CELEX: 61969CJ0057
Azienda Colori Nazionali
ACNA S.p.A. v Commission of the European Communities

1 IT IS COMMON GROUND THAT FROM JANUARY 1964 TO OCTOBER 1967 THREE GENERAL AND UNIFORM INCREASES IN THE PRICES OF DYESTUFFS TOOK PLACE IN THE COMMUNITY .
2 BETWEEN 7 AND 20 JANUARY 1964, A UNIFORM INCREASE OF 15 PER CENT IN THE PRICES OF MOST DYES BASED ON ANILINE, WITH THE EXCEPTION OF CERTAIN CATEGORIES, TOOK PLACE IN ITALY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG AND IN CERTAIN THIRD COUNTRIES .
3 ON 1 JANUARY 1965 AN IDENTICAL INCREASE TOOK PLACE IN GERMANY .
ON THE SAME DAY ALMOST ALL PRODUCERS IN ALL THE COUNTRIES OF THE COMMON MARKET EXCEPT FRANCE INTRODUCED A UNIFORM INCREASE OF 10 PER CENT ON THE PRICES OF DYES AND PIGMENTS EXCLUDED FROM THE INCREASE OF 1964 .
SINCE THE ACNA UNDERTAKING DID NOT TAKE PART IN THE INCREASE OF 1965 ON THE ITALIAN MARKET, THE OTHER UNDERTAKINGS DID NOT MAINTAIN THE ANNOUNCED INCREASE OF THEIR PRICES ON THAT MARKET .
4 TOWARDS MID-OCTOBER 1967, AN INCREASE FOR ALL DYES WAS INTRODUCED, EXCEPT IN ITALY, BY ALMOST ALL PRODUCERS, AMOUNTING TO 8 PER CENT IN GERMANY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG, AND 12 PER CENT IN FRANCE .
5 BY A DECISION OF 31 MAY 1967 THE COMMISSION COMMENCED PROCEEDINGS UNDER ARTICLE 3 OF REGULATION NO 17/62 ON ITS OWN INITIATIVE CONCERNING THESE INCREASES FOR PRESUMED INFRINGEMENT OF ARTICLE 85 ( 1 ) OF THE EEC TREATY AGAINST SEVENTEEN PRODUCERS OF DYESTUFFS ESTABLISHED WITHIN AND OUTSIDE THE COMMON MARKET, AND AGAINST NUMEROUS SUBSIDIARIES AND REPRESENTATIVES OF THOSE UNDERTAKINGS .
6 BY A DECISION OF 24 JULY 1969, THE COMMISSION FOUND THAT THE INCREASES WERE THE RESULT OF CONCERTED PRACTICES, WHICH INFRINGED ARTICLE 85 ( 1 ) OF THE TREATY BETWEEN, THE UNDERTAKINGS
- BADISCHE ANILIN - UND SODA-FABRIK AG ( BASF ), LUDWIGSHAFEN,
- CASSELLA FARBWERKE MAINKUR AG, FRANKFURT AM MAIN,
- FARBENFABRIKEN BAYER AG, LEVERKUSEN,
- FARBWERKE HOECHST AG, FRANKFURT AM MAIN,
- SOCIETE FRANCAISE DES MATIERES COLORANTES SA, PARIS,
- AZIENDA COLORI NAZIONALI AFFINI S . P . A . ( ACNA ), MILAN,
- CIBA SA, BASEL,
- J . R . GEIGY SA, BASEL,
- SANDOZ SA, BASEL, AND
- IMPERIAL CHEMICAL INDUSTRIES LTD ., ( ICI ), MANCHESTER .
7 IT THEREFORE IMPOSED A FINE OF 50 000 U . A . ON EACH OF THESE UNDERTAKINGS, WITH THE EXCEPTION OF ACNA, FOR WHICH THE FINE WAS FIXED AT 40 000 U . A .
8 BY APPLICATION LODGED AT THE COURT REGISTRY ON 6 OCTOBER 1969 THE UNDERTAKING AZIENDA COLORI NAZIONALI AFFINI S . P . A . ( ACNA ) HAS BROUGHT AN APPLICATION AGAINST THAT DECISION .
SUBMISSIONS RELATION TO PROCEDURE AND TO FORM
SUBMISSIONS CONCERNING THE ADMINISTRATIVE PROCEDURE
( A ) THE COMPLAINT CONCERNING THE INITIATION OF THE ADMINISTRATIVE PROCEDURE
9 THE APPLICANT ARGUES THAT THE COMMISSION HAS INFRINGED THE PROCEDURAL PROVISIONS LAID DOWN BY REGULATION NO 17/62 IN THAT IT SENT THE NOTICE OF OBJECTIONS TO THE APPLICANT AT THE SAME TIME AS IT INFORMED THE APPLICANT OF THE INITIATION OF THE PROCEDURE TO ESTABLISH AN INFRINGEMENT .
10 NEITHER THE PROVISIONS IN FORCE NOR THE GENERAL PRINCIPLES OF LAW REQUIRE NOTICE OF THE DECISION TO INITIATE THE PROCEDURE TO ESTABLISH AN INFRINGEMENT TO BE GIVEN PRIOR TO NOTIFICATION OF THE OBJECTIONS ADOPTED AGAINST THE INTERESTED PARTIES IN THE CONTEXT OF SUCH PROCEEDINGS .
