# EUR-Lex - 61969J0049 - EN

Avis juridique important

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# 61969J0049

**Judgment of the Court of 14 July 1972. - Badische Anilin- & Soda-Fabrik AG v Commission of the European Communities. - Case 49-69. **

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European Court reports 1972 Page 00713 Danish special edition Page 00217 Greek special edition Page 00181 Portuguese special edition Page 00281 *

Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part

## Keywords

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1 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY - ADMINISTRATIVE PROCEDURE - FINAL ATTITUDE OF THE COMMISSION - OBJECTIONS - NOTICE THEREOF

( EEC TREATY, ARTICLE 85 )

2 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY - ADMINISTRATIVE PROCEDURE - OBJECTIONS - COMMUNICATION TO THE INTERESTED PARTIES - METHOD

( REGULATION NO 17/62 OF THE COUNCIL, ARTICLE 19 )

3 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY - HEARING OF THE INTERESTED PARTIES - REPRESENTATION BY AN AUTHORIZED AGENT

( REGULATION NO 99/63 OF THE COMMISSION, ARTICLE 9 )

4 . MEASURE ADOPTED BY AN INSTITUTION - STATEMENT OF REASONS - EXTENT

( EEC TREATY, ARTICLE 190 )

5 . LIMITATION OF ACTIONS - PERIOD - MUST BE FIXED IN ADVANCE

6 . COMMUNITY ADMINISTRATION - INFRINGEMENT OF THE RULES OF EUROPEAN LAW - FINES - NO TIME-LIMIT LAID DOWN - POWERS OF THE COMMISSION - BAR TO EXERCISE RESULTING FROM THE COMMISSION' S CONDUCT

7 . COMPETITION - CARTELS - PROHIBITION - CONCERNED PRACTICE - CONCEPT

( EEC TREATY, ARTICLE 85 )

8 . COMPETITION - EFFECT - FUNCTION AS REGARDS PRICES

9 . COMPETITION - CARTELS - CONCERTED PRACTICE - PRICES - MANIPULATION - CRITERIA

( EEC TREATY, ARTICLE 85 )

10 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY - FINES - APPLICATION

( REGULATION NO 17 OF THE COUNCIL, ARTICLE 15 )

Summary

1 . THE NOTICE OF OBJECTIONS 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 .

## Summary

2 . IN ORDER TO PROTECT THE RIGHTS OF THE DEFENCE DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE, THOSE CONCERNED MUST BE INFORMED OF THE ESSENTIAL ELEMENTS OF FACT ON WHICH THE OBJECTIONS ARE BASED WITHOUT ITS BEING NECESSARY FOR THE CONTENTS OF THE FILE TO BE MADE AVAILABLE IN THEIR ENTIRETY .

3 . ARTICLE 9 ( 2 ) OF REGULATION NO 99/63 WHICH PROVIDES THAT UNDERTAKINGS MAY BE REPRESENTED ONLY BY A DULY AUTHORIZED AGENT APPOINTED FROM AMONG THEIR PERMANENT STAFF OR BY LEGAL REPRESENTATIVES OR REPRESENTATIVES AUTHORIZED BY THEIR CONSTITUTION, IS JUSTIFIED BY THE FACT THAT AS A GENERAL RULE THOSE PERSONS ARE THE BEST-INFORMED AS TO THE FACTS AND TECHNICAL OR ECONOMIC ASPECTS OF THEIR UNDERTAKING' S ACTIONS WHICH MAY BE OF DECISIVE IMPORTANCE IN APPLYING THE RULES ON COMPETITION .

4 . A MEASURE ADOPTED BY AN INSTITUTION MUST SET OUT CLEARLY AND COHERENTLY THE ESSENTIAL ELEMENTS OF FACT AND LAW ON WHICH IT IS BASED .

5 . IN ORDER TO FULFIL THEIR FUNCTION, LIMITATION PERIODS MUST BE FIXED IN ADVANCE .

