CFI, 7th chamber, September 30, 2009, No T-175/05

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Seventh Chamber),

Background to the dispute and the contested decision

1 In Decision C(2004) 4876 final of 19 January 2005 relating to a proceeding pursuant to Article 81 [EC] and Article 53 of the EEA Agreement (Case COMP/E-1/37.773 - MCAA) ('the contested decision'), the Commission of the European Communities found that the parent company Akzo Nobel NV and its subsidiaries Akzo Nobel Nederland BV, Akzo Nobel Chemicals BV, Akzo Nobel Functional Chemicals BV, Akzo Nobel Base Chemicals AB, Eka Chemicals AB and Akzo Nobel AB (together, 'the Akzo Nobel Group'), Elf Aquitaine SA and its subsidiary Arkema SA (formerly Elf Atochem SA and subsequently Atofina SA), Clariant AG and its subsidiary Clariant GmbH, and Hoechst AG had infringed Article 81(1) EC and Article 53(1) of the Agreement on the European Economic Area (EEA) by taking part in a cartel in the market for monochloroacetic acid (Article 1 of the contested decision).

2 Monochloroacetic acid ('MCAA') is a strong organic acid used as a chemical intermediate, in particular, in the manufacture of detergents, adhesives, textile auxiliaries and thickeners used in foods, pharmaceuticals and cosmetics (recitals 3 to 6 of the contested decision).

3 The Commission began its investigation of the MCAA market after Clariant GmbH informed it, by letter of 6 December 1999, of the existence of a cartel with regard to that market and submitted an application to it for favourable treatment under the Commission notice on the non-imposition or reduction of fines in cartel cases (OJ 1996 C 207, p. 4; 'the Leniency Notice') (recital 43 of the contested decision).

4 Subsequently, Clariant GmbH provided the Commission with documents and information relating to the cartel (recitals 44 and 45 of the contested decision).

5 On 14 and 15 March 2000, the Commission carried out on-the-spot inspections at the premises of Elf Atochem and at those of Akzo Nobel Chemicals and Akzo Nobel Functional Chemicals (recital 46 of the contested decision).

6 On 15 December 2000, Akzo Nobel Chemicals made an application under the Leniency Notice. On 25 July 2001, Akzo Nobel Chemicals and Akzo Nobel Functional Chemicals submitted a draft memorandum providing detailed information on the functioning of the cartel arrangements, which was replaced by another draft memorandum on 21 December 2001 and completed by a statement on 21 February 2003 (recitals 49 to 51 of the contested decision).

7 The Commission pursued its investigation by sending several requests for information to some of the participants in the cartel and their competitors (recitals 52 to 55 of the contested decision).

8 On 7 and 8 April 2004, the Commission sent a statement of objections to the following 12 addressees: 7 companies in the Akzo Nobel Group (namely the parent company, Akzo Nobel NV, and its subsidiaries Akzo Nobel Nederland, Akzo Nobel Functional Chemicals, Akzo Nobel Chemicals, Akzo Nobel AB, Eka Chemicals and Akzo Nobel Base Chemicals), and also to Clariant GmbH and Clariant AG (together, 'Clariant'), Hoechst and Elf Aquitaine and its subsidiary Atofina. All the addressees replied.

9 In the light of the evidence available to it, the Commission found that the aforementioned undertakings had participated in a cartel to maintain market shares through a volume and customer allocation system, that they exchanged price information and reviewed the actual sales volumes, as well as price information, at regular multilateral meetings so as to monitor the implementation of the arrangements (recitals 84 to 90 of the contested decision).

10 As regards the Akzo Nobel Group, and more specifically its MCAA activities in the Netherlands, the Commission established that Akzo Nobel Chemicals (from 1 January 1984 until 30 June 1997) and Akzo Nobel Functional Chemicals (from 1 July 1997 until 7 May 1999) had directly participated in the cartel (recital 224 of the contested decision).

11 Taking into account the fact that, following concentrations, Akzo Nobel Chemicals had become a holding company owning a 100% shareholding in Akzo Nobel Functional Chemicals, the Commission considered that Akzo Nobel Chemicals was liable for the direct participation in the infringement of Akzo Nobel Functional Chemicals (recital 225 of the contested decision).

12 Moreover, given that Akzo Nobel Nederland controlled the entire capital of Akzo Nobel Chemicals, the Commission held Akzo Nobel Nederland liable for the illicit activities of its subsidiary Akzo Nobel Chemicals. In addition, it established that employees of Akzo Nobel Nederland had directly participated in the infringement (recital 226 of the contested decision). The Commission also considered Akzo Nobel NV to be jointly and severally liable with Akzo Nobel Nederland for the infringement, since Akzo Nobel NV fully controlled Akzo Nobel Nederland (recital 227 of the contested decision).

13 The Commission also found that there were additional elements which demonstrate, in its view, the direct implication of Akzo Nobel NV in the infringement. First, an Akzo Nobel Nederland employee was directly involved in the infringement and had to report directly to a member of the board of management of Akzo Nobel NV who had also been president of Akzo Chemicals BV (which became Akzo Nobel Chemicals) between 1991 and 1994 and who must therefore have been aware of the infringement. Secondly, on an organisational level, the Commission found that the MCAA activities of the Akzo Nobel Group were, until 1993-94, organised in a 'Chemicals Division', which reported directly to the board of management of Akzo Nobel NV. Furthermore, the MCAA activities were the responsibility of the business unit 'Functional Chemicals' whose general manager was directly appointed by the board of management of Akzo Nobel NV, and as such had continued to report back to Akzo Nobel NV (recitals 227 and 228 of the contested decision).

14 As regards the Akzo Nobel Group's MCAA activities in Sweden, the Commission held Eka Nobel AB (which became Eka Chemicals), a wholly-owned subsidiary of Nobel Industrier AB (which became Akzo Nobel AB), and its wholly-owned subsidiary Eka Nobel Skoghall AB (which became Akzo Nobel Base Chemicals) responsible for their direct participation in the infringement between 15 June 1993 and 25 February 1994 (recital 229 of the contested decision).

15 The merger with Akzo NV on 25 February 1994 meant that Nobel Industrier became a wholly-owned subsidiary of Akzo Nobel NV. Taking into account the 100% shareholding that existed at the time of the infringement between Akzo Nobel Base Chemicals, Eka Chemicals, Akzo Nobel AB and Akzo Nobel NV, the Commission held Akzo Nobel NV jointly and severally liable for the infringement committed by Eka Chemicals and Akzo Nobel Base Chemicals for the period after 25 February 1994 (recitals 230 and 232 of the contested decision).

16 According to the Commission, there were also other elements showing Akzo Nobel NV's direct liability for the infringement committed in relation to the Swedish MCAA business. On an organisational level, responsibility for the MCAA business in Skoghall passed in 1994 to the business unit 'Functional Chemicals' of Akzo Nobel Chemicals. Furthermore, an employee of Eka Chemicals who had been directly involved in the infringement became directly employed by Akzo Nobel Nederland and reported to the general manager of the business unit 'Functional Chemicals', who in turn reported back to the ultimate parent company Akzo Nobel NV (recital 233 of the contested decision).

17 The Commission then stated that, in their reply to the statement of objections, the applicants had argued that Akzo Nobel NV and Akzo Nobel AB should not be held responsible in that they had not been involved in the infringement and had not been aware of it. Amongst the other arguments put forward to that effect was also the fact that Akzo Nobel NV was a 'pure' holding company and its size and structure prevented it from exercising decisive influence over its subsidiaries, that the involvement of the board of management of Akzo Nobel NV was restricted to major and broad financial and strategic decisions and that business units and business sub-units such as that competent for the MCAA sector enjoyed full responsibility for their own business conduct within the Akzo Nobel Group. The applicants also submitted that the same arguments should have also applied in relation to the holding company Akzo Nobel AB (recitals 235 to 237 of the contested decision).

18 The Commission considered that such factors did not constitute sufficient evidence to rebut the presumption that Akzo Nobel NV and Akzo Nobel AB had exercised decisive influence over their subsidiaries. Akzo Nobel NV is not simply a vehicle which serves merely to invest in companies whose operations it then leaves to those companies, but, in the light of the company's own description of its functions, at least since 1993 has served as the 'corporate centre' of the Akzo Nobel Group and has coordinated the most important tasks with regard to the general strategy of the group, finance, legal affairs and human resources. The 'Authority Schedules' communicated by the applicants in their reply to the statement of objections also confirm the lack of commercial autonomy of the business units of the Akzo Nobel Group (recitals 240 and 241 of the contested decision).

