Brussels, 17/06/2010 (Agence Europe) - In a judgment delivered on 17 June in case C-413/08P, the Court of Justice of the EU rejected the appeal lodged by Lafarge SA which sought the annulment of the ruling of the Court of First Instance of 8 July 2008 (see EUROPE 9700) and the Commission decision of 27 November 2002 (see EUROPE 8349) imposing a fine of €249.6 million for Lafarge's involvement, along with Gyproc, BPB and Knauf, in concerted action on price increases and sales volumes between 1992 and 1998 (this “plaster cartel” had record fines totalling €478.32 million imposed by the Commission). The Court rejected the arguments put by Lafarge and upheld the fine. The Court also ordered Lafarge to pay the costs.
Lafarge was challenging inter alia the 50% increase in the fine imposed by the Commission, on the grounds that this was a repeat offence by Lafarge, which had already been fined in 1994 for participating in a cement cartel. Lafarge said that the 2002 decision could take account of the repeat offence because of the amount of time between the two offences and because the Court of First Instance only confirmed its participation in the cement cartel in 2000, when the infringement on the plasterboard market ended in 1998. The Commission could not, therefore, legitimately, sustain the argument of repeat offences: when the second infringement came to an end, the Court of First Instance had not ruled on the company's appeal against the Commission decision of 1994 and had not yet upheld that decision.
The Court observed, firstly, that such increases meet the imperative of punishing repeated breaches of the competition rules by the same undertaking and that there is a relevant legal basis for taking repeated infringement into consideration in calculating the fine. With regard to the length of time between the two infringements, it said that any increase for repeated infringement must comply with the principle of proportionality. That principle requires that the time elapsed between the infringement in question and a previous breach of the competition rules be taken into account in assessing the undertaking's tendency to infringe those rules. It is for the Court of First Instance (now the General Court), or, where appropriate, the Court of Justice, to check if the Commission has abided by this principle in increasing the fine imposed and if such an increase was justified. However, the Court added that Commission decisions are presumed to be lawful until such time as they are annulled or withdrawn. Moreover, actions before the Court do not have suspensory effect. Consequently, even if a Commission decision is still subject to judicial review, it continues to have full effect, unless the General Court or the Court of Justice decides otherwise.
Finally, to the grievance of Lafarge which maintains that, in this affair, the Commission has violated the general principles of legality of penalties and legal security, the Court replies that the general principle whereby penalties must have a proper legal basis requires that the law clearly defines offences and the penalties sanctioning them. The power of discretion conferred upon the Commission with regard to competition is, at this level, circumscribed by objective criteria to which the Commission must adhere. Thus, a prudent trader can foresee in a sufficiently precise manner the method and order of magnitude of the fines which he may incur for a given line of conduct. The fact that that trader cannot know, in advance, precisely the level of the fines which the Commission will impose in each individual case cannot constitute a breach of the principle that penalties must have a proper legal basis. (F.G./transl.rt/jl)