On 12 December 2012, the General Court upheld the Commission’s € 20 million euro fine on Electrabel for implementing a concentration without notifying it (Case T-332/09).
In June 2003, Electrabel, a Belgian company active on the market for electricity and natural gas, acquired 16.88% of the voting rights, in Compagnie Nationale de Rhône (“CNR”). On 23 December 2003, Electrabel increased its participation to 47.92% of the voting rights.
On 9 August 2007, Electrabel contacted the Commission seeking its opinion on whether Electrabel had acquired sole control of CNR. Eventually it notified the concentration indicating it had acquired sole control of CNR in the course of 2007. The Commission declared the concentration compatible with the common market but left open the exact date on which Electrabel had acquired sole control. On 10 December 2009, the Commission issued its decision because the implementation of a concentration between 23 December 2003 and 9 August 2007 had breached Article 7(1) of Regulation No 4064/89.
In its judgment the Court concluded that a minority shareholder can hold de facto sole control of an undertaking, for example by obtaining a majority in the shareholders’ meeting where other shareholders are dispersed without having the majority of voting rights. According to the Court, the Commission put forward sufficient evidence that Electrabel held an absolute majority on the Board of directors as from December 2003 and had the prospect of maintaining that position. Moreover, French legislation might prevent Electrabel from acquiring de jure control of CNR because it was not a public undertaking, this however did not preclude the possibility to acquire de facto sole control.
The General Court confirmed that putting into effect a concentration contrary to EU law is not merely a formal or procedural infringement. Indeed, it can bring about significant changes in the competitive situation on the market. Hence, the five year limitation period of Article 1(1)(b) of Regulation 2988/74 and not the three year limitation period argued by Electrabel, applies.
The Court found no reason to annul or reduce the fine. The Commission rightfully considered the infringement as serious, even though it was committed out of negligence and the concentration was compatible with the common market. The unintentional character of the infringement is not necessarily an attenuating circumstance. The case confirms the need to actively assess the status of minority participants in entities with dispersed shareholder relations.