19 According to the Commission, through its functions, Akzo Nobel NV was able to exercise decisive influence over the commercial policy of its subsidiaries, all of which were directly or indirectly 100% owned, and, it could be assumed, it had in fact done so (recital 240 of the contested decision).

20 The Commission went on to state that it was evident from the corporate structure of the group that the economic unit which produced and sold MCAA had to include Akzo Nobel NV, since the latter had not argued that the legal entities responsible for its MCAA activities in Sweden constituted a separate and autonomous economic unit from the legal entities responsible for its activities in the Netherlands (recital 243 of the contested decision).

21 The Commission concluded that Akzo Nobel NV, Akzo Nobel Nederland, Akzo Nobel Chemicals, Akzo Nobel Functional Chemicals, Akzo Nobel Base Chemicals, Eka Chemicals and Akzo Nobel AB should therefore all be addressees of the contested decision (recital 244 of the contested decision).

22 As regards the calculation of the fines, their amount was fixed by the Commission in accordance with its guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the [CS] Treaty (OJ 1998 C 9, p. 3; 'the Guidelines') and the Leniency Notice.

23 In recitals 276 and 277 of the contested decision, the Commission set out the general criteria in the light of which it fixed the amount of the fines. It pointed out that it was required to have regard to all relevant circumstances and particularly the gravity and duration of the infringement which are the criteria explicitly referred to in Article 15(2) of Council Regulation No 17 of 6 February 1962: First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition 1959-1962), p. 87) and Article 23(3) of Council Regulation (EC) No 1-2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 [EC] and 82 [EC] (OJ 2003 L 1, p. 1) and assess on an individual basis the role played by each undertaking party to the infringement. It states that, in doing so, it took account, when fixing the amount of the fines, of any aggravating or attenuating circumstances and as appropriate, the Leniency Notice.

24 With regard to the gravity of the infringement, the Commission considered that, having regard to its nature, which consisted of market sharing and price fixing, its intentional character, its actual impact on the MCAA market and the fact that it covered the whole of the common market and, following its creation, the whole of the EEA, the undertakings concerned by the contested decision had committed a very serious infringement of Article 81(1) EC and Article 53(1) of the EEA Agreement (recitals 280, 281 and 288 of the contested decision).

25 When setting the starting amount of the fines, the Commission stated that in the circumstances of the present case, which involved several undertakings, it was necessary to take account of the specific weight, and therefore the real impact on competition, of each undertaking's offending conduct (recital 290 of the contested decision).

26 For that purpose, the Commission considered it appropriate in the present case to use the EEA market shares of the undertakings that participated in the infringement as a basis for comparison to determine their respective weight. The comparison was based on shares of the EEA market for the product at issue in the last full calendar year of the infringement (1998). For Hoechst, the year taken into consideration was however 1996. The Akzo Nobel Group, with an estimated EEA market share of 44%, was considered by the Commission to be the largest producer and was placed in the first category of the undertakings concerned (recitals 291 to 293 of the contested decision).

27 The starting amounts of the fines were determined as follows: EUR 30 million for the Akzo Nobel Group, EUR 21 million for Hoechst and Clariant, EUR 12 million for Atofina/Elf Aquitaine and EUR 1.33 million for Eka Nobel (the words 'basic amounts' appear by error in recitals 296 and 297 of the contested decision).

28 To ensure that the fines had a sufficient deterrent effect, the Commission increased the starting amount of the fine imposed on Atofina/Elf Aquitaine by a multiplier of 2.5, thereby increasing the fine to EUR 30 million, and increased the starting amount of the fine on the Akzo Nobel Group by a multiplier of 1.5, thereby increasing the fine to EUR 45 million, to take account of the size and the overall resources of those undertakings (recitals 298 to 300 of the contested decision).

29 The Commission also increased the starting amount of the fines for each undertaking in relation to the length of time in which they participated in the infringement, since it considered that the starting amounts of their fines should be increased by 10% for each full year of infringement and by 5% for any period of six months or more but less than a year. It therefore increased by 150% the starting amount of the fine imposed on the Akzo Nobel Group to take account of the fact that Akzo Nobel Chemicals, Akzo Nobel Functional Chemicals, Akzo Nobel Nederland and Akzo Nobel NV had participated in the cartel for 15 years. In that connection, it did not take account of the fact that the companies of the Swedish side of the group (Akzo Nobel Base Chemicals, Eka Chemicals and Akzo Nobel AB) had been involved in the infringement for five years. No increase for duration was applied to Eka Nobel for its independent infringement, given that it had been involved in the cartel for less than a year. The Commission also increased the starting amount of the fine imposed on Atofina/Elf Aquitaine by 150%, that imposed on Hoechst by 135% and that imposed on Clariant by 15% (recital 302 of the contested decision).

30 By reason of evidence submitted and statements made voluntarily by the Akzo Nobel Group which show that Eka Nobel, Eka Nobel Skoghall and Nobel Industrier were independently involved in the cartel for an eight-month period between 15 June 1993 and 25 February 1994, those companies were not penalised for that period and their fine of EUR 1.33 million was therefore reduced to zero. According to the Commission, Akzo Nobel, as a group, would otherwise have had to pay, for that specific period, a higher fine than it would have done if it had not cooperated (recital 318 of the contested decision).

31 With regard to the application of the Leniency Notice, the Commission granted a reduction of 100% of the amount of Clariant's fine under Section B because that undertaking was the first member of the cartel to provide evidence of its existence, functioning, duration and implementation. The Commission considered that Clariant had informed it about a secret cartel at a time when it had not undertaken an investigation and did not have sufficient information to establish the existence of the cartel (recitals 328 to 332 of the contested decision).

32 In addition, the Commission noted that neither Atofina nor the Akzo Nobel Group had been the first to provide the Commission with decisive information on the MCAA cartel and that they did not therefore satisfy the condition laid down by point (b) of Section B of the Leniency Notice for obtaining a substantial reduction in the fine under Section C thereof (recital 334 of the contested decision).

33 The Commission found that the Akzo Nobel Group had been the third undertaking to provide it, before the statement of objections was issued, with information and evidence that corroborated the existence of the MCAA cartel, and had not contested the facts that the Commission had relied upon to establish the existence of the cartel in its statement of objections. It therefore found that the Akzo Nobel Group fulfilled the conditions set out in the first and second indents of Section D.2 of the Leniency Notice so that it benefited from a 25% reduction in the fine that would have been imposed on it if it had not cooperated with the Commission (recitals 342 to 346 of the contested decision).

34 The Commission concluded in Article 1 of the contested decision:

'The following undertakings infringed Article 81 [EC] by allocating volume quotas, allocating customers, agreeing concerted price increases, agreeing on a compensation mechanism, exchanging information on sales volumes and prices, and participating in regular meetings and other contacts to agree and implement the above restrictions. The following undertakings' behaviour also constituted an infringement of Article 53(1) of the EEA Agreement as from 1 January 1994.

(a) Akzo Nobel Chemicals ..., Akzo Nobel Functional Chemicals ..., Akzo Nobel Nederland ... and Akzo Nobel NV, from 1 January 1984 to 7 May 1999;

(b) Akzo Nobel Base Chemicals ..., Eka Chemicals ... and Akzo Nobel AB, from 15 June 1993 to 7 May 1999;

...'

35 The amounts of the fines were fixed as follows in Article 2 of the contested decision:

'(a) Akzo Nobel Chemicals ..., Akzo Nobel Nederland ..., Akzo Nobel NV, Akzo Nobel Functional Chemicals ..., Akzo Nobel Base Chemicals ..., Eka Chemicals ... and Akzo Nobel AB:

EUR 84.38 million

(b) Hoechst ...:

EUR 74.03 million

(c) Elf Aquitaine ... and Arkema ... (formerly known as Atofina ...) jointly and severally:

EUR 45.00 million

(d) Arkema ... (formerly known as Atofina ...):

EUR 13.50 million

(e) Clariant AG and Clariant GmbH jointly and severally:

EUR 0

Akzo Nobel Base Chemicals ..., Eka Chemicals ... and Akzo Nobel AB shall be jointly and severally liable for payment of the fine imposed in point (a) of the first paragraph, up to an amount of EUR 50.63 million. The other Akzo [Nobel Group] companies listed in that point shall be jointly and severally liable for the full amount of the fine. ...'

36 Under Article 3 of the contested decision, the undertakings listed in Article 1 were to immediately bring to an end the infringements referred to in that article, in so far as they had not already done so. They were to refrain from repeating any act or conduct described in Article 1 and from any act or conduct having the same or similar object or effect.

