Case C-280/06 Autorità Garante della Concorrenza e del Mercato v Ente
tabacchi italiani – ETI SpA and others, judgment of 11 December 2007
Competition – economic succession
The Court clarifies the issue of responsibility for the breach of competition
rules where undertakings succeed each other economically.
Until 1999, all manufacturing and sales activities in the tobacco sector in Italy were
assigned to the autonomous body administering State monopolies (AAMS). They were
then transferred to the Ente tabacchi italiani (ETI). After being initially 100% owned by
the [Italian] Ministry of the Economy and Finance, ETI was privatised following a call
for tender launched in 2003. In 2003, the Italian Competition Authority found that the
companies in the Philip Morris group had – with AAMS and then with ETI – formed and
implemented a cartel which had as its effect the distortion of competition as regards
the sale price of cigarettes on the national market between 1993 and 2001. The
Authority therefore imposed fines on the companies in the Philip Morris group and on
ETI, also attributing to the latter the conduct adopted by AAMS in respect of the period
prior to 1999, in view of the fact that, whilst continuing to exist, AAMS ceased its
manufacturing and sales activities in the tobacco sector once ETI became operational.
The Competition Authority’s decision was challenged before the regional administrative
court. In these proceedings, the Consiglio di Stato (Council of State) referred to the
Court of Justice two questions concerning the criteria to be applied in order to
determine the attribution of responsibility in relation to the breach of competition rules
where undertakings succeed each other, in particular where the last part of such a
breach was carried out by the economic successor of the entity that commenced the
infringing conduct and the latter entity, while no longer operating in the economic
sector concerned, is still in existence.
The Court stated first of all that concepts taken from Community law, adopted in
domestic law and applied to purely internal situations should be interpreted uniformly.
It then went on to consider the questions referred, recalling the principle of personal
responsibility under which, when an entity infringes competition rules, it falls to that
entity to answer for the infringement. However, an entity that is not responsible for
the infringement can nevertheless be penalised if it may be regarded as the economic
successor of the entity which committed the infringement, provided that the latter
entity has in the meantime ceased to exist, either in law or economically. This is
necessary in order to prevent undertakings from escaping penalties by simply changing
their identity through restructurings, sales or other legal or organisational changes. In
this case, ETI could be regarded – for the purposes of the procedure relating to the
cartel on the sale price of cigarettes – as the economic successor of AAMS.
Finally, the Court examined the circumstances in which an economic entity can be
penalised for an infringement committed by another entity. It considered in particular
whether those two entities answer to the same public authority. In this case, at the
time of their infringing conduct, AAMS and ETI were owned by the same public entity,
namely the Ministry of the Economy and Finance. In such a case, the principle of
personal responsibility does not preclude the penalty for the infringement commenced
by AAMS and continued by ETI from being imposed in its entirety on ETI.
July 2008
http://ec.europa.eu/dgs/legal_service/arrets/06c280_en.pdf