Reinforcing bars cartel decision collapses following procedural weaknesses
On 21 September 2017, as a result of a number of procedural failings, the Court of Justice of the European Union ("ECJ") set aside judgments of the General Court ("GC") and annulled the European Commission's ("Commission") infringement decision in relation to the reinforcing steel bars cartel investigation. Ashurst acted for two of the appealing parties.
The Commission's investigation was originally launched under the treaty establishing the European Coal and Steel Community ("ECSC Treaty") and underwent several procedural steps under the regulations in force at that time, including issuing a statement of objections and an oral hearing. The oral hearing, however, was not attended by representatives of the Member States, as this was not required by the procedural rules in force at the time.
The ECSC Treaty expired in July 2002, after which the Commission issued a supplementary statement of objections under the newly adopted Regulation No 1/2003 ("Regulation"). A hearing relating to the legal consequences of the expiry of the ECSC Treaty followed, this time in the presence of representatives of the Member States pursuant to the new procedural rules. The Commission subsequently issued its decision in 2002.
The 2002 decision was, however, adopted on the basis of the ECSC Treaty which, the GC held, was wrong. As a result, the Commission re-adopted its decision in 2009. However, it only informed the undertakings concerned of its intention by way of a letter, to which the parties could reply by submitting their observations. This was appealed by the parties subject to the decision.
In its judgment, the ECJ held that:
- the GC correctly concluded that the Commission was not obliged to adopt a new statement of objections, as there was no major difference between the relevant rules under the ECSC Treaty and the new Regulation;
- however, before adopting its 2009 decision, the Commission should have had organised a hearing with the representatives of the Member States. This was because, during the second hearing held in 2002 (before the representatives of the Member States), the parties had the opportunity to discuss only the procedural aspects resulting from the expiry of the ECSC Treaty and not the substance of the case. The ECJ held that the failure to hold such hearing constituted an infringement of an essential procedural requirement.
As a result, the ECJ ruled that the GC erred in law in holding that the Commission was under no obligation to organise a new hearing before re-adopting the Commission's 2009 decision and therefore quashed the GC's judgment and the contested decision.
These judgments emphasise the importance of adhering to procedural requirements and highlight the implications of them not being followed.
With thanks to Giulia Carnazza and Julie Tirtiaux of Ashurst for their contribution.
All articles in the October edition of the Competition Newsletter
General Court rejects BMW's appeal against Commission decision on regional investment aid
CMA dispenses unconditional clearance to ATM merger at Phase 2
Swedish truck companies fail to swerve Commission cartel fine
FCA refers asset management sector to the CMA for further investigation
Reinforcing bars cartel decision collapses following procedural weaknesses
CMA gets creative - regulator's drive to increase awareness of competition law
Ripping up the tracks: Commission fines Lithuanian Railways €28 million.
Key Contacts
We bring together lawyers of the highest calibre with the technical knowledge, industry experience and regional know-how to provide the incisive advice our clients need.
Keep up to date
Sign up to receive the latest legal developments, insights and news from Ashurst. By signing up, you agree to receive commercial messages from us. You may unsubscribe at any time.
Sign upThe information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.