11 IT IS THE NOTICE OF OBJECTIONS ALONE AND NOT THE DECISION TO COMMENCE PROCEEDINGS WHICH IS THE MEASURE STATING THE FINAL ATTITUDE OF THE COMMISSION CONCERNING UNDERTAKINGS AGAINST WHICH PROCEEDINGS FOR INFRINGEMENT OF THE RULES ON COMPETITION HAVE BEEN COMMENCED .
12 ACCORDINGLY, THE FACT THAT THE COMMISSION DID NOT SEPARATE, CHRONOLOGICALLY AND PHYSICALLY, NOTIFICATION OF THE ABOVEMENTIONED DECISION FROM THE NOTICE OF OBJECTIONS CANNOT AFFECT THE RIGHTS OF THE DEFENCE .
13 THIS COMPLAINT IS THEREFORE UNFOUNDED .
( B ) THE COMPLAINT RELATING TO A CONTINUATION OF INQUIRIES FOLLOWING NOTIFICATION OF THE OBJECTIONS
14 THE APPLICANT BELIEVES THAT THE COMMISSION HAS INFRINGED REGULATION NO 17/62 BY CONTINUING ITS INQUIRIES RELATING TO INCREASES IN THE PRICES OF THE PRODUCTS FOLLOWING COMMUNICATION OF THE NOTICE OF OBJECTIONS .
15 THE COMMISSION HAS THE RIGHT AND WHERE APPROPRIATE THE DUTY TO INSTITUTE FRESH INQUIRIES DURING THE ADMINISTRATIVE PROCEDURE IF IT APPEARS FROM THE COURSE OF THAT PROCEDURE THAT ADDITIONAL INVESTIGATIONS ARE NECESSARY .
16 SUCH INQUIRIES WOULD RENDER IT NECESSARY TO SEND AN ADDITIONAL STATEMENT OF OBJECTIONS TO THE UNDERTAKINGS CONCERNED ONLY IF THE RESULT OF THE INVESTIGATIONS LED THE COMMISSION TO TAKE NEW FACTS INTO ACCOUNT AGAINST THE UNDERTAKINGS OR TO ALTER MATERIALLY THE EVIDENCE FOR THE CONTESTED INFRINGEMENTS .
THAT IS NOT THE POSITION IN THE PRESENT CASE .
17 THE SUBMISSION IS THEREFORE UNFOUNDED .
( C ) THE COMPLAINT CONCERNING THE DISPARITIES BETWEEN THE CONTESTED DECISION AND THE NOTICE OF OBJECTIONS
18 THE APPLICANT, ALLEGING INFRINGEMENT OF THE RIGHTS OF THE DEFENCE, COMPLAINS THAT THE COMMISSION TOOK THE CONTESTED DECISION ON THE BASIS OF FACTS OR ASSERTIONS OF WHICH THE SAID APPLICANT HAD NEVER HAD KNOWLEDGE .
19 MOREOVER, IT IS STATED THAT CERTAIN OBSERVATIONS APPEARING IN THE CONTESTED DECISION CONCERN ONLY CERTAIN OF THE UNDERTAKINGS AND YET THE DECISION DOES NOT MAKE IT POSSIBLE TO IDENTIFY THEM .
20 THUS THE COMMISSION, IT IS SAID, HAS SUCCEEDED IN REVERSING THE BURDEN OF PROOF .
21 FINALLY, IT IS ARGUED THAT THE COMMISSION HAS NOT PUT FORWARD EVIDENCE CONCERNING THE SPECIFIC CONDUCT OF THE APPLICANT .
22 IN ORDER TO PROTECT THE RIGHTS OF THE DEFENCE DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE, IT IS SUFFICIENT THAT UNDERTAKINGS SHOULD BE INFORMED OF THE ESSENTIAL ELEMENTS OF FACT ON WHICH THE OBJECTIONS ARE BASED .
23 IT APPEARS FROM THE TEXT OF THE NOTICE OF OBJECTIONS THAT THE FACTS TAKEN INTO CONSIDERATION AGAINST THE APPLICANT WERE CLEARLY STATED THEREIN .
24 THAT NOTICE CONTAINS ALL THE INFORMATION NECESSARY FOR DECIDING AS TO THE OBJECTIONS PUT FORWARD WITH REGARD TO THE APPLICANT, IN PARTICULAR THE CIRCUMSTANCES IN WHICH THE INCREASES OF 1964, 1965 AND 1967 WERE ANNOUNCED AND IMPLEMENTED .
25 AMENDMENTS INCLUDED IN THE CONTESTED DECISION CONCERNING THE PRECISE COURSE OF THE FACTS, WHICH WERE MADE PURSUANT TO INFORMATION FURNISHED BY THE INTERESTED PARTIES TO THE COMMISSION DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE, CAN BY NO MEANS BE RELIED UPON TO SUPPORT THIS COMPLAINT .
26 THE FACT THAT THE DECISION, WHICH WAS TAKEN IN RESPECT OF TEN SEPARATE UNDERTAKINGS, DEALT WITH THE ARGUMENTS PUT FORWARD BY ONLY SOME OF THE ADDRESSEES, WITHOUT IDENTIFYING THEM, CANNOT IMPAIR THE LEGALITY OF THAT MEASURE .