6 . ALTHOUGH THE PROVISIONS GOVERNING THE COMMISSION' S POWER TO IMPOSE FINES IN CASES WHERE COMMUNITY RULES HAVE BEEN INFRINGED DO NOT LAY DOWN ANY PERIOD OF LIMITATION, THE FUNDAMENTAL REQUIREMENT OF LEGAL CERTAINTY HAS THE EFFECT OF PREVENTING THE COMMISSION FROM INDEFINITELY DELAYING THE EXERCISE OF ITS POWER TO IMPOSE FINES .

7 . BY ITS VERY NATURE, 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 . 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 .

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 .

8 . 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 .

INDEPENDENT AND NON-UNIFORM CONDUCT BY UNDERTAKINGS IN THE COMMON MARKET ENCOURAGES 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 .

9 . 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 PRICE CHANGES 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 CHANGES .

10 . ARTICLE 15 OF REGULATION NO 17/62 DOES NOT LIMIT THE IMPOSITION OF FINES EXCLUSIVELY TO CASES OF RECURRENCE OF INFRINGEMENTS ALREADY FOUND TO HAVE TAKEN PLACE AND FORBIDDEN BY THE COMMISSION UNDER ARTICLE 3 .

Parties

IN CASE 49/69

## Parties

BADISCHE ANILIN - UND SODA-FABRIK AG, HAVING ITS REGISTERED OFFICE AT LUDWIGSHAFEN ( RHINE ), REPRESENTED BY ITS BOARD OF MANAGEMENT, ASSISTED BY PROFESSOR W . VON SIMSON, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF E . GRAF VON CARMER, COUNSELLOR ( FIRST CLASS ) AT THE GERMAN EMBASSY, 20-22 RUE DE L' ARSENAL, APPLICANT,

V

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISERS, J . THIESING, G . MARCHESINI AND J . GRIESMAR, ACTING AS AGENTS, ASSISTED BY PROFESSOR W . HEFERMEHL, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ITS LEGAL ADVISER, E . REUTER, 4 BOULEVARD ROYAL, DEFENDANT,

Subject of the case

APPLICATION FOR THE ANNULMENT OF THE COMMISSION DECISION OF 24 JULY 1969 PUBLISHED IN THE JOURNAL OFFICIEL NO L 195 OF 7 AUGUST 1969, P . 11 ET SEQ ., RELATING TO PROCEEDINGS UNDER ARTICLE 85 OF THE EEC TREATY ( IV/26.267 - DYESTUFFS ),

## Subject of the case

Grounds

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 .

## Grounds

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 .

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 PRICE 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 .

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 .

2 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 .

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 .

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 .

3 BY APPLICATION LODGED AT THE COURT REGISTRY ON 1 OCTOBER 1969 BADISCHE ANILIN - UND SODA-FABRIK AG HAS BROUGHT AN APPLICATION AGAINST THAT DECISION .

SUBMISSIONS RELATING TO PROCEDURE AND TO FORM

THE SUBMISSIONS CONCERNING THE ADMINISTRATIVE PROCEDURE

( A ) THE COMPLAINT RELATING TO THE COMMENCEMENT OF THE ADMINISTRATIVE PROCEDURE

4 THE APPLICANT PUTS FORWARD A SUBMISSION CONCERNING INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS IN RESPECT OF THE RIGHT OF THE INTERESTED PARTIES TO BE HEARD, IN THAT THE DECISION OF 31 MAY 1967 WHEREBY THE ADMINISTRATIVE PROCEDURE WAS COMMENCED DOES NOT MENTION ARTICLE 15 OF REGULATION NO 17/62 RELATING TO FINES .

MOREOVER, THE TEXT OF THAT DECISION, AS COMMUNICATED TO THE APPLICANT, REFERRED SIMPLY TO ARTICLE 3 ( 3 ) OF REGULATION NO 17/62, AND THE ADVERB " ESPECIALLY " DOES NOT APPEAR IN THAT TEXT .

5 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 .

THE NOTICE OF OBJECTIONS SENT TO THE APPLICANT EXPRESSLY REFERRED TO ARTICLE 15 ( 2 ) OF REGULATION NO 17 RELATING TO FINES .