Procedure and forms of order sought

37 By an application lodged at the Registry of the Court of First Instance on 27 April 2005, the applicants brought the present action.

38 The composition of the Chambers of the Court of First Instance was changed and the Judge-Rapporteur was assigned to the Seventh Chamber, to which this case was therefore allocated.

39 Upon hearing the report of the Judge-Rapporteur, the Court (Seventh Chamber) decided to open the oral procedure.

40 The parties presented their oral arguments and their replies to oral questions put by the Court at the hearing on 18 June 2008. The Court did not grant the application for suspension of the proceedings lodged by the applicants on 9 June 2008, which was based on the fact that the first plea was currently being examined by the Court of Justice in the context of an appeal in Case C-97-08 P.

41 At the hearing, the applicants stated that they intended to withdraw the sixth plea, alleging breach of the principle of equal treatment on account of the misapplication of the Leniency Notice and that, if the Court were to find that Akzo Nobel NV was liable for the conduct of its subsidiaries, the second plea, alleging infringement of Article 23(2) of Regulation No 1-2003 in the setting of the full amount of the fine, would become ineffective. Formal note of this was taken in the minutes of the hearing.

42 The applicants claim that the Court should:

- annul the contested decision;

- in the alternative, reduce the amount of the fine;

- order the Commission to pay the costs.

43 The Commission contends that the Court should:

- dismiss the application in its entirety;

- order the applicants to pay the costs.

Law

Admissibility of the action with regard to Akzo Nobel Nederland, Akzo Nobel Chemicals, Akzo Nobel Functional Chemicals, Akzo Nobel Base Chemicals and Eka Chemicals

Arguments of the parties

44 The Commission observes that the present action seeks the partial annulment of the contested decision because, in their application, the applicants challenge only the liability for the infringement of Article 81 EC and Article 53 of the EEA Agreement with regard to Akzo Nobel NV and Akzo Nobel AB. It submits that, if the Court decided to annul the contested decision on the basis of the pleas put forward by the applicants, the scope of the annulment which it would pronounce could, consequently, only refer to the aspects of the decision which were specifically challenged in the application. According to the Commission, the applicants cannot claim that they are seeking to challenge the contested decision in so far as it concerns the other companies of the Akzo Nobel Group. Such an application, which is formulated in vague terms, cannot be regarded as valid in respect of Akzo Nobel Nederland, Akzo Nobel Chemicals, Akzo Nobel Functional Chemicals, Akzo Nobel Base Chemicals and Eka Chemicals, since it does not fulfil the requirements of Article 44(1)(c) of the Rules of Procedure of the Court of First Instance.

45 The applicants counter that it is apparent from their application that they are seeking total annulment of the contested decision and, in the alternative, a reduction of the fine imposed.

Findings of the Court

46 The Court observes that, given that one and the same application is involved and that its admissibility with regard to Akzo Nobel NV and Akzo Nobel AB has not been challenged, it is not necessary to examine the plea of inadmissibility raised by the Commission in respect of the other applicants (Case T-282-06 Sun Chemical Group and Others v Commission [2007] ECR II-2149, paragraph 50; see also, to that effect and by analogy, Case C-313-90 CIRFS and Others v Commission [1993] ECR I-1125, paragraphs 30 and 31).

47 While it is true that the annulment of a decision imposing fines on a number of entities under Article 81 EC must not operate to the advantage of those who did not bring an action (see, to that effect, Case C-310-97 P Commission v AssiDomän Kraft Products and Others [1999] ECR I-5363, paragraph 63) or whose action is inadmissible, the fact remains that the Commission has not explained in what way annulment of the contested decision on the basis of the pleas put forward by all the applicants might operate to the advantage of Akzo Nobel Nederland, Akzo Nobel Chemicals, Akzo Nobel Functional Chemicals, Eka Chemicals and Akzo Nobel Base Chemicals. Indeed, the Commission itself maintains in the rejoinder that, in light of the pleas raised in the application, any annulment could affect only the liability of Akzo Nobel NV and Akzo Nobel AB regarding the infringement of Article 81 EC and Article 53 of the EEA Agreement. Furthermore, even on the assumption that the action were inadmissible with regard to Akzo Nobel Nederland, Akzo Nobel Functional Chemicals, Akzo Nobel Chemicals, Eka Chemicals and Akzo Nobel Base Chemicals, the Court would none the less have to examine the action in its entirety.

48 In those circumstances, for reasons of procedural economy the Court should not examine the plea of inadmissibility raised by the Commission.

Substance

49 The applicants put forward three main pleas in support of their action. The first plea claims that the attribution of joint and several liability to Akzo Nobel NV and Akzo Nobel AB for the infringements committed by their subsidiaries is erroneous. The second plea alleges an infringement of Article 23(2) of Regulation No 1-2003 in fixing the final amount of the fine. The third plea alleges an infringement of the obligation to state reasons laid down in Article 253 EC. In the alternative, the applicants put forward two pleas seeking a reduction in the amount of the fine: the fourth plea alleges an error in the classification of the parties to the cartel on the basis of the gravity of the infringement, whilst the fifth plea alleges an infringement of the principle of proportionality in the determination of the multiplier applied for the purpose of calculating the amount of the fine imposed on the applicants.

The first plea: erroneous attribution of joint and several liability to Akzo Nobel NV and Akzo Nobel AB for the infringements committed by their subsidiaries

- Arguments of the parties

50 The applicants submit that the Commission committed a manifest error of assessment and infringed Article 81(1) EC and Article 23(2) of Regulation No 1-2003 by imputing joint and several liability for the infringement to Akzo Nobel NV and to Akzo Nobel AB.

51 They state that it is clear from the case-law that the condition sine qua non for the attribution of liability to a parent company for infringements committed by its subsidiary is that the parent exerts a decisive influence over the commercial policy of its subsidiary, and claim that it is in principle for the Commission to prove that a parent company has the power to exert decisive influence over the commercial policy of its subsidiary and that it has actually exerted it in a given case. It is true that the Court of Justice has established a presumption by which it can be assumed that a subsidiary which is wholly-owned by its parent company necessarily follows the policy laid down by that company. That presumption may none the less be rebutted if the subsidiary submits evidence that it acted autonomously on the market, that is to say, it determined its commercial policy 'largely' on its own.

52 In addition, the applicants observe that in its decision-making practice the Commission has always referred to factual elements to show that, besides the 100% shareholding, the parent company was in fact involved in, or at least aware of, the infringement and could therefore be held liable. The case-law of the Community judicature confirms the Commission's practice. The applicants observe inter alia that in Case C-286-98 P Stora Kopparbergs Bergslags v Commission [2000] ECR I-9925 ('Stora'), paragraph 28, the Court of Justice decided that a 100% shareholding in a subsidiary did not suffice for a finding that the parent company was responsible for its conduct and noted that the company concerned did not contest that it was in a position to exert a decisive influence on its subsidiary's commercial policy and had produced no evidence to support its claim that the subsidiary was autonomous.

53 The applicants also submit that the Court of Justice seems now to focus on the test of awareness of the infringement on the part of the parent company in order to hold it liable for infringements committed by its subsidiaries (Case C-248-98 P KNP BT v Commission [2000] ECR I-9641, paragraphs 71 to 74).

54 At the hearing, the applicants stated that it was necessary to refer to the principle of personal liability in the present case in attributing liability to the companies involved in the cartel, and that it was inappropriate to apply the concept of control in the context of mergers, as the Commission had done in the contested decision.

55 The applicants take the view that the Commission is also attempting to lower the threshold for decisive influence as set out by the Court of Justice. The criterion used by the Commission, namely exercising decisive influence over the 'basic orientation of commercial strategy and operations', is not the criterion laid down in Community case-law for the imputation of liability to a parent company, any more than complying with an approved strategy, which in any event, in the present case, does not relate to commercial strategy but rather to issues such as the best practice rules of Akzo Nobel as a group. In this respect, the applicants state that marketing, budget and investment issues are not necessarily related to the commercial conduct of the various subsidiaries of the group, but concern corporate strategy.

56 The applicants deny that the alleged basic orientation of commercial strategy can be considered equivalent to the concept of decisive influence over the commercial policy stricto sensu, and submit that the Commission's position amounts to saying that a subsidiary belonging to a multinational group cannot, by definition, be considered commercially autonomous, simply because the general long-term orientations of the group are decided at a high level in the undertaking; such a position is contrary to the case-law.