27 FINALLY, THE QUESTION WHETHER THE FACTORS PUT FORWARD BY THE COMMISSION IN EVIDENCE OF THE INFRINGEMENT AT ISSUE ARE SUFFICIENT TO PROVE THE EXISTENCE OF THAT INFRINGEMENT IS A MATTER RELATING TO THE SUBSTANCE OF THE CONTESTED DECISION .
28 THESE COMPLAINTS ARE THEREFORE UNFOUNDED .
THE SUBMISSION AS TO THE LIMITATION PERIOD
29 THE APPLICANT ARGUES THAT THE CONTESTED DECISION IS CONTRARY TO THE TREATY AND TO THE RULES RELATING TO ITS APPLICATION BECAUSE THE COMMISSION, IN COMMENCING ON 31 MAY 1967 PROCEEDINGS CONCERNING THE PRICE INCREASE OF JANUARY 1964, EXCEEDED ANY REASONABLE LIMITATION PERIOD .
30 THE PROVISIONS GOVERNING THE COMMISSION' S POWER TO IMPOSE FINES FOR INFRINGEMENT OF THE RULES ON COMPETITION DO NOT LAY DOWN ANY PERIOD OF LIMITATION .
31 IN ORDER TO FULFIL THEIR FUNCTION, LIMITATION PERIODS MUST BE FIXED IN ADVANCE .
THE FIXING OF THEIR DURATION AND THE DETAILED RULES FOR THEIR APPLICATION COME WITHIN THE POWERS OF THE COMMUNITY LEGISLATURE .
32 ALTHOUGH, IN THE ABSENCE OF ANY PROVISIONS ON THIS MATTER, THE FUNDAMENTAL REQUIREMENT OF LEGAL CERTAINTY HAS THE EFFECT OF PREVENTING THE COMMISSION FROM INDEFINITELY DELAYING THE EXERCISE OF ITS POWER TO IMPOSE FINES, ITS CONDUCT IN THE PRESENT CASE CANNOT BE REGARDED AS CONSTITUTING A BAR TO THE EXERCISE OF THAT POWER AS REGARDS PARTICIPATION IN THE CONCERTED PRACTICES OF 1964 AND 1965 .
33 THEREFORE THE SUBMISSION IS UNFOUNDED .
SUBSTANTIVE SUBMISSIONS AS TO THE EXISTENCE OF CONCERTED PRACTICES
ARGUMENTS OF THE PARTIES
34 THE APPLICANT COMPLAINS, FIRST, THAT THE CONTESTED DECISION ACCUSED IT OF HAVING PARTICIPATED, OUTSIDE THE ITALIAN MARKET, IN 1965 AND IN 1967, IN CONCERTED PRACTICES RELATING TO PRICE INCREASES IN OTHER MEMBER STATES .
35 IT IS ARGUED THAT IN VIEW OF ACNA' S REFUSAL TO INCREASE ITS PRICES ON ITS NATIONAL MARKET AND THE SMALL COMMERCIAL IMPORTANCE TO IT OF THOSE OTHER MARKETS, THE ABOVEMENTIONED ALLEGATION IS NOT PLAUSIBLE .
36 DURING THE ORAL PROCEDURE BEFORE THE COURT, THE DEFENDANT REPLIED THAT IN THE APPLICANT' S CASE THE CONTESTED DECISION WAS BASED ON ITS PARTICIPATION IN THE INCREASE OF 1964 ALONE, AND THAT ITS CONDUCT IN 1965 AND 1967, VIEWED IN ISOLATION, WAS NOT OF A NATURE SUCH AS TO JUSTIFY THAT MEASURE .
37 THEREFORE, IN THE EXAMINATION OF THE EXISTENCE OF THE INFRINGEMENT ALLEGED AGAINST THE APPLICANT THAT LIMITATION SHOULD BE TAKEN INTO ACCOUNT .
38 THE APPLICANT ALSO COMPLAINS THAT THE COMMISSION HAS NOT PRODUCED VALID EVIDENCE TO THE EFFECT THAT IT PARTICIPATED IN CONCERTED PRACTICES CONTRARY TO ARTICLE 85 ( 1 ) OF THE EEC TREATY .
39 THE CONTESTED DECISION STATES THAT PRIMA FACIE EVIDENCE THAT THE INCREASE OF 1964 TOOK PLACE AS THE RESULT OF CONCERTED ACTION IS TO BE FOUND IN THE FACTS THAT THE RATES INTRODUCED FOR THAT INCREASE BY THE DIFFERENT PRODUCERS IN EACH COUNTRY WERE THE SAME, THAT WITH VERY RARE EXCEPTIONS THE SAME DYESTUFFS WERE INVOLVED, AND THAT THE INCREASES WERE PUT INTO EFFECT OVER ONLY A VERY SHORT PERIOD, IF NOT ACTUALLY ON THE SAME DATE .
40 IT IS CONTENDED THAT THAT INCREASE CANNOT BE EXPLAINED SIMPLY BY THE OLIGOPOLISTIC CHARACTER OF THE STRUCTURE OF THE MARKET .
IT IS SAID TO BE UNREALISTIC TO SUPPOSE THAT WITHOUT PREVIOUS CONCERTATION THE PRINCIPAL PRODUCERS SUPPLYING THE COMMON MARKET COULD HAVE INCREASED THEIR PRICES ON SEVERAL OCCASIONS BY IDENTICAL PERCENTAGES AT PRACTICALLY THE SAME MOMENT FOR ONE AND THE SAME IMPORTANT RANGE OF PRODUCTS INCLUDING SPECIALITY PRODUCTS FOR WHICH THERE ARE FEW, IF ANY SUBSTITUTES AND THAT THEY SHOULD HAVE DONE SO IN A NUMBER OF COUNTRIES WHERE CONDITIONS ON THE DYESTUFFS MARKET ARE DIFFERENT .