6 THIS SUBMISSION IS THEREFORE UNFOUNDED .

( B ) THE COMPLAINT RELATING TO A FAILURE TO MAKE INFORMATION AVAILABLE

7 THE APPLICANT COMPLAINS THAT THE COMMISSION INFRINGED THE RIGHTS OF THE DEFENCE IN FAILING TO INFORM THE APPLICANT OF THE FRESH CONCLUSIONS WHICH IT HAD REACHED AFTER THE INQUIRIES CARRIED OUT IN 1968 INTO THE PRICE INCREASES FOR DYESTUFFS, AND INTO THE TEXT OF THE INSTRUCTIONS SENT TO THEIR SUBSIDIARIES BY THE VARIOUS UNDERTAKINGS CONCERNED .

8 DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE THE UNDERTAKINGS CONCERNED MUST BE INFORMED OF THE ESSENTIAL ELEMENTS OF FACT ON WHICH THE COMMISSION BASES ITS OBJECTIONS AGAINST THEM . HOWEVER, IT IS NOT NECESSARY FOR THE CONTENTS OF THE FILE TO BE MADE AVAILABLE IN THEIR ENTIRETY .

AS REGARDS THE INQUIRIES CARRIED OUT IN 1968, THE RIGHTS OF THE DEFENCE OF THE UNDERTAKINGS WERE NOT INFRINGED BECAUSE THE DECISION WHEREBY THE ADMINISTRATIVE PROCEDURE WAS BROUGHT TO A CLOSE DOES NOT TAKE INTO CONSIDERATION AS AGAINST THOSE CONCERNED ANY FACTS OTHER THAN THOSE SET OUT IN THE NOTICE OF OBJECTIONS .

THE COMMISSION' S NOTICE OF OBJECTIONS, SENT TO THE APPLICANT BY LETTER ON 11 DECEMBER 1967, SETS OUT ALL THE FACTS NECESSARY FOR DETERMINING THE OBJECTIONS TAKEN INTO CONSIDERATION .

9 THIS SUBMISSION IS THEREFORE UNFOUNDED .

( C ) THE COMPLAINT CONCERNING THE HEARING OF THE UNDERTAKINGS CONCERNED

10 THE APPLICANT COMPLAINS THAT THE COMMISSION REFUSED TO ALLOW IT TO BE REPRESENTED AT THE HEARING OF THE PARTIES CONCERNED BY ITS LAWYER .

IT IS ARGUED THAT IF THAT REFUSAL IS IN CONFORMITY WITH ARTICLE 9 ( 2 ) OF REGULATION NO 99/63, THEN THAT PROVISION IS CONTRARY TO THE TREATY BECAUSE THE ADMINISTRATION MAY NOT EXERCISE CONTROL OVER THE UNDERTAKINGS' METHOD OF CHOOSING THEIR REPRESENTATIVES IN A PROCEDURE WHICH MAY LEAD TO THE IMPOSITION OF A FINE .

11 ARTICLE 9 ( 2 ) OF REGULATION NO 99/63, WHICH PROVIDES THAT UNDERTAKINGS MAY BE REPRESENTED ONLY BY A DULY AUTHORIZED AGENT APPOINTED FROM AMONG THEIR PERMANENT STAFF OR BY LEGAL REPRESENTATIVES OR REPRESENTATIVES AUTHORIZED BY THEIR CONSTITUTION, IS JUSTIFIED BY THE FACT THAT AS A GENERAL RULE THOSE PERSONS ARE THE BEST INFORMED AS TO THE FACTS AND TECHNICAL OR ECONOMIC ASPECTS OF THEIR UNDERTAKINGS' ACTIONS WHICH MAY BE OF DECISIVE IMPORTANCE IN APPLYING THE RULES ON COMPETITION .

THE HEARING OF THE PARTIES CONCERNED CANNOT SERVE ANY USEFUL PURPOSE IF THOSE PERSONS DO NOT TAKE PART .

12 THE COMPLAINT AS TO ILLEGALITY PUT FORWARD BY THE APPLICANTS IS THEREFORE UNFOUNDED .

THE SUBMISSION CONCERNING THE STATEMENT OF REASONS CONTAINED IN THE CONTESTED DECISION

13 THE APPLICANT ARGUES THAT INSUFFICIENT REASONS ARE STATED IN THE DECISION, PARTICULARLY AS REGARDS THE FACTS, FOR THE FINDING OF THE EXISTENCE OF THE INFRINGEMENT AT ISSUE, AND THAT IN CERTAIN PLACES THAT STATEMENT OF REASONS IS OBSCURE AND ATTRIBUTES TO THE UNDERTAKING CONCERNED STATEMENTS WHICH THE LATTER DENIES HAVING MADE .

