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Advocate general: CJEU should dismiss Toshiba cartel appeal

The Court of Justice of the European Union (CJEU) should dismiss an appeal by Toshiba over fines imposed by the European Commission for participation in a cartel, advocate general Evgeni Tanchev has said.27 Apr 2017

The European Commission imposed fines worth €750.71 million on 20 European and Japanese companies in 2007 for participation in a cartel on the market for gas insulated switchgear (GIS) between 1988 and 2004.

GIS is used in electric substations to convert current from high to low current and vice versa, to protect the transformer from overload and insulate the circuit and any faulty transformer.

Mitsubishi Electric and Toshiba were fined €113.92m and €86.25m respectively plus a further €4.65m joint fine.

The fines were annulled by the General Court in 2011 on the grounds that the Commission had infringed the principle of equal treatment in calculating them. The General Court also, however, confirmed that the two companies had participated in the cartel.

This judgment was upheld by the CJEU in 2013, and the Commission recalculated the fines at €74.82m for Mitsubishi and €56.79m for Toshiba plus, again, a joint fine of €4.65m.

The General Court dismissed a further request for annulment of the fines in 2016, and Toshiba appealed to the CJEU. This appeal also raised a procedural issue: whether the Commission is required to issue a new statement of objections before re-adopting a decision that has been annulled by the General Court.

In his non-binding opinion on the case, the advocate general said that the CJEU should dismiss Toshiba's appeal.

In his view, the Commission does not have to issue a new statement of objections because the same procedural rules were applicable when the statement of objections was issued and when the decision was adopted.

The Commission is also under no obligation to explain in its statement of objections how it intends to ensure the deterrent effect of the fine, the advocate general said.

The General Court did not infringe the principle of equal treatment in deciding that the starting amount for calculating Toshiba's fine could be based on the starting amount of another member of the cartel, TM T&D. An alternative method proposed by Toshiba was less accurate than this, and the General Court has explained why that was so, the advocate general said.

Finally, the advocate general said Toshiba's argument that its fine should be reduced because of its limited participation in the cartel has already been definitively ruled on and is inadmissible. The fact that Toshiba did not participate in the collusive arrangements in the European Economic Area (EEA) was "a mere consequence of its participation in the 'common understanding' whereby the Japanese producers agreed not to enter the EEA market", he said.

If the CJEU finds that Toshiba's argument on the reduction of the fine is admissible, it should reject the argument that is did not participate in the EEA as unfounded, Tanchev said.

Opinions of advocates general are not binding on the court, but are followed in the majority of cases.