41 THE COMMISSION HAS ARGUED BEFORE THE COURT THAT THE INTERESTED PARTIES NEED NOT NECESSARILY HAVE DRAWN UP A COMMON PLAN WITH A VIEW TO ADOPTING A CERTAIN COURSE OF BEHAVIOUR FOR IT TO BE SAID THAT THERE HAS BEEN CONCERTATION .
IT IS ARGUED THAT IT IS ENOUGH THAT THEY SHOULD PREVIOUSLY HAVE INFORMED EACH OTHER OF THE ATTITUDE WHICH THEY INTEND TO ADOPT SO THAT EACH COULD REGULATE HIS CONDUCT SAFE IN THE KNOWLEDGE THAT HIS COMPETITORS WOULD ACT IN THE SAME WAY .
42 THE APPLICANT ARGUES THAT THE CONTESTED DECISION IS BASED ON AN INADEQUATE ANALYSIS OF THE MARKET IN THE PRODUCTS IN QUESTION AND ON AN ERRONEOUS UNDERSTANDING OF THE CONCEPT OF A CONCERTED PRACTICE, WHICH IS WRONGLY IDENTIFIED BY THE DECISION WITH THE CONSCIOUS PARALLELISM OF MEMBERS OF AN OLIGOPOLY, WHEREAS SUCH CONDUCT IS DUE TO INDEPENDENT DECISIONS ADOPTED BY EACH UNDERTAKING, DETERMINED BY OBJECTIVE BUSINESS NEEDS, AND IN PARTICULAR BY THE NEED TO INCREASE THE UNSATISFACTORILY LOW RATE OF PROFIT ON THE PRODUCTION OF DYESTUFFS .
43 AT THE TIME COVERED BY THE CONTESTED DECISION THE APPLICANT' S POSITION WAS, IT IS SAID, CHARACTERIZED BY A VERY LARGE IMBALANCE IN THE RELATIONSHIP BETWEEN COSTS AND PROFITS, BY A PROGRESSIVE DETERIORATION IN ITS SITUATION ON THE NATIONAL MARKET AS A RESULT BOTH OF THE INTENSE COMPETITION TO WHICH ITS PRODUCTS, CONSISTING ALMOST EXCLUSIVELY OF DYES OF STANDARD TYPES AND THEREFORE EASILY INTERCHANGEABLE, WERE EXPOSED, AND OF THE HIGHLY CRITICAL SITUATION EXISTING IN WIDE AREAS OF DEMAND, TAKING INTO ACCOUNT THE RELATIVELY SMALL STATURE OF THE UNDERTAKING AND ITS LACK OF ABILITY TO PENETRATE OTHER COMMUNITY MARKETS .
44 IN THAT CRITICAL SITUATION IT HAD NO REASONABLE ALTERNATIVE, SO IT IS SAID, BUT TO PURSUE A POLICY OF VARYING PRICES BY MEANS OF ADJUSTMENTS OF ITS PRICES TO CUSTOMERS .
45 IT IS ARGUED THAT THE CONSTANT EROSION OF PRICES CHARGED TO CUSTOMERS SHOWS THAT THE UNIFORM PERCENTAGE OF THE INCREASE DID NOT ATTENUATE OPEN COMPETITION ON THE MARKET IN THE PRODUCTS IN QUESTION .
46 IN 1964, THE APPLICANT CONFINED ITSELF, EVEN ON ITS NATIONAL MARKET, TO FOLLOWING DECISIONS TO INTRODUCE INCREASES ALREADY ACTED UPON BY ITS LARGEST COMPETITORS .
47 IT IS ARGUED THAT THE STATISTICS OF THE OECD, ACCORDING TO WHICH PRODUCTION OF DYESTUFFS IN ITALY IN 1965 DECREASED BY 20.7 PER CENT IN QUANTITY AND 20 PER CENT IN VALUE, CONFIRM THESE ASSERTIONS .
48 THEREFORE, IT IS SAID, THE COMMISSION' S GENERAL STATEMENT CONCERNING THE EXPANSION OF THE DYESTUFFS INDUSTRY CANNOT APPLY TO THE PARTICULAR SITUATION OF THE APPLICANT .
THE CONCEPT OF A CONCERTED PRACTICE
49 ARTICLE 85 DRAWS A DISTINCTION BETWEEN THE CONCEPT OF " CONCERTED PRACTICES " AND THAT OF " AGREEMENTS BETWEEN UNDERTAKINGS " OR OF " DECISIONS BY ASSOCIATIONS OF UNDERTAKINGS "; THE OBJECT IS TO BRING WITHIN THE PROHIBITION OF THAT ARTICLE A FORM OF COORDINATION BETWEEN UNDERTAKINGS WHICH, WITHOUT HAVING REACHED THE STAGE WHERE AN AGREEMENT PROPERLY SO-CALLED HAS BEEN CONCLUDED, KNOWINGLY SUBSTITUTES PRACTICAL COOPERATION BETWEEN THEM FOR THE RISKS OF COMPETITION .