14 THE DECISION CONSIDERED AS A WHOLE SETS OUT CLEARLY AND COHERENTLY THE ESSENTIAL ELEMENTS OF FACT AND LAW ON WHICH IT IS BASED .

THE QUESTION WHETHER THE ELEMENTS OF FACT AND THE CONSIDERATIONS PUT FORWARD IN EVIDENCE OF THE INFRINGEMENTS IN DISPUTE ARE SUFFICIENT TO PROVE THE EXISTENCE OF THOSE INFRINGEMENTS IS A MATTER RELATING TO THE SUBSTANCE OF THE CASE .

FINALLY, SINCE THE DECISION WAS ONE TAKEN IN RESPECT OF TEN DIFFERENT UNDERTAKINGS, THE FACT THAT IT ADOPTED AN ATTITUDE WITH REGARD TO ARGUMENTS PUT FORWARD BY ONLY SOME OF THE ADDRESSEES, WITHOUT STATING WHICH, CANNOT BE CONSIDERED AS A FAULT VITIATING THE LEGALITY OF THAT MEASURE .

15 THIS SUBMISSION IS THEREFORE UNFOUNDED .

THE SUBMISSION AS TO THE LIMITATION PERIOD

16 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 INCREASES OF 1964 AND 1965, EXCEEDED ANY REASONABLE LIMITATION PERIOD .

17 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 .

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 COMES WITHIN THE POWERS OF THE COMMUNITY LEGISLATURE .

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 .

18 THEREFORE THE SUBMISSION IS UNFOUNDED .

SUBSTANTIVE SUBMISSIONS AS TO THE EXISTENCE OF CONCERTED PRACTICES

ARGUMENTS OF THE PARTIES

19 THE APPLICANT COMPLAINS THAT THE COMMISSION HAS NOT PROVED THE EXISTENCE OF CONCERTED PRACTICES WITHIN THE MEANING OF ARTICLE 85 ( 1 ) OF THE EEC TREATY IN RELATION TO ANY OF THE THREE INCREASES MENTIONED IN THE CONTESTED DECISION .

20 THAT DECISION STATES THAT PRIMA FACIE EVIDENCE THAT THE INCREASES OF 1964, 1965 AND 1967 TOOK PLACE AS THE RESULT OF CONCERTED ACTION IS TO BE FOUND IN THE FACTS THAT THE RATES INTRODUCED FOR EACH 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 .

IT IS CONTENDED THAT THESE INCREASES 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 .

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 INTENDED TO ADOPT SO THAT EACH COULD REGULATE HIS CONDUCT SAFE IN THE KNOWLEDGE THAT HIS COMPETITORS WOULD ACT IN THE SAME WAY .

21 THE APPLICANT ARGUES THAT EVEN IF THE FACTS SET OUT BY THE COMMISSION WERE ACCURATE, THE CONCLUSIONS WHICH IT DRAWS FROM THEM ARE INACCURATE AND ARE BASED ON THE IDEA THAT THE INCREASES IN QUESTION CANNOT BE EXPLAINED SOLELY BY THE FACT THAT THE MARKET IS OLIGOPOLISTIC IN STRUCTURE .

ON THE CONTRARY, IT IS ARGUED, THE CONDUCT OF THE APPLICANT WAS THE NATURAL CONSEQUENCE OF THE STRUCTURE OF THE MARKET AND CONSISTED IN EXERCISING A RIGHT OF CHOICE WHICH CANNOT BE DENIED TO ANY UNDERTAKING .

FOR IN FACT, SO IT IS ARGUED, BEFORE EACH INCREASE THE LEVEL OF PRICES ON THE MARKET HAD REACHED THE LOWEST POINT AT WHICH THERE WAS ANY RETURN, AND THEREFORE THERE WAS NO NEED FOR AN AGREEMENT BETWEEN PRODUCERS FOR THEM TO FALL IN LINE IMMEDIATELY WITH A PRICE INCREASE DECIDED UPON BY A SIZEABLE COMPETITOR .

