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Brussels, 29 June 2010
Antitrust: Commission welcomes Court judgment in Alrosa / De Beers diamond case
The European Commission welcomes today's judgment of the European Court of Justice (case C-441/07 P) setting aside in its entirety the General Court's judgment of 25/08/2007 (T-170/06) in the Alrosa / De Beers diamonds case and upholding the decision of the European Commission making binding De Beers' commitments to end purchases of rough diamonds from Alrosa as of 2009 (see IP/06/204).
This is a very important decision because it is the first ECJ judgement on a commitment decision, and in particular because it recognises the commitment procedure as an effective and distinct instrument providing a more rapid solution resolving competition problems. The judgement also clarifies the rights of interested parties in Commission proceedings and confirms that the Commission’s handling of the case was appropriate and fully respected the rights of defence of third parties.
Following an appeal by Alrosa, the General Court in 2007 annulled the decision of February 2006; that ruling has now been set aside.
This is the first judgment on the Commission's powers to make binding commitments pursuant to Article 9 of Regulation 1/2003.
Judgment of the Court of Justice
The Grand Chamber of the Court of Justice followed Advocate General Juliane Kokott's opinion of 17 September 2009 and overturned the General Court's judgment. The ECJ held that Alrosa had not demonstrated that the individual commitments offered by De Beers went manifestly beyond what was necessary to address the concerns identified by the Commission. The Commission successfully argued that contractual freedom is limited where a contract has an anticompetitive object or effect or where a company abuses its dominant market position. The ECJ held that the General Court had erred by substituting its own assessment of complex economic circumstances for that of the Commission.
The ECJ fully confirmed the Commission's application of its powers to accept commitments under Article 9 of Regulation 1/2003, also in view of the need to ensure an efficient handling of Commission cases. The Commission had a margin of assessment in examining whether the commitments were appropriate and necessary.
Finally, the ECJ also held that the Commission had fully respected Alrosa's procedural rights as an interested third party.
On 22 February 2006, the Commission made binding on De Beers its commitments to progressively phase out by 2009 purchases of rough diamonds from Alrosa. De Beers is the world's largest rough diamond producer. Alrosa is second. The commitments addressed the Commission's concerns that these purchases may have allowed De Beers to control the rough diamonds market in the absence of a viable competitor, in violation of the EU ban on the abuse of a dominant market position (Article 102 EU Treaty, formerly Article 82 EC Treaty).
Alrosa had appealed the Commission's decision as an interested third party.