57 In the applicants' submission, the Commission was wrong to maintain in the contested decision that, given the functions of its corporate centre, Akzo Nobel NV could be supposed to be in a position to exert decisive influence over the commercial policy of its subsidiaries, which is inconceivable for a company of that size, inasmuch as instructions by Akzo Nobel NV would have had to be given as regards allocation of quotas and of customers, price fixing, agreeing on a compensation mechanism and exchange of information in the MCAA market.

58 The applicants claim that they produced adequate evidence to show that the subsidiaries involved in MCAA activities determined their commercial policy largely on their own and each of them had its own decision-making body, in accordance with the principles set out in Community case-law.

59 They state that they explained in their reply to the statement of objections that Akzo Nobel NV is a holding company which does not engage in any commercial activity nor produce or distribute any product, and that decisions on sale prices and price increases are, as a rule, made by the managers in charge of marketing the products concerned, who, legally, operate within the subsidiaries.

60 The group has a two-tier organisational structure consisting of, on the one side, Akzo Nobel NV, the corporate centre of the undertaking, which deals exclusively with major strategic issues, such as finances, legal affairs, health, safety and environmental rules and policies, excluding stricto sensu commercial policy matters and, on the other side, the business units and business sub-units which deal with commercial strategy and policy. Subject to compliance with the financial and strategic targets set and approved by the corporate centre of the undertaking, the management of the business unit is in fact entirely independent and solely bound by the principles applicable to the Akzo Nobel Group as a whole.

61 Citing an internal magazine, the applicants observe that it can be seen from it that the Akzo Nobel Group is structured in business units which are responsible for marketing, sales, manufacturing, research and development and business analysis. In the applicants' view, that structure makes clear that all commercial policy matters are not decided by the Akzo Nobel NV board of management; it is not its role to interfere with the commercial conduct of its subsidiaries in the markets concerned. It also follows from this document that the spheres of competence of the business units and the holding company, Akzo Nobel NV, are distinct.

62 It can also be seen from the statement of Mr M., a member of Akzo Nobel NV's board of management, that the implementation of commercial policy, in particular, product allocation and pricing, is decided at the level of the specific product group within the business sub-unit concerned. Every business unit or business sub-unit has its own management which decides on commercial policy and reports to a member of Akzo Nobel NV's board of management, who acts as a contact person. That person is not involved in the operations of the business unit concerned or in the steering thereof.

63 The applicants explain that the group vice-presidents managing the business units were appointed by the division presidents of the two former chemical divisions of the Akzo Nobel Group after approval by the responsible member of the board of management of Akzo Nobel NV. The vice-presidents were employed by the chemical division which they worked for (in the case of MCAA, Akzo Chemicals) and reported to the president of that division, who in turn reported to the responsible member of the board of management of Akzo Nobel NV. However, appointment, employment and reporting obligations of executive management are not criteria laid down by the Community judicature for imputation of responsibility. In the applicants' view, it is logical that a large shareholder in a company has the power to appoint representatives of the executive management of that company. It is thus clear from the Community merger control rules and the rules on attribution of liability to a parent company that the mere possibility of appointing representatives of executive management is not equivalent to exercising decisive influence.

64 The applicants note that in the structure of the business units and business sub-units, commercial transactions are operated under the responsibility of a specific legal entity. In the MCAA sector, they were conducted under the responsibility of Akzo Nobel Chemicals until 1 July 1999, when it became a holding company, then under the responsibility of Akzo Nobel Functional Chemicals from 1 July 1999 as regards sales from the Dutch MCAA production factory and under the responsibility of Akzo Nobel Base Chemicals as regards sales from the Swedish MCAA production factory.

65 The Commission is therefore wrong to submit that the commercial strategies and operations of the subsidiaries are not decided by the subsidiaries themselves but by the managements of the business units and business sub-units, under the coordination of Akzo Nobel NV's management. The commercial strategies and operations of the subsidiaries are unrelated to those of the business sub-unit MCAA, which is the operational actor on the market and determines its own commercial policy, strategy and operations. The legal entities or the business units or business sub-units are not under the decisive influence of Akzo Nobel NV.

66 With regard to the imputation of liability to Akzo Nobel NV on the basis that the latter represents the only ownership link between the MCAA activities in Sweden and in the Netherlands, the applicants submit that, contrary to the Commission's contention, they adduced evidence to rebut the presumption of liability in regard to Akzo Nobel AB since it was clearly stated in their reply to the statement of objections that the same considerations put forward to rebut the presumption in regard to Akzo Nobel NV also applied to Akzo Nobel AB.

67 As regards the additional elements on which the Commission based itself in order to attribute liability for the infringement to Akzo Nobel NV, the applicants state that, in respect of the MCAA activities in Sweden and the Netherlands, the obligation of the chemicals division to report to the Akzo Nobel NV board of management relates essentially to financial results and forecasts. In that regard, the monthly report for December 1998, submitted with the reply to the statement of objections, is a piece of evidence that confirms that the reporting obligation could not concern information relating to the infringement.

68 Regarding the fact that the document entitled 'Authority Schedules' shows that certain investments must be authorised by certain bodies of Akzo Nobel NV, the applicants claim that the control exercised over certain investment decisions is simply dictated by economic reality, since Akzo Nobel NV is a holding company whose core task is to manage the finances of the group of which it is the head. Its role can be equated to that of an investment manager for the group.

69 They also submit that information about anti-competitive activities which was communicated by certain participants in the cartel could not have been sent to the highest level, since any participation in discussions of an anti-competitive nature was expressly forbidden within the group.

70 With regard to the argument that the fact that Akzo Nobel NV and its subsidiaries submitted a joint reply to the statement of objections and are represented by the same law firm is significant, they argue that the Commission has misinterpreted Stora, paragraph 52 above, and, in addition, neither Akzo Nobel AB nor Akzo Nobel NV have ever presented themselves as the sole interlocutor for companies in the Akzo Nobel Group. They state that the fact of retaining the same counsel has never been considered to be a justification for assuming decisive influence.

71 The Commission contends that the applicants' argument that the presumption of liability could be rebutted by showing that day-to-day operations of the subsidiaries are largely carried out independently of the instructions of the parent company, even though the latter determines the basic orientation of the commercial strategy and operations of its subsidiaries, is based on a wrong interpretation of the case-law concerning the concepts of decisive influence and undertaking.

72 The Commission states that, contrary to the applicants' claim, it did not, when imputing the conduct of the subsidiaries to the parent company, base its reasoning on the proposition that Akzo Nobel NV determined the basic orientation of the commercial strategy and operations of its subsidiaries but merely explained that, to rebut the presumption, the applicants should have shown that Akzo Nobel NV did not determine that basic orientation.

73 The Commission considers, on the basis of the Community case-law relating to the imputation to parent companies of infringements committed by their subsidiaries and to the concept of undertaking, that the presumption of liability can be rebutted only if it is shown that the subsidiary which committed the infringement and the parent did not constitute a single undertaking for the purposes of Article 81 EC. In other words, it should have been shown that the parent company, notwithstanding the fact that it owned all the shares in its subsidiary, was not in a position to, or did not in actual fact, exercise decisive influence with regard to the basic orientation of the subsidiary's commercial strategy and operations.

74 The Commission observes that it normally has a discretion as to whether or not to impute liability to a parent company for the infringements committed by its wholly-owned subsidiaries. The fact that it decided not to do so in its earlier decisions should by no means be considered as an indication that additional factors must be present in order for the Commission to be able to hold a parent company liable for the infringements committed by its wholly-owned subsidiaries.

75 The Commission contends that the applicants are wrong to consider that the Commission has to show that Akzo Nobel NV and Akzo Nobel AB were aware of the infringement or had been directly involved in it. That argument does not take account of the case-law to the effect that the liability of a parent company for infringements of competition law committed by its subsidiaries may be presumed where that parent company is the sole shareholder in the subsidiary, unless the party challenging the presumption adduces sufficient evidence to rebut it. In addition, the Commission denies that it is clear from its decision-making practice that it used a criterion of direct involvement of the parent company in the infringement to impute liability to the parent company for infringements committed by its subsidiaries.

76 The Commission considers that, in the present case, the applicants did not rebut the presumption of liability of Akzo Nobel NV arising from its 100% control, direct or indirect, of Akzo Nobel Nederland, Akzo Nobel Chemicals, Akzo Nobel Functional Chemicals and Akzo Nobel AB or the presumption of liability of Akzo Nobel AB arising from its 100% control, direct or indirect, of Akzo Nobel Base Chemicals and Eka Chemicals. The submissions made by the applicants during the administrative procedure and in their application, unsupported by documentary evidence, are not sufficient to rebut those presumptions.

