1..
: Procedure – Grounds of judgments – Scope

2..
: Competition – Administrative procedure – Statement of objections – Preparatory document capable of amendment by the Commission – Power of the Commission to request further information – Limits

3..
: Competition – Administrative procedure – Statement of objections – Necessary content – Observance of the rights of the defence

4..
: Competition – Administrative procedure – Commission decision finding an infringement – Evidence which may be used

5..
: Competition – Administrative procedure – Access to the file – Obligation on the Commission to adduce inculpatory evidence

6..
: Competition – Administrative procedure – Commission decision finding an infringement – Exclusion of evidence in documents not disclosed to the parties – Consequences – Relevant objection may not be proved by reference to those documents

7..
: Competition – Administrative procedure – Commission decision finding an infringement – Decision not identical to the statement of objections – Infringement of the rights of the defence – Condition – Demonstration by the undertaking concerned that further complaints have been raised

8..
: Competition – Administrative procedure – Observance of the rights of the defence – Introduction of new allegations at the stage of the decision finding the infringement – Sanction – Condition

9..
: Procedure – Application initiating proceedings – Procedural requirements – Subject-matter of the dispute to be indicated – Pleas in law relied upon to be briefly stated – Clear statement of the pleas in law

10..
: Competition – Administrative procedure – Access to the file – Purpose – Observance of the rights of the defence – Scope – Inculpatory evidence – Exclusion of evidence in documents not disclosed – Exculpatory evidence – Assessment of the utility of disclosure by the Commission alone – Not permissible

11..
: Competition – Administrative procedure – Access to the file – Documents not contained in the investigation file – Documents which may be of use to the defence – Infringement of the rights of the defence – Conditions

12..
: Competition – Administrative procedure – Access to the file – Documents not contained in the investigation file and which the Commission does not intend to use as inculpatory evidence – Commission's obligation to make those documents accessible to the parties on its own initiative – None

13..
: Competition – Administrative procedure – Access to the file – Limits – Undertaking in a dominant position and able to adopt retaliatory measures towards Commission informants

14..
: Actions for annulment – Actionable measures – Definition – Statement of objections – Exclusion

15..
: Competition – Administrative procedure – Communication by the Commission to the undertakings concerned of a large number of requests for information after the adoption
of a statement of objections – Limit of that burden – Observance of the rights of the defence

16..
: Transport – Maritime transport – Competition rules – Block exemptions – Strict interpretation – Services which are not maritime transport services within the scope of Regulation No 4056/86 – Exclusion

17..
: Competition – Community rules – Application by reference to the national practices of the Member States or of certain non-member States – Not permissible

18..
: Competition – Dominant position – Collective dominant position – Definition – Liner conference

19..
: Competition – Dominant position – Collective dominant position – Existence – Means of identification – Taking into consideration an agreement even though prohibited by Article 85(1) of the Treaty (now Article 81(1) EC)

20..
: Competition – Dominant position – Collective dominant position – Definition – Requirement that all competition between undertakings be eliminated – None

21..
: Competition – Dominant position – Collective dominant position – Definition – Liner conference – Exclusion in the case of substantial internal competition

22..
: Competition – Dominant position – Collective dominant position – Definition – Liner conference – Irrelevance, in principle, of other forms of competition when faced with a common price strategy

23..
: Competition – Dominant position – Relevant market – Delimitation – Criteria

24..
: Competition – Dominant position – Existence – Holding of extremely large market shares – Generally sufficient evidence

25..
: Competition – Dominant position – Meaning – Presumption of dominance when holding more than half of the market share

26..
: Competition – Maritime transport – Dominant position – Holding of large market shares – Generally sufficient evidence

27..
: Competition – Dominant position – Meaning – Ability to impose regular price increases – Not an essential factor

28..
: Competition – Dominant position – Abuse – Exemption – Exclusion – Obligations incumbent upon dominant undertakings – Ability of the dominant undertaking to protect its commercial interests provided that it does not reinforce its dominant position
or abuse it

29..
: Competition – Community rules – Scope ratione materiae – Conduct imposed by State measures – Precluded – Conditions

30..
: Competition – Dominant position – Abuse – Meaning – Creation or strengthening of a dominant position – Liner conference – Acceptance of new members – Factor capable of constituting an abuse

31..
: Transport – Maritime transport – Competition rules – Block exemptions – Regulation No 4056/86 on maritime transport – Strict interpretation

32..
: Competition – Agreements, decisions and concerted practices – Notification – Effects – Benefit of immunity from fines – Need for express provision – Immunity not provided for in Regulation No 1017/68

33..
: Competition – Agreements, decisions and concerted practices – Notification – Effects – Immunity from fines under the second paragraph of Article 19(4) of Regulation No 4056/86 on maritime transport – Scope – Infringement of Articles 85 and 86 of the Treaty (now Articles 81 EC and 82 EC)

34..
: Competition – Fines – Amount – Determination thereof – Division of an overall amount between different groups of undertakings constituted on the basis of size of undertakings which
participated in the infringement – Whether permissible – Conditions

35..
: Competition – Fines – Decision imposing fines – Obligation to state reasons – Scope – Statement of the factors by which the Commission assessed the gravity and duration of the infringement – Sufficient statement

36..
: Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringement – Undertaking a member of a liner conference – Assessment on the basis of total turnover of the undertaking – Whether permissible – Taking into account of other factors specific to each member undertaking – No obligation

37..
: Competition – Fines – Amount – Determination – Commission's margin of discretion – Economic operators precluded from relying on a legitimate expectation that an existing situation will be maintained – Raising of the general level of fines – Whether permissible – Conditions

38..
: Competition – Fines – Amount – Determination – Mitigating circumstances – Notification of an agreement which facilitated the finding that the practices stipulated by that agreement were abusive

39..
: Competition – Dominant position – Abuse – Meaning – Practices arising in contracts for services between a shipper and a liner conference or a carrier

40..
: Non-contractual liability – Conditions – Damage – Causal link – Burden of proof

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JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)

30 September 2003 (*)

« Competition - Liner conferences - Regulation (EEC) No 4056/86 - Block exemption - Individual exemption - Collective dominant
position - Abuse - Service contracts - Accession to the conference - Alteration of the competition structure - Withdrawal
of block exemption - Fines - Rights of the defence»

In Joined Cases T-191/98 and T-212/98 to T-214/98,

**Atlantic Container Line AB,** established in Gothenburg (Sweden),

**Cho Yang Shipping Co. Ltd,** established in Seoul (South Korea),

**DSR-Senator Lines GmbH,** established in Bremen (Germany),

**Hanjin Shipping Co. Ltd,** established in Seoul (South Korea),

**Hapag-Lloyd AG,** established in Hamburg (Germany),

**Hyundai Merchant Marine Co. Ltd,** established in Seoul (South Korea),

**A.P. Møller-Mærsk Line,** established in Copenhagen (Denmark),

**Mediterranean Shipping Co. SA,** established in Geneva (Switzerland),

**Orient Overseas Container Line (UK) Ltd,** established in London (United Kingdom),

**Polish Ocean Lines (POL)**, established in Gdynia (Poland),

**P & O Nedlloyd BV,** established in London (United Kingdom),

**Sea-Land Service Inc.,** established in Jersey City, New Jersey (United States of America),

**Neptune Orient Lines Ltd,** established in Singapore (Singapore),

**Nippon Yusen Kaisha,** established in Tokyo (Japan),

**Transportación Marítima Mexicana SA de CV,** established in Mexico City (Mexico),

**Tecomar SA de CV,** established in Mexico City (Mexico),

represented by J. Pheasant, N. Bromfield, M. Levitt, D. Waelbroeck, U. Zinsmeister, A. Bentley, C. Thomas, A. Nourry, M. Van
Kerckhove, P. Ruttley and A. Merckx, lawyers, with an address for service in Luxembourg,

applicants,

v

**Commission of the European Communities**, represented by R. Lyal, acting as Agent, and J. Flynn, Barrister, with an address for service in Luxembourg,

defendant,

supported by

**European Council of Transport Users ASBL**, represented by M. Clough QC, Solicitor-Advocate, with an address for service in Luxembourg,

intervener,

APPLICATION for the annulment of Commission Decision 1999/243/EC of 16 September 1998 relating to a proceeding pursuant to
Articles 85 and 86 of the EC Treaty (Case No IV/35.134 - Trans-Atlantic Conference Agreement) (OJ 1999 L 95, p. 1),partie
requérante,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Third Chamber),

composed of: K. Lenaerts, President, J. Azizi and M. Jaeger, Judges,

Registrar: J. Plingers, Administrator,

having regard to the written procedure and further to the hearing on 26 and 27 March 2003,

gives the following

**Judgment**

**Legal background**

1       Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special
Edition 1959-1962, p. 87), initially applied to all activities covered by the EEC Treaty. However, in view of the common transport
policy and the distinctive features of the transport sector, it proved necessary to lay down rules governing competition different
from those applicable for other sectors of the economy, and the Council therefore adopted Regulation No 141 of 26 November
1962 exempting transport from the application of Council Regulation No 17 (OJ, English Special Edition 1959-1962, p. 291).

2       On 19 July 1968 the Council adopted Regulation (EEC) No 1017/68 applying rules of competition to transport by rail, road and
inland waterway (OJ, English Special Edition 1968 (I), p. 302).

3       In accordance with Article 2 of Regulation No 1017/68, agreements, decisions and concerted practices which, for the three
modes of transport just mentioned, are liable to affect trade between Member States and which have as their object or effect
the prevention, restriction or distortion of competition within the common market are prohibited. The prohibition applies
inter alia to agreements, decisions and concerted practices which consist in:

(a) directly or indirectly fixing transport rates and conditions or any other trading conditions;

(b) limiting or controlling the supply of transport, markets, technical development or investment;

(c) sharing transport markets;

(d) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive
disadvantage;

(e) making the conclusion of contracts subject to acceptance by the other parties of additional obligations which, by their
nature or according to commercial usage, have no connection with the provision of transport services.

4       Article 5 of Regulation No 1017/68 provides for the exemption of agreements, decisions and concerted practices which contribute
towards improving the quality of transport services, or promoting greater continuity and stability in the satisfaction of
transport needs on markets where supply and demand are subject to considerable temporal fluctuation, or increasing productivity,
or furthering technical or economic progress, if the interests of transport users are taken into account and provided that
they do not impose on transport undertakings any restrictions not essential to the attainment of those objectives and do not
make it possible for such undertakings to eliminate competition in respect of a substantial part of the transport market concerned.

5       On 22 December 1986 the Council adopted Regulation (EEC) No 4056/86 laying down detailed rules for the application of Articles
85 and 86 of the Treaty to maritime transport (OJ 1986 L 378, p. 4).

6       Article 3 of Regulation No 4056/86 provides that:

Agreements, decisions and concerted practices of all or part of the members of one or more liner conferences are hereby exempted
from the prohibition in Article 85(1) of the Treaty, subject to the condition imposed by Article 4 of this Regulation, when
they have as their objective the fixing of rates and conditions of carriage, and, as the case may be, one or more of the following
objectives:

(a) the coordination of shipping timetables, sailing dates or dates of calls;

(b) the determination of the frequency of sailings or calls;

(c) the coordination or allocation of sailings or calls among members of the conference;

(d) the regulation of the carrying capacity offered by each member;

(e) the allocation of cargo or revenue among members.

7       A liner conference is defined in Article 1(3)(b) of Regulation No 4056/86 as a group of two or more vessel-operating carriers
which provides international liner services for the carriage of cargo on a particular route or routes within specified geographical
limits and which has an agreement or arrangement, whatever its nature, within the framework of which they operate under uniform
or common freight rates and any other agreed conditions with respect to the provision of liner services.

8       The eighth recital in the preamble to Regulation No 4056/86 states in this connection that:

... provision should be made for block exemption of liner conferences; ... liner conferences have a stabilising effect, assuring
shippers of reliable services; ... they contribute generally to providing adequate efficient scheduled maritime transport
services and give fair consideration to the interests of users; ... such results cannot be obtained without the cooperation
that shipping companies promote within conferences in relation to rates and, where appropriate, availability of capacity or
allocation of cargo for shipment, and income; ... in most cases conferences continue to be subject to effective competition
from both non-conference scheduled services and, in certain circumstances, from tramp services and from other modes of transport;
... the mobility of fleets, which is a characteristic feature of the structure of availability in the shipping field, subjects
conferences to constant competition which they are unable as a rule to eliminate as far as a substantial proportion of the
shipping services in question is concerned.

9       In order to prevent liner conferences engaging in practices incompatible with Article 85(3) of the Treaty (now Article 81(3)
EC) and, in particular, restricting competition in a way that is not indispensable for attaining the objectives which justify
any exemption granted, Regulation No 4056/86 attaches a number of conditions and obligations to block exemption. Article 4
provides that exemption is granted subject to the absolute condition that the agreement in question does not cause detriment
to certain ports, transport users or carriers as a result of the application of differential terms, failing which the agreement,
or the relevant part of it, will be automatically void. Article 5 of Regulation No 4056/86 attaches obligations to exemption
which relate, inter alia, to loyalty agreements, services not covered by freight charges and the availability of tariffs.

10     Furthermore, the 13th recital in the preamble states that there can be no exemption if the conditions set out in Article 85(3)
are not satisfied; ... the Commission must therefore have power to take ... appropriate measures where an agreement or concerted
practice proves, owing to special circumstances, to have certain effects incompatible with that article.

11     To that end, Article 7 of Regulation No 4056/86 introduces a mechanism for monitoring exempt agreements. It provides as follows:

1. Breach of an obligation

Where the persons concerned are in breach of an obligation which, pursuant to Article 5, attaches to the exemption provided
for in Article 3, the Commission may, in order to put an end to such breach and under the conditions laid down in Section
II:

–       address recommendations to the persons concerned;

–       in the event of failure by such persons to observe those recommendations and depending upon the gravity of the breach concerned,
adopt a decision that either prohibits them from carrying out or requires them to perform specific acts or, while withdrawing
the benefit of the block exemption which they enjoyed, grants them an individual exemption according to Article 11(4) or withdraws
the benefit of the block exemption which they enjoyed.

2. Effects incompatible with Article 85(3)

(a) Where, owing to special circumstances as described below, agreements, decisions and concerted practices which qualify
for the exemption provided for in Articles 3 and 6 have nevertheless effects which are incompatible with the conditions laid
down in Article 85(3) of the Treaty, the Commission, on receipt of a complaint or on its own initiative, under the conditions
laid down in Section II, shall take the measures described in (c) below. The severity of these measures must be in proportion
to the gravity of the situation.

(b) Special circumstances are, inter alia, created by:

(i) acts of conferences or a change of market conditions in a given trade resulting in the absence or elimination of actual
or potential competition such as restrictive practices whereby the trade is not available to competition; or

(ii) acts of conferences which may prevent technical or economic progress or user participation in the benefits;

(iii) acts of third countries which:

–       prevent the operation of outsiders in a trade,

–       impose unfair tariffs on conference members,

–       impose arrangements which otherwise impede technical or economic progress (cargo-sharing, limitations on types of vessels).

(c) (i) If actual or potential competition is absent or may be eliminated as a result of action by a third country, the Commission
shall enter into consultations with the competent authorities of the third country concerned, followed if necessary by negotiations
under directives to be given by the Council, in order to remedy the situation.

If the special circumstances result in the absence or elimination of actual or potential competition contrary to Article 85(3)(b)
of the Treaty the Commission shall withdraw the benefit of the block exemption. At the same time it shall rule on whether
and, if so, under what additional conditions and obligations an individual exemption should be granted to the relevant conference
agreement with a view, inter alia, to obtaining access to the market for non-conference lines.

(ii) If, as a result of special circumstances as set out in (b), there are effects other than those referred to in (i) hereof,
the Commission shall take one or more of the measures described in paragraph 1.

12     Article 8 of Regulation No 4056/86 provides:

1. The abuse of a dominant position within the meaning of Article 86 of the [EC] Treaty (now Article 82 EC) shall be prohibited,
no prior decision to that effect being required.

2. Where the Commission, either on its own initiative or at the request of a Member State or of natural or legal persons claiming
a legitimate interest, finds that in any particular case the conduct of conferences benefiting from the exemption laid down
in Article 3 nevertheless has effects which are incompatible with Article 86 of the Treaty, it may withdraw the benefit of
the block exemption and take, pursuant to Article 10, all appropriate measures for the purpose of bringing to an end infringements
of Article 86 of the Treaty.

3. Before taking a decision under paragraph 2, the Commission may address to the conference concerned recommendations for
termination of the infringement.

13     Article 9(1) of Regulation No 4056/86 provides that where the application of that regulation is liable to conflict with the
law of certain third countries, which would compromise important Community trading and shipping interests, the Commission
must at the earliest opportunity undertake consultations with the competent authorities of the third countries aimed at reconciling
the abovementioned interests as far as possible with Community law. Under Article 9(2) of the regulation, where agreements
with third countries need to be negotiated, the Commission is to make recommendations to the Council, which is to authorise
the Commission to open the necessary negotiations. The Commission must conduct those negotiations in consultation with the
Advisory Committee on agreements and dominant positions in maritime transport, in the framework of such directives as the
Council may issue to it.

