| EUROPEAN COMMUNITY — Free competition — Restriction or distortion of competition — Fine imposed by EC Commission — Amount not to exceed 10% of turnover in “preceding business year” — Business year Commission entitled to refer to — Council Regulation No 17, art 15(2)
Britannia Alloys & Chemicals Ltd v Commission of the European Communities (Case C-76/06P)
ECJ: President of Chamber Lenaerts, Judges Juhász, Silva de Lapuerta, Arestis and von Danwitz: 7 June 2007
Where the Commission of the European Communities found that an undertaking had participated in anti-competitive practices contrary to art 81 EC and imposed a fine by reference to the undertaking’s turnover in the “preceding business year”, and the undertaking had no turnover in the business year preceding the date of the infringement decision, the Commission was entitled to refer to another business year.
The Fourth Chamber of the Court of Justice of the European Communities so held, inter alia, when dismissing an appeal from the judgment of the Court of First Instance of the European Communities in Britannia Alloys & Chemicals Ltd v Commission of the European Communities (Case T-33/02) [2005] ECR II-4973.
Art 15(2) of Council Regulation No 17 implementing arts 81 and 82 EC provides that, on a finding of infringement of one of these provisions, “The Commission may … impose … fines of from 1,000 to 1,000,000 units of account, or a sum in excess thereof but not exceeding 10% of the turnover in the preceding business year of each of the undertakings participating in the infringement ...”
By decision of 11 December 2001, the Commission found that the appellant had between March 1994 and March 1997 participated in a cartel relating to zinc phosphate, used in the paint industry, and imposed a fine of EUR 3.37m, arrived at by reference to the appellant’s turnover for the year ending 30 June 1996, on the ground that that was “the last available figure reflecting an entire year of normal economic activity”. In its judgment dismissing the appellant’s application for annulment of the Commission’s decision, the Court of First Instance held inter alia that the Commission had not erred in law in basing its fine on turnover in that year. The appellant appealed to the Court of Justice.
THE COURT said that the appellant argued that, on the wording of the second part of art 15(2) of Regulation No 17, the Commission could only refer to the business year preceding the date of the Commission’s decision, ie in the present case the business year ending on 30 June 2001, and that since its turnover in that year was zero, the fine could only be between EUR 1,000 and 1m. That could not be accepted. The Commission had inter alia to have regard to the impact the penalty would have on the undertaking, and for that purpose to take into account a turnover reflecting the undertaking’s real economic situation during the period in which the infringement was committed. Accordingly, where, as in the present case, the undertaking concerned had not achieved any turnover for the business year preceding the adoption of the Commission decision, the Commission was entitled to refer to another business year in order to be able to make a correct assessment of the financial resources of the undertaking and to ensure that the fine had a sufficient deterrent effect.
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