European Union: ECJ Dismisses Appeal In Italian Raw Tobacco Cartel Case

On 12 June 2014, the Court of Justice of the European Union ("ECJ") handed down a judgment dismissing in its entirety an appeal brought by Deltafina against an earlier ruling by the General Court ("GC") in the Italian raw tobacco cartel case.

In its 2005 decision, the Commission imposed fines totalling € 56 million on four Italian raw tobacco processing companies for having fixed the prices paid to tobacco growers and for having allocated suppliers between 1995 and 2002. Although Deltafina filed for immunity under the 2002 Leniency Notice, it was nevertheless fined € 30 million as the Commission considered it had breached its obligation to cooperate in the administrative investigation by informing its competitors of its application (see VBB on Competition Law, Volume 2005, No. 10, available at www.vbb.com). The GC upheld the Commission's Decision and rejected in its entirety the appeal brought by Deltafina (see VBB on Competition Law, Volume 2011, No. 9, available at www.vbb.com). A further appeal was subsequently lodged before the ECJ.

In its recent judgment, the ECJ rejected the appeal brought by Deltafina. In particular, the ECJ determined that the GC had not made an error of assessment in relation to Deltafina's duty to cooperate within the framework of the Leniency Notice. The ECJ agreed with the GC, as well as the Commission, that Deltafina's voluntary and unsolicited disclosure to its competitors of its immunity application, which had not been expressly and unequivocally authorised in advance by the Commission, was itself sufficient to establish a breach of the obligation to cooperate.

However, the ECJ agreed with Deltafina that the duration of the proceedings before the GC, which lasted five years and eight months (including three years and seven months between the end of the written procedure and the decision to open the oral proceedings) was excessive. According to the ECJ, the GC's failure to adjudicate within a reasonable time was not justified by the inherent difficulty of the case or the number of parties (six) involved. However, considering that all the pleas made by Deltafina concerning the amount of the fine were rejected, the ECJ ruled that Deltafina was not entitled to reopen the validity of the amount of the fine solely based on the grounds that there was a failure to adjudicate within a reasonable time. Nevertheless, the ECJ ruled that the GC had sufficiently breached its duty for Deltafina to bring before the GC, sitting in a different composition, a claim for damages pursuant to Article 256(1) TFEU.

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