14     The first paragraph of Article 10 of Regulation No 4056/86 provides:

Acting on receipt of a complaint or on its own initiative, the Commission shall initiate procedures to terminate any infringement
of the provisions of Articles 85(1) or 86 of the Treaty or to enforce Article 7 of this Regulation.

15     Article 15(3) of the same regulation provides that an Advisory Committee on agreements and dominant positions in maritime
transport is to be consulted prior to the taking of any decision following upon a procedure under Article 10.

16     As regards individual application of Article 85(3) of the Treaty, the 18th recital in the preamble to Regulation No 4056/86
states that in view of the special characteristics of maritime transport, it is primarily the responsibility of undertakings
to see to it that their agreements, decisions and concerted practices conform to the rules on competition, and consequently
their notification to the Commission need not be made compulsory.

17     Thus, Article 11(4) of Regulation No 4056/86 provides:

If the Commission, whether acting on a complaint received or on its own initiative, concludes that an agreement, decision
or concerted practice satisfies the provisions both of Article 85(1) and of Article 85(3) of the Treaty, it shall issue a
decision applying Article 85(3). Such decision shall indicate the date from which it is to take effect. This date may be prior
to that of the decision.

18     However, under Article 12(1) of Regulation No 4056/86, undertakings may submit applications to the Commission seeking application
of Article 85(3) of the Treaty in respect of agreements, decisions and concerted practices falling within Article 85(1) of
the Treaty to which they are parties. Those applications will be considered in accordance with the opposition procedure laid
down by that provision.

19     Under Article 19 of Regulation No 4056/86:

2. The Commission may by decision impose on undertakings or associations of undertakings fines of from 1 000 to one million
ECU, or a sum in excess thereof but not exceeding 10% of the turnover in the preceding business year of each of the undertakings
participating in the infringement, where either intentionally or negligently:

(a) they infringe Article 85(1) or Article 86 of the Treaty, or do not comply with an obligation imposed under Article 7 of
this Regulation;

(b) they commit a breach of any obligation imposed pursuant to Article 5 or to Article 13(1).

In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.

...

4. Decisions taken pursuant to paragraphs 1 and 2 shall not be of criminal law nature.

The fines provided for in paragraph 2(a) shall not be imposed in respect of acts taking place after notification to the Commission
and before its Decision in application of Article 85(3) of the Treaty, provided they fall within the limits of the activity
described in the notification.

However, this provision shall not have effect where the Commission has informed the undertakings concerned that after preliminary
examination it is of the opinion that Article 85(1) of the Treaty applies and that application of Article 85(3) is not justified.

20     Article 23(1) of Regulation No 4056/86 provides that before taking a decision the Commission is to give the undertakings or
associations of undertakings concerned the opportunity of being heard on the matters to which the Commission has taken objection.
Commission Regulation No 4260/88 of 16 December 1988 on the communications, complaints and applications and the hearings provided
for by Council Regulation No 4056/86 (OJ 1988 L 376, p. 1), which was in force at the time of the facts in the present case,
sets out the procedural requirements governing such hearings.

**Facts**

I.      *The Transatlantic Agreement (TAA)*

21     All but one of the applicants in this action are shipping companies which were party to the TAA.

22     The TAA was an agreement relating to transatlantic liner services between northern Europe and the United States of America
which was notified to the Commission on 28 August 1992 and came into force on 31 August 1992.

23     The TAA set, amongst other things, the rates applicable to maritime transport and intermodal transport. In the case of maritime
transport there were at least two rate levels. The rates applicable to intermodal transport included, in addition to maritime
transport, the inland haulage of goods to or from the coast, from or to a point inland. The rates applicable to intermodal
transport thus covered both the maritime and the inland part. The TAA also contained provisions governing other aspects of
container liner transport, in particular the chartering of slots or space, equipment exchange, the fixing of rates for cargo-handling
activities in port and the joint management of maritime transport capacity.

24     On 19 October 1994 the Commission issued Decision 94/980/EC relating to a proceeding pursuant to Article 85 of the Treaty
(IV/34.446 - Trans-Atlantic Agreement) (OJ 1994 L 376, p. 1).

25     Decision 94/980 (the TAA decision) states that the agreements fixing prices, capacity non-utilisation in maritime transport
and the price of inland container transport in or via the Community as part of intermodal transport operations infringe Article
85(1) of the Treaty (Article 1 of the TAA decision).

26     As regards the application of Article 85(3) of the Treaty, the TAA decision concludes that the block exemption laid down by
Article 3 of Regulation No 4056/86 in respect of certain liner conference agreements does not apply to the provisions of the
TAA agreement, on the ground that the TAA is not a liner conference applying uniform or common freight rates within the meaning
of Article 1(3)(b) of Regulation No 4056/86 because it establishes at least two maritime rate levels. In any event, even if
the TAA were a liner conference, the Commission considers that the TAA provisions as to capacity non-utilisation and price
fixing in respect of inland transport services provided as part of intermodal transport operations could not qualify for block
exemption because freezing transport capacity cannot be regarded as the regulation of the carrying capacity offered by each
member within the meaning of Article 3(d) of Regulation No 4056/86 and price fixing for inland transport services, even as
part of intermodal transport, does not fall within the scope of Regulation No 4056/86, which applies only to port-to-port
maritime transport. Furthermore, the Commission refuses to grant individual exemption for those provisions under Article 85(3)
of the Treaty and Article 5 of Regulation No 1017/68 (Article 2 of the TAA decision).

27     Article 4 of the TAA decision prohibits the parties to whom it is addressed from engaging in price-fixing activities whose
object or effect is the same as or comparable to that of the provisions of the TAA.

28     Lastly, Article 5 of the TAA decision requires the undertakings to which it is addressed to inform customers with whom they
have concluded service contracts and other contractual relations in the context of the TAA that such customers are entitled,
if they so wish, to renegotiate the terms of those contracts or to terminate them forthwith.

29     By order of 10 March 1995 the President of the Court of First Instance granted the application for suspension of the operation
of Articles 1, 2, 3 and 4 of the TAA decision until delivery of the judgment of the Court of First Instance in the main action,
in so far as those articles prohibited the TAA parties from jointly exercising rate-making authority in respect of the inland
parts within the Community of through intermodal transport services (order of the President of the Court of First Instance
of 10 March 1995 in Case T-395/94 R *Atlantic Container Line and Others* v *Commission* [1995] ECR II-595). The Commission's appeal against that order was dismissed by order of the President of the Court of Justice
of 19 July 1995 (Case C-149/95 P(R)*Commission* v *Atlantic Container Line and Others* [1995] ECR I-2165).

30     By judgment of 28 February 2002, the Court of First Instance dismissed the application to annul the TAA decision subject to
Article 5 thereof (Case T-395/94 *Atlantic Container Line and Others* v *Commission* [2002] ECR II-875, the *TAA* judgment). No appeal was lodged against that judgment.

II.    *The Trans-Atlantic Conference Agreement (TACA)*

31     Following discussions between the parties to the TAA and the Commission, that agreement was amended and replaced by the TACA.

32     Like the TAA, the TACA covers eastbound and westbound shipping routes between ports in northern Europe and points served by
them on the one hand, and ports in the United States of America and points served by them on the other.

33     It is not in dispute that the TACA contains provisions identical to those of the TAA on the fixing of prices for inland transport
services provided within the Community. The TACA also contains a number of rules concerning other aspects of transport, in
particular as regards the conclusion of service contracts and the remuneration of freight forwarders.

*TACA notifications*

34     On 5 July 1994 the TACA was notified to the Commission pursuant to Article 12(1) of Regulation No 4056/86 with a view to obtaining
exemption under Article 85(3) of the Treaty and Article 53(3) of the Agreement on the European Economic Area (EEA).

35     The original parties to the TACA were the following 15 shipping companies: A.P. Møller-Mærsk Line (Mærsk), Atlantic Container
Line AB (ACL), Hapag-Lloyd AG (Hapag-Lloyd), Nedlloyd Lijnen BV (Nedlloyd), P&O Containers Ltd (P&O), Sea-Land Service, Inc.
(Sea-Land), Mediterranean Shipping Co. (MSC), Orient Overseas Container Line (UK) Ltd (OOCL), Polish Ocean Lines (POL), DSR-Senator
Lines GmbH (DSR-Senator), Cho Yang Shipping Co. Ltd (Cho Yang), Neptune Orient Lines Ltd (NOL), Nippon Yusen Kaisha (NYK),
Transportación Marítima Mexicana SA de CV (TMM) and Tecomar SA de CV (Tecomar). Hanjin Shipping Co. Ltd (Hanjin) subsequently
became a party to the TACA on 31 August 1994. Hyundai Merchant Marine Co. Ltd (Hyundai) became a party to the TACA on 11 September
1995. Hyundai is the only one of those shipping companies never to have been a party to the TAA.

36     By letter of 15 July 1994 the Commission informed the TACA parties that, pursuant to Article 4(8) of Regulation No 4260/88,
it also intended to examine the application for individual exemption under Regulation No 1017/68, on the ground that some
of the activities notified fell outside the scope of Regulation No 4056/86.

37     The TACA came into force on 24 October 1994. As a result of successive amendments, several new versions of that agreement
were notified to the Commission after 5 July 1994.

38     On 29 November 1995, following various discussions and exchanges of correspondence with the Commission, the TACA parties notified
the European Inland Equipment Interchange Arrangement (the EIEIA), a cooperation agreement in respect of the inland part of
through intermodal transport.

39     On 10 January 1997 the TACA parties notified to the Commission a hub and spoke system of cooperation with a view to obtaining
exemption for the collective fixing of prices for all inland transport services.

40     The TACA gave rise to two separate procedures: the procedure withdrawing immunity from fines and the procedure for infringement
of Articles 85 and 86 of the Treaty. These proceedings concern the latter procedure.

*Administrative procedure withdrawing immunity from fines*

41     On 21 June 1995 the Commission adopted a statement of objections addressed to the TACA parties (with the exception of Hyundai,
which was not a party to the TACA at that time), stating that it was disposed to adopt a decision withdrawing immunity from
the fines which might result from the notification of the TACA in respect of the agreement between the parties to fix prices
for inland transport services supplied within the territory of the Community.

42     On 1 March 1996 the Commission addressed a supplementary statement of objections to the TACA parties in which it stated that
the EIEIA in no way altered its assessment of 21 June 1995.

43     On 26 November 1996 the Commission adopted Decision C (96) 3414 (final) relating to a proceeding pursuant to Article 85 of
the Treaty (IV/35.134 - Trans-Atlantic Conference Agreement, unpublished, the decision withdrawing immunity) by which it withdrew
from the TACA parties immunity from fines in respect of the TACA provisions fixing inland rates, given that, according to
the Commission's preliminary opinion, those provisions did not satisfy the requirements of Article 85(3) of the Treaty, Article
5 of Regulation No 1017/68 and Article 53(3) of the EEA Agreement.

44     By judgment of 28 February 2002, the Court of First Instance held that the TACA parties' action challenging that decision
was inadmissible (Case T-18/97 *Atlantic Container Line and Others* v *Commission* [2002] ECR II-1125). No appeal was lodged against that judgment.

*Administrative procedure for infringement of Articles 85 and 86 of the Treaty*

45     On 24 May 1996 the Commission addressed a statement of objections on the merits to the TACA parties, adopted on the basis
of Regulations Nos 17, 1017/68 and 4056/86. In that statement the Commission declared, inter alia, that it considered that
the TACA fell within the prohibition in Article 85(1) of the Treaty and that it contained a number of elements which did not
fall within the scope of Article 85(3) of the Treaty. The Commission stated that it was disposed to adopt a decision finding
the TACA parties to be in breach of Article 85(1) and requiring them to bring to an end the practices which fell outside the
scope of Article 85(3). The statement of objections also indicated that the TACA parties had abused their dominant position,
contrary to Article 86 of the Treaty, and that the Commission intended to impose fines on them in that regard. Lastly, the
statement of objections announced that the Commission was disposed to withdraw the benefit of the block exemption laid down
by Regulation No 4056/86 pursuant to Articles 7 and/or 8 of that regulation.

46     On 6 September 1996 the applicants replied to the Commission's statement of objections of 24 May 1996. The TACA parties set
out their position orally at a hearing on 25 October 1996.

47     A supplementary statement of objections was adopted by the Commission on 11 April 1997 in which it stated that, notwithstanding
the notification of the hub and spoke system, it remained disposed to adopt a decision prohibiting, inter alia, the practice
of fixing prices for carrier haulage services supplied within the Community which fall outside the scope of the TACA hub and
spoke system.

48     On 16 September 1998 the Commission adopted Decision 1999/243/EC relating to a proceeding pursuant to Articles 85 and 86 of
the EC Treaty (Case No IV/35.134 - Trans-Atlantic Conference Agreement, OJ 1999 L 95, p. 1, the contested decision). In adopting
that decision the Commission followed the procedures laid down by Regulations Nos 17, 1017/68 and 4056/86.

49     The Commission concluded in the contested decision that certain provisions of the TACA were contrary to Article 85(1) of the
Treaty, Article 53(1) of the EEA Agreement and Article 2 of Regulation No 1017/68 and that the conditions for the grant of
individual exemption laid down by Article 85(3) of the Treaty, Article 53(3) of the EEA Agreement and Article 5 of Regulation
No 1017/68 were not fulfilled. The Commission further concluded that the applicants had infringed the provisions of Article
86 of the Treaty and Article 54 of the EEA Agreement and, on that ground, imposed fines on all of the applicants.

**The contested decision**

III. *The relevant provisions of the TACA*

50     The relevant provisions of the TACA which are the subject of the contested decision concern the fixing of transport rates,
the conclusion of service contracts and the remuneration of freight forwarders.

*The collective fixing of transport rates*

51     The contested decision states that the TACA members collectively fix a five-part tariff showing separate rates for each of
the following services: inland transport to the port, cargo handling in the port (transfer from the inland transport mode
to the vessel), maritime transport (transport from one port to another), cargo handling in the port of destination (transfer
from the vessel to the inland transport mode) and inland transport from the port of destination to the place of final destination
(paragraph 96).

52     The contested decision further states that:

–       - the common tariff contains a matrix of prices for the carriage of cargo between defined points: 26 classes of cargo are
defined and a rate is specified for each class (paragraph 13);

–       - the tariff is published by the TACA and is available to all shippers (paragraph 13);

–       - the conference tariff sets out a number of different rates: standard rates, time/volume rates (TVRs) and loyalty contract
rates (paragraph 103);

–       - under US law, any member of a conference has the right to depart from the conference tariff in respect of a particular class
of goods, provided that the other members of the conference are notified (paragraph 104).

*Service contracts*

53     Service contracts are contracts by which a shipper undertakes to provide a minimum quantity of cargo to be transported by
the conference (conference service contracts) or by an individual carrier (individual service contracts) over a fixed period
of time and the carrier or the conference commits to a certain rate or rate schedule as well as a defined service level (paragraph
110).

54     Individual service contracts are referred to as being joint where they are entered into by several individual carriers. It
is not in dispute that the term joint service contracts in the contested decision covers both conference service contracts
and individual joint service contracts.

55     It is common ground between the parties that, on the transatlantic trade, some 50% to 60% of cargo travels under service contracts
(paragraph 122).

56     In the contested decision, the Commission states that the TACA sought to regulate the negotiation and the conclusion of both
conference and individual service contracts.

57     First, as regards conference service contracts (or TACA service contracts), Article 14(3) of the TACA provides that these
must be negotiated on behalf of the TACA parties by the TACA secretariat. Service contracts negotiated by the TACA secretariat
are then put to the TACA voting procedure. Any TACA party which does not wish to participate in that service contract may
take unilateral action, the scope of which is limited in accordance with Article 14(2)(j) of the TACA (paragraphs 132 to 148).

58     The contested decision states that Article 14(2) of the TACA also imposes a number of binding guidelines concerning the content
of service contracts and the circumstances in which they may be concluded (paragraph 149). The relevant restrictions relate
to the following matters:

–       - duration: under Article 14(2)(a) of the TACA, service contracts must be concluded for a maximum period of one calendar year;
that period was subsequently increased to two and then three years (paragraphs 17(f) and 491);

–       - conditional clauses (or contingency clauses): under Article 14(2)(c) of the TACA, there is a prohibition on the inclusion
in service contracts of any clause providing for a reduction in the rate payable under those service contracts by reference
to terms agreed with other shippers under other arrangements (paragraphs 17(g) and 489);

–       - multiple contracts: under Article 14(2)(c) of the TACA, none of the parties to it may participate, individually or with
any other party to the TACA, in more than one service contract at a time with any particular shipper in respect of cargo to
be carried on the trade (paragraphs 17(f) and 493);

–       - the level of liquidated damages for non-performance of the contract: under Article 14(2)(d) of the TACA, the TACA parties
agree on the level of liquidated damages included in service contracts entered into by them (paragraph 495); according to
the contested decision, the level of liquidated damages has been set by the TACA parties at USD 250 per Twenty Foot Equivalent
Unit (TEU) (paragraph 226);

–       - confidentiality: the contested decision states that the TACA parties require the disclosure to each other of the terms of
all service contracts to which they are party and make this information available to carriers which become party to the TACA
(paragraph 496).