77 The Commission considers that, given the hierarchical structure and organisation of the group, the group vice-presidents are appointed directly by Akzo Nobel NV and must report to it. The rules concerning the appointment and employment of the management of the business units and the business sub-units and their reporting duties support the presumption of the exercise of decisive influence.

78 The Commission considers that the applicants' argument that it is logical that a majority shareholder in a company has the power to appoint representatives of the executive management of a company in which it holds shares does not rebut the presumption of liability. On the contrary, in its view, if a majority or sole shareholder interferes with a subsidiary and appoints its executive managers, as the applicants state was the case here, then that is a ground for considering that the subsidiary is not autonomous.

79 In addition, the information concerning the different spheres of competence of the business units shows, contrary to the applicants' claim, that the commercial strategies and operations of the subsidiaries were not decided by the subsidiaries but by the management of the business units and therefore under the coordination of Akzo Nobel NV.

80 By the same token, in the Commission's view, the fact that the subsidiaries have their own boards of management does not necessarily mean that they are autonomous with regard to the essential commercial decisions concerning the production and sale of MCAA. The fact that the subsidiaries are all subject to the control and coordination of the business sub-unit responsible for MCAA shows that none of those subsidiaries determines its commercial policy autonomously on the market.

81 It submits that the applicants' observation that the business units and business sub-units do not relate to the legal entities within the Akzo Nobel Group confirms that Akzo Nobel NV is the only legal entity within the group that ensures coherence and direction not only to the group as a whole but also within each business unit or business sub-unit. The applicants thereby admit that there is no legal entity within the business units or business sub-units responsible for MCAA that can be said to have decisive influence over the commercial operations regarding MCAA, and that the only common denominator between the business units and the legal structure is Akzo Nobel NV.

82 The Commission submits that the applicants do not indicate a single legal entity that was exclusively responsible for the MCAA business below the level of Akzo Nobel NV. In its view, several legal entities were operating the MCAA business and they did not operate as separate commercial units but operated together under a common Akzo Nobel Group business plan for that sector.

83 With regard to the applicants' claim that it should have addressed its decision to the business sub-unit responsible for MCAA, the Commission states that, in practice, it must address its decisions to legal entities and, in the present case, such a business sub-unit is not a legal entity.

84 The Commission also observes that it did not rely entirely on the criterion of shareholding when imputing liability to Akzo Nobel NV and Akzo Nobel AB but also on other evidence which supports the presumption that the parent companies exercise decisive influence over the commercial policy of their subsidiaries.

85 Thus, in addition to the fact that certain employees of the Dutch and Swedish subsidiaries who participated in the infringement reported, directly or indirectly, to a member of Akzo Nobel NV's board of management, the Commission states that it took account of the fact that it is clear from the Authority Schedules that certain investments had to be approved by Akzo Nobel NV, which indicates that the latter keeps tight control over the commercial policies of its business units.

86 With regard to the argument alleging an obligation on the part of certain employees of the Dutch and Swedish subsidiaries to report directly or indirectly to a member of Akzo Nobel NV's board of management, the Commission states that it did not intend, by relying on that argument, to demonstrate that Akzo Nobel NV was aware of the anti-competitive conduct of its subsidiaries but that the existence of such reporting obligations is an indication of the fact that Akzo Nobel NV had put in place a mechanism allowing it to supervise its subsidiaries' activities and to ensure that they operate in accordance with the commercial objectives and strategies set by it.

87 The Commission also notes that the applicants submitted a joint reply to the statement of objections and that the same lawyer was retained to represent them both in the administrative procedure and, thereafter, before the Court. That fact corroborates the presumption that the parent company and its wholly-owned subsidiaries constitute a single undertaking.

- Findings of the Court

88 It must be borne in mind, first of all, that the concept of undertaking within the meaning of Article 81 EC includes economic entities which consist of a unitary organisation of personal, tangible and intangible elements which pursues a specific economic aim on a long-term basis and can contribute to the commission of an infringement of the kind referred to in that provision (see Case T-9-99 HFB and Others v Commission [2002] ECR II-1487, paragraph 54 and the case-law cited).

89 It is not therefore because the parent company instigated its subsidiary to commit the infringement or, a fortiori, because the parent company is involved in the infringement, but because they constitute a single undertaking in the above sense that the Commission is able to address the decision imposing fines to the parent company of a group of companies. It should be recalled that under Community competition law different companies belonging to the same group form an economic entity and therefore an undertaking within the meaning of Articles 81 EC and 82 EC if the companies concerned do not independently determine their own conduct on the market (Case T-203-01 Michelin v Commission [2003] ECR II-4071, paragraph 290).

90 It should also be noted that, for the purpose of applying and enforcing Commission competition law decisions, it is necessary to identify, as addressee, an entity having legal personality (see, to that effect, Joined Cases T-305-94 to T-307-94, T-313-94 to T-316-94, T-318-94, T-325-94, T-328-94, T-329-94 and T-335-94 Limburgse Vinyl Maatschappij and Others v Commission [1999] ECR II-931 ('PVC II'), paragraph 978).

91 In the specific case of a parent company holding 100% of the capital of a subsidiary which has committed an infringement, there is a rebuttable presumption that the parent company exercises decisive influence over the conduct of its subsidiary (see, to that effect, Case 107-82 AEG-Telefunken v Commission [1983] ECR 3151, paragraph 50, and PVC II, paragraph 90 above, paragraphs 961 and 984), and that they therefore constitute a single undertaking within the meaning of Article 81 EC (judgment of 15 June 2005 in Joined Cases T-71-03, T-74-03, T-87-03 and T-91-03 Tokai Carbon and Others v Commission (not published in the ECR), paragraph 59). It is thus for a parent company which disputes before the Community judicature a Commission decision fining it for the conduct of its subsidiary to rebut that presumption by adducing evidence to establish that its subsidiary was independent (Case T-314-01 Avebe v Commission [2006] ECR II-3085, paragraph 136; see also, to that effect, Stora, paragraph 52 above, paragraph 29).

92 In that regard, whilst it is true that at paragraphs 28 and 29 of the judgment in Stora, paragraph 52 above, the Court of Justice referred not only to the fact that the parent company owned 100% of the capital of the subsidiary but also to other circumstances, such as the fact that it was not disputed by the parent company that it exercised influence over the commercial policy of its subsidiary and the fact that both companies were jointly represented during the administrative procedure, the Court of Justice mentioned those circumstances for the sole purpose of identifying all the elements on which the Court of First Instance had based its reasoning before concluding that that reasoning was not based solely on the fact that the parent company held the entire capital of its subsidiary. Accordingly, the fact that the Court of Justice upheld the findings of the Court of First Instance in that case does not mean that the principle laid down in paragraph 50 of AEG- Telefunken v Commission, paragraph 91 above, is amended.

93 That being so, provided that the Commission proves that the entire capital of a subsidiary is held by the parent company and that, consequently, the latter is able to exercise decisive influence over the commercial policy of its subsidiary, it is for the parent company to rebut the presumption by adducing evidence to establish that its subsidiary decides independently upon its own conduct in the market. If the presumption is not rebutted, the Commission will then be able to hold the parent company jointly and severally liable for payment of the fine imposed on the subsidiary.

94 In that regard, it is first of all necessary to reject the applicants' argument that in the contested decision the Commission lowered the threshold for decisive influence exercised by the parent company over the commercial policy of its subsidiaries, as set out by the Court of Justice. According to the applicants, decisive influence should be understood stricto sensu and concern the allocation of quotas and of customers, price fixing, agreeing on a compensation mechanism and exchange of information in the market concerned (see paragraphs 55 and 56 above).

95 Several factors have indeed been taken into account in the case-law to determine the existence of an economic entity consisting of a number of companies forming part of a group, the Community judicature having examined whether the parent company was able to influence pricing policy (see, to that effect, Case 48-69 Imperial Chemical Industries v Commission [1972] ECR 619, paragraph 137, and Case 52-69 Geigy v Commission [1972] ECR 787, paragraph 45), production and distribution activities (see, to that effect, Joined Cases 6-73 and 7-73 Istituto Chemioterapico ItalianoandCommercial Solvents v Commission [1974] ECR 223, paragraphs 37 and 39 to 41), sales objectives, gross margins, sales costs, cash flow, stocks and marketing (Case T-102-92 Viho v Commission [1995] ECR II-17, paragraph 48). However, it cannot be inferred that those are the only factors that fall within the concept of the commercial policy of a subsidiary for the purposes of applying Articles 81 EC and 82 EC with respect to the parent company.

