Competition: Commission welcomes Court of First Instance judgments in carbon and graphite cartel case entirely confirming level of fines
- European Union
- 10/08/2008
The European Commission welcomes today’s judgments by the Court of First Instance in Cases T-68/04, T-69-04 and T-73/04 dismissing in their entirety the appeals by SGL Carbon AG (SGL), by Schunk GmbH and Schunk Kohlenstofftechnik GmbH and by Le Carbone Lorraine S.A.. The three appeals concerned a Commission decision of December 2003 finding the involvement of these and several other companies in a cartel on electrical and mechanical carbon and graphite products. The Court fully confirmed the fines imposed on the companies of € 23 million, € 30 million and € 43 million respectively.
The judgments of the Court of First Instance
The three appeals did not dispute the infringement as such, but focused rather on the calculation of the fine amounts, raising multiple arguments. SGL contested in particular the Commission’s grouping of the companies concerned for the determination of the fines into small, medium-size and large. Schunk and Carbone Lorraine claimed that the effects of the cartel on certain categories of large consumers (notably suppliers to car manufacturers) had been minimal because of the buying power of these clients. In their view, this should have led to lower fines. Finally, Carbone Lorraine also claimed an additional fine reduction for having informed the Commission of the destruction of certain documents by the immunity applicant in the case, the Morgan Crucible Company plc (Morgan).
The Court rejected all arguments brought against the Commission’s Decision and confirmed the fines at the levels set by the Commission. It confirmed that the Commission’s appreciation of the cooperation of the companies and stated that the Commission had stayed within its margin of discretion. The Court confirmed, in particular, that the Commission’s classification of the companies concerned into the three categories of small, medium-size and large was reasonable, taking into account each company’s turnover, and did not violate the principles of equal treatment and proportionality.
With respect to the lesser impact of the cartel on certain types of clients, the Court emphasised that in determining the gravity of the infringement, the impact on the market of the cartel as a whole has to be taken into account. The Court found that the Commission was able to rely on the effective implementation of the cartel to conclude that it had an impact on the market.
Finally, the Court also rejected Carbone Lorraine’s claim for an additional reduction for the information it had given the Commission regarding the destruction of documents by Morgan. The Court underlined that a fine reduction for cooperating with the Commission is only justified if the information is of effective assistance to the Commission in determining the infringement and bringing it to an end. This was not the case, in particular as the Commission had determined that Morgan continued to be entitled to full immunity, given the very extensive evidence Morgan had still been able to bring to the Commission and taking into account that the destruction of the documents had taken place a considerable time before the immunity application was lodged.
Having rejected all arguments brought in the three appeals, the Court fully confirmed the levels of the fines imposed by the Commission.
The Commission’s investigation
On 3 December 2003, the Commission adopted a decision finding that a total of six companies had participated between 1988 and 1999 in a cartel on electrical and mechanical carbon and graphite products covering the entire European Economic Area (EEA). One of these companies, Morgan, was granted immunity from fines for having voluntarily disclosed the cartel to the Commission.
The cartel covered a wide range of products made of carbon and graphite, for use in electrical and mechanical applications, including for daily consumer use. Examples of electrical applications are carbon brushes, used to power car windows, electric shavers or vacuum cleaners, and current collectors, used to power trains. Examples of mechanical applications are sealing rings in pumps and turbines.
The practices of the cartel consisted, inter alia, in agreeing uniform methods of calculating prices, regular percentage price increases, particular surcharges to customers and account leadership and market-sharing for major customers. The cartel also agreed common measures to counter competitors outside the cartel.
Considering that these practices constituted very serious infringements of Article 81 of the Treaty, the Commission imposed significant fines on the companies.