59     Second, the TACA prohibited the conclusion of individual service contracts until 1995. The TACA permitted such contracts in
1994 and 1995. The contested decision states:

32       On 9 March 1995, the TACA parties informed the Commission that the FMC [the US Federal Maritime Commission] had imposed a
further condition on the TACA parties. This condition required the TACA parties to amend the TACA so as to allow the various
signatories to enter into 1996 service contracts without having received the approval of the other TACA parties, provided
that those contracts complied with the provisions of Article 14(2) of the TACA.

*Remuneration of freight forwarders*

60     Under Article 5(1)(c) of the TACA, the TACA parties agree on the amounts, levels or rates of brokerage and freight forwarder
remuneration including the terms and conditions for the payment of such sums and the designation of persons eligible to act
as brokers (paragraph 164).

IV.    *The definition of the relevant market*

61     The contested decision states, on the basis of the analysis set out in paragraphs 60 to 84, that the market for maritime transport
services to which the TACA relates is that for scheduled containerised liner shipping between ports in northern Europe and
ports in the United States and Canada.

62     At paragraph 519, the Commission states in relation to the application of Article 86 of the Treaty:

The relevant market for maritime transport services is described at paragraphs 60 to 75. The geographic market [consists]
of the area in which the maritime transport services defined above are marketed, that is, in this case, the catchment areas
of the ports in northern Europe. Such a geographic market is commensurate with the scope of the TACA's inland tariff and constitutes
a substantial part of the common market.

V.      *Legal assessment*

63     The contested decision finds that the TACA's rules and practices in question fall within Article 85 and Article 86 of the
Treaty.

*Application of Article 85 of the Treaty*

64     With regard to the application of Article 85 of the Treaty, the Commission states that the following aspects of the TACA have
the object or effect of restricting or distorting competition within the meaning of paragraph 1 thereof:

–       - the price agreement between the parties relating to maritime transport (paragraphs 379 and 380);

–       - the price agreement between the parties relating to inland transport services supplied within the territory of the Community
to shippers in combination with other services as part of an intermodal transport operation for the carriage of containerised
cargo (carrier haulage services) between northern Europe and the United States of America (paragraphs 379 and 380);

–       - the agreement between the parties as to the conditions under which they may enter into service contracts with shippers (paragraphs
379, 380 and 442 to 448); and

–       - the agreement between the parties relating to the fixing of maximum levels of freight forwarder compensation (paragraphs
379, 380 and 505 to 508).

65     The Commission considers, by contrast, that it is unclear at this stage whether the equipment interchange agreement set out
in the EIEIA affects competition to any appreciable degree. The applicability of Article 85 of the Treaty to that agreement
is therefore not addressed in the contested decision (paragraphs 384, 399 and 426).

66     As regards the grant of an exemption, the Commission concludes that with the exception of the agreement relating to the price
of maritime transport, the other agreements restricting competition do not fall within the block exemption provided for by
Article 3 of Regulation No 4056/86 (paragraphs 397 to 399). As regards the possibility of individual exemption, the Commission
considers that none of the agreements concerned fulfils the conditions laid down by Article 85(3) of the Treaty and Article
5 of Regulation No 1017/68 (paragraphs 409 to 441).

*Application of Article 86 of the Treaty*

67     As regards the application of Article 86 of the Treaty, the contested decision finds that the TACA members hold a collective
dominant position on the relevant market (paragraphs 519 to 576) and that they abused that collective dominant position between
1994 and 1996, first, by entering into an agreement to place restrictions on the availability and content of service contracts
(the first abuse) and secondly by altering the competitive structure of the market so as to reinforce the TACA's dominant
position (the second abuse) (paragraphs 550 to 576).

68     As regards the first abuse (paragraphs 551 to 558), the Commission considers that this arose, in particular, in relation to
the terms imposed by the TACA parties ... concerning contingency clauses, the duration of service contracts, the ban on multiple
contracts and liquidated damages and to the prohibition of individual service contracts in 1995 (paragraphs 556 and 557).

69     As regards the second abuse (paragraphs 559 to 567), the Commission states that the intention of the TACA parties was ...
to ensure that if a potential competitor wished to enter the market it would only do [so] after it had become a party of the
TACA (paragraph 562). The steps taken by the TACA parties to induce potential competitors to enter the market as parties to
the TACA include also, according to the contested decision, specific steps in favour of Hanjin (disclosure of confidential
information and the allocation of market share) and Hyundai (immediate access to service contracts), the conclusion of a large
number of dual-rate service contracts and the fact that the former structured TAA members did not compete for certain service
contracts with non-vessel operating common carriers (NVOCCs).

*Fines*

70     The contested decision imposes fines on each of the TACA parties for their infringement of Article 86 of the Treaty. No fine
is imposed for the infringement of Article 85 of the Treaty.

71     The contested decision states that the duration of those two infringements covers part of 1994 and the whole of 1995 and 1996
(paragraphs 592 and 594).

*The operative part*

72     The operative part of the contested decision provides as follows:

Article 1

The undertakings listed in Annex I have infringed the provisions of Article 85(1) of the EC Treaty, Article 53(1) of the EEA
Agreement and Article 2 of Regulation (EEC) No 1017/68 by agreeing prices for inland transport services supplied within the
territory of the European Community to shippers in combination with other services as part of a multimodal transport operation
for the carriage of containerised cargo between northern Europe and the United States of America. The conditions of Article
85(3) of the EC Treaty, Article 53(3) of the EEA Agreement and of Article 5 of Regulation (EEC) No 1017/68 are not fulfilled.

*Article 2*

The undertakings listed in Annex I have infringed the provisions of Article 85(1) of the EC Treaty and Article 53(1) of the
EEA Agreement by fixing the amounts, levels or rates of brokerage and freight forwarder remuneration, the terms and conditions
for the payment of such sums and the designation of persons eligible to act as brokers. The conditions of Article 85(3) of
the EC Treaty and Article 53(3) of the EEA Agreement are not fulfilled.

*Article 3*

The undertakings listed in Annex I have infringed the provisions of Article 85(1) of the EC Treaty and Article 53(1) of the
EEA Agreement by agreeing the terms and conditions on and under which they may enter into service contracts with shippers.
The conditions of Article 85(3) of the EC Treaty and Article 53(3) of the EEA Agreement are not fulfilled.

*Article 4*

The undertakings listed in Annex I are hereby required to put an end forthwith to the infringements referred to in Articles
1, 2 and 3 and are hereby required to refrain in future from any agreement or concerted practice having the same or a similar
object or effect to the agreements referred to in Articles 1, 2 and 3.

*Article 5*

The undertakings listed in Annex I have infringed the provisions of Article 86 of the EC Treaty and Article 54 of the EEA
Agreement by altering the competitive structure of the market so as to reinforce the dominant position of the Transatlantic
Conference Agreement.

*Article 6*

The undertakings listed in Annex I have infringed the provisions of Article 86 of the EC Treaty and Article 54 of the EEA
Agreement by placing restrictions on the availability and contents of service contracts.

*Article 7*

The undertakings listed in Annex I are hereby required to put an end forthwith to the infringements referred to in Articles
5 and 6 and are hereby required to refrain in future from any action having the same or a similar object or effect to the
infringements referred to in Articles 5 and 6.

*Article 8*

In respect of the infringement of the provisions of Article 86 of the EC Treaty and Article 54 of the EEA Agreement referred
to in Articles 5 and 6, the following fines are imposed:

A.P. Møller-Mærsk Line ECU 27 500 000

Atlantic Container Line AB ECU 6 880 000

Hapag Lloyd Container Linie GmbH ECU 20 630 000

P&O Nedlloyd Container Line Limited ECU 41 260 000

Sea-Land Service, Inc. ECU 27 500 000

Mediterranean Shipping Co. ECU 13 750 000

Orient Overseas Container Line (UK) Ltd ECU 20 630 000

Polish Ocean Lines ECU 6 880 000

DSR-Senator Lines ECU 13 750 000

Cho Yang Shipping Co., Ltd ECU 13 750 000

Neptune Orient Lines Ltd ECU 13 750 000

Nippon Yusen Kaisha ECU 20 630 000

Transportación Marítima Mexicana SA de

CV/Tecomar SA de CV ECU 6 880 000

Hanjin Shipping Co. Ltd ECU 20 630 000

Hyundai Merchant Marine Co. Ltd ECU 18 560 000

*Article 9*

The undertakings listed in Annex I are hereby required, within a period of two months of the date of notification of this
decision, to inform customers with whom they have concluded joint service contracts that those customers are entitled to renegotiate
the terms of those contracts or to terminate them forthwith.

*Article 10*

The fines imposed under Article 8 shall be paid, in ECU, within three months of the date of notification of this Decision,
into bank account No 310-0933000-43 of the European Commission, Banque Bruxelles Lambert, Agence Européenne, Rond-Point Schuman
5, B-1040 Brussels.

After expiry of that period, interest shall be automatically payable on the fine at the rate charged by the European Central
Bank for transactions in ECU on the first working day of the month in which this Decision is adopted, plus 3.5 percentage
points, namely 7.5%.

*Article 11*

This Decision is addressed to the undertakings listed in Annex I.

This Decision shall be enforceable pursuant to Article 192 of the EC Treaty.

**Procedure**

73     By application lodged at the Registry of the Court of First Instance on 7 December 1998, 12 of the 17 shipping companies to
whom the contested decision was addressed, namely ACL, Cho Yang, DSR-Senator, Hanjin, Hapag-Lloyd, Hyundai, Mærsk, MSC, OOCL,
POL, P&O Nedlloyd (P&O Nedlloyd is the result of the merger in January 1997 of Nedlloyd and P&O, to both of which the contested
decision had been addressed when it was adopted) and Sea-Land, lodged an application at the Registry of the Court of First
Instance for annulment of that decision pursuant to Article 173 of the EC Treaty (now, after amendment, Article 230 EC). That
application was registered as Case T-191/98 *Atlantic Container Line and Others* v *Commission*.

74     By separate application lodged on 29 December 1998, NOL brought an action for annulment of the contested decision. That application
was registered as Case T-212/98 *Neptune Orient Lines* v *Commission*. On the same day NYK also lodged an application for annulment of the contested decision, which was registered as Case T-213/98
*Nippon Yusen Kaisha* v *Commission*. Finally, on 30 December 1998, TMM and Tecomar also lodged an application for annulment of the contested decision, which
was registered as Case T-214/98 *Transportación Marítima Mexicana and Tecomar* v *Commission*.

75     On 18 January 1999, on the initiative of the Registrar, the Judge Rapporteur, Judge Jaeger, held an informal meeting with
the applicants at which they were requested to put their applications, which run to about 2 000 pages (excluding annexes),
in order, to consider the possibility of summarising them, to sort the relevant documents contained in approximately 100 loose-leaf
files annexed to the applications and to resolve the confidentiality issues arising in respect of some of those documents.
Only some of those confidentiality issues were able to be resolved at that meeting.

76     By order of 22 February 1999 the President of the Third Chamber of the Court of First Instance ordered that Cases T-191/98,
T-212/98, T-213/98 and T-214/98 be joined for the purposes of the written and the oral procedure and judgment.

77     On 21 June 1999 the European Council of Transport Users ASBL (the ECTU, comprising the European Shippers' Council, ESC) sought
leave to intervene in support of the form of order sought by the Commission in Cases T-191/98, T-212/98, T-213/98 and T-214/98.

78     By order of 21 July 1999, the President of the Court of First Instance dismissed the application lodged by DSR-Senator to
suspend enforcement of the contested decision (Case T-191/98 R *DSR-Senator Lines* v *Commission* [1999] ECR II-2531). The appeal lodged against that order was dismissed by the President of the Court of Justice on 14 December
1999 (Case C-364/99 P(R) *DSR-Senator Lines* v *Commission* [1999] ECR I-8733).

79     On 17 August 1999 the applicants requested that certain documents be treated as confidential vis-à-vis the intervener. That
request was further particularised in a fax of 23 August 1999. The Commission raised various objections to that request by
letters of 10 September and 8 October 1999.

80     By order of 15 November 1999, the President of the Third Chamber of the Court of First Instance granted the ECTU leave to
intervene and granted in part the application for confidentiality. In addition confidentiality was provisionally accorded
to certain appendices to the application in Case T-191/98.

81     By letter of 8 December 1999 the applicants informed the Registrar that they intended to withdraw from the case-file all but
one of the appendices referred to in the order of 15 November 1999. By letter of 10 December 1999 the applicants further requested
confidentiality in respect of certain information contained in the rejoinder and the annexes thereto. By letter of 17 January
2000 the Commission objected to that request.

82     By order of 14 March 2000 the President of the Third Chamber of the Court of First Instance granted in part the applicants'
request for confidentiality in respect of certain information contained in the application and the rejoinder.

83     By order of 28 June 2000, the President of the Court of First Instance dismissed the application to suspend enforcement of
the contested decision lodged by Cho Yang (Case T-191/98 R II *Cho Yang Shipping* v *Commission* [2000] ECR II-2551). The appeal lodged against that order was dismissed by the President of the Court of Justice on 15 December
2000 (Case C-361/00 P(R) *Cho Yang Shipping* v *Commission* [2000] ECR I-11657).

84     On 27 September 2000 in the covering letter accompanying its observations on the ECTU's statement in intervention, the applicant
in Case T-213/98 requested that the Court of First Instance accord confidentiality to certain figures set out in its observations.
That request was repeated in a letter of 20 October 2000. The Commission objected to the request in a letter of 17 November
2000. By order of 20 June 2002 the President of the Third Chamber of the Court of First Instance granted the applicant's request.

85     Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Third Chamber) decided to open the oral procedure
and, by way of measures of organisation of procedure, requested the parties to produce certain documents and answer written
questions. The parties complied with those requests within the prescribed time-limit.

86     The oral arguments of the parties and their answers to the oral questions were heard at the hearing on 26 and 27 March 2003.

**Forms of order sought**

87     The applicants claim that the Court should:

–       - annul the contested decision;

–       - in the alternative, annul or reduce the fines imposed by Article 8 of the contested decision;

–       - order the Commission to pay the costs;

–       - order the Commission to pay the costs incurred by each applicant in providing a bank guarantee in lieu of payment of the
fines pending judgment by the Court.

88     The Commission, supported by the intervener, the ECTU, contends that the Court should:

–       dismiss the application;

–       order the applicants to pay the costs.

**Law**

89     In support of their application for annulment the applicants essentially raise seven groups of pleas. The first comprises
those alleging infringement of the rights of the defence. The second concerns those alleging that there is no infringement
of Article 85 of the Treaty. The third relates to those alleging that there is no infringement of Article 86 of the Treaty.
The fourth relates to failure to comply with the procedure laid down by Regulation No 4056/86. The fifth relates to the pleas
alleging various failures to state reasons. The sixth comprises the pleas on the fines. Finally, the seventh concerns infringement
of the second paragraph of Article 215 of the EC Treaty (now the second paragraph of Article 288 EC).

90     The Court observes at the outset that the applications lodged by the applicants, and the annexes thereto, are exceptionally
long: each application comprises some 500 pages whilst the annexes make up about 100 files, and there are almost 100 different
pleas. Attention must be drawn to the fact that the Court of Justice has held that the requirement for the Court of First
Instance to give reasons for its decisions must not be interpreted as meaning that it is obliged to respond in detail to each
argument advanced by a party, particularly if the argument is not sufficiently clear and precise and is not supported by adequate
evidence (Case C-374/99 P *Connolly* v *Commission* [2001] ECR I-1611, paragraph 121, and Case C-197/99 P *Belgium* v *Commission* [2003] ECR I-8461, paragraph 81). The numerous pleas put forward by the applicants in support of their actions must be considered
in the light of that case-law.

I.      *The pleas alleging infringement of the rights of the defence*

91     There are essentially three separate parts to the applicants' pleas alleging infringement of the rights of the defence. The
first part alleges infringement of the right to be heard. The second part alleges infringement of the right of access to the
file. The third and final part alleges infringement of the principles of sound administration, objectivity and impartiality.

*Part one: infringement of the right to be heard*

92     In their application, the applicants divided this part into three sections. In the first, the applicants allege that the statement
of objections is invalid because it was not adopted at the conclusion of the Commission's investigation and was therefore
premature. In the second, they claim that the allegation that they abusively altered the competitive structure of the market
is a new complaint which is, moreover, based on fresh evidence. In the third and final section, the applicants claim that
the contested decision contains new allegations of fact and law not contained in the statement of objections.

