Increase in Antitrust Fine and Unlimited Jurisdiction of the CFI: Joined Cases T-101/05 and T-111/05

In its judgment in Joined Cases T-101/05 and T-111/05 BASF and UCB v. Commission, the Court of First Instance did a remarkable thing: It increased the fine imposed on an undertaking for a breach of the antitrust rules.

That is the first time the Court of First Instance has exercised its unlimited jurisdiction in that way.

The Commission adopted a decision on December 9th, 2004 imposing a fine of €34.97 million (US $ 52,016,089.11) on BASF for participating in a cartel prohibited by Article 81 EC relating to choline chloride. BASF brought an action to annul the decision before the Court of First Instance on a number of grounds, including one relating to the manner in which the Commission had calculated the fine imposed on it.

Even though BASF was successful in one respect which need not detain us now - but we'll deal with that aspect of the case in a separate post - the Court of First Instance recalculated the quantum of the fine and actually increased it to €35.024 million (US$ 52,096,411.35).

The Court of First Instance recalled that Article 31 of Regulation 1/2003 conferred unlimited jurisdiction on it to substitute its own appraisal of the penalty imposed by the Commission and to cancel, reduce or increase it where the question of the amount is before it. (see Case C-3/06 Groupe Danone v. Commission, paragraphs 61 and 62). In this case, BASF clearly requested the Court of examine the quantum of the fine with the consequence that it could exercise its unlimited jurisdiction in respect to the amount.

The Court of First Instance also recalled that the 1998 Commission Guidelines on the method of setting fines are without prejudice to the assessment by the EC Courts when they exercise that unlimited jurisdiction (see Joined Cases T-49/02 to T-51/02 Brasserie nationale and others v. Commission, paragraph 169).

In this particular case, the Court of First Instance held that the Commission was wrong to take into account an infringement which had already ceased its effects, was time barred and thus had to be disregarded. That aspect will the be subject of the separate post. As a consequence, BASF was not entitled to any reduction for its coöperation with the Commission under 1996 Commission Notice on the non-imposition or reduction of fines in cartel cases in respect of the infringement that had to be disregarded. That accounts for the increase in fine.

Let's hope that the lawyers for BASF warned their clients of the risk of an increase in the fine and are well covered by their insurance.

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