96 On the contrary, it follows from that case-law, read together with the considerations set out at paragraphs 91 to 93 above, that it is for the parent company to produce any evidence relating to the economic, legal and organisational links between its subsidiary and itself which in its view are such as to demonstrate that they do not constitute a single economic entity. It also follows that when making its assessment the Court must take into account all the evidence adduced by the parties, the nature and importance of which may vary according to the specific features of each case.

97 It is by reference to those considerations that the Court must ascertain whether Akzo Nobel NV, Akzo Nobel AB and their subsidiaries to which the contested decision was addressed constitute a single economic entity.

98 In the present case, the parties are agreed that Akzo Nobel NV directly or indirectly holds 100% of the capital of its subsidiaries to which the contested decision was addressed. Nor is it disputed, in respect of the Swedish side of the group, that Akzo Nobel AB, a wholly-owned subsidiary of Akzo Nobel NV, also holds 100% of its subsidiaries' capital.

99 Moreover, the Court notes that at recital 241 of the contested decision the Commission observed that the lack of autonomy of the Akzo Nobel Group's business units responsible for the MCAA business was apparent inter alia from the Authority Schedules that the applicants sent on the occasion of their reply to the statement of objections in order to describe the organisational links of the group.

100 It is apparent from those schedules that Akzo Nobel NV's board of management has a coordinating and decision-making role in a number of areas [confidential]. (1)

101 Thus, as regards the strategy to be pursued by the business units or sub-units, each of them prepares and submits its strategic plan for an opinion to [confidential] of Akzo Nobel NV, which subsequently submits it to [confidential] for review within guidelines set by [confidential]. It is, however, Akzo Nobel NV which, applying [confidential], decides on major strategic moves. With respect to investments, each business unit or sub-unit has the power to take decisions, but within limits previously agreed upon with [confidential] of Akzo Nobel NV and depending on the value of those investments.

102 It is therefore apparent from the Authority Schedules that, contrary to the applicants' submission that the Akzo Nobel Group merely defines major strategic issues for the group, Akzo Nobel NV's board of management plays a significant role in several essential aspects of the strategy of the business units and sub-units by reserving the power of final decision with respect to a range of matters that define their course of conduct on the market.

103 The fact, pointed out by the applicants, that the Akzo Nobel Group is structured and organised in such a way that it is necessary to distinguish the policy of the business units and sub-units from that of the subsidiaries cannot undermine the foregoing conclusion. As the applicants themselves submit in their written pleadings (see paragraph 64 above), the MCAA business sub-unit was operated, in respect of the Dutch side, under the responsibility of Akzo Nobel Chemicals until 1 July 1999 and subsequently under that of Akzo Nobel Functional Chemicals and, in respect of the Swedish side, under the responsibility of Akzo Nobel Base Chemicals. Moreover, the contested decision could be addressed only to entities having legal personality which also formed part of the undertaking participating in the infringement (see case-law cited in paragraph 90 above).

104 In those circumstances, it must be concluded, as the Commission stated at recitals 240 and 241 of the contested decision, that the business units and sub-units of the Akzo Nobel Group lacked commercial autonomy and that the parent company had a coordinating role vis-à-vis the business units and sub-units and, consequently, vis-à-vis the legal entity on which they depend.

105 Nor is the applicants' argument that the obligation of the chemicals division to report to the board of management of the parent company, Akzo Nobel NV, relates only to financial results and forecasts, in support of which they submitted the monthly report for December 1998 (see paragraph 67 above), capable of rebutting the presumption that the parent company exercised decisive influence over the commercial policy of its subsidiaries. That document does not show that the strategy to be pursued, that is to say, the commercial objectives to be pursued and the investment policy of each business unit, fell outside the commercial policy of the parent company.

106 The same holds for the applicants' argument that it is common practice in groups of Akzo Nobel's size that the appointment of executive managers, in the present case those of the business unit managers, is approved by the board of management and that each business unit possesses its own management body. The applicants themselves stated in the reply that the group vice-presidents, who manage the business units, are appointed by the presidents of the chemicals divisions of the group after approval by the competent member of the board of management of Akzo Nobel NV. They report to the president of Akzo Nobel Chemicals, who in turn reports to the competent member of the board of management of Akzo Nobel NV. The existence of such a link confirms, on the contrary, the Commission's assessment that Akzo Nobel NV's board of management has a coordinating role over all the business units and sub-units of the Akzo Nobel Group and, consequently, that the parent company exercises decisive influence over the commercial policy of its subsidiaries.

107 In the light of all the foregoing, the inevitable conclusion is therefore that the applicants have failed to rebut the presumption that Akzo Nobel NV and Akzo Nobel AB, companies with a 100% shareholding in the Dutch and Swedish subsidiaries to which the contested decision was addressed, exercised decisive influence over the policy of those subsidiaries. In the light of the organisational and shareholding links between the Dutch and Swedish branches of the group, and in view of the fact that the applicants have failed to adduce evidence to show that the Swedish subsidiaries are independent of the parent company Akzo Nobel AB, the Commission was entitled to consider that it was necessary to hold the ultimate parent company, Akzo Nobel NV, jointly and severally liable for the infringements committed by the Dutch and Swedish subsidiaries to which the contested decision was addressed.

108 It follows that Akzo Nobel NV and, on the one hand, its Dutch subsidiaries, namely Akzo Nobel Nederland, Akzo Nobel Functional Chemicals and Akzo Nobel Chemicals, and, on the other hand, its Swedish subsidiaries, namely Akzo Nobel AB, parent company of the Swedish side, Akzo Nobel Base Chemicals and Eka Chemicals, must be considered to constitute a single undertaking for the purposes of Article 81 EC. The Commission was therefore entitled to hold the parent companies Akzo Nobel NV and Akzo Nobel AB jointly and severally liable for the conduct of their Dutch and Swedish subsidiaries to which the contested decision was addressed.

109 In any event, the Commission correctly points out, at recitals 226 to 228, 231 and 233 of the contested decision, that it adduced additional items of evidence confirming the decisive influence of Akzo Nobel NV over the conduct of its subsidiaries and the actual use of that power, irrespective of the presumption based on the fact that it owned 100% of the capital of its subsidiaries and of the finding by the Commission that Akzo Nobel NV was directly involved in the infringement.

110 The appointment of the general manager of the business unit 'Functional Chemicals' by Akzo Nobel NV's board of management and that manager's obligation to report to the board corroborate the fact that the parent company had a coordinating and monitoring role with regard to the commercial strategy of the business units. The same conclusion can be drawn from the obligation, whose existence was not challenged by the applicants, to report directly or indirectly to a member of Akzo Nobel NV's board of management imposed on employees of Akzo Nobel Nederland and Eka Chemicals who participated directly in the infringement.

111 It must however be pointed out that the Commission's argument in its written pleadings that Akzo Nobel NV and its subsidiaries submitted a joint reply to the statement of objections and lodged a joint application is entirely irrelevant. It cannot be inferred from those circumstances that Akzo Nobel NV exercised decisive influence over its subsidiaries.

112 In the light of all the foregoing, the first plea, alleging erroneous attribution of joint and several liability to Akzo Nobel NV and Akzo Nobel AB for the infringements committed by their subsidiaries, must be rejected as unfounded.

The second plea: infringement of Article 23(2) of Regulation No 1-2003 in fixing the final amount of the fine

- Arguments of the parties

113 The applicants claim that the amount of the fine imposed jointly and severally on Akzo Nobel Base Chemicals, Eka Chemicals and Akzo Nobel AB infringes the second subparagraph of Article 23(2) of Regulation No 1-2003 inasmuch as it exceeds the limit of 10% of the total turnovers of those companies, which are jointly and severally liable for EUR 50.63 million of the fine.

- Findings of the Court

114 As the applicants acknowledged at the hearing, the second plea is intimately linked to the first one since the rejection of the first plea would inevitably have an effect on the merits of this plea. Accordingly, in the light of the considerations which gave rise to the rejection of the first plea, the Commission did not err by taking Akzo Nobel Group's consolidated turnover as a reference for the calculation of the ceiling of 10% of turnover. That ceiling must be calculated on the basis of the total turnover of all the companies constituting the economic entity acting as an undertaking for the purposes of Article 81 EC (Case T-9-99 HFB and Others v Commission [2002] ECR II-1487, paragraph 528).