93     It is, however, apparent from consideration of the application that the present part in fact comprises two different kinds
of plea concerning the Commission's conduct of the administrative procedure. First, by a plea which appears in the first part
of their argument, the applicants challenge the legality of the statement of objections as such on the ground that it is premature.
Second, by pleas appearing in all three parts of their argument, they criticise the presence of new allegations of fact or
law in the contested decision.

A –  *The plea alleging that the statement of objections is unlawful because it is premature*

Arguments of the parties

94     The applicants allege that the statement of objections which the Commission sent them on 24 May 1996 is invalid because it
was not adopted at the conclusion of the Commission's investigation.

95     The applicants refer to the case-law to the effect that the statement of objections must set out clearly the facts upon which
the Commission relies and its classification of those facts (Case C-62/86 *AKZO* v *Commission* [1991] ECR I-3359, paragraph 29; Joined Cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85 *Ahlström and Others* v *Commission* (*Woodpulp II*) [1993] ECR I-1307, paragraphs 40 to 54 and 152 to 154; and Joined Cases T-10/92 to T-12/92 and T-15/92 *Cimenteries CBR and Others* v *Commission* [1992] ECR II-2667, paragraph 33). Accordingly, as the Court of First Instance held in Case T-7/89 *Hercules Chemicals* v *Commission* [1991] ECR II-1711, paragraph 51, regard for the rights of the defence requires that an applicant must have been put in a
position to express, as it sees fit, its views on all the objections raised against it by the Commission in the statement
of objections addressed to it and on the evidence which is to be used to support those objections and is mentioned by the
Commission in the statement of objections or annexed to it (see also Case T-334/94 *Sarrió* v *Commission* [1998] ECR II-1439, paragraph 39).

96     The applicants infer from this that the Commission may not rely in its decision on evidence obtained after the adoption of
the statement of objections and upon which the undertaking concerned has had no opportunity to comment. As the Court held
in Case 60/81 *IBM* v *Commission* [1981] ECR 2639, at paragraph 15: ... in accordance with Article 19(1) of Regulation No 17 and in order to guarantee observance
of the rights of the defence, it is necessary to ensure that the undertaking concerned has the right to submit its observations
on conclusion of the inquiry on all the objections which the Commission intends to raise against it in its decision ....

97     The applicants point out that in this case the Commission sent them a request for information two days before the statement
of objections was issued and some 30 requests for further information after the statement of objections was issued, both during
the period prescribed for replying to the statement of objections and after the response was made. According to the applicants,
it follows that, contrary to the principle of sound administration and the case-law cited above, the statement of objections
was sent to the addressees prematurely.

98     The applicants claim that the premature adoption of the statement of objections in the present case had the following consequences:

–       - the statement of objections did not state all of the factual matters regarded by the Commission as relevant to its appraisal
of the TACA notification;

–       - the legal assessment in the statement of objections was not based on all of the factual matters regarded by the Commission
as relevant to its appraisal of the notification;

–       - the statement of objections cannot be regarded as reflecting the Commission's position on the notification and its compatibility
with Community law;

–       - the applicants could not effectively exercise the rights of the defence by replying to the statement of objections.

99     Therefore, the applicants claim, the statement of objections of 24 May 1996 did not fulfil the role ascribed to it, namely
to provide the undertaking under investigation with an opportunity to comment on the Commission's case prior to the adoption
of the final decision, in accordance with the rights of the defence.

100   The applicants observe that whilst some of the requests for further information concern matters covered by the statement of
objections, others concerned entirely new matters.

101   The applicants claim that there is therefore a legal and procedural incompatibility between the position adopted by the Commission
in the statement of objections and the continuation of its fact-finding after the adoption of the statement of objections.
Thus, whilst the Commission claimed that it required the information requested on 11 July 1996 in order to enable it to assess
the parties' application for individual exemption in its full economic and legal context , the statement of objections of
24 May 1996 stated that there was no possibility of the TACA being granted exemption (paragraph 249 of the statement of objections).

102   In response to the Commission's claims that the TACA's practices were continuously evolving, or that the applicants adopted
an obstructive manner, they observe that the Commission does not specify which practices of the TACA members were taken to
be continuously evolving so as to justify the requests for further information, and they deny ever having obstructed the inquiry.

103   The applicants claim that since no valid statement of objections was adopted the Commission did not validly initiate formal
proceedings against them, so that the contested decision does not deal with any objections on which the applicants have been
afforded an opportunity of commenting. The decision should therefore be annulled in its entirety for infringement of the rights
of the defence.

104   The Commission submits that it is perfectly entitled to carry out fact-finding after issuing the statement of objections.
It therefore contends that the Court should reject this plea of the applicants.

Findings of the Court

105   It is common ground that in the present case the Commission sent the TACA parties a request for information two days before
issuing the statement of objections and about 30 further requests for information after it had been issued, including after
the applicants' response to the statement of objections and the hearing before the Commission, up to March 1998.

106   In the applicants' view, those facts show that because it was premature, the statement of objections did not fulfil the role
normally ascribed to it, namely to provide the undertaking under investigation with an opportunity to comment effectively
on all allegations of fact and law made against it by the Commission.

107   As stated above at paragraph 93, in so far as the applicants allege by the present plea that the Commission used the responses
to the requests for further information to formulate new allegations of fact or law in the contested decision without giving
them the opportunity to comment thereon, this plea coincides with those alleging the presence of new allegations of fact or
law in the contested decision and therefore will be considered in the section dealing with those pleas.

108   At this stage it is thus necessary to consider the present plea only in so far as it alleges that the statement of objections
is unlawful because it is premature.

109   The applicants' argument in that regard rests on the premiss that before the Commission issues a statement of objections it
must have completed its preparatory investigation. In order to determine the merits of this plea it is therefore necessary
to consider whether the Commission is under such an obligation.

110   It is true that according to the case-law the rules necessary for the application of Articles 85 and 86 of the Treaty, introduced
by the Council in Regulation No 17, Regulation No 1017/68 and Regulation No 4056/86, upon which the contested decision was
based, prescribe two successive but clearly separate procedures: first, a preparatory investigation procedure, and secondly,
a procedure involving submissions by both parties initiated by the statement of objections (Case 374/87 *Orkem* v *Commission* [1989] ECR 3283, paragraph 20, and *Cimenteries CBR*, cited at paragraph 95 above, paragraph 45).

111   It follows that, in principle, the statement of objections is issued after a preparatory investigation by the Commission following
a notification or a complaint or on its own initiative, as the case may be, in order to assess whether the practices in question
are compatible with Articles 85 and 86 of the Treaty. Only after having carried out such an investigation can the Commission
be sufficiently informed, both in fact and in law, as to the lawfulness of those practices and therefore be able to decide
whether or not to initiate the infringement procedure by issuing the statement of objections.

112   Contrary to the applicants' submission, it does not, however, follow that after issuing the statement of objections the Commission
is prevented from continuing with its investigation, inter alia by sending requests for further information.

113   Under Article 19(1) of Regulation No 17, Article 26(1) of Regulation No 1017/68 and Article 23(1) of Regulation No 4056/86,
the purpose of the statement of objections is to afford the undertakings concerned, before the Commission adopts a decision
establishing an infringement of Articles 85 and 86 of the Treaty, the opportunity of making known their views on the complaints
made against them. Under Article 4 of Regulation No 99/63/EEC of the Commission of 25 July 1963 on the hearings provided for
in Article 19(1) and (2) of Council Regulation No 17 (OJ, English Special Edition 1963-1964 (I), p. 47), Article 4 of Regulation
(EEC) No 1630/69 of the Commission of 8 August 1969 on the hearings provided for in Article 26(1) and (2) of Council Regulation
No 1017/68 (OJ, English Special Edition 1969 (II), p. 381) and Article 8 of Regulation No 4260/88, the Commission can only
deal in its decision with objections upon which the recipient undertakings have been afforded the opportunity of making known
their views. According to the case-law, that requirement is observed where the decision does not allege that the persons concerned
have committed infringements other than those referred to in the statement of objections and only takes into consideration
facts on which the persons concerned have had the opportunity of making known their views (Case 41/69 *ACF Chemiefarma* v *Commission* [1970] ECR 661, paragraph 94).

114   The statement of objections is thus a procedural measure adopted preparatory to the decision which represents the culmination
of the administrative procedure (*IBM*, cited at paragraph 96 above, paragraph 21).

115   Consequently, until a final decision has been adopted, the Commission may, in view, in particular, of the written or oral
observations of the parties, abandon some or even all of the objections initially made against them and thus alter its position
in their favour (*IBM*, cited at paragraph 96 above, paragraph 18, and *Cimenteries CBR*, cited at paragraph 95 above, paragraph 47) or, conversely, decide to add new complaints, provided that it affords the undertakings
concerned the opportunity of making known their views in that respect (Case 107/82 *AEG* v *Commission* [1983] ECR 3151, paragraph 29; order of the Court of 5 June 2002 in Case C-217/00 P *Buzzi Unicem* v *Commission*, not published in the ECR, paragraph 65; and Case T-16/99 *Lögstör Rör* v *Commission* [2002] ECR II-1633, paragraph 168).

116   Far from being a measure recording the Commission's final assessment of the lawfulness of the practices in question, the statement
of objections is, on the contrary, a purely preparatory measure setting out the Commission's provisional findings, which it
may revisit in the final decision. The Commission is therefore perfectly entitled, in order in particular to take account
of the arguments or other evidence put forward by the undertakings concerned, to continue with its fact-finding after the
adoption of the statement of objections with a view to withdrawing certain complaints or adding others as appropriate. That
is all the more so where, as in the present case, the Commission must decide whether the arguments and evidence put forward
by the addressees of the statement of objections justify the grant of an individual exemption under Article 85(3) of the Treaty
in respect of the practices referred to in the statement of objections.

117   The requests for information provided for by Article 11 of Regulation No 17, Article 19 of Regulation No 1017/68 and Article
16 of Regulation No 4056/86 are manifestly appropriate measures of inquiry for that purpose. According to the first paragraph
of those provisions, the Commission may obtain all necessary information from the undertakings and associations of undertakings
by such requests, provided that it states the legal bases and the purpose of the request and also the penalties for supplying
incorrect information, pursuant to the third paragraph of those provisions. A request for information thus enables the Commission
to obtain all necessary clarification of the arguments and the evidence put forward by the undertakings concerned in their
response to the statement of objections.

118   Subject to the rules on limitation, the provisions of the applicable regulations cited above do not impose any restriction
on the Commission as to the timing of requests for information. In particular, provided that the information requested is
relevant, those provisions do not restrict the power of the Commission to send requests for information after the statement
of objections has been issued.

119   Thus, even if the Commission already has evidence, or indeed proof, of the existence of an infringement, it may legitimately
take the view that it is necessary to request further information to enable it better to define the scope of the infringement,
to determine its duration or to identify the circle of undertakings involved (*Orkem*, cited at paragraph 110 above, paragraph 15). The Court has held that requests for information enable the Commission both
to bring to light infringements of the competition rules (*Orkem*, cited above, paragraph 15) and to investigate putative infringements (Case T-39/90 *SEP* v *Commission* [1991] ECR II-1497, paragraph 25).

120   Accordingly, the mere fact that the Commission continues its investigation after issuing the statement of objections by sending
requests for further information cannot in itself affect the validity of the statement of objections.

121   On the contrary, given the preliminary nature of the statement of objections, which reflects the adversarial nature of the
administrative procedure applying the competition rules of the Treaty, the Commission must logically be able to send supplementary
requests for information after issuing the statement of objections in order to be able, if necessary, to withdraw complaints
or add new ones.

122   Contrary to the applicants' assertions, it is irrelevant in this regard that those requests for further information raise
fresh issues not addressed in the statement of objections. It is true that that might show that when it adopted the statement
of objections the Commission had not completed its administrative investigation into the practices in question. However, as
stated above, since the statement of objections is a preliminary document which may be amended by the Commission, in particular
so as to take account of the response to the statement of objections, there is no requirement that the Commission must have
finally completed its administrative investigation by the time it adopts the statement of objections. Consequently, the Commission
cannot be restricted as to the questions it seeks to raise in the requests for information sent after the statement of objections,
provided however that (i) in accordance with the applicable regulations, those questions enable it to obtain information necessary
for the investigation and (ii) the Commission gives the undertakings concerned the opportunity to comment on fresh matters
of fact or law arising from the responses of the undertakings concerned to those questions. Those last two issues fall, however,
within separate pleas which will be examined in the context of the applicants' pleas alleging infringement of the principles
of sound administration, objectivity and impartiality and the presence of new allegations of fact or law in the decision.

123   The plea alleging that the statement of objections is unlawful because it is premature must therefore be rejected.

B –  *The pleas alleging the presence of new allegations of fact or law in the contested decision*

124   By these pleas the applicants submit that they were given no opportunity to comment, first, on the case in respect of the
second abuse alleging alteration of the competitive structure of the market and, second, on certain matters of fact and law
on which the other allegations in the contested decision were based.

1. The purportedly new allegations of fact or law concerning the second abuse

a) Arguments of the parties

125   The applicants allege, first, that in dealing with the second abuse of a dominant position, described in paragraphs 559 to
567 of the contested decision, the Commission changed its case from that first set out in the statement of objections.

126   The applicants claim in that regard that they were given no opportunity to comment, first, on the finding that they had induced
Hanjin and Hyundai to join the conference (paragraphs 563 to 566) and, second, as to the steps they were said to have taken
for that purpose (paragraphs 561 and 563 to 565). Neither of those points appears in the statement of objections, in particular
at paragraphs 107 to 115 dealing with the allegation of abusive alteration of the structure of the market. In particular,
the statement of objections does not criticise the TACA parties for having taken measures to assist those potential competitors
successfully to enter the market as parties to the TACA, as paragraph 563 of the contested decision states.

127   The applicants claim that paragraph 112 of the statement of objections refers essentially to a structural abuse based on the
fact that there were four companies independent of the TACA which were not present on the transatlantic route but were linked
with TACA parties on other trades, that various arrangements had allowed NYK, NOL, Hanjin and Hyundai to enter the market
and that the TACA's ability to neutralise potential competition was demonstrated by dual-rate service contracts and by the
fact that the majority of TACA members did not participate in service contracts with NVOCCs. By contrast, in referring to
measures adopted by the applicants to induce Hyundai and Hanjin to join the TACA, the contested decision complains that the
applicants' abuse lies essentially in their conduct.

128   Furthermore, the position adopted by the Commission in the defence differs from the positions set out in the statement of
objections and in the contested decision. According to the applicants, the Commission now alleges in the defence that the
abuse lies not in inducing Hanjin and Hyundai to join the conference, but in adopting a prior policy to neutralise potential
competition and to prevent the emergence of actual competition. That allegation does not appear in the statement of objections.
The same applies to the allegation at paragraph 557 of the defence that, in reserving business linked to service contracts
with NVOCCs to independent shipping companies, the applicants induced those companies to remain in the trade as TACA members
and not as independent competitors.

129   Second, the applicants claim that the fresh allegation of abuse made in the contested decision is based on evidence upon which
the applicants were given no opportunity to comment, namely:

–       - Hanjin's letter to the TACA of 19 August 1994 requesting that it be provided with relevant conference documents and statistics
(paragraphs 229 and 563);

–       - the minutes of the meeting of the TACA directors (TACA PWSC meeting No 95/8) on which the Commission bases the allegation
that the applicants allowed Hyundai immediate access to conference service contracts (paragraphs 230 and 564);

–       - the letter from the Chairman of the TACA to Hanjin dated 30 January 1996 (paragraphs 292 and 561);

–       - the briefing paper of 15 February 1996 in which the secretariat of the conference suggests that the Chairman should encourage
and persuade all carriers to collectively find a way to enable Hanjin to build up a market share consistent with its slot
capacity in the trade (paragraphs 239 and 564).

130   The applicants allege that none of those documents was referred to in or annexed to the statement of objections. Furthermore,
the Commission gave the applicants no indication at all that it proposed to rely on those documents. The applicants claim
in that respect that, contrary to the Commission's assertion, it does not matter whether the documents in question were provided
by them. In so far as those documents were used against them, the applicants claim that the Commission ought to have stated
the importance it intended to attach to them. Since they were unaware of the use the Commission intended to make of those
documents, they were given no reasonable opportunity to comment on their relevance in the exercise of the rights of the defence.

131   The Commission claims, first, that the contested decision did not change the position set out in the statement of objections.
It stresses the fact that the statement of objections alleged that the applicants had adopted measures to neutralise potential
competition (paragraphs 107 to 115, 345 and 346), in particular by the conclusion of slot-chartering agreements (paragraph
110) and service contracts (paragraph 112) with Hanjin and Hyundai.

132   The Commission claims that the use in the contested decision of the word inducements does not alter the fact that what the
TACA parties are found to have done is to have facilitated the entry of Hanjin and Hyundai to the trade as TACA members, precisely
the criticism made in the statement of objections. All that is added in the contested decision to what was contained in the
statement of objections is a matter of detail, namely that the applicants provided Hanjin with sensitive information and allowed
Hyundai to participate immediately in service contracts. The other components of the second abuse, namely dual-rate service
contracts and contracts with NVOCCs, are, the Commission maintains, described in the statement of objections.