AN ANALYSIS OF THE WAY IN WHICH PRICES AND COSTS WERE RISING SHOWS, IT IS ALLEGED, THAT THE INCREASES IN QUESTION DID NOT DISTORT COMPETITION, BUT THAT, WITHIN A CONTEXT OF CONTINUOUS COMPETITION AND BECAUSE IT WAS TAKING PLACE, THERE WAS A RISE IN THE LEVEL AT WHICH COMPETITION STARTED .

IT IS STATED THAT THE COMMISSION DID NOT SUFFICIENTLY ACQUAINT ITSELF WITH THE ACTUAL SITUATION EXISTING ON THE RELEVANT MARKET, WITH THE STRUCTURE OF THAT MARKET AND WITH THE IMPLICATIONS OF THAT STRUCTURE AS REGARDS COMPETITION, IN ACCORDANCE WITH THE JUDGMENT OF THE COURT IN CASE 13/60 .

THE CONCEPT OF A CONCERTED PRACTICE

22 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 .

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 .

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 .

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 .

23 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

24 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 .

THE PRODUCTION PATTERNS AND THEREFORE THE COST STRUCTURES OF THESE MANUFACTURERS ARE VERY DIFFERENT, AND THIS MAKES IT DIFFICULT TO ASCERTAIN COMPETING MANUFACTURERS' COSTS .

THE TOTAL NUMBER OF DYESTUFFS IS VERY HIGH, EACH UNDERTAKING PRODUCING MORE THAN A THOUSAND .

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 .

AS REGARDS SPECIALITY PRODUCTS, THE MARKET TENDS IN CERTAIN CASES TOWARDS AN OLIGOPOLISTIC SITUATION .

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 .

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 .

25 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 .

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 .

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 .

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 .

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 .

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 .

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 INCREASES OF 1964, 1965 AND 1967

26 THE INCREASES OF 1964, 1965 AND 1967 COVERED BY THE CONTESTED DECISION ARE INTERCONNECTED .

THE INCREASE OF 15 PER CENT IN THE PRICES OF MOST ANILINE DYES IN GERMANY ON 1 JANUARY 1965 WAS IN REALITY NOTHING MORE THAN THE EXTENSION TO ANOTHER NATIONAL MARKET OF THE INCREASE APPLIED IN JANUARY 1964 IN ITALY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG .

THE INCREASE IN THE PRICES OF CERTAIN DYES AND PIGMENTS INTRODUCED ON 1 JANUARY 1965 IN ALL THE MEMBER STATES, EXCEPT FRANCE, APPLIED TO ALL THE PRODUCTS WHICH HAD BEEN EXCLUDED FROM THE FIRST INCREASE .

THE REASON WHY THE PRICE INCREASE OF 8 PER CENT INTRODUCED IN THE AUTUMN OF 1967 WAS RAISED TO 12 PER CENT FOR FRANCE WAS THAT THERE WAS A WISH TO MAKE UP FOR THE INCREASES OF 1964 AND 1965 IN WHICH THAT MARKET HAD NOT TAKEN PART BECAUSE OF THE PRICE CONTROL SYSTEM .

THEREFORE THE THREE INCREASES CANNOT BE ISOLATED ONE FROM ANOTHER, EVEN THOUGH THEY DID NOT TAKE PLACE UNDER IDENTICAL CONDITIONS .

27 IN 1964 ALL THE UNDERTAKINGS IN QUESTION ANNOUNCED THEIR INCREASES AND IMMEDIATELY PUT THEM INTO EFFECT, 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 ON THE ITALIAN MARKET WITHIN TWO OR THREE DAYS .

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 .

WITH MINOR DIFFERENCES, PARTICULARLY BETWEEN THE PRICE INCREASES BY THE GERMAN UNDERTAKINGS ON THE ONE HAND AND THE SWISS AND UNITED KINGDOM UNDERTAKINGS ON THE OTHER, 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 .