50 BY ITS VERY NATURE, THEN, A CONCERTED PRACTICE DOES NOT HAVE ALL THE ELEMENTS OF A CONTRACT BUT MAY INTER ALIA ARISE OUT OF COORDINATION WHICH BECOMES APPARENT FROM THE BEHAVIOUR OF THE PARTICIPANTS .
51 ALTHOUGH PARALLEL BEHAVIOUR MAY NOT BY ITSELF BE IDENTIFIED WITH A CONCERTED PRACTICE, IT MAY HOWEVER AMOUNT TO STRONG EVIDENCE OF SUCH A PRACTICE IF IT LEADS TO CONDITIONS OF COMPETITION WHICH DO NOT CORRESPOND TO THE NORMAL CONDITIONS OF THE MARKET, HAVING REGARD TO THE NATURE OF THE PRODUCTS, THE SIZE AND NUMBER OF THE UNDERTAKINGS, AND THE VOLUME OF THE SAID MARKET .
52 THIS IS ESPECIALLY THE CASE IF THE PARALLEL CONDUCT IS SUCH AS TO ENABLE THOSE CONCERNED TO ATTEMPT TO STABILIZE PRICES AT A LEVEL DIFFERENT FROM THAT TO WHICH COMPETITION WOULD HAVE LED, AND TO CONSOLIDATE ESTABLISHED POSITIONS TO THE DETRIMENT OF EFFECTIVE FREEDOM OF MOVEMENT OF THE PRODUCTS IN THE COMMON MARKET AND OF THE FREEDOM OF CONSUMERS TO CHOOSE THEIR SUPPLIERS .
53 THEREFORE THE QUESTION WHETHER THERE WAS A CONCERTED ACTION IN THIS CASE CAN ONLY BE CORRECTLY DETERMINED IF THE EVIDENCE UPON WHICH THE CONTESTED DECISION IS BASED IS CONSIDERED, NOT IN ISOLATION, BUT AS A WHOLE, ACCOUNT BEING TAKEN OF THE SPECIFIC FEATURES OF THE MARKET IN THE PRODUCTS IN QUESTION .
THE CHARACTERISTIC FEATURES OF THE MARKET IN DYESTUFFS
54 THE MARKET IN DYESTUFFS IS CHARACTERIZED BY THE FACT THAT 80 PER CENT OF THE MARKET IS SUPPLIED BY ABOUT TEN PRODUCERS, VERY LARGE ONES IN THE MAIN, WHICH OFTEN MANUFACTURE THESE PRODUCTS TOGETHER WITH OTHER CHEMICAL PRODUCTS OR PHARMACEUTICAL SPECIALITIES .
55 THE PRODUCTION PATTERNS AND THEREFORE THE COST STRUCTURES OF THESE MANUFACTURERS ARE VERY DIFFERENT, AND THIS MAKES IT DIFFICULT TO ASCERTAIN COMPETING MANUFACTURERS' COSTS .
56 THE TOTAL NUMBER OF DYESTUFFS IS VERY HIGH, EACH UNDERTAKING PRODUCING MORE THAN A THOUSAND .
57 THE AVERAGE EXTENT TO WHICH THESE PRODUCTS CAN BE REPLACED BY OTHERS IS CONSIDERED RELATIVELY GOOD FOR STANDARD DYES, BUT IT CAN BE VERY LOW OR EVEN NON-EXISTENT FOR SPECIALITY DYES .
58 AS REGARDS SPECIALITY PRODUCTS, THE MARKET TENDS IN CERTAIN CASES TOWARDS AN OLIGOPOLISTIC SITUATION .
59 SINCE THE PRICE OF DYESTUFFS FORMS A RELATIVELY SMALL PART OF THE PRICE OF THE FINAL PRODUCT OF THE USER UNDERTAKING, THERE IS LITTLE ELASTICITY OF DEMAND FOR DYESTUFFS ON THE MARKET AS A WHOLE AND THIS ENCOURAGES PRICE INCREASES IN THE SHORT TERM .
60 ANOTHER FACTOR IS THAT THE TOTAL DEMAND FOR DYESTUFFS IS CONSTANTLY INCREASING, AND THIS TENDS TO INDUCE PRODUCERS TO ADOPT A POLICY ENABLING THEM TO TAKE ADVANTAGE OF THIS INCREASE .
61 IN THE TERRITORY OF THE COMMUNITY, THE MARKET IN DYESTUFFS IN FACT CONSISTS OF FIVE SEPARATE NATIONAL MARKETS WITH DIFFERENT PRICE LEVELS WHICH CANNOT BE EXPLAINED BY DIFFERENCES IN COSTS AND CHARGES AFFECTING PRODUCERS IN THOSE COUNTRIES .
62 THUS THE ESTABLISHMENT OF THE COMMON MARKET WOULD NOT APPEAR TO HAVE HAD ANY EFFECT ON THIS SITUATION, SINCE THE DIFFERENCES BETWEEN NATIONAL PRICE LEVELS HAVE SCARCELY DECREASED .
63 ON THE CONTRARY, IT IS CLEAR THAT EACH OF THE NATIONAL MARKETS HAS THE CHARACTERISTICS OF AN OLIGOPOLY AND THAT IN MOST OF THEM PRICE LEVELS ARE ESTABLISHED UNDER THE INFLUENCE OF A " PRICE-LEADER ", WHO IN SOME CASES IS THE LARGEST PRODUCER IN THE COUNTRY CONCERNED, AND IN OTHER CASES IS A PRODUCER IN ANOTHER MEMBER STATE OR A THIRD STATE, ACTING THROUGH A SUBSIDIARY .