133   The Commission therefore rejects the applicants' argument that the abuse at issue in the contested decision lies in conduct
whereas in the statement of objections it is structural. The Commission considers it hard to imagine what a structural abuse
might be. In the present case the abuse consisted in the adoption of a policy of neutralising competition, in part by offering
inducements facilitating entry to the trade as members of the conference.

134   Furthermore, the Commission denies that the defence sets out a new allegation which did not appear in the statement of objections
and in the contested decision. It stresses that the measures referred to in the statement of objections to induce Hyundai
and Hanjin to join the TACA were merely illustrations of the applicants' policy of neutralising competition. The argument
that the contracts with NVOCCs were reserved for non-traditional conference members is not a new one. Moreover, there is no
logical distinction between an inducement to enter the conference and an inducement to remain.

135   Second, as regards the four new documents used in the contested decision, the Commission points out that they were disclosed
by the applicants. Consequently, the complaint that the applicants did not have an opportunity to comment on those documents
is unfounded.

b) Findings of the Court

136   By the present pleas the applicants essentially allege, first, that the Commission altered the nature of its case in respect
of the second abuse recorded in the contested decision when compared with that recorded in the statement of objections and,
second, that the Commission based its finding on documentary evidence upon which they were afforded no opportunity to comment.

1.     The change of case in relation to the second abuse in the contested decision

137   The applicants submit essentially that in the contested decision the Commission changed its case from that set out in the
statement of objections concerning the second abuse in that the contested decision alleged that the applicants had committed
an abuse of conduct by taking certain measures to induce potential competitors to join the TACA, whilst the statement of objections
alleged that their abuse was purely structural, arising from certain structural links between the potential competitors and
the TACA parties.

138   The Court has held that the statement of objections must be couched in terms that, albeit succinct, are sufficiently clear
to enable the parties concerned properly to identify the conduct complained of by the Commission (Case T-352/94 *Mo och Domsjö* v *Commission* [1998] ECR II-1989, paragraph 63). Due observance of the rights of the defence in a proceeding in which sanctions such as
those in question may be imposed requires that the undertakings and associations of undertakings concerned must have been
afforded the opportunity during the administrative procedure to make known their views effectively on the truth and relevance
of the facts and circumstances alleged and objections raised by the Commission (*Cimenteries CBR*, cited at paragraph 95 above, paragraph 39). That requirement is satisfied if the decision does not allege that those concerned
have committed infringements other than those referred to in the notice of complaints and only takes into consideration facts
on which they have had the opportunity of making known their views (*ACF Chemiefarma*, cited at paragraph 113 above, paragraph 94). It follows that the Commission may adopt only objections on which those undertakings
and associations have had the opportunity to make known their views (Joined Cases T-39/92 and T-40/92 *CB and Europay* v *Commission* [1994] ECR II-49, paragraph 47).

139   In assessing the merits of the present plea, it is therefore necessary to consider whether the statement of objections sets
out sufficiently clearly and precisely the complaints relating to the second abuse recorded in the contested decision. To
this end, it is necessary first to note the nature of the complaints made in that decision on that point and then to determine
the extent to which those complaints already appear in the statement of objections.

140   It should be noted, first, that there is a dispute between the parties arising from the pleas concerning the application of
Article 86 of the Treaty as to the nature of the complaints relating to the second abuse recorded in the contested decision.
For the reasons set out below at paragraphs 1255 to 1257 and 1261 to 1265, however, it is apparent from Article 5 of the operative
part of the contested decision and the grounds in support thereof as set out at paragraphs 559 to 567 that, by the second
abuse, the Commission complains that the applicants abusively altered the competitive structure of the market so as to reinforce
the TACA's dominant position by adopting certain measures intended to induce potential competitors to enter the transatlantic
trade not as independent carriers but as TACA parties.

141   The contested decision distinguishes between specific measures intended to induce Hanjin and Hyundai and general measures
intended to induce all potential competitors. As for the specific measures, it is apparent from paragraphs 563 and 564 of
the contested decision that, in the case of Hanjin, they consisted in the disclosure of confidential information concerning
the TACA and in the collective willingness to allow that shipping company to build up a market share consistent with its slot
capacity on the trade and that, in the case of Hyundai, they consisted in that company's immediate participation in the TACA
service contracts. As for the general measures, paragraph 565 of the contested decision indicates that they consisted in the
conclusion of a large number of dual-rate service contracts and in the fact that the former structured TAA members did not
compete for certain service contracts with NVOCCs.

142   Next, as regards the nature of the complaints in the statement of objections, at paragraph 340 of that statement the Commission
criticised the TACA parties for abusing their dominant position by altering the competitive structure of the market so as
to reinforce the dominant position of the TACA. In that regard, the Commission states at paragraph 346:

Paragraphs 107 to 115 above demonstrate the ways in which the TACA has taken steps to neutralise potential competition. The
steps in question include the accession of new parties, the agreement of the TACA parties to allow dual rate service contracts
and the fact that the former structured TAA members did not compete for certain service contracts with NVOCCs. The Commission
considers that such behaviour, which was not disclosed in the application for individual exemption, has damaged the competitive
structure of the market and amounts to an abuse of a dominant position. The Commission considers that the purpose of the members
of the TACA was to eliminate price competition by damaging the structure of the market and limiting the supply of transport.
It should be noted in this context that an undertaking in a dominant position has a special responsibility not to allow its
conduct to impair genuine undistorted competition.

143   Further, at paragraphs 107 to 115 of the statement of objections, to which paragraph 346 refers, the Commission states in
particular:

108       The Commission's general observations on the mobility of fleets, and the contestability of the liner shipping markets, are
set out below at paragraphs 126 to 168. Nevertheless, it is possible to demonstrate that in the case of the TACA, potential
competition in the form of mobility of fleets is unlikely to be effective. A chronology of TACA party membership shows that
every significant potential competitor that has entered the transatlantic trade since the inception of the TAA has done so
by joining the TAA/TACA.

Version I (28/8/92) - 11 lines Version II (12/3/93) - 12 lines

ACL NYK

Hapag Lloyd

P&O Version III (31/3/93) - 13 lines

Nedlloyd NOL

Sealand

Mærsk Version IV (7/4/93) - 15 lines

MSC TMM

OOCL Tecomar

POL

DSR-Senator Version V (26/8/94) - 16 lines

Cho Yang Hanjin

Version VI (31/8/95) - 17 lines

Hyundai

109 It is especially significant that not one of the four Asian carriers which has entered the trade since 1992 (NYK, NOL,
Hanjin and Hyundai) has done so as an independent carrier operating in competition to the TACA parties. Furthermore, various
arrangements with TACA parties have allowed each of these carriers to enter and obtain a foothold in the market without facing
the competition normally to be expected in such circumstances.

110 In particular, Hanjin and Hyundai have been able to enter the market on a slot charter basis without having had to make
any investment in vessels for the trade. The TAA/TACA had argued that these carriers were significant potential competitors
to the TAA/TACA: in fact the TAA has been able to ensure that they did not enter the transatlantic trade as independent lines
but as parties to the TACA. It was reported in Lloyd's List on 11 September 1995 that Hyundai, as part of its arrangements
to enter the trade on a slot charter basis, agreed not to introduce its own tonnage on the trade for a three year period.

111 This is not intended to suggest that entry to a particular trade on the basis of slot charter arrangements without putting
actual tonnage in place is necessarily anticompetitive. The question here is whether any benefits of such cooperation are
accompanied by changes in the structure of the market such as the elimination of potential competition.

112 This ability to neutralise potential competition has come about in part by the practice of the TACA to offer shippers
service contracts which contain a dual rate price structure and by the fact that the majority of the TACA parties do not compete
to participate in service contracts with NVOCCs (see paragraphs 88 to 93 above). In relation to dual rate tariffs and the
elimination of competition, this has substantially the same effects as those described in the TAA decision at paragraphs 341
to 343.

144   Lastly, at paragraphs 113 to 115 the statement of objections mentions too that four potential competitors (APL, Mitsui, Yangming
and K Line) are linked to the TACA on other trades and that the potential competition from the Canadian ports is limited.

145   In the light of the passages in the statement of objections cited above, it should be noted as a preliminary point that, like
Article 5 of the operative part of the contested decision, paragraph 340 of the statement of objections states that the abuse
alleged against the TACA parties consists in having altered the competitive structure of the market so as to reinforce the
dominant position of the TACA.

146   Next, again like the contested decision, the statement of objections alleges that the TACA parties altered the competitive
structure of the market by adopting certain measures intended to induce potential competitors to enter the transatlantic trade
not as independent carriers but as TACA parties. Paragraph 346 of the statement of objections states, with reference to paragraphs
107 to 115, that the TACA took steps to neutralise potential competition, including the accession of new members, dual-rate
service contracts and not competing for certain service contracts with NVOCCs. With regard to the accession of new members,
it is apparent from paragraphs 109 and 110 of the statement of objections that the Commission expressly alleges that the TACA
parties entered into arrangements with potential competitors enabling them to ensure that they did not enter the transatlantic
trade as independent lines but as parties to the TACA. Furthermore, with regard to the two other practices in question, paragraph
112 of the statement of objections emphasises that they enabled the TACA to neutralise potential competition, referring in
that regard, in particular, to paragraph 341 of the TAA decision, in which the Commission found that the real purpose of the
introduction of differentiated [tariff] rates in a case such as that of the TAA is to bring independents inside the agreement:
if they were not allowed to quote prices lower than those of the old conference members, these independents would continue
as outsiders competing against the conference, notably in terms of price.

147   Lastly, like paragraphs 563 to 565 of the contested decision the statement of objections distinguishes, as is apparent from
the foregoing, between specific measures addressed to Hanjin and Hyundai and general measures addressed to all potential competitors.
It is apparent from a combined reading of paragraphs 109, 110 and 346 of the statement of objections that, as in paragraphs
563 and 564 of the contested decision, the Commission finds that specific measures were addressed to Hanjin and Hyundai to
enable them to enter the relevant market. Furthermore, it is apparent from paragraphs 112 and 346 of the statement of objections
that the Commission finds, as in paragraph 565 of the contested decision, that measures were addressed by the TACA to all
potential competitors in order to neutralise potential competition both in the form of the conclusion of dual-rate service
contracts and in the fact that the majority of the former structured TAA members did not compete for certain service contracts
with NVOCCs.

148   In those circumstances, the applicants were able, upon reading the statement of objections, to comprehend that the Commission
was alleging that they had altered the competitive structure of the market by adopting measures to induce potential competitors
to join the TACA.

149   None of the arguments put forward by the applicants is capable of undermining that conclusion.

150   As regards, first, the allegedly structural nature of the abuse recorded in the statement of objections, having regard to
the passages of the statement of objections cited above the applicants cannot seriously argue, as they did at length at the
hearing, that the statement of objections criticised them merely for the objective fact that they were structurally linked
to the potential competitors and not for certain conduct towards the latter. Since the statement of objections finds that
the potential competitors were induced to join the TACA by the conclusion of certain agreements with the TACA parties, the
dual-rate service contracts offered by the TACA and the fact that the majority of the TACA parties did not compete for certain
service contracts with NVOCCs, it clearly criticises them for certain conduct, since all the contested measures involve the
TACA parties.

151   Furthermore, that the abuse is one of conduct appears expressly from the wording of the passages from the statement of objections
cited above. Thus, paragraph 346 of the statement of objections expressly sets out the various steps taken by the TACA. Moreover,
the same paragraph continues by noting that such steps constitute behaviour amounting to an abuse of a dominant position.
Next, paragraph 109 of the statement of objections, concerning the accession of new members to the TACA, refers to arrangements
with TACA allowing new members to enter the trade without facing the competition normally to be expected in such circumstances.
Finally, paragraph 112 of the statement of objections, in relation to dual-rate service contracts and the fact that the majority
of former structured TAA members did not compete for certain service contracts with NVOCCs, expressly states that these are
practices of the TACA reflecting its ability to neutralise potential competition.

152   It is irrelevant in this regard that the contested decision, in finding the second abuse, no longer refers to certain structural
links between the TACA parties and the potential competitors identified in the statement of objections. According to the case-law,
the decision is not necessarily required to be an exact replica of the statement of objections (Joined Cases 209/78 to 215/78
and 218/78 *Van Landewyck and Others* v *Commission* [1980] ECR 3125, paragraph 68). Thus, as long as it does not alter the nature of its case, the Commission may alter its assessment
and withdraw certain complaints if necessary, in particular in the light of the responses to the statement of objections (see,
to that effect, Case T-228/97 *Irish Sugar* v *Commission* [1999] ECR II-2969, paragraphs 34 and 36, and *CB and Europay*, cited at paragraph 138 above, paragraphs 49 to 52). In the present case, the Commission was therefore perfectly entitled
to withdraw its allegations as to the structural links between the TACA parties and potential competitors since that withdrawal
did not result in the alteration of the nature of the case, the fact that the abuse was one of conduct being apparent from
other evidence set out clearly and precisely in the statement of objections.

153   Second, as to whether the steps in question served as inducements, it is true that, as the applicants point out in their written
pleadings, the Commission does not expressly state in the passages of the statement of objections cited above that the TACA
parties took steps to induce potential competitors, to use the terminology of the contested decision. However, since it is
apparent from the statement of objections that the Commission alleges that the applicants took steps to enable potential competitors,
including Hanjin and Hyundai, to join the conference rather than enter the transatlantic trade as independent competitors,
it impliedly, though necessarily, finds that the TACA parties induced those potential competitors to act in that way.

154   That finding is further apparent from the express wording of the statement of objections. Thus paragraph 109 of that statement
refers to arrangements with the TACA which have allowed new members to enter the transatlantic trade. More particularly, paragraph
110 of the statement of objections states that by the conclusion of slot-chartering agreements the TAA/TACA has been able
to ensure that Hyundai and Hanjin do not enter the market as independent lines. Similarly, in relation to dual-rate service
contracts and the fact that the majority of former structured TAA members did not compete for certain service contracts with
NVOCCs, paragraph 112 of the statement of objections states that those practices constitute the TACA's ability to neutralise
potential competition. In those terms the statement of objections, like the contested decision, manifestly criticises the
TACA parties precisely for having adopted measures to induce potential competitors to join the TACA rather than enter the
trade in question as independent competitors.

155   Third, as regards the fact that the specific measures addressed to Hanjin and Hyundai relied on in the contested decision
no longer consist in the conclusion of certain agreements, but in the disclosure of confidential information to Hanjin on
the TACA, the collective willingness of the TACA to enable Hanjin to build up a market share consistent with its slot capacity
and in the fact that Hyundai obtained immediate access to service contracts, it suffices to state that that fact does not
entail any alteration of the nature of the complaints alleged against the applicants, since the Commission continues to allege
that the TACA parties induced potential competitors, including Hanjin and Hyundai, to enter the market in question by joining
the TACA rather than as independent competitors. At most, that fact raises the separate question whether the applicants ought
to have been given the opportunity to comment on that new evidence intended to support the complaint in the statement of objections,
which is the subject of a separate plea considered below at paragraphs 159 to 188.

156   In the light of the foregoing, it must therefore be concluded that the complaints relating to the second abuse recorded in
the contested decision were already set out clearly and precisely in the statement of objections, so that the applicants were
in a position, upon notification of the statement of objections, to understand the extent of those complaints. Therefore,
it cannot be held that there was an infringement of the rights of the defence in that regard.

157   As for the allegation, in relation to the nature of the second abuse, that the Commission's position in the defence differs
from that set out in the statement of objections and in the contested decision, it suffices to observe that, even if that
were true, it does not affect the assessment of the legality of the contested decision. Even if the Commission ventured in
the pleadings it lodged with the Court to alter the nature of the abuse alleged in the contested decision, the review of legality
carried out by the Court in the context of the present action for annulment on the basis of Article 173 of the Treaty concerns
solely the allegation of abuse as set out in the contested decision and not as set out in the defence lodged by the Commission.
Consequently, the applicants' argument on that point must be rejected without its being necessary to decide whether in the
defence the Commission did in fact alter the position it set out in the contested decision, as alleged.

158   For those reasons, the applicants' plea alleging infringement of the rights of the defence in relation to the nature of the
case in respect of the second abuse recorded in the contested decision must be rejected.

2.     The documentary evidence relied upon in support of the second abuse recorded in the contested decision

159   In assessing the merits of the applicants' plea alleging infringement of the rights of the defence with regard to the documentary
evidence relied upon in support of the second abuse, it must be observed at the outset that the documents upon which the applicants
allege they were not afforded the opportunity to comment, namely the minutes of the meeting of 5 October 1995 of the TACA
directors (PWSC 95/8, the PWSC 95/8 minutes), Hanjin's letter to the TACA of 19 August 1994 (Hanjin's letter of 19 August
1994), the letter from Mr Rakkenes, the Chairman of the TACA and ACL, to Mr Rhee of Hanjin dated 30 January 1996 (the TACA
letter of 30 January 1996) and the TACA briefing paper of 15 February 1996 are reproduced, at least in part, in the section
of the contested decision setting out the facts, at paragraphs 229, 230, 239 and 292, and then in the section containing the
legal assessment in relation to Article 86, at paragraphs 561, 563 and 564.

