Case C-451/13, Gigaset – wanting joint and several liability for an EU cartel law fine

When the EU Commission imposes a fine on a cartel but does not apportion how much each company should pay, then is it a matter for national law whether and how that fine is paid between the individual members of the cartel? Or if it is a matter of EU law, then does EU law contain provisions as to how a fine should be apportioned among joint and several debtors?

Facts
Gigaset was one of three companies in a cartel that influenced the sale of specific chemicals to the steel and gas industries. Employees of the companies had kept the cartel going for a number of years. Consequently, the EU Commission decided to impose a fine of 13 million euro.

The Commission’s decision led to three reactions. First, the companies decided to appeal the Commission’s decision to the Court of First Instance. Second, and even before the result of the appeal was known, Gigaset decided to surrender bank guarantees to the EU Commission for a sum equivalent to half of the fine (6.7 million euro). And third, Gigaset decided to sue the other two companies in the German courts.

The essence of Gigaset’s claim was to have the other two companies identified as the primary debtors, and for Gigaset to be reimbursed for having in effect already paid the Commission. If that request was turned down, then as an alternative, it asked the judge to order that the fine be divided equally among the three companies. Gigaset’s claims were however unsuccessful both at first instance and on appeal. A further appeal was made to the German Supreme Court.

At the German Supreme Court
The German Supreme Court took as its starting point Council Regulation No 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty.

It paid particular concern to the wording of Recital 30 of the Regulation, which provides:

In order to ensure effective recovery of fines imposed on associations of undertakings for infringements that they have committed, it is necessary to lay down the conditions on which the Commission may require payment of the fine from the members of the association where the association is not solvent. In doing so, the Commission should have regard to the relative size of the undertakings belonging to the association and in particular to the situation of small and medium-sized enterprises. Payment of the fine by one or several members of an association is without prejudice to rules of national law that provide for recovery of the amount paid from other members of the association.

The last sentence to Recital 30 seemed to leave it to the rules of national law to govern any recovery of the fine from other members of the cartel. The German Supreme Court determined that under German law, Gigaset alone should pay the fine – it had gained the most from the cartel, for example the positive effect on its share price (actual profitability of the cartel being irrelevant). German law was not interested in who had committed the wrongs and their relative degrees of culpability. Therefore, under German law, Gigaset had no right to be reimbursed from the other members of the cartel.

However, in circumstances where the EU Commission had not apportioned any liability of the fine among the cartel members, did German law square with EU law? The German Supreme Court felt that the CJEU’s case law had not dealt with the issue of joint and several liability. Nevertheless, there seemed to be some indications in the reasoning to the recent judgment of the General Court in Joined Cases T-122/07 to T-124/07, Siemens AG Österreich.

In light of the reasoning used in Siemens AG Österreich, it should not be left to the companies themselves to divvy up the fine as they saw fit. Equally, the matter should also not be left to the national courts. Instead, this seemed to be a matter over which the EU Commission enjoyed exclusive competence. The General Court had also indicated that where a company paid the whole fine, it may, on the basis of the Commission’s decision, make a claim for recovery against each of the other joint and several debtors in respect of its share. And that if the Commission did not apportion the share, then the liability should be split equally among the cartel members.

However, the German Supreme Court noted that the General Court’s judgment in Siemens AG Österreich was now itself the matter of an appeal to the CJEU. Furthermore, German legal commentary on the General Court’s case law was divided not only on how the case law should be interpreted but also on whether the rules governing joint and several liability were a matter of EU law or of national law. There was further discussion on whether a company which had voluntarily paid the fine could, in advance of the appeal relating to the fine, go off to court and demand payment from other cartel members – could this not amount to an abuse of the law? Or could there hardly be talk of an abuse of law in circumstances where, in the event of the appeal being unsuccessful, interest would have accrued on the fine throughout the period of the appeal, and the cost to the company would have become that much greater.

A five judge chamber of the German Supreme Court, led by Judge Bornkamm, decided to make a reference to the CJEU.

Questions Referred
According to the Curia website, the German Supreme Court has asked:

1. In a decision by which it imposes a fine on several natural or legal persons as joint and several debtors for a breach of Article 101 TFEU, is the Commission also obliged to give a conclusive ruling on the question as to what shares of the fine should be apportioned to the individual joint and several debtors?

2. If Question 1 is answered in the affirmative:
(a) Is a Commission decision which contains no express instruction as to apportionment among joint and several debtors to be interpreted as meaning that the fine is to be paid in equal shares by all of the joint and several debtors?
(b) If Question 2(a) is answered in the negative:
Can the courts of the Member States close the gap in the decision that ensues if the Commission does not rule on the apportionment of the fine among joint and several debtors, without any need for a supplementary decision by the Commission?

3. If Question 1 is answered in the negative or Question 2(b) in the affirmative: Does European Union law contain provisions as to how a fine should be apportioned among joint and several debtors?

4. If Question 1 or Question 3 is answered in the affirmative:
Can a joint and several debtor which has paid the fine in full or in part seek settlement by the other joint and several debtors before a final decision has been taken on an action brought challenging the fixing of the fine?

Update – 27 September 2014
The case was removed from the register by Order ECLI:EU:C:2014:2125, dated 4 July 2014.