28 AS REGARDS THE INCREASE OF 1965 CERTAIN UNDERTAKINGS ANNOUNCED IN ADVANCE PRICE INCREASES AMOUNTING, FOR THE GERMAN MARKET, TO AN INCREASE OF 15 PER CENT FOR PRODUCTS WHOSE PRICES HAD ALREADY BEEN SIMILARLY INCREASED ON THE OTHER MARKETS, AND TO 10 PER CENT FOR PRODUCTS WHOSE PRICES HAD NOT YET BEEN INCREASED . THE ANNOUNCEMENTS WERE SPREAD OVER THE PERIOD BETWEEN 14 OCTOBER AND 28 DECEMBER 1964 .

THE FIRST ANNOUNCEMENT WAS MADE BY BASF, ON 14 OCTOBER 1964, FOLLOWED BY AN ANNOUNCEMENT BY BAYER ON 30 OCTOBER AND BY CASSELLA ON 5 NOVEMBER .

THESE INCREASES WERE SIMULTANEOUSLY APPLIED ON 1 JANUARY 1965 ON ALL THE MARKETS EXCEPT FOR THE FRENCH MARKET BECAUSE OF THE PRICE FREEZE IN THAT STATE, AND THE ITALIAN MARKET WHERE, AS A RESULT OF THE REFUSAL BY THE PRINCIPAL ITALIAN PRODUCER, ACNA, TO INCREASE ITS PRICES ON THE SAID MARKET, THE OTHER PRODUCERS ALSO DECIDED NOT TO INCREASE THEIRS .

ACNA ALSO REFRAINED FROM PUTTING ITS PRICES UP BY 10 PER CENT ON THE GERMAN MARKET .

OTHERWISE THE INCREASE WAS GENERAL, WAS SIMULTANEOUSLY INTRODUCED BY ALL THE PRODUCERS MENTIONED IN THE CONTESTED DECISION, AND WAS APPLIED WITHOUT ANY DIFFERENCES CONCERNING THE RANGE OF PRODUCTS .

29 AS REGARDS THE INCREASE OF 1967, DURING A MEETING HELD AT BASEL ON 19 AUGUST 1967, WHICH WAS ATTENDED BY ALL THE PRODUCERS MENTIONED IN THE CONTESTED DECISION EXCEPT ACNA, THE GEIGY UNDERTAKING ANNOUNCED ITS INTENTION TO INCREASE ITS SELLING PRICES BY 8 PER CENT WITH EFFECT FROM 16 OCTOBER 1967 .

ON THAT SAME OCCASION THE REPRESENTATIVES OF BAYER AND FRANCOLOR STATED THAT THEIR UNDERTAKINGS WERE ALSO CONSIDERING AN INCREASE .

FROM MID-SEPTEMBER ALL THE UNDERTAKINGS MENTIONED IN THE CONTESTED DECISION ANNOUNCED A PRICE INCREASE OF 8 PER CENT, RAISED TO 12 PER CENT FOR FRANCE, TO TAKE EFFECT ON 16 OCTOBER IN ALL THE COUNTRIES EXCEPT ITALY, WHERE ACNA AGAIN REFUSED TO INCREASE ITS PRICES, ALTHOUGH IT WAS WILLING TO FOLLOW THE MOVEMENT IN PRICES ON TWO OTHER MARKETS, ALBEIT ON DATES OTHER THAN 16 OCTOBER .

30 VIEWED AS A WHOLE, THE THREE CONSECUTIVE INCREASES REVEAL PROGRESSIVE COOPERATION BETWEEN THE UNDERTAKINGS CONCERNED .

IN FACT, AFTER THE EXPERIENCE OF 1964, WHEN THE ANNOUNCEMENT OF THE INCREASES AND THEIR APPLICATION COINCIDED, ALTHOUGH WITH MINOR DIFFERENCES AS REGARDS THE RANGE OF PRODUCTS AFFECTED, THE INCREASES OF 1965 AND 1967 INDICATE A DIFFERENT MODE OF OPERATION . HERE, THE UNDERTAKINGS TAKING THE INITIATIVE, BASF AND GEIGY RESPECTIVELY, ANNOUNCED THEIR INTENTION OF MAKING AN INCREASE SOME TIME IN ADVANCE, WHICH ALLOWED THE UNDERTAKINGS TO OBSERVE EACH OTHER' S REACTIONS ON THE DIFFERENT MARKETS, AND TO ADAPT THEMSELVES ACCORDINGLY .