160   It is apparent from paragraphs 561, 563 and 564 of the contested decision that those documents were used by the Commission
for the purposes of the finding of the second abuse in support of the complaint, at paragraph 562, that the intention of the
TACA parties was ... to ensure that if a potential competitor wished to enter the market it would only do [so] after it had
become a party of the TACA.

161   Thus:

–       - the PWSC 95/8 minutes are cited to show that the immediate access to service contracts was a powerful inducement to Hyundai
to enter the transatlantic trade as a TACA member (paragraphs 230 and 564 of the contested decision);

–       - Hanjin's letter of 19 August 1994 is cited to show that the disclosure of confidential information was a powerful inducement
to Hanjin to enter the transatlantic trade as a TACA party and not as an independent carrier (paragraphs 229 and 563 of the
contested decision);

–       - the TACA letter of 30 January 1996 is cited to show that the TACA intended to help potential competitors to enter the market
as TACA members (paragraphs 292, 561 and 562) and

–       - the TACA briefing paper of 15 February 1996 is cited to show that the TACA's willingness to enable Hanjin to build up a
market share consistent with its slot capacity in the trade reduced the commercial risks inherent in the entry to a new market
and, accordingly, was a factor inducing Hanjin to enter the transatlantic trade as a TACA party (paragraphs 239 and 564 of
the contested decision).

162   According to the case-law, regard for the rights of the defence requires that the undertaking concerned shall have been able
to make known effectively its point of view on the documents relied upon by the Commission in making the findings on which
its decision is based (Joined Cases 43/82 and 63/82 *VBVB and VBBB* v *Commission* [1984] ECR 19, paragraph 25). Consequently, in principle only the documents cited or mentioned in the statement of objections
are admissible evidence as against the addressee of the statement of objections (*AKZO*, cited at paragraph 95 above, paragraph 21; Case T-11/89 *Shell* v *Commission* [1992] ECR II-757, paragraph 55; and Case T-13/89 *ICI* v *Commission* [1992] ECR II-1021, paragraph 34). Moreover, as far as the documents appended to the statement of objections but not mentioned
therein are concerned, they may, according to the case-law, be used in the decision as against the addressee of the statement
of objections only if that person could reasonably infer from the statement of objections the conclusions which the Commission
intended to draw from them (*Shell*, cited above, paragraph 56, and *ICI*, cited above, paragraph 35).

163   In the present case, none of the documents in question is cited or mentioned in the statement of objections dated 24 May 1996,
nor were they appended thereto. The Commission expressly confirmed this to be the case in reply to a question from the Court.

164   Three of the documents in question were disclosed by the applicants in response to requests for information sent by the Commission
after the hearing of 25 October 1996, and, therefore, after the statement of objections. Thus Hanjin's letter of 19 August
1994, the TACA letter of 30 January 1996 and the TACA briefing paper of 15 February 1996 were sent by letter of 24 December
1996 in response to a request for information of 15 November 1996. The TACA letter of 30 January 1996 was also sent subsequently
by letter of 7 February 1997 in response to a request for information of 24 January 1997. Although an extract of the PWSC
95/8 minutes was sent by the applicants by letter of 9 May 1996 in response to a request for information of 8 March 1996,
so that the Commission was in possession of that extract when it issued the statement of objections, it is not in dispute
that a full copy of those minutes was provided by the applicants after that statement was issued, by letter of 4 June 1996
in response to a request for information of 22 May 1996.

165   Whilst there is nothing to prevent the Commission from using new documents which it considers support its argument and which
were obtained after the statement of objections was issued, the Commission must afford the undertakings concerned the opportunity
of making known their views in that respect (*AEG*, cited at paragraph 115 above, paragraph 29; *Buzzi Unicem*, cited at paragraph 115 above, paragraph 65; *Lögstör Rör*, cited at paragraph 115 above, paragraph 168).

166   It is not in dispute that, in the present case, the Commission did not expressly give the applicants the opportunity of making
known their views on the four documents in question before using them in support of its complaints in the contested decision.
In particular, it is not in dispute that the Commission did not inform the applicants of its intention to use those documents
in support of its complaints and, therefore, that it did not inform the applicants of how it intended to use those documents
or request the applicants to provide explanations as to their probative value.

167   As was stated above at paragraph 156, it is true that the statement of objections already set out the complaint that the applicants
induced Hanjin and Hyundai to enter the transatlantic trade as TACA parties rather than as independent undertakings. Paragraphs
109 and 110 of the statement of objections were based in this respect on the slot-chartering agreements entered into by those
two lines with the TACA parties. According to the Commission, those agreements enabled Hanjin and Hyundai to enter the market
without having to face the competition which they would normally have had to face. The applicants were therefore in a position,
in their response to the statement of objections, to reply to the Commission's complaint in that regard.

168   However, to the extent that, following the applicants' explanations in relation to paragraphs 192 to 206 of the statement
of objections, the Commission chose to base this complaint no longer on the slot-chartering arrangements but on three of the
four documents in question, namely the PWSC 95/8 minutes, Hanjin's letter of 19 August 1994 and the TACA briefing paper of
15 February 1996, it should, in principle, have allowed the applicants to comment on the relevance and probative value of
those documents in support of that complaint. Whilst the Commission is perfectly entitled to redraft and supplement its arguments
both of fact and of law in support of the complaints (*Irish Sugar*, cited at paragraph 152 above, paragraph 34), it cannot substitute three sources of evidence for one other, which it withdraws,
without giving the undertakings concerned the opportunity to comment in a situation where, without those new sources of evidence,
the complaint would not be made out.

169   The same is true of the complaint that the TACA induced potential competitors to join the TACA. It is true that that complaint
appeared in the statement of objections, so that the applicants had the opportunity to make known their views in that regard.
However, since the Commission abandoned certain evidence set out in the statement of objections and replaced it with one of
the four documents in question, namely the TACA letter of 30 January 1996, it should, if it intended to rely on that evidence
in support of the complaint, have given the applicants the opportunity to comment on its probative value in support of that
complaint.

170   However, all the documents in question were provided by the applicants themselves and they all consist of written material
generated either by the TACA itself or by the parties thereto, so that the content of those documents must be deemed to have
been known to the applicants.

171   In those circumstances, it is apparent from the case-law that the documents in question must be regarded as evidence which
may not be relied upon as against the applicants unless it is shown that the latter must have known the risk that the Commission
might use the documents as evidence against them (*Shell*, cited at paragraph 162 above, paragraph 59). It is necessary to ascertain in that regard whether the applicants could reasonably
infer the conclusions which the Commission intended to draw from them (see, to that effect, *Shell*, cited above, paragraph 56, and *ICI*, cited at paragraph 162 above, paragraph 35). It is apparent from the case-law that it is not the documents as such which
are important but the conclusions which the Commission drew from them. If certain documents were not mentioned in the statement
of objections, the undertaking concerned was entitled to consider that they were of no importance for the purposes of the
case. By not informing an undertaking that certain documents would be used in the decision, the Commission prevents it from
putting forward at the appropriate time its view of the probative value of such documents (see to that effect *AEG*, cited at paragraph 115 above, paragraph 27, and *AKZO*, cited at paragraph 95 above, paragraph 21).

172   It is true that the Court of First Instance has already held that the rights of the defence are not infringed by the Commission's
failure to disclose to an applicant a document which might contain exculpatory evidence where that document emanates from
that applicant or was manifestly in its possession during the administrative procedure (Joined Cases T-25/95, T-26/95, T-30/95
to T-32/95, T-34/95 to T-39/95, T-42/95 to T-46/95, T-48/95, T-50/95 to T-65/95, T-68/95 to T-71/95, T-87/95, T-88/95, T-103/95
and T-104/95 *Cimenteries CBR and Others* v *Commission* [2000] ECR II-491, paragraph 248). However, that can in no circumstances apply to inculpatory documents. Whilst it is for
the applicants to put forward upon their own initiative any exculpatory document, it is the Commission which bears the burden
of proving infringements and must adduce evidence sufficient to establish the facts constituting the infringement (Case T-43/92
*Dunlop Slazenger* v *Commission* [1994] ECR II-441, paragraph 79).

173   In order to ascertain whether the applicants could reasonably infer the conclusions which the Commission drew from the four
documents in question in the contested decision, it is necessary to take account not only of the content of the statement
of objections but also of subsequent circumstances from which such conclusions could be inferred - in the present case, the
terms of the requests for information which led to the disclosure of the documents in question and the content of those documents.

174   First, as regards the contents of the statement of objections, whilst paragraph 109 thereof alleges that the TACA implemented
certain arrangements enabling, inter alia, Hanjin and Hyundai to enter the market without having to face the competition which
those lines would normally have had to face, paragraph 110 merely states that Hanjin and Hyundai had been able to enter the
market on a slot charter basis. On the other hand, the statement of objections is silent in that regard as to the TACA's having
given Hyundai immediate access to service contracts or disclosed confidential information to Hanjin or as to its being willing
to build up a market share for it compatible with its slot capacity on the trade.

175   In that context it must be held that the statement of objections did not contain any indication that immediate access to service
contracts, the disclosure of confidential information and the willingness to build up a market share compatible with slot
capacity on the trade were capable of amounting to measures which induced Hanjin and Hyundai to join the TACA.

176   Second, as regards the terms of the requests for information which led to the production of the documents in question, in
the case of the PWSC 95/8 minutes, the extract of that document cited at paragraphs 230 and 564 of the contested decision
was disclosed in response to a request for information of 8 March 1996, by which the Commission sought, inter alia, the disclosure
of any document of the TACA or of one of the parties thereto concerning (a) the issue of sharing vessels or space between
TACA parties, on the one hand, and independent, non-conference carriers in the transatlantic trade on the other, (b) Hyundai's
decision to join the TACA ... in order to assist us to assess ... [the] application for individual exemption of the TACA in
its full economic and legal context.

177   The express terms of the request for information in question make it plain that its purpose was to enable the Commission not
to find any infringement of Article 86 of the Treaty but to consider the possibility of granting an individual exemption under
Article 85(3) of the Treaty. It is apparent in that regard from the wording of that request that the question of Hyundai's
joining the TACA was raised in the context of the Commission's assessment of the issue of slot-chartering arrangements between
the TACA parties and the independent shipping lines. It is not in dispute that Hyundai joined the TACA in 1995 on the basis
of such an arrangement. It appears in that context that the disclosure by TACA of information concerning Hyundai's accession
was intended to enable the Commission to assess the internal competition within the TACA, having regard to the requirement,
for the grant of an individual exemption under Article 85(3) of the Treaty, that the agreement in question must not permit
the elimination of competition.

178   It is not in dispute that after the TACA sent its response to that request for information on 9 May 1996 the Commission, by
a request for information of 22 May 1996, requested the TACA, in the light of that reply, to disclose complete copies of the
Minutes of the TACA Principals' Meetings held on 31 August 1995 and 5 October 1995. Given the express reference to the TACA's
reply to the previous request for information, and in the absence of any evidence to the contrary in the request for information
of 22 May 1996, the latter request must have had the same purpose as the former, namely to enable the Commission to assess
the internal competition within the TACA in the context of considering the conditions for granting an individual exemption
laid down by Article 85(3) of the Treaty.

179   In those circumstances, it is not apparent from the wording of the requests for information which led to the disclosure of
the PWSC 95/8 minutes that the Commission intended to use that document in support of the complaint that the TACA parties
had infringed Article 86 of the Treaty, inter alia by inducing Hyundai to join the TACA. A fortiori it is not apparent from
the wording of the requests for information in question that the Commission intended to use the document in question to support
the finding that the TACA's giving Hyundai immediate access to service contracts served as an inducement to that shipping
line to join the TACA.

180   Next, Hanjin's letter of 19 August 1994, the TACA letter of 30 January 1996 and the TACA briefing paper of 15 February 1996
were disclosed to the Commission in response to a request for information of 15 November 1996, by which the Commission sought
the disclosure of any agreement between the TACA parties on Hanjin's accession to the TACA, and any document relating to independent
action, TVRs, individual service contracts and other service contracts concluded by Hanjin in order to assist us to assess
... [the] application for individual exemption of the TACA in its full economic and legal context and in particular to assist
us in our examination of your client's reply to the statement of objections (in particular paragraphs 195 to 200 and 216 to
217).

181   It is thus apparent, again from the express terms of the request for information in question, that its purpose was to enable
the Commission not to find any infringement of Article 86 of the Treaty but to consider the possibility of granting an individual
exemption under Article 85(3) of the Treaty. At paragraphs 195 to 200, 216 and 217 of their response to the statement of objections,
to which the request for information referred in stating its purpose, the TACA parties presented the Commission with certain
evidence intended to show that Hanjin's entry to the transatlantic trade increased internal price competition within the TACA,
given Hanjin's initiatives in relation to independent action, TVRs and individual service contracts. It is apparent from paragraphs
192 to 194 of the response to the statement of objections and from the title of that part of the response, Price competition
within vessel sharing agreements (VSAs), that the TACA parties sought by that evidence, by reference in particular to Hanjin's
situation on the trade in question, to rebut the Commission's argument at paragraphs 106, 235 and 238 of the statement of
objections that the slot-chartering arrangements entered into between the TACA parties and the independent shipping lines,
in particular the one to which Hanjin was a party, had the effect of restricting price competition between the parties to
such agreements and therefore between the conference members. At paragraphs 235 to 238 of the statement of objections the
Commission considers whether the conditions for the withdrawal of block exemption laid down by Article 7 of Regulation No
4056/86, where the effects of an exempted conference are incompatible with Article 85(3) of the Treaty, in particular the
lack of potential external competition, are met in the present case. It appears in that context that by asking the TACA parties
to disclose to it any agreement entered into between them concerning the accession of Hanjin and any document concerning price
initiatives by Hanjin, the Commission's request for information sought to ascertain whether the TACA continued to qualify
for block exemption under Regulation No 4056/86 and/or individual exemption, having regard in particular to the requirement
in Article 85(3) of the Treaty that competition not be eliminated.

182   It is not in dispute that the TACA letter of 30 January 1996 was also disclosed in response to a request for information of
24 January 1997. According to the wording of that request, the Commission sought in the light of the TACA letter of 30 January
1996 previously disclosed to obtain copies of the correspondence between Mr Rhee and Mr Rakkenes concerning the TACA's pricing
practices and the correspondence between Mr Rakkenes and the TACA or its members or any other document relating to pricing
malpractices which were the subject of the letter in question, in order to assess the TACA's response to the statement of
objections and, in particular, their comments concerning the degree of internal competition within the TACA. It is therefore
apparent from the express wording of that request that, in common with the request of 15 November 1996, its sole purpose was
to enable the Commission to assess whether the TACA qualified for individual exemption under Article 85(3) of the Treaty and,
in particular, whether the requirement under Article 85(3) of the Treaty that competition not be eliminated was met.

183   In those circumstances, it must be held that it is not apparent from the wording of the requests for information which led
to the disclosure of Hanjin's letter of 19 August 1994, the TACA letter of 30 January 1996 and the TACA briefing note of 15
February 1996 that the Commission intended to use those documents in support of the complaint that the TACA parties had infringed
Article 86 of the Treaty, in the case of the first and the third of those documents, by inducing Hanjin to join the TACA,
and in the case of the second of those documents, by inducing potential competitors to join the TACA. A fortiori it is not
apparent from the wording of the requests for information in question that the Commission intended to use those documents
to support the finding, first, that the disclosure of confidential information and the willingness to build up a market share
compatible with slot capacity on the trade were measures which induced Hanjin to join the TACA and, second, that the TACA
had always intended to help potential competitors to enter the market as TACA members.

184   Third and finally, with regard to the content of the documents in question, for the reasons set out below at paragraphs 1279
to 1304 and 1311 to 1326, on the assessment of the merits of the pleas relating to the allegation of abuse of a dominant position,
the conclusions which the Commission drew from those documents in the contested decision are not made out to the requisite
legal standard by that content.

185   Clearly the applicants cannot be criticised for not having been able to draw from the content of the documents which they
disclosed to the Commission conclusions which prove to be erroneous.

186   It follows from all the foregoing that neither the content of the statement of objections nor the terms of the requests for
information which led to the production of the documents in question nor the content thereof enabled the applicants reasonably
to infer the conclusions which the Commission drew from them to the detriment of the applicants in the contested decision.

187   In those circumstances it must be held that by relying on the four documents in question in support of the second abuse alleged
against the applicants in the contested decision the Commission infringed the rights of the defence. Therefore those documents
must be excluded as inculpatory evidence.

