On October 4, 2024, following two annulments,[1] the Court of Justice confirmed the Commission’s second readoption of its decision to fine Italian manufacturers of reinforcing steel bars for a price-fixing cartel. While dismissing all other pleas, the Court of Justice found that the Commission had breached the principle of equal treatment by granting two manufacturers different fine discounts per year of their non-participation in the cartel.[2] To rectify the unequal treatment, the Court of Justice reduced Ferriere Nord’s fine from €2,237,000 to €2,165,000.
Background
On December 17, 2002, the Commission fined eight Italian companies a total of €85 million for a price-fixing cartel, relating to the manufacture of reinforcing steel bars, between December 1989 and July 2000 (the “2002 Decision”). On October 25, 2007, the General Court annulled the 2002 Decision because its legal basis (Article 65 of the Treaty constituting the European Coal and Steel Community) was no longer in force when the decision was adopted.
The Commission readopted its decision on September 30, 2009 based on corresponding provisions of Regulation 1/2003.[3] The readopted decision confirmed the Commission’s original findings and reimposed near-identical fines (the “2009 Decision”). All eight companies appealed to the General Court once more. On December 9, 2014, the General Court handed down a series of judgments that upheld the 2009 Decision. Five of the companies, including Ferriere Nord, appealed to the Court of Justice. On September 21, 2017, the Court of Justice set aside the General Court judgment and annulled the 2009 Decision on the ground that the Commission had infringed the appellants’ respective rights of defense by not granting an oral hearing following the sending of the statement of objections preceding the 2009 Decision.[4]
On July 4, 2019, the Commission readopted its decision (following an oral hearing), citing the “public interest in pursuing an effective and deterrent enforcement against cartels.”[5] In its latest decision, the Commission granted the five companies an exceptional 50% fine reduction (from €32 million to €16 million) due to the excessive length of proceedings caused by appeals to the EU courts against multiple procedural errors by the Commission.[6] On November 9, 2022, the General Court handed down a series of judgments that upheld the Commission’s latest decision. Ferriere Nord and another participant then lodged a final appeal to the Court of Justice.
Equal treatment
On October 4, 2024, the Court of Justice delivered two judgments dismissing the final appeals against the Commission’s 2019 Decision, except for Ferriere Nord’s unequal treatment plea. Ferriere Nord successfully claimed that the Commission treated two similar situations differently when calculating its fine (discount), thus breaching the principle of equal treatment. The Court of Justice agreed, finding that the Commission failed to justify why it had applied a lower fine reduction rate to Ferriere Nord than to another cartel participant, Riva, for the same mitigating circumstance—namely a period of interrupted participation in the cartel.
| Party | Duration of participation | Period of non-participation | Fine discount |
|---|---|---|---|
| Riva | 10.5 years | 1 year | 3% |
| Ferriere Nord | 7 years | 3 years | 6% |
The Commission argued that since Riva had participated in the cartel for longer than Ferriere Nord, its participation was necessarily more serious, as was the effect of its temporary non-participation. According to the Commission, this justified granting Riva a higher fine reduction rate (3% per year of non-participation) than Ferriere Nord (only 2% per year of non-participation). The Court of Justice rejected this argument, holding that a period of non-participation by any cartelist in an ongoing cartel “has, in principle, the same effect on competition.”[7] Further, the Court of Justice pointed out that the analysis of the two firms’ periods of participation versus periods of non-participation militates against granting Riva a higher fine discount rate. Indeed, Riva was inactive less than one tenth of the time, while Ferriere Nord’s period of inactivity (three years) is almost half as long as its period of participation in the cartel (seven years). To rectify the unequal treatment, the Court of Justice, in exercising its unlimited jurisdiction, increased Ferriere Nord’s fine reduction to a total of 9% (i.e., 3% per year of non-participation).
Conclusion
This judgment signals the Court of Justice’s increased willingness to engage closely with the facts and scrutinize the Commission’s approach in setting fine (discounts) in cartel cases. The judgment is also a reminder that the principle of equal treatment prohibits the Commission from both treating different situations in the same way and treating similar situations in a different way, without an objective justification. Until now, the few successful appeals on grounds of unequal treatment had all involved the Commission unjustifiably applying the same fine reduction rate to cartel participants, despite differences in their respective situations.[8] This judgment reveals the flipside of the principle of equal treatment, which raises the bar for the Commission to substantiate in sufficient detail each step of its assessment when setting cartel fines.
[1] See Cleary Antitrust Watch Blog, “The Commission Grants An Exceptional 50% Fine Reduction To Compensate For Protracted Cartels Proceedings,” July 4, 2019, available here.
[2] Ferriere Nord v. Commission (“Ferriere Nord v. Commission”) (Case C-31/23 P) EU:C:2024:851.
[3] See Council Regulation (EC) No. 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1/1, Article 7(1), and Article 23(2).
[4] The Court of Justice annulled the 2009 Decision only to the extent that it concerned the five companies which had appealed to the Court of Justice, namely: (i) AlfaAcciai; (ii) Feralpi Holding; (iii) Ferriere Nord; (iv) Partecipazioni Industriali / Riva Fire (“Riva”); and (v) Valsabbia Investimenti / Ferriera Valsabbi. Conversely, the 2009 Decision became final for the remaining three cartel participants who did not appeal.
[5] Commission Press Release MEX/19/3709, “Antitrust: Commission re-adopts decision and fines five producers of reinforcing steel bars €16 million for price-fixing cartel,” July 4, 2019, available here.
[6] Reinforcing Steel Bars (Case COMP/AT.37956), Commission decision of July 4, 2019, para. 521.
[7] Ferriere Nord v. Commission, para. 294.
[8] See Pometon SpA v. Commission (Case C-440/19 P) EU:C:2021:214, paras. 150–152.