Fine imposed on E.ON for breaking seal may be revised
By Sophie Mosca | Friday 22 June 2012
The EU General Court did not carry out a review that was sufficiently independent from the European Commission’s assessment leading to a fine on the German firm E.ON Energie AG for having broken a seal placed by its competition inspectors. Thus concludes Yves Bot, advocate-general at the EU Court of Justice. He consequently recommended, on 21 June, referral of the case in question (C-89/11 P) back to the General Court.
As part of a probe into presumed anti-competitive practices on the German electricity market, the Commission carried out an inspection at the company’s premises in Munich, on 29 May 2006. As the inspection could not be completed in a single day, documents selected for closer examination were stored in a locked room and an official Commission seal made of self-adhesive plastic was placed on the door. The next day, the Commission’s inspectors found that the seal has been removed, as evidenced by the ‘VOID’ markings that appear irreversibly when these stickers have been moved and traces of glue around it. E.ON refused to sign the report establishing that the seal had been broken. The expert analysis revealed that the seal had been cut and glued back in place. It also turned out that 20 other keys to the locked room were in circulation in the company.
The Commission, finding that the broken seal resulted from negligence and hindered its investigation, imposed a fine of €38 million on E.ON Energie, on 30 January 2008, for this infringement of Regulation (EC) 1/2003 on the implementation of competition rules. This amount corresponds to around 0.14% of its turnover, whereas the regulation allows the possibility of “fines not exceeding 1% of the total turnover in the preceding business year”. The General Court, to which E-ON appealed, upheld the fine.
For Bot, however, that court should have carried out its own assessment of the amount of the fine. The court failed in particular to evaluate the fine’s proportionality, accepting the level determined by the Commission “in a rather general way”. In fact, it did not have all the financial information required to do so, such as E.ON Energie’s exact turnover, which would have enabled it to better assess the fine incurred for its infringement of the competition rules being investigated by the Commission and, by comparison, to determine whether the fine for breaking the seal had a sufficient deterrent effect. The advocate-general also finds that the General Court failed to give sufficient consideration to the attenuating circumstance that the seal was broken by negligence.
Since the dispute cannot be judged by the Court of Justice, the advocate-general recommends that it be referred back to the General Court for a ruling on the proportionality of the fine in question.