European Court upholds fine against JCB
IN a press statement issued last week, JCB expressed ‘extreme disappointment’ that a European court had ignored more than 20 years of bureaucratic errors in approving JCB’s distribution agreements by the European Commission, yet had upheld a fine against the company for competition infringements during a period up to 1996.
The European Court of Justice fined the company Euro 30.8 million (£20.7 million), a figure which JCB say is totally unjustified.
In 1973, following the UK’s accession to the Common Market, JCB were one of the first British companies to comply with European competition law and apply for exemption of all of their distribution agreements. The company says it amended those agreements on the advice of the European Commission and was led by the Commission to believe that they were in order.
However, 27 years later, in 2000, the Commission issued a decision rejecting JCB’s application for exemption, even though JCB had twice since (in 1980 and 1995) re-notified it of the agreements. As a result the company was fined Euro 39.6 million for competition infringements for a period up to 1996.
JCB appealed against this judgment and in 2004 the European Court of First Instance upheld the company’s appeal on a number of counts and reduced the fine by 25% to Euro 30 million.
The Court apparently agreed with JCB that the 27-year delay by the European Commission was ‘regrettable’ and breached the Commission’s obligations under European law, but decided that the delay did not infringe the company’s fundamental rights, a decision with which JCB strongly disagree.
According to the company, at no time did the Commission identify the economic impact of the stated infringements in setting the fine, which JCB say is on a vastly inflated scale compared with those imposed on certain car manufacturers.
John Patterson, JCB managing director and CEO, said: ‘We are very frustrated indeed that, after six years of pursuing this action in the courts, the European Court of Justice has ignored the failings of the Commission and found against us. The Commission is not giving European industry the efficient and effective legal framework it needs in order to compete globally.’
