Case T‑69/04 Schunk and Schunk v Commission

For the facts of this case see this post. The applicants of the present case requested the Court to annul the decision of the Commission or, in the alternative, reduce the amount of the fine imposed. In support of their action, the applicants claimed, first, that the Commission erred in law by assuming that the first applicant, SG, which was a finance holding company, was jointly and severally liable for the fine imposed on its subsidiary, the second applicant, SK.

Further, they pleaded that the contested decision had an unlawful legal basis, since Art. 15 of Regulation 17/621 gave the Commission a margin of discretion in relation to the amount of fines and was therefore incompatible with the principle of legal certainty and with higher ranking Community law.

In addition, they argued that the Commission discriminated against the applicants relative to other undertakings in fixing the amount of the imposed fines, incorrectly assessed the deterrent effect of the fines and the cooperation of the applicants, and failed to have regard to material circumstances.


The Commission requested the Court to exercise its unlimited jurisdiction under Article 229 EC and Article 17 of Regulation 17 and to increase the amount of the fine imposed on the applicants, which challenged for the first time before the Court the facts set out in the statement of objections.

The Court first of all held that the principle that penalties must have a proper legal basis was a corollary of the principle of legal certainty, which constituted a general principle of Community law and required, inter alia, that any Community legislation, in particular when it imposed or permitted the imposition of sanctions, must be clear and precise so that the persons concerned might know without ambiguity what rights and obligations flew from it and might take steps accordingly.

The Court held that that principle, which formed part of the constitutional traditions common to the Member States and which had been enshrined in various international treaties, in particular in Art. 7 ECHR must be observed in regard both to provisions of a criminal nature and to specific administrative instruments imposing or permitting the imposition of administrative sanctions.

It applied not only to the provisions which established the elements of an offence, but also to those which defined the consequences of contravening them. (see
Case 169/80 Gondrand Frères and Garancini [1981]; Case 137/85 Maizena [1987]; Case C‑143/93 van Es Douane Agenten [1996]; and Joined Cases C‑74/95 and C‑129/95 X [1996]).

The Court held that Article 15(2) of Regulation 17, while leaving the Commission a certain discretion, laid down the criteria and limits to which it was subject in the exercise of its power to impose fines. Although the Commission’s previous practice in taking decisions did not in itself serve as a legal framework for fines in competition matters, the fact remained that, under the principle of equal treatment, which was a general principle of law which the Commission must observe, the Commission must not treat comparable situations differently and different situations in the same way, unless such treatment was objectively justified. (see
Case C‑167/04 P JCB Service v Commission [2006]; and Case C‑76/06 P Britannia Alloys & Chemicals v Commission [2007]).

The Court stated that the Commission might at any time adjust the level of fines if the proper application of the Community competition rules so required, since such an alteration of an administrative practice might then be regarded as objectively justified by the objective of general prevention of infringements of the Community competition rules. (see inter alia,
Joined Cases 100/80 to 103/80 Musique diffusion française and Others v Commission [1983]).

The Court furthermore held that the conditions under which SG was made an addressee of the Decision were clearly stated in that decision. The Court held that in the specific case of a parent company holding 100% of the capital of a subsidiary which had committed an infringement, there was a simple presumption that the parent company exercised decisive influence over the conduct of its subsidiary and that they therefore constituted a single undertaking within the meaning of Art. 81 EC. It was for a parent company which disputed before the Community judicature a Commission decision fining it for the conduct of its subsidiary to rebut that presumption by adducing evidence to establish that its subsidiary was independent.

The Court held that the Commission was right in finding that the applicants had infringed Art. 81 EC in participating in a complex of agreements and concerted practices.

With regard to the admissibility of the Commission’s counterclaim, the Court of First Instance held that it n the context of its unlimited jurisdiction accorded to it by Art. 229 EC and Art. 17 of Regulation 17, the powers of the Community judicature were not limited to declaring the contested decision void, as provided in Art. 231 EC, but allowed it to vary the penalty imposed by that decision.

The Community judicature was therefore empowered, in addition to carrying out a mere review of the lawfulness of the penalty, to substitute its own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or penalty payment imposed.

Accordingly, there was nothing preventing the Commission from also referring to the Community judicature the question of the amount of the fine and from applying to have that fine increased. (see inter alia
Case C‑3/06 P Groupe Danone v Commission [2007]).

The Court concluded that unlimited jurisdiction could be exercised by the Community judicature only in the context of the review of acts of the Community institutions, more particularly in actions for annulment. The sole effect of Art. 229 EC was to enlarge the scope of the powers of the Community judicature in the context of the action referred to in Art. 230 EC. Therefore, the applicants’s arguments that the application to increase the Commission’s fine was incompatible with Art. 230 EC and failed to have regard to the subject matter of the action defined in the application, was rejected.


Text of Judgment