BY MEANS OF THESE ADVANCE ANNOUNCEMENTS THE VARIOUS UNDERTAKINGS ELIMINATED ALL UNCERTAINTY BETWEEN THEM AS TO THEIR FUTURE CONDUCT AND, IN DOING SO, ALSO ELIMINATED A LARGE PART OF THE RISK USUALLY INHERENT IN ANY INDEPENDENT CHANGE OF CONDUCT ON ONE OR SEVERAL MARKETS .

THIS WAS ALL THE MORE THE CASE SINCE THESE ANNOUNCEMENTS, WHICH LED TO THE FIXING OF GENERAL AND EQUAL INCREASES IN PRICES FOR THE MARKETS IN DYESTUFFS, RENDERED THE MARKET TRANSPARENT AS REGARDS THE PERCENTAGE RATES OF INCREASE .

THEREFORE, BY THE WAY IN WHICH THEY ACTED, THE UNDERTAKINGS IN QUESTION TEMPORARILY ELIMINATED WITH RESPECT TO PRICES SOME OF THE PRECONDITIONS FOR COMPETITION ON THE MARKET WHICH STOOD IN THE WAY OF THE ACHIEVEMENT OF PARALLEL UNIFORMITY OF CONDUCT .

31 THE FACT THAT THIS CONDUCT WAS NOT SPONTANEOUS IS CORROBORATED BY AN EXAMINATION OF OTHER ASPECTS OF THE MARKET .

IN FACT, FROM THE NUMBER OF PRODUCERS CONCERNED IT IS NOT POSSIBLE TO SAY THAT THE EUROPEAN MARKET IN DYESTUFFS IS, IN THE STRICT SENSE, AN OLIGOPOLY IN WHICH PRICE COMPETITION COULD NO LONGER PLAY A SUBSTANTIAL ROLE .

THESE PRODUCERS ARE SUFFICIENTLY POWERFUL AND NUMEROUS TO CREATE A CONSIDERABLE 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 .

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 ALL THE NATIONAL MARKETS .

ALTHOUGH A GENERAL, SPONTANEOUS INCREASE ON EACH OF THE NATIONAL MARKETS IS JUST CONCEIVABLE, THESE INCREASES MIGHT BE EXPECTED TO DIFFER ACCORDING TO THE PARTICULAR CHARACTERISTICS OF THE DIFFERENT NATIONAL MARKETS .

THEREFORE, ALTHOUGH PARALLEL CONDUCT IN RESPECT OF PRICES MAY WELL HAVE BEEN AN ATTRACTIVE AND RISK-FREE OBJECTIVE FOR THE UNDERTAKINGS CONCERNED, 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 .

32 NOR IS IT ANY MORE PLAUSIBLE 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 PATTERN OF COMPETITION, COULD HAVE BEEN BROUGHT INTO EFFECT WITHIN A PERIOD OF TWO TO THREE DAYS WITHOUT PRIOR CONCERTATION .

AS REGARDS THE INCREASES OF 1965 AND 1967 CONCERTATION TOOK PLACE OPENLY, SINCE ALL THE ANNOUNCEMENTS OF THE INTENTION TO INCREASE PRICES WITH EFFECT FROM A CERTAIN DATE AND FOR A CERTAIN RANGE OF PRODUCTS MADE IT POSSIBLE FOR PRODUCERS TO DECIDE ON THEIR CONDUCT REGARDING THE SPECIAL CASE OF FRANCE AND ITALY .

IN PROCEEDING IN THIS WAY, THE UNDERTAKINGS MUTUALLY ELIMINATED IN ADVANCE ANY UNCERTAINTIES CONCERNING THEIR RECIPROCAL BEHAVIOUR ON THE DIFFERENT MARKETS AND THEREBY ALSO ELIMINATED A LARGE PART OF THE RISK INHERENT IN ANY INDEPENDENT CHANGE OF CONDUCT ON THOSE MARKETS .

THE GENERAL AND UNIFORM INCREASE ON THOSE DIFFERENT MARKETS CAN ONLY BE EXPLAINED BY A COMMON INTENTION ON THE PART OF THOSE 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 .

