the two stages before the General Court following the Commission’s first and second decisions, is unreasonably long. [117] The question then arises whether this should have precluded the Commission from adopting a third decision.
50. According to the European Court of Human Rights, a failure to adjudicate within a reasonable time must, as a procedural irregularity constituting the breach of a fundamental right, give rise to an entitlement of the party concerned to an effective remedy granting him appropriate relief. [118]
51. The Court of Justice has often been confronted with the question of what remedy the General Court or the Court of Justice itself should grant if the General Court or the Court of Justice finds that the administrative and/or judicial proceedings in an antitrust case have been unreasonable long. The Court of Justice has consistently held that the General Court or the Court of Justice can only annul a Commission’s decision finding an infringement of Articles 101 or 102 TFEU and imposing fines for such an infringement if it has been proven that the unreasonable duration of the administrative and/or judicial proceedings has adversely affected the ability of the undertakings concerned to defend themselves in the administrative and/or judicial proceedings. Abstract and imprecise claims by the undertakings concerned that their rights of the defence were breached are not sufficient. [119] What must be proven is a concrete adverse effect on the undertaking’s ability to defend itself, for instance in that the individuals within the undertaking that would be able to provide exculpatory explanations of the evidence in the Commission’s file were no longer alive or available at the time the undertaking was granted belated access to the Commission’s file, whereas those individuals would have been available if the access to the file had not been belated. [120]
52. In the absence of a proven concrete adverse effect on the undertaking’s ability to defend itself, the Court of Justice has always held that the General Court or the Court of Justice could only grant financial compensation. Whereas older case law considered that this compensation could be granted by the General Court or the Court of Justice in the form of a reduction of the fine applied by the court in the exercise of its unlimited jurisdiction within the meaning of Article 261 TFEU, [121] the more recent case law considers that the appropriate remedy is for the undertaking concerned to bring a separate action for damages under Article 268 TFEU in conjunction with the second paragraph of Article 340 TFEU. [122]
53. This case law concerns the remedy the General Court or the Court of Justice should grant if the General Court or the Court of Justice finds that the administrative and/or judicial proceedings in an antitrust case have been unreasonably long, whereas the question the Commission was confronted with in the Reinforcing bars case was the different question whether it should continue proceedings and adopt a new, third decision, which, with the ensuing judicial review, to which the undertakings are fully entitled, would easily prolong the already very long proceedings by another four or five years. [123] An essential difference is that the Commission is under no obligation to resume proceedings after an annulment on procedural grounds of an earlier decision finding an antitrust infringement and imposing fines, nor under any obligation to continue such resumed proceedings until the adoption of a new decision. [124]
54. The undertakings concerned by the Reinforcing bars case argued that, in a situation where there is a real risk that the Court of Justice may consider that the overall duration of the proceedings is already unreasonably long, the Commission would necessarily lose all discretion and would automatically be obliged to discontinue the proceedings. [125] This view appears wrong in that it puts too one-sidedly all weight on the need to protect the undertakings’ rights under the Charter of Fundamental Rights to have their case dealt with within a reasonable time, while neglecting entirely the importance of the implementation of the EU competition rules, which is a fundamental aim of the EU treaties. [126]
55. The correct position rather appears to be that, in such a situation, the Commission is under an obligation, in the exercise of its discretion whether or not to resume proceedings and to continue such proceedings up to the adoption of a new decision finding an antitrust infringement and imposing fines, to consider and give due weight to the possible breach of the undertakings’ fundamental right to have their case dealt with within a reasonable time that has already occurred as well as to the further impact of its decision on the protection of the undertakings’ fundamental right. This means that, before adopting a new decision, the Commission must examine, taking into account all the circumstances of the case, whether the contribution which the adoption of such a new decision makes to the attainment of the aim of the implementation of the EU competition rules would not be outweighed by the impact of this course of action on the protection of the undertakings’ rights under the Charter of Fundamental Rights. If the outcome of the balancing exercise is that the contribution which the adoption of a new decision makes to the attainment of the aim of the implementation of the EU competition rules outweighs the impact of this course of action on the respect for the undertakings’ fundamental right under the Charter, the Commission can adopt such a third decision. To remedy the possible breach of the undertakings’ fundamental right, the Commission must then, in my view, grant a reduction in the amount of the fines. The size of the reduction must reflect the specificities of the case, including the fact that the excessive duration as a result of the annulment of earlier decisions is not attributable to the conduct of the undertakings. [127]
56. A similar approach has been taken by the Commission in the Reinforcing bars case. As explained in the summary of the third decision adopted in July 2019:
“In the present case, the Commission’s discretion to adopt a decision must be exercised by weighing up the public interest in obtaining effective enforcement of the competition rules against the interest of the addressees in obtaining the fullest possible remedy for the alleged infringement of their fundamental rights owing to the lengthy duration of the proceedings.