64 ACCORDING TO THE EXPERTS THIS DIVIDING-UP OF THE MARKET IS DUE TO THE NEED TO SUPPLY LOCAL TECHNICAL ASSISTANCE TO USERS AND TO ENSURE IMMEDIATE DELIVERY, GENERALLY IN SMALL QUANTITIES, SINCE, APART FROM EXCEPTIONAL CASES, PRODUCERS SUPPLY THEIR SUBSIDIARIES ESTABLISHED IN THE DIFFERENT MEMBER STATES AND MAINTAIN A NETWORK OF AGENTS AND DEPOTS TO ENSURE THAT USER UNDERTAKINGS RECEIVE SPECIFIC ASSISTANCE AND SUPPLIES .
65 IT APPEARS FROM THE DATA PRODUCED DURING THE COURSE OF THE PROCEEDINGS THAT EVEN IN CASES WHERE A PRODUCER ESTABLISHES DIRECT CONTACT WITH AN IMPORTANT USER IN ANOTHER MEMBER STATE, PRICES ARE USUALLY FIXED IN RELATION TO THE PLACE WHERE THE USER IS ESTABLISHED AND TEND TO FOLLOW THE LEVEL OF PRICES ON THE NATIONAL MARKET .
66 ALTHOUGH THE FOREMOST REASON WHY PRODUCERS HAVE ACTED IN THIS WAY IS IN ORDER TO ADAPT THEMSELVES TO THE SPECIAL FEATURES OF THE MARKET IN DYESTUFFS AND TO THE NEEDS OF THEIR CUSTOMERS, THE FACT REMAINS THAT THE DIVIDING-UP OF THE MARKET WHICH RESULTS TENDS, BY FRAGMENTING THE EFFECTS OF COMPETITION, TO ISOLATE USERS IN THEIR NATIONAL MARKET, AND TO PREVENT A GENERAL CONFRONTATION BETWEEN PRODUCERS THROUGHOUT THE COMMON MARKET .
67 IT IS IN THIS CONTEXT, WHICH IS PECULIAR TO THE WAY IN WHICH THE DYESTUFFS MARKET WORKS, THAT THE FACTS OF THE CASE SHOULD BE CONSIDERED .
THE INCREASE OF 1964
68 IN 1964 ALL THE UNDERTAKINGS IN QUESTION ANNOUNCED AND IMMEDIATELY PUT INTO EFFECT AN INCREASE IN THE PRICES OF MOST ANILINE DYES, THE INITIATIVE COMING FROM CIBA-ITALY WHICH, ON 7 JANUARY 1964, FOLLOWING INSTRUCTIONS FROM CIBA-SWITZERLAND, ANNOUNCED AND IMMEDIATELY INTRODUCED AN INCREASE OF 15 PER CENT . THIS INITIATIVE WAS FOLLOWED BY THE OTHER PRODUCERS, AND IN PARTICULAR THE APPLICANT, ON THE ITALIAN MARKET WITHIN TWO OR THREE DAYS .
69 ON 9 JANUARY ICI-HOLLAND TOOK THE INITIATIVE IN INTRODUCING THE SAME INCREASE IN THE NETHERLANDS, WHILST ON THE SAME DAY BAYER TOOK THE SAME INITIATIVE ON THE BELGO-LUXEMBOURG MARKET .
70 WITH MINOR DIFFERENCES, THESE INCREASES CONCERNED THE SAME RANGE OF PRODUCTS FOR THE VARIOUS PRODUCERS AND MARKETS, NAMELY, MOST ANILINE DYES OTHER THAN PIGMENTS, FOOD COLOURINGS AND COSMETICS .
71 ON THE ITALIAN MARKET IN PARTICULAR, THIS CONDUCT ON THE PART OF THE UNDERTAKINGS CANNOT BE CONSIDERED TO HAVE BEEN SPONTANEOUS .
72 IN FACT, FROM THE NUMBER OF PRODUCERS CONCERNED IT IS NOT POSSIBLE TO SAY THAT THE ITALIAN MARKET IN DYESTUFFS IS AN OLIGOPOLY IN WHICH PRICE COMPETITION CAN NO LONGER PLAY A SUBSTANTIAL ROLE AND IN WHICH THE LEVEL OF PRICES IS FIXED BY CONSCIOUS PARALLELISM .
73 THESE PRODUCERS ARE SUFFICIENTLY NUMEROUS AND SOME OF THEM ARE SUFFICIENTLY POWERFUL TO CREATE A REAL RISK THAT IN TIMES OF RISING PRICES SOME OF THEM MIGHT NOT FOLLOW THE GENERAL MOVEMENT BUT MIGHT INSTEAD TRY TO INCREASE THEIR SHARE OF THE MARKET BY BEHAVING IN AN INDIVIDUAL WAY .
74 IN FACT IT APPEARS FROM ACNA' S ACCOUNT OF THE SITUATION ON THE ITALIAN MARKET IN THE YEARS PRIOR TO 1964, WHICH DID NOT PERMIT IT TO INTRODUCE PRICE INCREASES WHICH HAD BECOME NECESSARY, THAT A GENERAL, UNIFORM AND SPONTANEOUS INCREASE ON THAT MARKET WAS HARDLY CONCEIVABLE .
