On October 2, 2024, the General Court dismissed Crown’s and Silgan’s respective appeals[1] against a 2022 Commission decision imposing a total fine of €31.5 million for participating in a cartel concerning the sales of metal cans and closures in Germany between 2011 and 2014.[2] The judgments serve as a reminder of the General Court’s tendency to defer to the Commission’s cartel enforcement practice, including on the conditions for accepting case referrals from national competition authorities, particularly in cases that were initially settled by the applicants.
Background
In March 2015, the German Federal Cartel Office (“FCO”) launched an investigation into Crown and Silgan, among other metal packaging manufacturers. Two years into its investigation, the FCO referred the proceedings to the Commission after finding that the anticompetitive conduct may have extended to national markets beyond Germany and that German law applicable at the time could allow the investigated companies to escape liability.[3] The Commission initiated proceedings in April 2018 and conducted dawn raids in several Member States.
On July 12, 2022, the Commission fined Crown and Silgan €31.5 million for breaching Article 101 TFEU by exchanging sensitive information and coordinating their commercial strategies for the sale of metal cans and closures in Germany over a three-year period.[4] Both companies opted for the settlement procedure: they agreed not to contest the Commission’s legal and factual assessment in exchange for a 10% fine reduction. Crown also benefited from an additional 50% leniency reduction and was fined only €7.7 million compared to €23.9 million for Silgan.
The judgments
Crown and Silgan sought to annul the Commission’s decision on the grounds of procedural irregularities. The Commission made a counterclaim, requesting the General Court to exercise its unlimited jurisdiction to withdraw the 10% settlement discount that it had granted to Crown and Silgan in the contested decision. The General Court dismissed Crown’s and Silgan’s respective appeals, as well as the Commission’s counterclaim.
The framework for case re-allocation
Crown and Silgan argued that the Commission violated their legitimate expectations, and other fundamental principles of EU law[5] by unlawfully accepting the FCO’s case re-allocation request three years after the opening of the initial investigation in Germany. The applicants argued that the Commission’s Notice on cooperation within the Network of Competition Authorities (“Cooperation Notice”) had given rise to “legitimate expectations” that case re-allocation would only take place within a period of two months.[6]
The General Court rejected the appeals in their entirety, concluding that the Cooperation Notice could not have created legitimate expectations because it did not provide a precise and unconditional time limit for case re-allocation. Under the Cooperation Notice, case re-allocation should “normally” occur “within a period of two months”, but it can also take place after that “initial period” if the facts known about the case “change materially”.[7] According to the General Court, the material change exception extends to “any relevant fact that comes to light during the proceedings”, including the FCO’s concerns that the appellants might have escaped liability under the German law applicable at the time.[8] The General Court found that the timing of the FCO’s referral request (and the Commission’s acceptance thereof) was therefore justified in the present case.
The validity of settlement discounts
The General Court dismissed the Commission’s counterclaim that Crown and Silgan should be stripped of the 10% settlement discount applied to their fines in the contested decision. According to the Commission, Crown’s and Silgan’s respective appeals undermined the procedural gains normally derived from the use of the settlement procedure and should therefore not benefit from the standard 10% settlement discount.
The General Court found that, notwithstanding the appeals, the Commission did derive procedural benefits from the settlement because Crown and Silgan had (i) recognized their liability for the infringement and (ii) relinquished their rights to request further access to the file or to be heard again in the oral hearing.[9] Further, the General Court found that the appeals did not seek to revisit any of the content of Crown’s and Silgan’s settlement submissions: the appellants merely dispute the competence of the Commission in place of the competence of the FCO.[10] The General Court found that the evidentiary burden lies with the Commission to prove that Crown and Silgan had accepted its jurisdiction during the settlement process. Absent such evidence, Crown’s and Silgan’s respective appeals cannot be held to undermine the validity of the settlement discount.
Conclusion and takeaways
The judgments confirm that settling parties may validly challenge the procedural validity of a Commission settlement decision without necessarily foregoing the benefit of undertaking settlement proceedings (namely receiving a 10% fine discount). At the same time, the judgments signal the General Court’s unwillingness to annul late-stage case referrals from national competition authorities to the Commission. Accordingly, companies should remain vigilant that investigations may be re-allocated from national to European level at any point.
[1] Crown Holdings and Crown Cork & Seal Deutschland v. Commission (Case T-587/22) EU:T:2024:661 (“Crown Holdings”) and Silgan Holdings and Others v. Commission (Case T-589/22) EU:T:2024:662 (“Silgan Holdings”).
[2] Metal Packaging (Case AT.40522), Commission Decision of July 12, 2022. See also July 2022 EU Competition Law Newsletter for additional information on the contested decision, available here.
[3] See July 2022 EU Competition Law Newsletter for more information on the FCO’s concerns about potential liability loopholes under the German law applicable at the time, available here.
[4] The Commission found that Crown and Silgan had engaged in a single and continuous infringement between 2011 and 2014, which consisted of two parts: (i) regular exchanges of detailed data on their most recent past annual sales volumes of metal lids to individual customers; (ii) coordination to impose a surcharge and apply shorter minimum durability recommendations for metal cans and lids coated with BPA-free lacquers.
[5] The applicants also argued that the Commission’s actions breached the fundamental EU principles of, inter alia, subsidiarity, proportionality, and good administration.
[6] See Commission Notice on cooperation within the Network of Competition Authorities, OJ 2004 C 101/3, para. 18 (“Where case re-allocation issues arise, they should be resolved swiftly, normally within a period of two months, starting from the date of the first information sent to the network pursuant to Article 11 of the Council Regulation”).
[7] Ibid., paras. 18–19.
[8] See Crown Holdings, paras. 51–63.
[9] See Crown Holdings, paras. 148–151. See also Silgan Holdings, paras. 147–150.
[10] See Crown Holdings, para. 150. See also Silgan Holdings, paras. 149.