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European Union: EU General Court Dismisses Guardian’s Appeal In Flat Glass Cartel Case

Post Time:Nov 16,2012Classify:Industry NewsView:559

On 27 September 2012, the EU General Court ("GC") issued its judgment on the appeal brought by Guardian Industries Corp and Guardian Europe Sarl ("Guardian") against a Commission decision fining them a total of € 148 million for their participation in a cartel in the flat glass sector from 20 April 2004 to 22 February 2005. The GC upheld the fine imposed on Guardian and ruled that the appeal should be dismissed in its entirety.

In its November 2007 decision, the Commission imposed fines totalling approximately € 487 million on four corporate groups, namely Asahi, Guardian, Pilkington, and Saint-Gobain, for their participation in the cartel. The Commission found that the companies had participated in a single and continuous infringement of Article 101 TFEU, which covered the territory of the EEA and consisted in the fixing of price increases, minimum prices, target prices, price freezing and other commercial conditions in respect of sales to independent customers of four categories of flat glass products used in the building industry, as well as in the exchange of commercially sensitive information.

Among other claims, Guardian argued that the Commission made errors of fact about the duration of its participation in the cartel and the geographic scope of the cartel. In its decision, the Commission found that Guardian began to participate in the collusive practices from a meeting held in Germany on 20 April 2004 between a representative of Guardian and a representative of Pilkington. The Commission found that this participation continued by way of a telephone call with Pilkington in June 2004 and attendance in a meeting in Luxembourg in December 2004. Guardian claimed, however, that it did not participate in the cartel until its attendance at a meeting in Paris on 11 February 2005 with three other members of the cartel.

In its ruling, the GC recalled the Commission must produce sufficiently precise and consistent evidence to support the firm conviction that the alleged infringement took place. However, it is sufficient if the body of evidence relied on by the institution, viewed as a whole, meets that requirement. The GC also noted that, where the Commission's reasoning is based on the supposition that the facts established cannot be explained other than by concerted action between undertakings, it is sufficient (unless the findings are based on documentary evidence) for the applicants to prove circumstances which allow another explanation of the facts to be substituted for the one adopted by the Commission.

The GC found that Guardian failed to provide another explanation of the facts relied on by the Commission in determining the duration of the infringement. The GC further noted that the fact that the meeting of 20 April 2004 took place over dinner at a restaurant (for which expenses were claimed) was not sufficient to call into question the anti-competitive nature of the meeting. The GC equally rejected Guardian's claim that the Commission had not adduced any evidence of the content of the telephone conversation of 15 June 2004 to support its finding of collusion. The GC noted, in particular, that the fact that the evidence relied on by the Commission was provided as part of a leniency application did not, of itself, weaken its evidential value. Also, although the Commission had not provided documentary evidence relating to the telephone conversation (or the cartel meeting which was allegedly reported in that conversation), the Commission was entitled to reconstitute certain details by deduction.

In addition, the GC found that the Commission had correctly found that the cartel had an EEA-wide scope. In this respect, the Court ruled that, in order to establish the geographic scope of the infringement, which must be taken into account in order to assess the seriousness of the infringement, it is sufficient for the Commission to assess the greater or lesser extent of the market or markets concerned, without being required to define precisely the markets in question.

The GC also found that there was no basis for reducing the fine imposed on Guardian. In particular, the Commission had not breached the principle of non-discrimination in its approach to setting the fines for the cartel participants, as it was entitled to take the view that it was not appropriate to increase the fines on two of the other cartel participants for recidivism on the basis that the previous infringements had taken place over fifteen years previously. According to the GC, this was a sufficiently long period to preclude an increase on grounds of recidivism.

The GC, therefore, dismissed Guardian's appeal in its entirety.

 

Source: www.usgnn.comAuthor: shangyi

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