On March 10, 2016, the Court of Justice of the European Union (CJEU) rendered its judgment in the so-called Cement case, (C-247/14 P HeidelbergCement v Commission, C-248/14 P Schwenk Zement v Commission, C-267/14 P Buzzi Unicem v Commission and C-268/14 P Italmobiliare v Commission) ruling that the General Court of the European Union (GCEU) had erred in law in finding that decisions of the European Commission (EC) requesting information from cement manufacturers during the course of a cartel investigation were adequately reasoned.

Following inspections carried out at the premises of companies active in the cement industry in 2008 and 2009, the EC initiated cartel proceedings against several of these companies. Two years after the inspections, the EC issued several decisions requesting these companies to respond to a questionnaire concerning the suspected infringements of the EU competition rules. This questionnaire was a very lengthy, broad and all-encompassing request for information (“RFI”) that covered very diverse types of information.

Several companies brought actions for annulment against these decisions, arguing that the EC had failed to adequately explain the allegations made against them, and that responding to such questionnaires imposed on them a disproportionate workload. The GCEU ruled on March 14, 2014 that the RFIs were lawful. Subsequently, the companies appealed to the CJEU to set aside the judgment of the GCEU. In the present case, the CJEU ruled that the GCEU had erred in law in finding the EC’s RFI to be adequately reasoned.

According to the CJEU, the obligation for the EC to state specific reasons when issuing a RFI is a fundamental requirement, designed not merely to show that the RFI is justified, but also to enable the undertakings concerned to assess the scope of their duty to cooperate whilst at the same time safeguarding their rights of defense.

The CJEU also recalled the requirements imposed on the EC under Regulation 1/2003. First, the EC must indicate the subject of its investigation in its request, and therefore identify the alleged infringement of the EU competition rules. Second, while the EC is not required to communicate all the information at its disposal concerning the alleged infringements, or to make a precise legal analysis of those infringements, it must, by contrast, clearly indicate the suspicions which it intends to investigate. Third, the EC is entitled to require companies to provide “all necessary information”, that is to say information which may enable the EC to investigate the alleged infringements.

The CJEU then analyzed whether the EC had met the aforementioned obligations. It pointed out that the questions asked were extremely numerous and covered very different types of information, namely information relating to transactions in relation to 12 EU Member States over a period of ten years. However, the EC’s decisions did not disclose, clearly and unequivocally, the suspicions of infringement which justified the adoption of these decisions, and did not make it possible to determine whether the requested information was necessary for the purposes of the investigation.

The CJEU further noted that the context in which the decisions in question were taken, and notably the decision to initiate proceedings, is relevant to assess the statement of reasons relating to them. However, the CJEU found that, while the background to the case (the alleged infringement, the relevant product market, and the geographical scope of the alleged infringement), was adequately described, this did not compensate for the fact that the RFI was inadequately reasoned.

Moreover, the CJEU considered that the excessively succinct, vague and generic statement of reasons had to be read in the light of the timing of the RFI, which was sent more than two years after the EC’s first inspections. Therefore, at the time the RFIs were issued, the EC already had enough information to present a sufficiently accurate statement of reasons.

Consequently, the CJEU concluded that the statement of reasons for the EC’s decisions did not meet the requisite legal standard. It therefore set aside the judgments of the GCEU as well as the EC’s decisions.

Paul Dodelleris co-author of this article.