Decision allows Commission to consider sales of products incorporating cartelized goods when calculating cartel fines for a vertically integrated group selling the “transformed product” in Europe.

On 9 July 2015, the Court of Justice of the European Union (ECJ) dismissed InnoLux’s appeal seeking to reduce a €288 million fine for its involvement in the liquid crystal display (LCD) cartel. The judgment confirms the Commission’s ability to take into account for fining purposes intra-group/company sales of products subject to collusion where such sales occurred outside the European Economic Area (EEA), if these products are subsequently incorporated into finished goods by a vertically integrated undertaking and sold to third parties in the EEA. The ECJ judgment did not follow the recommendations of the Advocate General delivered in April this year which had argued — on jurisdictional grounds — that the Commission should not have taken the sale of transformed products into account when setting InnoLux’s fine. By ignoring the jurisdictional analysis, however, the judgment expressly does not address the significant issue of the limits of the territorial application of EU competition rules and is limited to the narrow issue of fine calculations.