The General Court overturned SP fine for erroneous application of 10 pc. fine cap

On 9 December 2014, the General Court ("GC") issued nine separate judgments on appeals against the Commission's second adoption of the Italian steel bar cartel decision. The GC decided in the appeal of SP (Joined Cases T-472/09, T-55/10) that the Commission wrongly applied the 10% statutory fine cap on the basis of the combined turnover of SP and its former parent company Lucchini, as they did not form a single economic entity at the time of the adoption of the decision.

The case has a long history, an earlier decision of the Commission had been annulled by the GC on the ground that the Commission applied the wrong basis for exercising its authority, namely Article 65(1) of the ECSC Treaty, which had expired at the time of the adoption of the decision.

This time the GC validated the basis for the Commission´s authority to act under Article 7(1) of Regulation 1/2003. Arguments relating to alleged procedural errors and breaches of rights of defense were rejected. However, the Commission should not have set the 10% of turnover fine cap on the combined turnover of SP and its former parent company Lucchini. SP and Lucchini formed one undertaking during the infringement but were subsequently split up before the Commission adopted its second decision. In those circumstances, the 10% fine cap should be applied on the basis of the turnover of the companies individually in the year preceding the decision. As SP did not generate any turnover in the year preceding the decision, the fine was fully annulled.

The judgment shows that events after the period of an infringement but before a decision is issued may have important consequences for the level of fines that can be imposed by the Commission.