Commission re-readopts rebar cartel decision

On 4 July 2019, the European Commission ("Commission") re-adopted, for a second time, a cartel decision against five Italian manufacturers of reinforcing steel bars for concrete, this time with a 50% reduction in fines.

On 4 July, the Commission re-adopted, for a second time, a cartel decision against five Italian manufacturers of reinforcing steel bars for concrete, namely Alfa Acciai, Feralpi Holding, Ferriere Nord, Partecipazioni Industriali (Riva Fire) and Valsabbia Investimenti / Ferriera Valsabbia.

This second re-adoption decision, something which has never been done before under EU competition law, follows two successive annulments of the Commission's previous decisions by the EU Courts. 

In December 2002, the Commission adopted a decision imposing fines on eight steel manufacturers and the Italian steel manufacturers' association ("2002 Decision"). The EU General Court ("GC") annulled that decision in October 2007 due to the fact that it had been adopted on the basis of Article 65 of the ECSC Treaty, even though that Treaty had lapsed at the time of the adoption of the 2002 Decision.

In September 2009, the Commission re-adopted a decision imposing fines on all eight companies on the basis of Regulation 1/2003 ("2009 Decision"). In December 2014, the GC upheld the 2009 Decision.

Some of the companies appealed that GC judgment before the Court of Justice ("ECJ") arguing inter alia that the Commission committed a fundamental procedural error when it had adopted a decision under Regulation 1/2003 without first seeking the opinion of the representatives of the Member States as required by that regulation. The ECJ agreed with the applicants and in September 2017 set aside the GC's judgment and annulled the 2009 Decision.

In its new decision, the Commission asserts that it has addressed this procedural defect, having organized a new hearing with the representatives of the Member States before adopting the decision for a third time. The Commission claimed that the re-adoption was justified by the public interest in deterring cartels.

However, the Commission exceptionally granted a 50% fine reduction for all five companies in recognition of the long duration of proceedings which, the Commission recognised, "is not attributable to the companies involved".

It is, however, questionable whether the public interest in pursuing cartelists remains 20 years after the fact and whether the principle according to which fining proceedings must take place within a reasonable period of time (enshrined inter alia in Article 6 of the ECHR) should have prevailed. Should the companies appeal, the EU Courts may indeed have to answer that point.

Ashurst represents Ferriera Valsabbia, Valsabbia Investimenti and Alfa Acciai.

With thanks to Sabina Pacifico of Ashurst for her contribution.