No impairment of the EC’s impartiality: ECJ upholds Scania judgment
In its judgment of 1 February 2024, the ECJ dismissed Scania’s appeal in its entirety and upheld the Commission’s fine of EUR 880.5 million for Scania’s participation in a price cartel. In this case, Scania had principally argued that the Commission had acted with bias, since the same Commission case team that had entered into a settlement agreement with the other participants of the cartel subsequently imposed the penalty decision on Scania.
The judgment shows that such hybrid settlement procedures are efficient and the Commission’s choice of organisational setup does not directly raise issues regarding its impartiality and the undertaking’s right to the presumption of innocence. In line with earlier case law, the ECJ also emphasised that there is no need for the Commission to prove that every disputed act is an infringement in and of itself in order to establish a single and continuous infringement.
Background
In 2017, the European Commission imposed an EUR 880.5 million fine on Scania AB, Scania CV AB and Scania Deutschland GmbH (collectively Scania) for violating Article 101 TFEU by participating in a price cartel on the EEA’s medium and heavy trucks market from January 1997 to January 2011. Other competitors under investigation (Daimler, CAF, Iveco, Volvo/Renault & MAN) had settled with the Commission in 2016 already. Following the Commission’s infringement decision against Scania, it brought an action for annulment before the General Court. This appeal was rejected in 2022.
Key takeaways from the judgment
In its judgment of 1 February 2024, the European Court of Justice (ECJ) upheld the General Court’s judgment, by dismissing the appeal in its entirety.
First, the ECJ considered the General Court’s assessment as to whether the administrative procedure was in line with the principle of impartiality. In the investigation process, the same officials of the European Commission that dealt with the 2016 settlement later imposed the infringement decision on Scania. Scania had argued on appeal that this was in breach of the principle of impartiality and the presumption of innocence. The ECJ confirmed that the mere fact that the same Commission officials are responsible for conducting the settlement procedure as well as imposing the final penalty decision on Scania does not necessarily impair the Commission’s impartiality. In fact, a change on the team within the Commission would even run counter to the principles of good administration and the handling of the administrative procedure within a reasonable period of time, according to the ECJ. No evidence was presented to the General Court that pointed to any bias on the part of the Commission.
Second, the ECJ dismissed Scania’s claim that it did not intend to participate in an infringement that went beyond Germany. The ECJ held that it sufficed for the Commission to show that Scania participated in meetings in which information was discussed that related to the EEA. Absent evidence that Scania actively opposed receiving such information, that sufficed to establish its participation in the broader infringement, according to the ECJ.
Third, the ECJ dismissed Scania’s argument that the Commission unjustly included legitimate conduct to prove the ‘single and continuous infringement’ (SCI). The concept of an SCI allows the Commission to lump together various anti-competitive practices under a ‘single’ infringement if they form part of an overall plan of which the participants are aware and to which they intended to contribute. In this context, the ECJ found that otherwise legitimate conduct (in this case neutral conversations within different levels of the Scania organisation) can be used as evidence for a broader violation, provided that there was a link to the overall plan to breach competition law. The ECJ reaffirmed its recent ruling in Sony that the Commission is not required to demonstrate that all the disputed acts comprising the single and continuous infringement in themselves qualify as separate infringements.
Concluding remarks
The ECJ’s judgment makes it clear that ensuring the Commission’s impartiality and the presumption of innocence in hybrid settlement procedures does not require two different teams working on the cases. Whereas the ECJ has been critical in its assessment of hybrid settlements and procedural safeguards (see our April 2021 newsletter), the judgment shows that the organisational setup chosen by the Commission survives such scrutiny. However, the ECJ reminded the Commission that it is not released from its obligation to operate without prejudice and to observe the presumption of innocence in relation to the undertakings that decide not to engage with the settlement procedure.
The case is in line with the ECJ’s earlier case law on the concept of a single and continuous infringement, which reaffirms the Commission’s considerable room for manoeuvre in establishing this type of infringement.
This article was published in the Competition Newsletter of March 2024. Other articles in this newsletter:
- Commission steers market definition to the 21st century
- The honeymoon phase of the Foreign Subsidies Regulation is over!
- District Court ruled on the recognition of the res judicata effect of a Turkish judgment and dismissed an antitrust follow on damages claim regarding the cathode-ray tube markets
- Court of Appeal overturns first instance judgment and establishes that several prestressing steel producers are liable for the potential loss alleged by Deutsche Bahn
- Podcast - Vertical price fixing: enforcement, fines, and damages claims
*Note: Eva ten Hoor contributed to this article. She was a Legal Assistant at the Competition & Regulated Markets practice group during December 2023-February 2024.
