Case C-3/06 P, Groupe Danone v Commission

The Court of Justice yesterday upheld a fine of 42.4 mln eur imposed by the Court of First Instance, but not without having to deal inter alia with the nulla poena sine lege principle, the principle of legal certainty, and the principle of non-retroactivity.

The European Court of Justice yesterday upheld a fine of 42.4 mln eur imposed by the Court of First Instance on the French food company Groupe Danone for cartel activity on the Belgian beer market.

The contested Commission decision found that the infringement took place over the period from 28 January 1993 to 28 January 1998

Groupe Danone essentially argued that to the Court of First Instance’s misinterpreted the concept of repeated infringement and incorrectly applied the method of calculating the amount of the fine.

As mentioned, Groupe Danone inter alia invoked the nulla poena sine lege principle, the principle of legal certainty, the obligation to state reasons, misuse of judicial powers, and the principle of non-retroactivity.

1) Nulla poena sine lege principle.

Groupe Danone maintained that a system which took account of repeated infringement, without any legal basis, could not be applied in the context of Articles 81 EC and 82 EC.

It argued that the possibility for the Commission to increase the amount of the fine where there had been a repeated infringement was not expressly provided for in Regulation No 17 and was found only in
these Guidelines, which, according to Danone, lacked sufficient legal force to introduce such a basis for increasing a penalty.

The Court, however, held reiterated the Guidelines ensured legal certainty on the part of the undertakings since they determined the method which the Commission had bound itself to use for the purposes of setting fines (
see, inter alia, C‑213/02 P Dansk Rørindustri and Others v Commission (2005))

It also held that any repeated infringement was among the factors to be taken into consideration in the analysis of the gravity of the infringement in question.

The gravity was determined by reference to numerous other factors, in respect of which the Commission had a wide discretion. To take into account aggravating circumstances when setting the fine was consistent with the Commission’s task of ensuring compliance with the competition rules (see
Case C‑308/04 P SGL Carbon v Commission (2006)).

2) Principle of legal certainty

Groupe Danone also submitted that the aggravating circumstance consisting in repeated infringement, resulting from conduct on two previous occasions, breached the principle of legal certainty, since the Commission’s earlier decisions had been issued in different contexts.

According to Groupe Danone, a ‘perpetual’ threat of repeated infringement being taken into account as an aggravating circumstance was contrary to the principle of legal certainty.

The Court of Justice rejected this plea. It held that the finding of the Court of First Instance that there was no infringement of the principle of legal certainty was consistent with settled case-law, according to which the Commission had a particularly wide discretion as regards the choice of factors to be taken into account for the purposes of determining the amount of fines (see, inter alia,
Case C-219/95 P Ferriere Nord v Commission (1997)).

3) Obligation to state reasons

The Court of Justice also rejected that plea of Danone Group that the judgment of the Court of First Instance was not vitiated by contradictory reasoning.

The Court of First Instance was not required to provide an account that followed exhaustively and point by point all the reasoning articulated by the parties to the case.

The Court of Justice held that the reasoning might be implicit on condition that it enabled the persons concerned to know why the measures in question were taken and provided the competent court with sufficient material for it to exercise its power of review (see
Case C-105/04 P Nederlandse Federatieve Vereniging voor de Groothandel op Electrotechnisch Gebied v Commission (2006)).

4) Misuse of judicial powers

The plea of Groupe Danone that, by amending the contested decision, the Court of First Instance exceeded its jurisdiction under Article 230 EC, was also rejected.

The Court simply pointed out that the Court of First Instance acted not within the framework of Article 230 EC, but in the exercise of its unlimited jurisdiction under Article 229 EC and Article 17 of
Council Regulation No 17.

5. The principle of non-retroactivity

Finally, Groupe Danone argued that Court of First Instance’s assessment of the legality of the application of the aggravating circumstance consisting in repeated infringement was contrary to the principle that offences and penalties must be defined by law and the principle of non-retroactivity of criminal laws.

The Court reiterated that the principle that penal provisions might not have retroactive effect was one that was common to all the legal orders of the Member States and formed an integral part of the general principles of law whose observance was ensured by the Community judicature (see
Case 63/83 Kirk (1984)).

The Court also referred to Article 7(1) of the ECHR in this context. It held that a method of calculating fines, such as that applied by the Court of First Instance in the judgment under appeal, was reasonably foreseeable for an undertaking such as Groupe Danone at the time when the infringements concerned were committed.

Text of Judgment