188   However, it is apparent from the case-law that, far from entailing the annulment of the entire decision, the exclusion of
those documents is significant only if the objection made by the Commission in that respect could be proved only by reference
to those documents (Case T-37/91 *ICI* v *Commission* [1995] ECR II-1901, paragraph 71, and *Cimenteries CBR*, cited at paragraph 172 above, paragraph 364). That question falls within the assessment of the pleas concerning the merits
of the Commission's findings in support of the allegation of abuse of a dominant position arising from the alteration of the
structure of the market, which will be considered in the context of the third group of pleas concerning the allegation of
infringement of Article 86 of the Treaty.

2. The purportedly new allegations of fact or law other than those relating to the second abuse

189   The applicants also allege that the Commission based allegations other than those relating to the second abuse on points of
fact or law upon which they were not given the opportunity to comment.

190   They submit, first, in that regard that the contested decision contains new allegations concerning the lawfulness of joint
service contracts, the fact that the TACA parties held a collective position and the fact that that position was a dominant
one. Next, at the hearing, they submitted in response to a question from the Court on that point that the contested decision
contains new allegations which arise from evidence disclosed in response to certain requests for information after the statement
of objections was issued.

a) Preliminary observations

191   According to the case-law, the decision is not necessarily required to be an exact replica of the statement of objections
(*Van Landewyck*, cited at paragraph 152 above, paragraph 68). The Commission must be permitted in its decision to take account of the responses
of the undertakings concerned to the statement of objections. It must be able not only to accept or reject the arguments of
the undertakings concerned, but also to carry out its own assessment of the facts put forward by those undertakings in order
either to abandon such complaints as have been shown to be unfounded or to supplement and redraft its arguments, both in fact
and in law, in support of the complaints which it maintains (*ACF Chemiefarma*, cited at paragraph 113 above, paragraph 92; Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 113/73 and 114/73
*Suiker Unie and Others* v *Commission* [1975] ECR 1663, paragraphs 437 and 438; and *Irish Sugar*, cited at paragraph 152 above, paragraphs 34 and 36). Thus it is only if the final decision alleges that the undertakings
concerned have committed infringements other than those referred to in the statement of objections or takes into consideration
different facts that there will be an infringement of the rights of the defence (*ACF Chemiefarma*, cited at paragraph 113 above, paragraphs 26 and 94; and *CB and Europay*, cited at paragraph 138 above, paragraphs 49 to 52). That is not the case where the alleged differences between the statement
of objections and the final decision do not concern any conduct other than that in respect of which the undertakings concerned
had already submitted observations and are therefore unrelated to any new complaint (Joined Cases T-305/94 to T-307/94, T-313/94
to T-316/94, T-318/94, T-325/94, T-328/94, T-329/94 and T-335/94 *Limburgse Vinyl Maatschappij and Others* v *Commission* (*PVC II*), [1999] ECR II-931, paragraph 103).

192   In asserting that there was an infringement of the rights of the defence with regard to the complaints made in the contested
decision, it is not sufficient for the undertakings concerned to point to the mere existence of differences between the statement
of objections and the contested decision without explaining precisely and specifically why each of those differences constitutes,
in the circumstances, a new complaint upon which they were not given the opportunity to comment (see, to that effect, *Irish Sugar*, cited at paragraph 152 above, paragraph 33). According to the case-law, an infringement of the rights of the defence must
be examined in relation to the specific circumstances of each particular case, since it depends essentially on the objections
raised by the Commission in order to prove the infringement which the undertakings concerned are alleged to have committed
(Case T-36/91 *ICI* v *Commission* [1995] ECR II-1847, paragraph 70).

193   Furthermore, in order to determine whether the differences alleged are new complaints upon which the undertakings concerned
should have been given the opportunity to comment, it is necessary to distinguish between differences which directly affect
the legal assessments set out in the contested decision and those which affect the presentation of the facts therein.

194   In the first case, according to the case-law cited above, an infringement of the right to be heard can only be made out if
the alleged differences between the statement of objections and the contested decision show that the latter contains allegations
of fact or law which did not already appear in the statement of objections. On the other hand, if it is apparent from an examination
of the statement of objections that the supposed new allegations of fact or law are in fact merely the restatement, redrafting
or development, as the case may be, of a point already made in the statement of objections so as to respond to the observations
of the undertakings concerned in their response to the statement of objections, there is no infringement of the right to be
heard (*ACF Chemiefarma*, cited at paragraph 113 above, paragraph 92, *Suiker Unie*, cited at paragraph 191 above, paragraphs 437 and 438, and *Irish Sugar*, cited at paragraph 152 above, paragraphs 34 and 36).

195   In the second case, mere differences in the presentation of the facts between the statement of objections and the contested
decision do not in principle show that the undertakings concerned have not had an opportunity to comment on the complaints
made against them unless in the course of its legal assessment the Commission refers to them expressly, or even impliedly
but obviously, in such a way that the factual matters in question may be regarded as the necessary basis for the legal assessment.
The evidence mentioned in the contested decision in order to describe a fact or conduct but not used subsequently in order
to make a finding of an infringement cannot be regarded as incriminating evidence against the undertakings in question (*Cimenteries CBR*, cited at paragraph 172 above, paragraph 387).

196   Finally, in any event, even if the decision contains new allegations of fact or law on which the undertakings concerned have
not been given the opportunity to comment, the defect will only entail the annulment of the decision in that respect if the
allegations concerned cannot be substantiated to the requisite legal standard on the basis of other evidence in the decision
on which the undertakings concerned were given the opportunity to comment (Case T-86/95 *Compagnie générale maritime and Others* v *Commission* (*FEFC*) [2002] ECR II-1011, paragraph 447).

197   It is in the light of those principles that the applicants' arguments should be considered.

b) The new allegations of fact or law concerning the lawfulness of joint service contracts, the fact that the TACA parties
held a collective position and the fact that that position was a dominant one

1.     Arguments of the parties

198   The applicants criticise the Commission for having based certain allegations in the contested decision on matters of fact
or of law upon which they did not have an opportunity to comment. The allegations concern the compatibility of conference
service contracts with Regulation No 4056/86 and Article 85(1) and (3) of the Treaty, the possibility of considering the applicants'
position collectively and the actual holding of a collective dominant position by the applicants.

199   According to the applicants, the contested decision contains new findings of fact with regard to those allegations, including
new construction of, or inferences from, facts and new findings of law which do not appear in the statement of objections.

200   The Commission points out that, according to the case-law, the final decision need not be a copy of the statement of objections
(*Van Landewyck*, cited at paragraph 152 above, paragraph 68). Consequently, it contends that the Court should reject the applicants' argument
on this point.

2.     Findings of the Court

201   It should be noted as a preliminary point that in order to challenge the contested decision the applicants merely list in
their applications the paragraphs of the contested decision which, in their view, were not already set out in the statement
of objections, before going on to claim that they were not afforded the opportunity to comment on the assessments or findings
made in those paragraphs.

202   It is plain that in so doing the applicants have failed to state why, in the light of the specific circumstances of the present
case, the alleged differences between the contested decision and the statement of objections constitute new complaints, with
the result that the rights of the defence were infringed. At most the listing in the application shows that the contested
decision is not an exact replica of the statement of objections as regards the aspects of that decision in issue. According
to the case-law, the contested decision need not necessarily be an exact replica of the statement of objections as the Commission
can change its argument in support of the complaints. Therefore, in order to prove an infringement of the rights of the defence,
as stated at paragraph 192 above, the burden is on the applicants to explain specifically how the assessments and findings
in the contested decision in this case adversely affected them. In the absence of such explanations the Court can make no
finding of infringement of the rights of the defence.

203   Even though this ground suffices for the applicants' arguments alleging that the Commission made new assessments or findings
in the contested decision to be rejected, it must also be observed that in any event the examination of the differences alleged
by the applicants does not reveal any infringement of the rights of the defence.

(i) The allegations concerning the lawfulness of joint service contracts

204   The applicants claim that several findings in the contested decision relating to joint service contracts are based on points
of fact not referred to in the statement of objections.

205   First, in relation to the application of Regulation No 4056/86 to joint service contracts, the applicants submit first that
the differences between the tariff and contractual arrangements set out at paragraphs 104 to 108 of the contested decision
do not appear in the statement of objections.

206   Contrary to the applicants' submissions, however, two of the alleged differences, namely the right of members of an exempted
conference under US law to take independent action on tariff rates (paragraph 104 of the contested decision) and the fact
that in the case of contractual arrangements, unlike in tariff arrangements, the price is not set out in the tariff (paragraph
108), already appeared in the statement of objections in footnote 3 at paragraph 12, and in paragraphs 64 and 58. On these
points therefore the applicants' complaints have no factual basis.

207   It follows that the only new point in the contested decision upon which the applicants were given no opportunity to comment
is the finding, at paragraph 106, that carriers operating under tariff arrangements are expected to hold themselves out to
the public as common carriers.

208   Paragraph 106, like the other paragraphs in question, appears solely in the section of the contested decision setting out
the facts and is purely descriptive. Furthermore, that paragraph does not, any more than the other paragraphs in question,
form the necessary basis for the finding at paragraphs 454 to 462 of the contested decision that, in contrast to the tariff,
joint service contracts do not fall within the meaning of uniform or common freight rates for the purposes of Article 1(3)(b)
of Regulation No 4056/86 and, therefore, do not qualify for block exemption under Article 3 of that regulation. That latter
finding is not based on differences between the tariff and contractual arrangements set out at paragraphs 104 to 108 of the
contested decision but on other points which were set out in paragraphs 206 to 208 of the statement of objections.

209   Next, the applicants allege that the analysis of loyalty arrangements set out in paragraphs 113 to 119 of the contested decision
is new in several respects when compared with the statement of objections.

210   Contrary to the applicants' submissions, however, two of the four points set out in paragraphs 113 to 119 of the contested
decision, namely, first, the fact that the definition of a service contract used by the US Shipping Act does not extend to
contracts for a percentage or portion of a shipper's cargo (paragraph 113 of the contested decision) and, second, the fact
that loyalty arrangements are specifically referred to in Article 5(2) of Regulation No 4056/86 (paragraph 114 of the contested
decision), were already set out in the statement of objections in footnote 15 at paragraph 60 and in paragraph 211. On these
points therefore the applicants' complaints have no factual basis.

211   Furthermore, a third point made in this part of the contested decision, namely the fact that the Code of the United Nations
Conference on Trade and Development (Unctad) recognises no form of contract between shippers and conferences other than loyalty
contracts (paragraph 115 of the contested decision) was developed so as to take account of the arguments put forward by the
applicants at paragraphs 281 to 283 of the response to the statement of objections.

212   It follows that the only new point in the contested decision upon which the applicants were given no opportunity to comment
is the finding at paragraph 116 of the contested decision that there are three types of loyalty arrangement and the description
of each of them at paragraphs 117 to 119.

213   Like the other paragraphs in question, those paragraphs appear in the section of the contested decision setting out the facts
and are purely descriptive. Furthermore, those paragraphs do not form the necessary basis for the finding, at paragraph 463
of the contested decision, that, in contrast to loyalty contracts, service contracts do not qualify for block exemption under
Article 3 of Regulation No 4056/86. That finding is based not on the points referred to in paragraphs 116 to 119 but on other
points which were already set out in paragraph 211 of the statement of objections which was essentially reproduced in paragraph
463 of the contested decision.

214   Second, as regards the application of Article 85 of the Treaty to joint service contracts, the applicants consider, first,
that the finding at paragraph 443 of the contested decision that, essentially, joint service contracts may restrict competition
where there is an express or implied agreement not to enter into individual service contracts is a new complaint.

215   However, paragraph 202 of the statement of objections states that the TACA's prohibition of individual service contracts is
contrary to Article 85(1) of the Treaty. Furthermore, paragraphs 200 and 201 of the statement of objections state that joint
service contracts of the kind entered into by the TACA parties also fall within that provision. Paragraph 82 of the statement
of objections states that the TACA prohibited individual service contracts in 1994 and 1995. In the light of those statements
in the statement of objections, the applicants were perfectly able to understand the complaint alleged against them on that
point.

216   In any event, in so far as the applicants complain that the Commission based its assessments in the contested decision on
reasoning which does not appear in the statement of objections, it suffices to point out that such reasoning does not form
part of any new complaint since it does not refer to conduct other than that upon which the undertakings had already commented.

217   Next, the applicants submit that the application of Article 85(1) of the Treaty to joint service contracts of the kind they
entered into is based on two allegations of fact made for the first time at paragraph 444 of the contested decision, namely,
first, the proportion of individual service contracts entered into by former members of the TAA's Contract Committee and,
second, the large number of slot-chartering arrangements.

218   It is clear, however, that the sole purpose of those allegations of fact is to support the conclusion at paragraph 443 that
joint service contracts may restrict competition where there is an express or implied agreement not to enter into individual
service contracts. It has been held at paragraph 215 above that, in the light of the statements at paragraphs 200 to 202 of
the statement of objections, the applicants were perfectly able to understand the complaint alleged against them on that point.
Consequently the fact that the applicants were not given the opportunity to comment on the factual allegations set out in
paragraph 444 does not undermine the conclusion in paragraph 443 that those allegations were intended to support.

219   Finally, the applicants allege that the finding, at paragraphs 500 and 501 of the contested decision, that the prohibition
of independent action on service contracts does not satisfy the requirements of Article 85(3) of the Treaty is new.

220   However, paragraph 203 of the statement of objections expressly states that that prohibition is not authorised by Regulation
No 4056/86, so that, in the absence of individual exemption, it is prohibited by Article 85(1) of the Treaty. That paragraph
of the statement of objections is the exact equivalent of paragraph 449 of the contested decision. Whilst it is true that
the statement of objections does not address the grant of an individual exemption in favour of that prohibition, it is for
the applicants to adduce the evidence to justify the grant of an individual exemption under Article 85(3) of the Treaty (see,
inter alia, *VBVB and VBBB*, cited at paragraph 162 above, paragraph 52).

221   Consequently, since the statement of objections expressly referred to the fact that the prohibition of independent action
restricted competition within the meaning of Article 85(1) of the EC Treaty, the applicants were able to understand the nature
of the complaints made against them by the Commission and therefore the burden was on them to adduce evidence in their response
to the statement of objections proving that that prohibition did qualify for individual exemption under Article 85(3) of the
EC Treaty.

222   It follows from the foregoing that the applicants' complaints alleging infringement of the rights of the defence with regard
to the allegations concerning the lawfulness of joint service contracts must be rejected in their entirety.

(ii) The allegations that the TACA parties held a collective position

223   The applicants submit that in finding that there was a collective dominant position, the Commission relies on several points
demonstrating the absence of internal competition which were not referred to in the statement of objections.

224   First, the applicants point out that the contested decision contains fresh allegations when compared with the statement of
objections in that it describes the NVOCCs (paragraphs 158 to 161), finds that the US Shipping Act requires the TACA parties
to publish their tariffs (paragraphs 174 to 176), states that TVRs are discounts on the tariff (paragraph 120) and asserts
that there is no independent action on service contracts (paragraph 131).

225   It should be noted in that regard that those paragraphs of the contested decision appear in the section of the contested decision
setting out the facts and are purely descriptive.

226   Furthermore, as to whether those paragraphs are the necessary basis for the legal assessments concerning the collective nature
of the dominant position held by the TACA parties it should be noted that, as will be set out in more detail in the course
of examining the pleas concerning the application of Article 86 of the Treaty, at paragraphs 521 to 531 of the contested decision
the Commission considered that the position of the TACA parties should be assessed collectively on the basis of five factors,
namely the TACA tariff (paragraph 526), the enforcement provisions adopted by the TACA (paragraph 527), the annual business
plan published by the TACA (paragraphs 528 and 530), the TACA secretariat (paragraphs 528 and 529) and the consortia arrangements
linking certain TACA parties (paragraph 531).

227   It follows that, of the points put forward by the applicants, only the fact that US law requires the publication of the tariff
contributes to the necessary basis for the legal assessment in that, according to that assessment, the Commission relies on
the tariff as being an economic link between the TACA parties. On the other hand, it is clear that the other factors put forward
by the applicants are purely descriptive and form no part of the economic links referred to in paragraphs 521 to 531 of the
contested decision.

228   On the question of the tariff, the Commission had already stated at paragraph 318 of the statement of objections that the
enforcement provisions adopted by the TACA were intended to eliminate price competition between the parties to the conference,
referring in this regard to paragraphs 16 and 17 of the statement of objections, in which it pointed out that the enforcement
provisions adopted by the TACA enabled it, inter alia, to impose substantial fines on its members for infringement of the
collective price-fixing arrangements. In those circumstances, the applicants were perfectly able to understand the extent
of the complaint made against them in this regard.

229   Accordingly, this complaint must be rejected.

230   Second, the applicants claim that the contested decision contains fresh allegations at paragraphs 177 and 178 concerning the
enforcement provisions adopted by the TACA.

231   It is true that paragraph 527 of the contested decision refers to enforcement provisions for the purposes of the finding of
a collective dominant position. However, as stated above, that point is expressly mentioned as an economic link between the
TACA parties at paragraph 318 of the statement of objections and is the subject of a detailed description at paragraphs 16
and 17 of the statement of objections.

