Antitrust Law Daily Wrap Up, ANTITRUST—EUCJ: EC’s €357M fine upheld in car glass cartel suit, (Sep 7, 2016)

By Greg Hammond, J.D.

Pilkington Group—one of the largest glass and glazing products manufacturers in the world—must pay €357 million for participating in a cartel to allocate supplies of car glass sold to auto makers. The European Union (EU) Court of Justice today affirmed a December 2014 decision entered by the General Court of the EU that upheld the European Commission (EC) fine (Pilkington Group Ltd. v. EC, Case C-101/15 P, September 7, 2016).

The EC concluded in November 2008 that a number of companies, including Pilkington, infringed EU competition law by participating in a number of agreements and concerted practices in the automotive glass sector. Pilkington and others attempted to maintain the stability of the parties’ positions in the relevant market by allocating the supply of car glass. The EC reduced its initial fine against Pilkington from €370 million to €357 million, and the General Court affirmed.

The Court of Justice has now agreed with the General Court that the EC was entitled to take into account the sales made during the infringement period on the basis of contracts concluded prior to that period when calculating the fine.

In addition, Pilkington had argued that the EC should not have used the exchange rate applicable in the business year preceding the adoption of the decision at issue but should rather have used the exchange rate applicable on the day on which the decision was adopted. Under this theory, the maximum amount of the fine would have been €317.5M. The Court of Justice rejected this argument, finding that the choice made by the EU legislature to take the turnover figures for the last full business year preceding the adoption of the decision as the reference value that is most likely to reflect the financial capacity of an understanding at the time when it is identified as responsible for the infringement, also justified the use of the exchange rate applicable during that period to convert the reference value, where the denomination of the reference value is expressed in a currency other than the euro. This would neutralize the effect of monetary fluctuations with regard to the statutory ceiling of the fine, according to the Court of Justice.

Lastly, Pilkington challenged that the fine imposed on Pilkington was proportionally higher than that imposed on other cartel participants because its activity was less diversified. The Court of Justice did not find Pilkington’s argument persuasive. Rather, the court determined that the EC cannot confer an advantage on the least diversified undertakings on the basis of criteria that are irrelevant in light of the gravity and the duration of the infringement.

Companies: Pilkington Group Ltd.

Cases: Antitrust