Antitrust Law Daily Wrap Up, ANTITRUST—EUCtJust: European Court of Justice affirms denial of immunity from fines in elevator and escalator cartel matter, (Oct 25, 2013)

By Edward L. Puzzo, J.D.

The Kone Group was not entitled to the reduction or elimination of fines previously imposed for cartel violations, the European Court of Justice has ruled (Kone Oyj v. Commission, October 24, 2013).

In 2003, the European Commission (EC) learned of the possible existence of a cartel among manufacturers of elevators and escalators engaged in business within the European Union. In 2007, the Commission imposed fines on a number of companies for engaging in cartel activity during the period of 1995 through 2004. The activity involved rigged bids for procurement contracts, fixed prices, allocated projects, shared markets, and the exchange of commercially important and confidential information in the market for elevators and escalators. The fines were the largest ever imposed by the EC for cartel violations.

One of the manufacturers fined was Finnish company Kone Oyj, along with its German and Netherlands subsidiaries (the Kone group). The Kone group applied for immunity under the 2002 Leniency Notice in return for information relating to the cartel activities. Due to their cooperation, Kone was granted immunity from fines with respect to infringements in Belgium and Luxembourg, but was held liable for infringements in Germany and the Netherlands. This determination was upheld by the General Court in 2011. Kone then appealed to the Court of Justice to set aside the lower court’s decision.

Immunity from fines in cartel cases, under the 2002 Leniency Notice, can only be granted when, at the time of submission, the EC did not have sufficient evidence for a finding of infringement, and the evidence provided represented significant added value to the evidence already in the EC’s possession, the court explained.

The General Court had held that the probative value of the evidence provided by the Kone group was limited because it was not contemporaneous with the infringement or it was insufficient to enable the Commission to find an infringement. The Court of Justice ruled that the lower court had not made an error of law in reaching that conclusion. It had carried out a detailed analysis of the value represented by the evidence provided by the appellants.

Under the 2002 Leniency Notice, the Commission may grant conditional immunity from fines in writing but cannot give any precise assurance as to any reduction of, or immunity from, fines. As a result, the Court of Justice ruled, the General Court was correct in concluding that the appellants could not entertain a legitimate expectation in that regard.

Regarding added value, the General Court noted that the information submitted by Kone had denied that the discussions between competitors had an anti-competitive purpose. This reduced the probative value of the evidence which the Commission already had, the Court of Justice stated. The General Court had also set out in detail the reasons why the information which Kone had provided to the Commission was not sufficiently detailed to be regarded as representing significant added value. The Court of Justice therefore upheld the lower court’s finding that the information Kone submitted did not represent significant added value that would warrant the elimination or reduction of the fine imposed.

The case is C-510/11 P.

Companies: Kone Oyj

Cases: Antitrust