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On May 14, 2020, the Court of Justice of the European Union (CJEU) annulled part of the judgment of the General Court (GC) and partially upheld the appeal filed by the cable manufacturer NKT, reducing the fine imposed by the European Commission from 3.88 million to 3.68 million (case C-607/18 P NKT Verwaltung and NKT v. European Commission).

This judgment results from the different appeals lodged in the frame of a decision of the Commission in 2014, in which several cable manufacturers were fined with over €300 million, as a result of forming cartel.

On April 2, 2014, the European Commission published its decision on case AT.39610 — Power Cables, concluding that 11 high-voltage underground and submarine power cable manufacturers had infringed article 101 of the Treaty on the Functioning of the European Union (TFEU) and article 53 of the Agreement on the European Economic Area (EEA) by creating a cartel over almost a decade sharing markets and customers worldwide. The investigation was triggered by a leniency application from the Swiss producer ABB, who benefited from full immunity and was not fined. NKT, on the other hand, was fined €3,887,000 for being part of the cartel from July 2002 to February 2006; its parent company, NKT Holdings (now NKT Verwaltung), was declared jointly and severally liable.

NKT and NKT Verwaltung appealed the Commission’s decision before the GC, which dismissed the appeal in 2018 and confirmed the Commission’s decision in its entirety, so the companies brought the case before the CJEU. In its appeal before the CJEU, NKT raised three grounds of appeal, two of which were partially accepted by the court.

First, NKT reaffirmed before the CJEU that the Commission had infringed its rights of defense by stating its participation in events that had not been included in the statement of objections.

As the CJEU’s judgment states, the infringement assigned to the appellants in the statement of objections did not cover cartel activities related to sales outside the EU or the EEA, although the final decision did conclude that the anticompetitive conduct affected sales in non-EU or non-EEA countries.

The CJEU states that article 27 of Regulation 1/2003 expressly envisages that “[t]he Commission shall base its decisions only on objections on which the parties concerned have been able to comment”.

European caselaw indicates that the statement of objections is one of the safeguards for the parties’ right of defense. Therefore, in the framework of competition law infrigment proceedings initiated by the European Commission, the parties are entitled to submit their arguments on the objections against them included in the statement of objections, which the Commission must issue before its final decision.

Given that it could not make arguments on the legal assessment included in the Commission’s decision, as it differed from the statement of objections, the CJEU upheld the ground considering that NKT’s rights of defense were infringed in relation to sales outside the EU or EEA.

The CJEU dismissed, almost in its entirety, the second ground of appeal on the existence of a single and continuous infringement. However, the ECJ accepted NKT’s view in that the GC had erred in law when considering that, in the frame of defining NKT’s responsibility, the Commission was not obliged to demonstrate that this party had directly participated or that it knew about the collective refusal to supply accessories and technical assistance to competitors not participating in the cartel, agreed by other companies.

In its judgment, the CJEU brings back the caselaw on single and continuous infringements, which establishes that a company that has participated in an infringement of article 101 can also be liable for the conduct of other companies in the context of the same infringement, when participating in the same. Thus, this situation arises when it is proven that a company in question attempted to contribute to the achievement of common objectives pursued by the rest of the participants with its own conduct, and that it knew about the infringing conduct plans or its execution by other companies or that it could have reasonably foreseen it.

It then stated that, as the GC considered proven, the Commission’s decision acknowledged that NKT had not participated in the collective refusal to supply accessories and technical assistance to competitors not participating in the cartel but it considered that this conduct was only a “non-essential” characteristic of the infringement. Therefore, the Commission was not required to comply with the caselaw requirements of single and continuous infringement (to prove that the company knew or could have reasonably foreseen the conduct of the other companies).

On this point, the CJEU concluded that the GC’s interpretation of single and continuous infringements contradicts settled caselaw, which does not distinguish between “essential” and non-essential practices, and so it upheld this part of the second ground of appeal.

The CJEU also upheld NKT’s view on the lack of evidence proving its participation in the infringement from July to November 2002, as the single email on which the Commission relied on was not considered sufficient evidence.

In view of the above, the CJEU partially annulled the ruling of the GC and, therefore, part of the Commission’s decision. Moreover, given that the annulment only affects limited aspects of the infringement, the CJEU decided that the fine imposed on NKT should be reduced by €200,000, reducing the fine from 3.88 million to 3.68 million.

It should be remembered that the CJEU has full jurisdiction, under article 31 of Regulation 1/2003 and article 261 of the TFEU, which means it can remove, reduce and even increase the fine imposed by the Commission. Spanish law contains the prohibition of reformatio in peius or worsening of the appellant’s legal situation declared in the challenged decision, so Spanish courts could never increase the fine imposed by the Spanish Markets and Competition Commission in an appeal against one of its decisions.

NKT is not the only company fined by the Commission in this case that has decided to bring actions before EU Courts. Last November and December, the appeals filed by six companies have been rejected and, on the contrary, ABB’s challenge had been partially accepted. The judgments on Prysmian, Pirelli and Goldman Sachs are pending.

At the same time, the CJEU will have to decide on the appeal filed by Nexans against the Commission’s dawn raid decision, claiming that it had exceeded when defining its dimension. However, Advocate General Kokott recently argued that the appeal should be dismissed, and, although his opinion is not binding for the Court, it is usually reflected in the ruling.

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