Appealing EU Cartel Decisions before the European Courts: Winning (and Losing) Arguments

By Paemen, Dieter; Blondeel, Jonathan | Business Law International, May 2017 | Go to article overview

Appealing EU Cartel Decisions before the European Courts: Winning (and Losing) Arguments


Paemen, Dieter, Blondeel, Jonathan, Business Law International


Introduction

For some time now, cartel enforcement has been a high priority for the European Commission (the 'Commission'), and this is reflected in the amount of fines imposed over the years. Although the number of infringement decisions and total amount of fines vary from year to year, the trend over the past ten years (and indeed since the mid-1990s) is upward. In the period from 2005 to February 2017, the number of undertakings subject to a Commission cartel decision practically doubled compared to 1995-2004.1 Fines increased from an aggregate of €3.76bn in the period 1995-2004 to €18.50bn over the past decade.2 In 2016 alone the average fine imposed amounted to €266.2m per undertaking.3 Addressees of a Commission decision have an incentive to appeal their cartel decision in order to try and reduce the fine amount before the General Court4 since it has unlimited jurisdiction to impose fines5 and can, in addition to upholding or overturning a decision, decide to adjust the fine itself, either downward or, exceptionally, upward.6

The chances of success of an appeal before the European courts make obtaining a fine reduction far from a shoo-in. Still, about one-third of applicants before the General Court achieve some reduction of the amount of the fine imposed by the Commission - be it by obtaining a partial or complete annulment and/or a reduction of the fine. No doubt many decision addressees conclude that with such odds, an appeal is worth trying as they believe their infringement decision is wrong on the merits and that, besides other benefits that might result from an appeal (eg, slowing down or discouraging private damages claims), the potential fine reduction could far outweigh the (budgeted) legal fees and risks associated with an appeal (whereas these added costs are often small, relative to the total fine amount). The number of appeals lodged relative to the number of infringement decisions would seem to bear out the perception of an incentive to appeal. In the period from January 2005 to February 2017, the Commission found that 434 undertakings had committed a cartel infringement7 in the context of a total of 74 cartel cases.8 Against the infringement decisions in those 74 cases, 300 appeals9 were lodged before the General Court.

At the same time, the General Court has found fault with the Commission's cartel decision and reduced the fine in a significant portion of the cartel appeals that have come before it. In the 2005 to February 2017 period, the General Court handed down judgments (including orders) on 339 appeals.10 More than one in three of these appeals resulted in the General Court reducing the amount of the fine.11 However, the odds of achieving a substantial reduction are in reality not that high. The General Court reduced the fine by over €3m in only 84 out of the 339 appeals (approximately 25 per cent). 12 Thus, the odds of actually recouping very substantially more than the costs of an appeal by obtaining a fine reduction greater than that amount are rather low.

To maximise the chances of achieving success on appeal, by (a) raising any argument that might carry favour with the European courts, and generally (b) casting doubt on the solidity of the infringement decision as a whole, applicants tend to raise as many arguments as possible in their application to the European courts. Whether a particular argument is likely to succeed on appeal is of course highly dependent on the facts of the case: each individual case is different, and arguments that are baseless in many appeals might exceptionally fit the particular circumstances of that one instance in which it provides the key to a positive outcome. The chances of success will also be influenced by the credibility of the Commission's theory of harm and the imperviousness of the Commission's decision as a whole. Moreover, views of the European courts on a particular issue may change over time and affect the chances of success of arguments related to that issue. …

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