EU: General Court rejects optical disk drive appeals

On Friday, July 12, the EU’s General Court rejected appeals from five members of the optical disk drive cartel to have their collective fines of €116 million (US$130.7 million) annulled or reduced.

By a decision of October 21, 2015, the European Commission found that several undertakings had participated in a cartel on the optical disk drives (ODD) market, in breach of EU competition law. Those products are used inter alia in personal computers manufactured by Dell and Hewlett Packard (HP), which are the two most important original equipment manufacturers on the global market for PCs.

According to the Commission, the cartel at issue, which lasted between at least June 2004 and November 2008, sought to accommodate volumes on the market and ensure that the prices remained at levels higher than they would have been in the absence of the cartel.

The General Court found that some of the ODDs covered by the cartel were sold in EU Member States to entities owned by Dell and HP or shipped to those states for operators acting on behalf of Dell and HP. Consequently, the Commission was correct to find that the geographic scope of the cartel at issue covered the entire EU and therefore that the EU competition law rules were applicable in the present case.

The Court also concluded that the prohibition on economic operators exchanging with their

competitors information on their market conduct is all the more relevant in a situation, such as that at issue, which was characterized by the presence of a limited number of competitors. In that context, after examining a series of contacts between the cartel participants by reference to the sales that they made to Dell and HP, the Court observes that most of those contacts reveal practices which, by their object, were capable of distorting competition on the relevant market.

The Court also considered that the Commission was entitled to find (i) that the anticompetitive practices at issue constituted a single and continuous infringement, and (ii) that they consisted of a series of instances of individual anticompetitive conduct. Moreover, the Court found that the cartel participants intentionally took part in an overall network of parallel contacts pursuing a common objective of undermining the mechanisms for selecting suppliers set up by Dell and HP in order to intensify competition on the relevant market.

The Court rejected the arguments of the fined companies that the amounts of the fines that the Commission imposed on them were calculated incorrectly. In particular, the Court considers that the Commission did not err in not derogating from the general method set out in the 2006 Guidelines on the method of setting fines in order to reduce the amount of the fine imposed on Hitachi-LG Data Storage and Hitachi-LG Data Storage Korea in the light of the particular circumstances on which those companies relied.

The Court dismissed the appeals in their entirety.