The outcome of the Commission weighing up the respective interests shows that, in the present case, the adoption of a decision imposing fines will avoid impunity of the parties by ensuring a deterrent effect and consistent and effective application of the competition rules. At the same time, the specific circumstances of this case were taken into consideration by the Commission for the purposes of setting the fines applicable to the addressees of the Decision. The addressees will therefore be able to benefit from an appropriate reduction of the fines otherwise applicable, in order to mitigate the potential consequences of procedural errors committed by the Commission.
(. . .) the Commission concludes that a reduction of the fines of 50% as an extraordinary attenuating circumstance may be granted in order to mitigate the negative consequences for the addressees of this Decision arising from the lengthy duration of the proceedings. ” [128]
6. Further legal and policy considerations
57. At various occasions, [129] concerns have been expressed about the EU law and practice concerning readoption of cartel fining decisions following annulments for procedural reasons: What is the point of judicial review if, following an annulment, the same decision can be readopted? What incentives remain for the Commission to respect the procedural rules? And is this EU law and practice compatible with the case law of the European Court of Human Rights?
58. Such questioning could be enlarged to cover also the EU (case) law according to which not all procedural irregularities constitute grounds for annulment but only those in the absence of which the contested decision might have been substantially different (sometimes referred to in the literature as the “harmless error principle”). [130] According to the Court of Justice, “[t]hat rule makes good sense since it would be a manifestly disproportionate and wrong result if a decision correct as to its content were to be struck down owing to a flaw in the procedure leading to its adoption which, however, had no effect on the content of the decision.” [131]
59. Both the “harmless error principle” and the possibility of readoption of decisions annulled on procedural grounds reflect a predominantly instrumental conception of procedural rules. The underlying idea is that procedural rules predominantly exist to ensure the correctness of the substantive outcomes. [132]
60. The EU law on readoption of cartel fining decisions annulled on procedural grounds appears fully compatible with the European Convention on Human Rights and the case law of the European Court of Human Rights. [133]
61. As already apparent from the above analysis on the principle of ne bis in idem, [134] Article 4(1) of Protocol No. 7 ECHR limits the prohibition of a second procedure or second punishment to the situation where the defendant “has already been finally acquitted or convicted in accordance with the law and penal procedure of that State.” As clarified by the PVC II judgment, this is not the case for a European Commission cartel fining decision that has been annulled by the EU courts on procedural grounds, and without the EU courts having exercised their unlimited jurisdiction. [135] Moreover, Article 4(2) of Protocol No. 7 ECHR provides that the prohibition of a second procedure or second punishment “shall not prevent the reopening of the case in accordance with the law and the penal procedure of the State concerned, (. . .) if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the case.”
62. In the same spirit, the European Court of Human Rights has a “settled case-law to the effect that when [the] applicant has suffered an infringement of his rights guaranteed by Article 6 of the Convention, he should, as far as possible, be put in the position in which he would have been had the requirements of that provision not been disregarded, and that the most appropriate form of redress would, in principle, be the reopening of the proceedings. ” [136]
63. Fears about the lack of incentives for the Commission to respect procedural rules do not appear justified either. As an institution charged with guarding EU law, [137] the Commission is naturally inclined to respect procedural rules. It has also created in its internal organisation the function of Hearing Officer for competition proceedings, whose general mission is to safeguard the effective exercise of procedural rights throughout competition proceedings before the Commission. [138]
64. In any event, even in those cases where the Commission can subsequently resume its proceedings and adopt a new decision, the annulment of the initial decision is never without cost for the Commission. First, annulments on procedural grounds cause reputational damage. Secondly, when annulling the initial decision, the EU courts invariably condemn the Commission to the costs of the court proceedings. [139] Third, reopening proceedings and adopting a new decision consume administrative resources. Finally, when, following an annulment, the Commission reimburses a provisionally paid fine, it must pay default interest calculated from the day of the provisional payment at a standard rate. [140] Indeed, in its judgment confirming this obligation, the Court of Justice specifically mentioned its incentive effect: “the obligation, in the event of annulment of a decision entailing the provisional payment of an amount such as a fine imposed for infringement of competition rules, to repay the amount paid together with default interest calculated from the date of payment of that amount is an incentive for the institution concerned to pay particular attention when adopting such decisions, which may entail an obligation for an individual to pay a considerable amount immediately.” [141]
65. As to the incentives for addressees of cartel fining decisions to raise procedural pleas before the EU courts, there is no indication that such pleas have been raised less frequently since the PVC II judgment of October 2002, which made the possibility of readoptions fully clear. [142] Furthermore, as discussed above, the Commission cannot always resume proceedings after an annulment on procedural grounds, [143] and has not always done so in cases where it could in principle have resumed proceedings. [144] Finally, when readoption has happened, the newly imposed fines have in several cases been lower than the initial fines, [145] while they have never exceeded the initial fines. [146]
