This post was also written by Angela Gregson.
There has been a perception that Asian companies have received unfair treatment at the hands of the European Commission over the years. Three recent appeal cases brought by Mitsubishi Electric Corp (“Mitsubishi”), Toshiba Corp (“Toshiba”) and Fuji Electric Company Ltd (“Fuji”) appear to confirm this as fact. However, the wrong caused by the European Commission’s unequal or unfair treatment of Mitsubishi, Toshiba and Fuji was fully rectified on appeal when the Court completely removed (and in Fuji’s case reduced) the unfairly inflated fines that the European Commission had imposed on the three companies.
In 2007 the European Commission (the “Commission”) imposed fines of €750.71 million on twenty European and Japanese companies for their participation in a cartel on the market for gas insulated switchgear.
Nine companies brought appeals against the Commission’s decision. On 12 July 2011, the European General Court (the “Court”) handed down judgments in appeals brought by the Japanese companies, Mitsubishi, Toshiba, Fuji and Hitachi Ltd. In the appeal cases brought by Mitsubishi and Toshiba respectively, the Court found that, by using a different basis for calculating the level of fine to that used in respect of the European producers, the European Commission had breached the principle of equal treatment.
Mitsubishi (Case T-133/07); and Toshiba (Case T-113/07)
Mitsubishi and Toshiba each appealed their respective fines of €188,575,000 and €90,000,000 on the grounds that they were not part of the cartel and that in calculating the size of the fine based on a different year of turnover from that applied to the European producers (2001 as opposed to 2003) the Commission had breached the principle of equal treatment. The Court rejected the argument that they were not part of the cartel but agreed that the Commission had infringed the principle of equal treatment and on that basis removed the fines.
Fuji Electric Co Ltd (Case T-132/07)
In Fuji’s appeal, the Court reduced the level of fine from €2.4 million to €2.2 million, since the company had provided essential information relating to the cartel to the Commission and this should have been taken into account under the leniency provisions when the Commission set the level of fine.
It is very important to the reputation of European competition authorities that they are viewed as being even handed. The European Court has performed an important function in this case, of ensuring equal treatment. Non-European companies should be reassured by this decision, and hopefully DG Comp will be vigilant to prevent this unfortunate situation from reoccurring.