75 MOREOVER, IT IS VERY SIGNIFICANT IN THIS CONTEXT THAT BY REFUSING TO TAKE PART IN THE INCREASES OF 1965 AND 1967 AS REGARDS THE ITALIAN MARKET ACNA WAS ABLE TO PREVENT THEIR BEING ACHIEVED .
76 FURTHERMORE, THE DIVIDING-UP OF THE COMMON MARKET INTO FIVE NATIONAL MARKETS WITH DIFFERENT PRICE LEVELS AND STRUCTURES MAKES IT IMPROBABLE THAT A SPONTANEOUS AND EQUAL PRICE INCREASE WOULD OCCUR ON MOST OF THE NATIONAL MARKETS .
77 ALTHOUGH A GENERAL, SPONTANEOUS INCREASE ON EACH OF THE NATIONAL MARKETS IS JUST CONCEIVABLE, IN VIEW OF THEIR STRUCTURE, THESE INCREASES MIGHT BE EXPECTED TO DIFFER ACCORDING TO THE PARTICULAR CHARACTERISTICS OF THE DIFFERENT NATIONAL MARKETS .
78 THEREFORE, ALTHOUGH PARALLEL CONDUCT IN RESPECT OF PRICES MAY WELL HAVE BEEN AN ATTRACTIVE AND RISK-FREE OBJECTIVE FOR THE UNDERTAKINGS CONCERNED, PARTICULARLY FOR ACNA, IT IS HARDLY CONCEIVABLE THAT THE SAME ACTION COULD BE TAKEN SPONTANEOUSLY AT THE SAME TIME, ON THE SAME NATIONAL MARKETS AND FOR THE SAME RANGE OF PRODUCTS .
79 IT CANNOT BE ACCEPTED THAT THE INCREASES OF JANUARY 1964, INTRODUCED ON THE ITALIAN MARKET AND COPIED ON THE NETHERLANDS AND BELGO-LUXEMBOURG MARKETS, WHICH HAVE LITTLE IN COMMON WITH EACH OTHER EITHER AS REGARDS THE LEVEL OF PRICES OR THE PATTERNS OF COMPETITION, COULD HAVE BEEN BROUGHT INTO EFFECT WITHIN A PERIOD OF TWO TO THREE DAYS WITHOUT PRIOR CONCERTATION .
80 THE GENERAL AND UNIFORM INCREASE ON THE DIFFERENT MARKETS CAN ONLY BE EXPLAINED BY A COMMON INTENTION ON THE PART OF THE UNDERTAKINGS, FIRST, TO ADJUST THE LEVEL OF PRICES AND THE SITUATION RESULTING FROM COMPETITION IN THE FORM OF DISCOUNTS, AND SECONDLY, TO AVOID THE RISK, WHICH IS INHERENT IN ANY PRICE INCREASE, OF CHANGING THE CONDITIONS OF COMPETITION .
81 THE FUNCTION OF PRICE COMPETITION IS TO KEEP PRICES DOWN TO THE LOWEST POSSIBLE LEVEL AND TO ENCOURAGE THE MOVEMENT OF GOODS BETWEEN THE MEMBER STATES, THEREBY PERMITTING THE MOST EFFICIENT POSSIBLE DISTRIBUTION OF ACTIVITIES IN THE MATTER OF PRODUCTIVITY AND THE CAPACITY OF UNDERTAKINGS TO ADAPT THEMSELVES TO CHANGE .
82 DIFFERENCES IN RATES ENCOURAGE THE PURSUIT OF ONE OF THE BASIC OBJECTIVES OF THE TREATY, NAMELY THE INTERPENETRATION OF NATIONAL MARKETS AND, AS A RESULT, DIRECT ACCESS BY CONSUMERS TO THE SOURCES OF PRODUCTION OF THE WHOLE COMMUNITY .
83 BY REASON OF THE LIMITED ELASTICITY OF THE MARKET IN DYESTUFFS, RESULTING FROM FACTORS SUCH AS THE LACK OF TRANSPARENCY WITH REGARD TO PRICES, THE INTERDEPENDENCE OF THE DIFFERENT DYESTUFFS OF EACH PRODUCER FOR THE PURPOSE OF BUILDING UP THE RANGE OF PRODUCTS USED BY EACH CONSUMER, THE RELATIVELY LOW PROPORTION OF THE COST OF THE FINAL PRODUCT OF THE USER UNDERTAKING REPRESENTED BY THE PRICES OF THESE PRODUCTS, THE FACT THAT IT IS USEFUL FOR USERS TO HAVE A LOCAL SUPPLIER AND THE INFLUENCE OF TRANSPORT COSTS, THE NEED TO AVOID ANY ACTION WHICH MIGHT ARTIFICIALLY REDUCE THE OPPORTUNITIES FOR INTERPENETRATION OF THE VARIOUS NATIONAL MARKETS AT THE CONSUMER LEVEL BECOMES PARTICULARLY IMPORTANT ON THE MARKET IN THE PRODUCTS IN QUESTION .
