(CN) – Europe’s highest court voided court-ordered damages against the EU on Thursday over speedy trial issues, finding the companies fighting antitrust fines cannot expect to be reimbursed for surety costs when they could have paid the fines instead.
Thursday’s order by the European Court of Justice stems from fines levied by the European Commission against plastic bag manufacturers for running a cartel in the sector. The manufacturers lodged an appeal of the fines with the European General Court in 2006, which was finally dismissed five years and nine months later.
While the EU high court upheld the fines in 2013, it also gave the companies a green light to sue the EU over the excessive length of proceedings. In 2017, the general court awarded damages totaling $918,000 based on the companies’ charges related to the sureties they put up on appeal.
All parties appealed the award, and on Thursday the Luxembourg-based high court acknowledged the need for speedy trials and that the EU may sometimes be liable for damages when proceedings are excessive. In this case, however, the “damages” the companies sought were incurred by voluntary actions: The companies opted to put up sureties rather than pay the fines up front and receive a refund from the commission if their appeal was successful.
“Nothing prevents, as a matter of EU law, that undertaking from terminating, at any time, the bank guarantee that it has provided and paying the fine imposed, where, in view of the evolution of the circumstances in relation to those existing on the date when that guarantee was provided, that undertaking deems that option more advantageous for it,” the high court wrote. “That might be the case, in particular, where the conduct of the proceedings before the general court leads the undertaking in question to take the view that the judgment will be delivered at a date later than that which it had initially envisaged and that, consequently, the cost of the bank guarantee will be higher than the cost that it had initially envisaged when providing that guarantee.”
The case is similar to a 2017 order by the European General Court awarding damages to a glass company whose appeal of a cartel fine took 4 ½ years to hear. The company sought $19 million; the court awarded just over $730,000 – the costs of maintaining the surety on appeal.
In other antitrust news, the European General Court on Thursday agreed with the European Commission's 2014 assessment that a joint venture by Slovak Telekom and Deutsche Telekom – which owns 50 percent of Slovak Telekom – violated the law by making it difficult and costly for other operators to join the telecommunications market when it was opened to competition in the 2000s.
However, the court cut the fine on Deutsche Telekom from $35 million to just under $22 million after finding the company's annual turnover did not support a fine enhancement levied by the commission.