115 This plea must therefore be rejected as unfounded.

The third plea: infringement of the obligation to state reasons provided for in Article 253 EC

- Arguments of the parties

116 The applicants claim that (i) the calculation of the part of the fine imposed on the Swedish side of the Akzo Nobel Group and (ii) the imputation of liability to Akzo Nobel NV and the exceeding of the ceiling of 10% of turnover were insufficiently reasoned.

117 They submit in the first place that the Commission failed to set out clearly why and how it divided liability for the fine between the Swedish and Dutch subsidiaries of the Akzo Nobel Group and arrived at the amount of EUR 50.63 million for which Akzo Nobel Base Chemicals, Eka Chemicals and Akzo Nobel AB are jointly and severally liable, out of a total amount of fine of EUR 84.38 million imposed on the Akzo Nobel Group as a whole. Given that the only factor that the Commission uses to differentiate the Swedish side and the Dutch side is the duration of their participation in the infringement, namely 5 years for the Swedish side and 15 years for the Dutch side, the amount of the fine for which the Swedish side could be held liable should take account of that difference.

118 In the second place, the applicants consider that the Commission has violated its obligation to state reasons when attributing joint and several liability for the infringements to Akzo Nobel NV and imposing a fine of EUR 50.63 million on the Swedish side of the business, thus exceeding the limit of 10% of its turnover.

119 With regard to the imputation of liability to Akzo Nobel NV for the infringements committed by its Dutch and Swedish subsidiaries, the statement of reasons concerning the presumption of liability and the additional elements on which the Commission based itself are wrong and insufficient, since the Commission merely applied the presumption without explaining the reasons why it ignored the applicants' rebuttal thereof.

120 The applicants consider that the Commission has given no reasons whatsoever with regard to the exceeding of the 10% ceiling of the turnover of the Swedish side of the business.

121 Finally, they claim that the sufficiency of the reasoning for a Community act can hardly be measured by determining whether its addressee is able to contest it. If that were the case, a challenge on the basis of a failure to state reasons would never be successful, since as long as a challenge could be lodged the reasoning could not be deemed insufficient.

122 The Commission contends that this plea should be rejected.

- Findings of the Court

123 It should be borne in mind that the obligation to provide a statement of reasons is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure (see, to that effect, Case C-367-95 P Commission v Sytraval and Brink's France [1998] ECR I-1719, paragraph 67, and Case T-304-02 Hoek Loos v Commission [2006] ECR II-1887, paragraph 54).

124 In the present case, the applicants submit that the obligation to provide a statement of reasons was not observed but do not distinguish between the merits of the contested decision, on the one hand, and its statement of reasons on the other.

125 In so far as this plea can be understood as alleging infringement by the Commission of its obligation to state reasons, it must be recalled that, according to settled case-law, as regards the calculation of the amount of fines imposed by the Commission for infringements of Community competition law, the essential procedural requirement to state reasons is satisfied where the Commission indicates in its decision the factors which enabled it to determine the gravity of the infringement and its duration (Case C-279-98 P Cascades v Commission [2000] ECR I-9693, paragraph 43, and Case T-279-02 Degussa v Commission [2006] ECR II-897, paragraph 193). There is no obligation on the Commission, as part of its duty to state reasons, to set out in its decision the figures showing the method of calculating the fines (see, to that effect, Cascades v Commission, paragraph 50, and Case C-291-98 P Sarrió v Commission [2000] ECR I-9991, paragraph 80).

126 As regards, in the first place, the calculation of the part of the fine imposed on the Swedish side of the Akzo Nobel Group, recital 302 of the contested decision states that:

'The fine to be imposed on [the] Akzo [Nobel Group] for its 15-year participation (Akzo Nobel Chemicals ..., Akzo Nobel Functional Chemicals ..., Akzo Nobel Nederland ..., Akzo Nobel NV) should therefore be increased by 150%. Although the Swedish side of the business (Akzo Nobel Base Chemicals ..., Eka Chemicals ... and Akzo Nobel AB) was involved for [five] years, meaning the fine should be increased by 50%, there will be no double counting for the purposes of calculating the increase in respect of duration. A single increase for duration of 150% will be applied to [the] Akzo [Nobel Group]. No increase for duration is applied to Eka [Nobel AB (now Eka Chemicals) (see paragraph 14 above)] for its independent infringement, given that it was involved in the cartel for less than a year.'

127 Footnote 217 to the contested decision states that although an increase for duration of 150% is imposed, the Swedish side of the Akzo Nobel Group's business cannot be held jointly and severally liable with the Dutch side of the Akzo Nobel Group for an increase for duration for a period in which it did not participate in the cartel. According to the contested decision, as both the Swedish and Dutch sides of the Akzo Nobel Group participated in the infringement for at least five years, they must be held jointly and severally liable for a part of the fine comprising the starting amount, a multiplier and an increase for duration of 50%. As the Dutch side of the Akzo Nobel Group was involved in the infringement for 10 years more than the Swedish side, Akzo Nobel NV and its Dutch subsidiaries are to be jointly and severally liable for the other part of the fine, that is, an amount comprising only a 100% increase for duration attributable to those Dutch companies for the additional 10 years of infringement.

128 Consequently, in point (a) of the first paragraph of Article 2 of the contested decision, the Commission decided to impose a fine of EUR 84.38 million on Akzo Nobel NV and on its Swedish and Dutch subsidiaries, and states, in the second paragraph of Article 2, that the Swedish subsidiaries are jointly and severally liable for payment of the fine imposed up to an amount of EUR 50.63 million. According to that provision, the other companies of the Akzo Nobel Group, namely Akzo Nobel NV and its Dutch subsidiaries, are to be jointly and severally liable for the full amount of the fine.

129 It must be stated, in the light of the foregoing, that, in accordance with the case-law cited (see paragraph 125 above), the Commission set out the factors used to take account of the difference in the duration of the participation in the cartel of the Swedish and Dutch subsidiaries. Accordingly, there was no inadequacy in the statement of reasons regarding the calculation of the part of the fine imposed on the Swedish side of the Akzo Nobel Group.

130 That conclusion cannot be undermined by the applicants' argument that the Commission erred in its calculation of the amounts attributable to the Dutch and Swedish sides. That argument does not relate to the statement of reasons, but to the merits of the grounds, which is a matter which goes to the substantive legality (see paragraph 123 above).

131 In the second place, the complaint relating to the inadequacy of the statement of reasons regarding the imputability of liability to Akzo Nobel NV cannot be upheld. The contested decision sets out, at recitals 224 to 244, all the relevant information to enable the applicants to understand the grounds on which the infringement was imputed to Akzo Nobel NV.

132 The complaint that the Commission failed to provide a statement of reasons for allegedly exceeding the 10% ceiling of the total turnover of the Swedish subsidiaries is lacking in any factual basis. The applicants rely on the incorrect premiss that the Swedish subsidiaries of the Akzo Nobel Group are independent and that, therefore, the amount of the fine could not exceed 10% of the total turnover of those subsidiaries. However, the Court found, when examining the first plea (see paragraph 108 above), that Akzo Nobel NV and its Dutch and Swedish subsidiaries formed an undertaking for the purposes of Article 81 EC. Accordingly, the Commission was entitled to impose a fine not exceeding the ceiling of 10% of the total turnover of the undertaking, in accordance both with Article 15(2) of Regulation No 17 and with Article 23(2) of Regulation No 1-2003.

133 In that connection, the Court notes that the Commission explained the ceiling of the amount of the applicable fine, by referring explicitly to those two provisions at recital 275 of the contested decision and by specifying, at recital 243 of the contested decision, that Akzo Nobel NV and its Swedish and Dutch subsidiaries formed an undertaking for the purposes of Article 81 EC.

134 It follows from all the foregoing considerations that this plea must be rejected as unfounded.

The fourth plea: wrongful classification of the cartel participants on the basis of the gravity of the infringement

- Arguments of the parties

135 The applicants claim that the Commission erred in classifying the participants in the cartel according to their market shares during the last full year of the infringement, namely 1998, and in the case of Hoechst, 1996. The Commission should have used an average of the market shares that existed throughout the infringement, that is to say, over a period of 15 years. By using solely the last full year of the infringement as its reference, the Commission wrongly considered the applicants to have the largest effective economic capacity to cause significant damage to competition.

136 Given that the market shares of the participating companies were radically affected by acquisitions or divestments during the relevant time period, the applicants submit that the reference to market shares during the last full year of the infringement cannot be accepted. Hoechst left the MCAA market in 1997 although it had held the largest market share of the cartel participants during the greater part of the duration of the infringement. That situation changed only in 1994 when the Akzo Nobel Group acquired Eka Nobel; the Akzo Nobel Group then had the largest market share for the last five years of the cartel.