84 ALTHOUGH EVERY PRODUCER IS FREE TO CHANGE HIS PRICES, TAKING INTO ACCOUNT IN SO DOING THE PRESENT OR FORESEEABLE CONDUCT OF HIS COMPETITORS, NEVERTHELESS IT IS CONTRARY TO THE RULES ON COMPETITION CONTAINED IN THE TREATY FOR A PRODUCER TO COOPERATE WITH HIS COMPETITORS, IN ANY WAY WHATSOEVER, IN ORDER TO DETERMINE A COORDINATED COURSE OF ACTION RELATING TO A PRICE INCREASE AND TO ENSURE ITS SUCCESS BY PRIOR ELIMINATION OF ALL UNCERTAINTY AS TO EACH OTHER' S CONDUCT REGARDING THE ESSENTIAL ELEMENTS OF THAT ACTION, SUCH AS THE AMOUNT, SUBJECT-MATTER, DATE AND PLACE OF THE INCREASES .
85 IN THESE CIRCUMSTANCES AND TAKING INTO ACCOUNT THE NATURE OF THE MARKET IN THE PRODUCTS IN QUESTION, THE CONDUCT OF THE APPLICANT, IN CONJUNCTION WITH OTHER UNDERTAKINGS AGAINST WHICH PROCEEDINGS HAVE BEEN TAKEN, WAS DESIGNED TO REPLACE THE RISKS OF COMPETITION AND THE HAZARDS OF COMPETITORS' SPONTANEOUS REACTIONS BY COOPERATION CONSTITUTING A CONCERTED PRACTICE PROHIBITED BY ARTICLE 85 ( 1 ) OF THE TREATY .
THE EFFECT OF THE CONCERTED PRACTICE ON TRADE BETWEEN MEMBER STATES
86 THE APPLICANT ARGUES THAT THE UNIFORM PRICE INCREASES WERE NOT CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES BECAUSE NOTWITHSTANDING THE NOTICEABLE DIFFERENCES EXISTING BETWEEN PRICES CHARGED IN THE DIFFERENT STATES CONSUMERS HAVE ALWAYS PREFERRED TO MAKE THEIR PURCHASES OF DYESTUFFS IN THEIR OWN COUNTRY .
87 HOWEVER, IT APPEARS FROM WHAT HAS ALREADY BEEN SAID THAT THE CONCERTED PRACTICES, BY SEEKING TO KEEP THE MARKET IN A FRAGMENTED STATE, WERE LIABLE TO AFFECT THE CIRCUMSTANCES IN WHICH TRADE IN THE PRODUCTS IN QUESTION TAKES PLACE BETWEEN THE MEMBER STATES .
88 THE PARTIES WHO PUT THESE PRACTICES INTO EFFECT SOUGHT, ON THE OCCASION OF EACH PRICE INCREASE, TO REDUCE TO A MINIMUM THE RISKS OF CHANGING THE CONDITIONS OF COMPETITION .
89 THE FACT THAT THE INCREASES WERE UNIFORM AND SIMULTANEOUS HAS IN PARTICULAR SERVED TO MAINTAIN THE STATUS QUO, ENSURING THAT THE UNDERTAKINGS WOULD NOT LOSE CUSTOM, AND HAS THUS HELPED TO KEEP THE TRADITIONAL MARKETS IN THOSE GOODS " CEMENTED " TO THE DETRIMENT OF ANY REAL FREEDOM OF MOVEMENT OF THE PRODUCTS IN QUESTION IN THE COMMON MARKET .
90 THEREFORE THIS SUBMISSION IS UNFOUNDED .
THE FINE
91 THE APPLICANT ARGUES AS AN ALTERNATIVE SUBMISSION THAT THE FINE WHICH HAS BEEN IMPOSED ON IT, WHICH IS LITTLE SMALLER THAN THAT IMPOSED ON THE OTHER UNDERTAKINGS, IS IN CONTRADICTION WITH THE CONSIDERATIONS TO WHICH THE DECISION REFERS RELATING TO THE GRAVITY AND DURATION OF THE INFRINGEMENT, THE CIRCUMSTANCES IN WHICH IT TOOK PLACE, AND THE RELATIVE SIZE OF THE UNDERTAKINGS WITHIN THE COMMON MARKET .
92 IT IS ONLY AS REGARDS THE INCREASE OF 1964 THAT THE COMMISSION HAS HELD THAT THERE WAS AN INFRINGEMENT OF ARTICLE 85 .
93 ON THE OTHER HAND, THE APPLICANT PLAYED AN IMPORTANT PART IN THE SUCCESS OF THAT INCREASE ON THE ITALIAN MARKET .
94 THEREFORE, COMPARED WITH THE FINES IMPOSED ON THE OTHER PARTICIPANTS IN THE CONCERTED PRACTICES IN QUESTION, A SUM OF 30 000 U . A . APPEARS COMMENSURATE WITH THE GRAVITY OF THE INFRINGEMENT OF THE COMMUNITY RULES ON COMPETITION .
95 IT IS THEREFORE APPROPRIATE TO REDUCE THE AMOUNT OF THE FINE IMPOSED TO THAT SUM .
Decision on costs
96 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .
97 SINCE THE APPLICANT HAS FAILED IN ITS PRINCIPAL SUBMISSIONS, IT MUST BE ORDERED TO BEAR THE COSTS OF THESE PROCEEDINGS .
Operative part
THE COURT
HEREBY :
1 . REDUCES THE AMOUNT OF THE FINE IMPOSED ON THE APPLICANT BY THE COMMISSION DECISION OF 24 JULY 1969 TO 30 000 U . A .;
2 . DISMISSES THE REMAINDER OF THE APPLICATION;
3 . ORDERS THE APPLICANT TO BEAR THE COSTS .