THE FACT THAT THE PRICE INCREASES ANNOUNCED WERE NOT INTRODUCED IN ITALY AND THAT ACNA ONLY PARTIALLY ADOPTED THE 1967 INCREASE IN OTHER MARKETS, FAR FROM UNDERMINING THE CONCLUSIONS, TENDS TO CONFIRM IT .

33 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 .

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 .

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 PORPORTION 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 .

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 .

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 SUBMISSION CONCERNING MISUSE OF POWERS

34 THE APPLICANT COMPLAINS THAT THE COMMISSION WISHED TO INFLUENCE THE PRICING POLICY OF THE UNDERTAKINGS BY THE EXPEDIENT OF THE PROVISIONS CONCERNING COMPETITION POLICY .

35 THE CONTESTED DECISION DOES NOT CRITICIZE THE PRICE INCREASES BECAUSE OF THEIR LEVEL, BUT ONLY BECAUSE OF THEIR CONCERTED CHARACTER .

THE UNIFORM NATURE OF THE PERCENTAGE INCREASES IS TREATED AS EVIDENCE OF CONCERTATION .

36 THEREFORE, AND WITHOUT PREJUDICE TO THE QUESTION WHETHER AND IN WHAT CIRCUMSTANCES THE COMMUNITY MAY EXERCISE CONTROL OVER PRICES WHEN APPLYING THE RULES ON COMPETITION, THE ABOVE-MENTIONED SUBMISSION IS UNFOUNDED .

THE FINE

37 THE APPLICANT PUTS FORWARD THE ALTERNATIVE ARGUMENT THAT THE COMMISSION' S OBJECTIVE COULD HAVE BEEN ATTAINED BY THE APPLICATION OF ARTICLE 3 OF REGULATION NO 17/62, WITHOUT ITS BEING NECESSARY TO IMPOSE FINES .

IT IS ARGUED THAT SINCE THE FINES AUTHORIZED BY REGULATION NO 17/62 ARE NOT OF A CRIMINAL LAW NATURE, THEY SHOULD BE IMPOSED NOT IN ORDER TO PUNISH INFRINGEMENTS WHICH HAVE ALREADY OCCURRED, BUT IN ORDER TO PREVENT THEIR RECURRENCE .

FURTHERMORE, IT IS SAID, THE CONTESTED DECISION DOES NOT ADEQUATELY JUSTIFY THE AMOUNT OF THE FINE, AND IN PARTICULAR IT FAILS TO EXAMINE THE TRUE GRAVITY OF THE CONDUCT COMPLAINED OF .

38 ARTICLE 15 OF REGULATION NO 17/62 DOES NOT LIMIT THE IMPOSITION OF FINES EXCLUSIVELY TO CASES OF RECURRENCE OF INFRINGEMENTS ALREADY FOUND TO HAVE TAKEN PLACE AND FORBIDDEN BY THE COMMISSION UNDER ARTICLE 3 .

SUCH LIMITATION OF ARTICLE 15 WOULD CONSIDERABLY REDUCE THE DETERRENT EFFECT OF FINES .

IT CANNOT THEREFORE BE PRESUMED . IN VIEW OF THE FREQUENCY AND EXTENT OF THE APPLICANT' S PARTICIPATION IN THE PROHIBITED PRACTICES, AND TAKING INTO ACCOUNT THE CONSEQUENCES THEREOF IN RELATION TO THE CREATION OF A COMMON MARKET IN THE PRODUCTS IN QUESTION, THE AMOUNT OF THE FINE IS APPROPRIATE TO THE GRAVITY OF THE INFRINGEMENT OF THE COMMUNITY RULES ON COMPETITION .

39 THE SUBMISSION IS THEREFORE UNFOUNDED .

Decision on costs

40 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .

## Decision on costs

THE APPLICANT HAS FAILED IN ITS SUBMISSIONS .

THEREFORE IT MUST BE ORDERED TO BEAR THE COSTS .

Operative part

THE COURT

## Operative part

HEREBY :

1 . DISMISSES THE APPLICATION;

2 . ORDERS THE APPLICANT TO BEAR THE COSTS .