137 Since the applicants claim that they should have been placed in the same category as Hoechst and, later, as Clariant, they ask that the basic amount (which must be understood as the starting amount) of the fine determined on the basis of the gravity of the infringement should be fixed at EUR 21 million.

138 The Commission contends that this plea should be rejected.

- Findings of the Court

139 It is settled case-law that the criteria for assessing the gravity of an infringement may, depending on the circumstances, include the volume and value of the goods in respect of which the infringement was committed and the size and economic power of the undertaking and, consequently, the influence which it was able to exert on the market. It follows that, on the one hand, it is permissible, for the purpose of fixing a fine, to have regard both to the overall turnover of the undertaking, which gives an indication, albeit approximate and imperfect, of the size of the undertaking and of its economic power, and to the proportion of that turnover accounted for by the goods in respect of which the infringement was committed, which gives an indication of the scale of the infringement. On the other hand, it follows that it is important not to confer on one or other of those figures an importance which is disproportionate in relation to other factors and that the fixing of an appropriate fine cannot be the result of a simple calculation based on overall turnover (Case T-327-94 SCA Holding v Commission [1998] ECR II-1373, paragraph 176, and Case T-38-02 Groupe Danone v Commission [2005] ECR II-4407, paragraph 158).

140 In the present case, the Court notes that the Commission divided the undertakings concerned by the contested decision according to the market shares for the product in question during the last full calendar year of the infringement, namely 1998, except for Hoechst, for which the year taken into consideration was 1996 (recital 292 of the contested decision).

141 Without calling into question as such the criterion used by the Commission, namely the classification of the undertakings into categories according to their respective shares on the MCAA market, the applicants none the less take the view that in the present case that criterion does not make it possible to take account of the effective economic capacity of the offenders because of changes in market shares during the infringement period owing to acquisitions and divestments during this time.

142 In this regard, to the extent to which reliance is to be placed on the turnover of the undertakings involved in the same infringement for the purpose of determining the proportions between the fines to be imposed, the period to be taken into consideration must be ascertained in such a way that the resulting turnovers are as comparable as possible. Consequently, an individual undertaking cannot compel the Commission to rely, in its case, upon a period different from that used for the other undertakings, unless it proves that, for reasons peculiar to it, its turnover in the latter period does not reflect its true size and economic power or the scale of the infringement which it committed (Case T-319-94 Fiskeby Board v Commission [1998] ECR II-1331, paragraph 42).

143 It has also been held that the taking account of the turnover of each of the undertakings during the reference year, namely the last full year of the infringement found, makes it possible to assess the size and economic power of each undertaking and the scale of the infringement committed by each of them, those factors being relevant to an assessment of the gravity of the infringement committed by each undertaking (see, to that effect, Fiskeby Board v Commission, paragraph 142 above, paragraph 41).

144 The applicants merely state that Hoechst held the largest MCAA market share prior to 1994, when the Akzo Nobel Group acquired Eka Nobel, but do not show that their turnover in the last full calendar year of the infringement does not reflect their true size and economic power or the scale of the infringement which they committed.

145 Accordingly, the applicants' assertion that over a period of 10 years out of the 15 years of the infringement period Hoechst was the undertaking with the largest market share, which is unsubstantiated by any figures, does not permit the conclusion that, in the specific case of the applicants, the Commission ought to have relied on the turnover achieved during a period different from that taken into account.

146 The plea alleging wrongful classification of the Akzo Nobel Group for the purposes of determining the gravity of the infringement must therefore be rejected as unfounded.

The fifth plea: breach of the principle of proportionality when determining the multiplier

- Arguments of the parties

147 The applicants challenge the application of a multiplier of 1.5 to the Akzo Nobel Group, which had a turnover of EUR 13 billion, whereas a factor of 2.5 was applied to the Atofina/Elf Aquitaine Group, whose turnover was EUR 84.5 billion. They consider that the proportion between the turnover figures is not reflected in the proportion between the two multipliers. A proportionate calculation would have led to a multiplier of 1.22.

148 In reply to the Commission's argument that the multiplier is not based on worldwide turnover but is rather a rough adjustment taking into account the size and overall resources of the undertakings in question, the applicants state that only turnover makes it possible to indicate the size and overall resources of an undertaking. The applicants consider that the fact that, in Decision C (2004) 4717 of 9 December 2004 relating to a proceeding pursuant to Article 81 EC and Article 53 of the EEA Agreement (Case COMP/E-2/.37.533 - Choline chloride), a summary of which is published in the Official Journal of 22 July 2005 (OJ 2005 L 190, p. 22), the same multiplier of 1.5 was applied to it is irrelevant because it cannot be seen as meaning that 1.5 is the appropriate multiplier in any case where a company of the Akzo Nobel Group is involved in a cartel.

149 The Commission contends that the plea should be rejected.

- Findings of the Court

150 It should be noted that the object of the penalties provided for in Article 15 of Regulation No 17 and Article 23 of Regulation No 1-2003 is to suppress illegal activities and to prevent any recurrence (see Case T-15-02 BASF v Commission [2006] ECR II-497, paragraph 218 and the case-law cited).

151 Section 1.A of the Guidelines, dealing with the gravity of infringements, refers to that objective. More particularly, the fourth paragraph of that section states that it will be necessary 'to set the fine at a level which ensures that it has a sufficiently deterrent effect'. In addition, the fifth paragraph of that section states that, '[g]enerally speaking, account may also be taken of the fact that large undertakings usually have legal and economic knowledge and infrastructures which enable them more easily to recognise that their conduct constitutes an infringement and be aware of the consequences stemming from it under competition law'.

152 In the present case, that objective is referred to in the heading of the relevant section of the contested decision ('Sufficient deterrence') and in recitals 298 and 300 thereof. To achieve that objective, the Commission considered that it was appropriate to multiply by 2.5 the starting amount of the fine imposed on Atofina/Elf Aquitaine and by 1.5 that of the fine imposed on the Akzo Nobel Group, relying on their respective worldwide turnovers of EUR 84.5 billion and EUR 13 billion in 2003, in order to take account of the size and overall resources of those two groups.

153 Without calling into question the lawfulness of the application of a multiplier to the starting amount of the fine imposed on them, the applicants none the less claim that, in the present case, the application of a multiplier of 1.5 is disproportionate.

154 In that connection, it should be borne in mind that the amount of the fine must be adjusted in order to take account of the desired impact on the undertaking on which the fine is imposed. This is so that the fine is not negligible or excessive, notably by reference to the financial capacity of the undertaking in question, in accordance with the requirements resulting from, first, the need to ensure that the fine is effective and, second, respect for the principle of proportionality. The Court thus observed, in Joined Cases T-236-01, T-239-01, T-244-01 to T-246-01, T-251-01 and T-252-01 Tokai Carbon and Others v Commission [2004] ECR II-1181, paragraph 241, that owing to its worldwide turnover, which was significantly higher than that of the other members of the cartel, one of the undertakings concerned in that case would find it easier to find the funds necessary to pay its fine, which would justify the application of a multiplier in order to ensure that the fine was sufficiently deterrent.

155 In the present case, it is true that the Commission acknowledged the difference of economic capacity between the Hoechst and Akzo Nobel Groups only by a margin of one point in the multiplier applied to the starting amount of the fines imposed on them. However, since the Commission has a discretion when setting the fine and is not required to apply a precise mathematical formula (see Hoek Loos v Commission, paragraph 123 above, paragraph 68 and the case-law cited), the Court holds, in the exercise of its unlimited jurisdiction, that the Commission correctly took into consideration the different economic capacity of each of the two groups when selecting the multipliers that it applied. Accordingly, it did not infringe the principle of proportionality by applying a multiplier of 1.5 to the Akzo Nobel Group.

156 It follows that the fifth plea must be rejected as unfounded.

157 In the light of all of the above, all of the applications made in the context of the present action must be dismissed.

Costs

158 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. As the applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

On those grounds,

THE COURT OF FIRST INSTANCE (Seventh Chamber)

hereby:

1. Dismisses the action;

2. Orders Akzo Nobel NV, Akzo Nobel Nederland BV, Akzo Nobel AB, Akzo Nobel Chemicals BV, Akzo Nobel Functional Chemicals BV, Akzo Nobel Base Chemicals AB and Eka Chemicals AB to pay the costs.