232   The applicants' arguments on that point must therefore be rejected.

233   Third, the applicants claim that the contested decision contains fresh allegations at paragraphs 181 to 198 concerning restrictive
agreements affecting the transatlantic trade, namely the consortia arrangements.

234   It is true that consortia arrangements are referred to at paragraph 531 of the contested decision for the purposes of the
finding of a collective dominant position. However, those arrangements are expressly referred to as economic links between
the TACA parties at paragraph 322 of the statement of objections and are the subject of a detailed description at paragraphs
94 to 106 of the statement of objections.

235   Furthermore, in so far as the applicants allege that the Commission referred in the contested decision to more arrangements
of that type at paragraphs 182, 188 (Table 4), 190 and 191, or identified, at paragraphs 181, 192, 194, 220 (Table 5) and
221, additional effects on internal competition not mentioned in the statement of objections, the applicants' criticisms are
irrelevant. Since the statement of objections expressly states that consortia arrangements reinforce the economic links between
the TACA parties, the applicants were perfectly able to understand the scope of the complaint made against them by the Commission.
Thus, at paragraphs 192 to 196 of their response to the statement of objections, the TACA parties put forward various arguments
to show that the consortia arrangements do not restrict internal competition. In those circumstances, the applicants cannot
submit that the statement of complaints was not sufficiently clear on that point.

236   Moreover, it is not true to say that, in the contested decision, the Commission identified additional restrictive effects
caused by the consortia arrangements entered into by the TACA parties.

237   Thus, first, at paragraph 181 of the contested decision the Commission states in general terms that consortia arrangements
are likely to reduce competitive pressure within the TACA. The same idea is set out not only in the title itself of the relevant
section of the statement of objections (VII. Other restrictive arrangements affecting the Trans-Atlantic Trade), but also
in paragraph 101 which states that those arrangements contribute to coordination and discipline between their parties. The
same finding also appears at paragraph 226 of the statement of objections.

238   Next, at paragraph 193 of the contested decision the Commission states: thus the effect of these agreements has been to restrict
intra-TACA competition, particularly by their achievement of curtailment of independent action. The same conclusion appears
at paragraph 101 of the statement of objections.

239   Furthermore, at paragraphs 220 and 221 of the contested decision, the Commission compares the transatlantic trade with other
trades to demonstrate how little independent action there is on the former. Paragraph 101 and footnote 69 at paragraph 224
of the statement of objections had already made such a comparison and it is in response to the applicants' arguments in paragraphs
168 to 191 of their response to the statement of objections that the examples cited in the statement of objections were developed
in the contested decision.

240   Lastly, at paragraphs 193 and 194 of the contested decision, the Commission notes that consortia arrangements, because of
the extensive use of space on other TACA parties' vessels, have the effect of restricting non-price competition between the
TACA parties. The same idea is expressed at paragraphs 102 and 103 of the statement of objections.

241   In any event, paragraphs 526 to 530 refer to other links between the TACA parties, on which they stated their views, which
already establish to the requisite legal standard, for reasons which will be set out in the course of considering the first
part of the pleas relating to the application of Article 86 of the Treaty, that the TACA parties must be considered collectively
for the purposes of applying Article 86 of the Treaty.

242   In those circumstances, the applicants' arguments alleging infringement of the rights of the defence on that point must be
rejected.

243   Fourth, the applicants allege that the contested decision states for the first time, at paragraphs 214 to 219, that independent
action is not proof of internal competition.

244   However, the statement of objections expressly states at paragraph 223 that the reduction in the notice time before independent
action can be taken is unlikely to have a significant effect on internal competition. Furthermore, paragraph 224 of the statement
of objections notes that there was no significant independent action on the trade in question in 1994 and 1995. Lastly, if
the Commission developed that point further in the contested decision it was in response to the information supplied by the
TACA parties at paragraphs 168 to 191 of the response to the statement of objections in order to prove that independent action
demonstrates the existence of significant internal competition.

245   The applicants' arguments on that point must therefore be rejected.

246   Fifth and finally, the applicants submit that the Commission relies on two items of evidence, namely a letter from POL to
Hanjin of 28 December 1995 and the TACA briefing paper of 15 February 1996, which are not referred to in the statement of
objections.

247   The contents of the letter from POL to Hanjin are reproduced in part at paragraph 180 of the contested decision in the section
setting out the facts in order to illustrate the spirit of cooperation within TACA. As for the TACA briefing paper of 15 February
1996, the applicants allege in the context of the present pleas that the Commission did not afford them the opportunity to
comment on the part of that paper cited at paragraph 129 of the contested decision, which states that independent action is
a tool of last resort.

248   Whilst those documents are not expressly relied upon by the Commission in support of its legal assessment in paragraphs 521
to 531 of the contested decision for the purposes of concluding that there was a collective dominant position, they are capable
of supporting the finding, at paragraph 528, that the tariff and the enforcement provisions adopted by the TACA had the purpose
of substantially eliminating price competition between the TACA parties.

249   However, it is apparent from the contested decision that that finding is also based upon many other factors, in particular
those set out at paragraphs 199 to 222, upon which the applicants did comment. For the reasons set out below at paragraphs
697 to 712, those factors suffice to show that the tariff and the enforcement provisions adopted by the TACA had the purpose
of substantially eliminating price competition between the TACA parties.

250   Therefore, the applicants' arguments on that point must be rejected.

(iii) The allegations concerning the dominant nature of the TACA parties' position

251   First, the applicants submit that the correspondence cited at paragraph 271 and the conclusions drawn from it at paragraphs
271 and 273 of the contested decision were not referred to in the statement of objections.

252   At paragraphs 265 to 273 of the contested decision the Commission examines the actual external competition from operators
of shipping lines transporting containerised cargo originating in or destined for the American mid-west to or from northern
Europe via Canadian ports (the Canadian Gateway). At paragraph 271 of the contested decision, the Commission reproduces extracts
of correspondence from the Canadian conference secretariat to members of the Joint Inland Committee of those conferences which,
in its view, demonstrates in particular that the members of the Canadian conferences had detailed knowledge of the pricing
practices of the TACA parties. At paragraph 273 of the contested decision the Commission concludes that for the reasons set
out in the preceding paragraphs, the market share of the TACA parties for services provided through the Canadian Gateway should
be aggregated with the market share of the TACA parties for direct services and not treated as a distinct competitor.

253   It is true, as the applicants claim, that the statement of objections does not refer to the extracts of the correspondence
cited at paragraph 271 of the contested decision.

254   In so far as the market share of the TACA parties for cargo passing through the Canadian Gateway was taken into account in
determining the applicants' share of the relevant market, paragraphs 271 to 273 of the contested decision constitute the necessary
basis for the legal assessment, at paragraph 533, that the market share of the TACA parties during the relevant period gives
rise to a strong presumption of a dominant position.

255   However, at paragraph 50 of the statement of objections, the Commission had already clearly stated that:

In the TAA decision, the Commission found that containerised cargo travelling between the United States and Northern Europe
via Canadian ports (the Canadian Gateway) formed part of the same market as the direct trade. The Commission continues to
hold that view.

256   Furthermore, at paragraphs 51 to 55 of the statement of objections, the Commission sets out the reasons in support of that
position.

257   Next, in response to those allegations in the statement of objections, the applicants submitted at paragraphs 15 to 17 of
their response to the statement of objections that the competition faced by the TACA members' direct trade services from their
transport services via the Canadian Gateway was demonstrated by the price data for the two types of transport and by a shipper's
invitation to tender.

258   In those circumstances, the applicants were perfectly able upon notification of the statement of objections to understand
the scope of the Commission's complaint in relation to the actual external competition from cargo passing via the Canadian
Gateway since the extracts of the correspondence cited at paragraph 271 of the contested decision were intended solely to
support the Commission's position following the applicants' criticisms in their response to the statement of objections.

259   Therefore, the applicants' arguments on that point must be rejected.

260   Second, the applicants allege that paragraphs 207 to 213 of the contested decision contain fresh allegations concerning the
TACA's discriminatory pricing practices.

261   The assessments set out in paragraphs 207 to 213 of the contested decision clearly constitute the necessary basis for the
legal assessment that the TACA parties held a dominant position. At paragraph 534 of the contested decision, the Commission
considered that the presumption of a dominant position arising from the TACA parties' market share was confirmed by the fact
that those parties succeeded in maintaining a discriminatory price structure.

262   However, that assessment appears in full at paragraph 326 of the statement of objections.

263   In any event, paragraphs 207 to 213 of the contested decision, far from containing fresh allegations, merely clarify the extent
to which the applicants are able to discriminate on price, in particular having regard to their submissions at the hearing
before the Commission. This is so at paragraphs 209 and 210 of the contested decision, which are based on the comments of
Mr Jeffries, the TACA General Manager, in response to a question from the Commission at that hearing.

264   In those circumstances, the applicants cannot maintain that the Commission infringed the rights of the defence on that point.

265   Third, and finally, the applicants allege that the Commission relied, at paragraphs 324 to 328 of the contested decision,
on a fresh analysis of the TACA's prices in concluding, for the purposes of Article 86 of the Treaty, that the TACA was able
regularly to increase prices between 1994 and 1996.

266   The assessments set out in paragraphs 224 to 328 of the contested decision constitute the necessary basis for the legal assessment
that the TACA parties held a dominant position. At paragraph 543 of the contested decision, the Commission considered that
the ability of the TACA parties to impose price increases was one factor demonstrating the existence of a dominant position.

267   Paragraphs 118 and 119 of the statement of objections had already stated, on the basis of the data provided by the ESC, that
the TACA had increased prices significantly between 1993 and 1995. It is true that that factor is not set out as such in the
statement of objections as evidence of the existence of a dominant position but appears in the section of that statement setting
out the facts to describe the effects of the TACA. However, paragraph 243 of the statement of objections expressly states,
in the course of examining the possible withdrawal of the block exemption pursuant to Article 7 of Regulation No 4056/86,
that the fact that the TACA was able to maintain its market share between 1994 and 1996 in spite of significantly increasing
prices suggests that the actual external competition was limited. Furthermore, in their response to the statement of objections,
the TACA parties set out, at paragraphs 224 to 245 of that response, detailed figures showing the TACA prices for the period
from 1994 to 1996.

268   In those circumstances, the applicants were perfectly able to understand the scope of the Commission's complaints on that
point since the price analysis in the decision is a direct response to the allegations they made during the administrative
procedure.

269   Therefore, the Commission did not infringe the rights of the defence on that point.

270   Examination of the alleged differences between the contested decision and the statement of objections thus reveals that the
contested decision does not contain any new complaints and is not based on any new points upon which the applicants were not
given the opportunity to comment in the response to the statement of objections. Consequently, the applicants' arguments on
that point must be rejected in their entirety.

c) The new allegations of fact and law arising from the applicants' responses to certain requests for information after the
statement of objections was issued

1.     Arguments of the parties

271   The applicants observe that whilst some of the requests for further information after the statement of objections was issued
concerned matters covered by the statement of objections, others concerned entirely new matters. That is so in the case of
the requests for information sent during the period for responding to the statement of objections and those sent after the
response had been made.

272   Save for the statement of objections adopted on 11 April 1997, which was concerned solely with the notification of the hub
and spoke system, the Commission adopted no supplementary statement of objections and provided them with no opportunity to
comment on the probative value of the information given to, or on the conclusions drawn from it by, the Commission (*Sarrió*, cited at paragraph 95 above, paragraphs 36 and 41). The applicants maintain that requests for information can never properly
take the place of the adoption of a statement of objections.

273   Consequently, the applicants assert that the rights of the defence were infringed on that point.

274   The Commission submits that the contested decision is not based on any information or document provided by the applicants
in reply to the requests for information in question. The Court should therefore reject the applicants' arguments on that
point.

2.     Findings of the Court

275   By the present argument, the applicants allege that after the statement of objections was issued the Commission sent them
requests for information raising new questions not covered by that statement and that it relied on information supplied in
response to those requests to adduce new documentary evidence and to make new allegations against them in the contested decision.

(i) The admissibility of the plea

276   The present argument appears in the part of the application in which the applicants allege that the Commission sent them the
statement of objections prematurely. It has already been stated at paragraph 122 above that, contrary to the applicants' argument,
the fact that certain requests for information raised new questions and that the information provided in response thereto
was used in the contested decision, even if that were established, in no way demonstrates that the statement of objections
is unlawful.

277   However, it is apparent from the terms of the application on that point that the applicants also allege that the Commission
infringed the rights of the defence by using in the contested decision documents and information disclosed in response to
requests for information after the statement of objections was issued which raise new questions, without having given them
the opportunity to comment on the probative value of those documents and that information. After listing and describing the
contents of the requests for information sent after the statement of objections was issued and comparing the latter with certain
paragraphs of the contested decision, the applicants stress not only that some of the requests for information listed raise
new questions not covered by the statement of objections, but also that save for the statement of objections adopted on 11
April 1997, which was concerned solely with the notified hub and spoke system, the Commission adopted no supplementary or
revised statement of objections and provided the applicants with no opportunity to comment on the probative value of the information
provided to, or on the conclusions drawn from it, by the Commission.

278   In so far as that plea refers at least in part to the requests for information which gave rise to the applicants' disclosure
of the four documents referred to at paragraph 159 above, it coincides with the pleas alleging infringement of the rights
of the defence with regard to the allegedly new matters of fact or law relating to the second abuse which must be upheld for
the reasons set out at paragraphs 163 to 187 above.

279   For present purposes, it is therefore necessary to consider that plea only in so far as it seeks a declaration that the rights
of the defence were infringed in the case of information other than those four documents, disclosed in response to the requests
for information in question.

280   In reply to a question from the Court seeking clarification of their application on this point, the applicants stated at the
hearing that the purpose of this argument was thus not only to support the plea alleging that the statement of objections
was premature, but also to raise a separate plea alleging infringement of the right to be heard on certain evidence disclosed
in response to requests for information which the applicants claim was used by the Commission in the contested decision.

281   Under the first paragraph of Article 21 of the Statute of the Court of Justice, applicable to proceedings before the Court
of First Instance by virtue of the first paragraph of Article 53 thereof, and under Article 44(1)(c) and (d) of the Rules
of Procedure of the Court of First Instance, the application must contain, amongst other things, the subject-matter of the
dispute, the forms of order sought and a brief statement of the pleas. Those particulars must be sufficiently clear and precise
to enable the defendant to prepare the defence, and the Court of First Instance to rule on the application without further
information, as the case may be. In order to guarantee respect for the adversarial system, legal certainty and sound administration
of justice it is necessary, for an action to be admissible, that the basic matters of law and fact relied on be indicated,
at least in summary form, coherently and intelligibly in the application itself (order in Case T-85/92 *de Hoe* v *Commission* [1993] ECR II-523, paragraph 20; judgment in Case T-277/97 *Ismeri Europa* v *Court of Auditors* [1999] ECR II-1825, paragraph 29; and the order of 12 March 2003 in Case T-382/02 *Partido Latinoamericano* v *Council*, not published in the ECR, paragraph 6).

282   As a preliminary point it should be noted that, in the present case, the four applications lodged by the applicants and the
annexes thereto are unusually voluminous. Whilst there is as yet no restriction on the length of the pleadings or on the number
of documents which may be lodged by applicants in support of an action for annulment under Article 173 of the Treaty, the
burden is nevertheless upon applicants, having regard in particular to the formal requirements set out above, to confine their
application to a reasonable length and, in any event, to set out clearly the pleas they raise in support of the form of order
they are seeking as distinct from the points of fact and law put forward in support of that form of order which are not in
themselves pleas.

283   The present plea appears in a single paragraph of the application, in the sub-section entitled Factual background of the section
setting out the allegation that the statement of objections was premature. There is no corresponding paragraph in the sub-section
entitled Submissions of law of that section of the application. Thus, in the concluding paragraph of that section, the applicants
themselves summarise that section of their application by submitting that the Commission has committed a breach of essential
procedural requirements in the administrative procedure leading to the adoption of the [contested] decision in that [it] did
not address a valid statement of objections to [them], thus referring to the fact that the statement of objections was premature.
On the other hand, they make no reference whatsoever in that conclusion to the infringement of their right to be heard on
the evidence disclosed in response to requests for information.

284   Next, no other part of the application contains the plea in question. It does not appear in any event in the list of pleas
(submissions) which the applicants themselves drew up at the start of each of the relevant sections of the application to
summarise the legal arguments developed therein. Above all, it does not appear in the list of pleas summarised in the introductory
part of the section of the application concerning the infringement of the right to be heard.

285   In those circumstances, it must be found that the plea is not made in accordance with the first paragraph of Article 21 of
the Statute of the Court of Justice and Article 44(1)(c) and (d) of the Rules of Procedure of the Court of First Instance,
as interpreted by the case-law, and therefore is inadmissible.

(ii) The substance of the plea

286   For the sake of completeness, it is observed that the plea is unfounded.

287   According to the case-law, whilst the Commission is entitled, after issuing the statement of objections, to make fresh allegations
in support of its complaints, it must give the undertakings concerned the opportunity of making known their views in that
regard (*AEG*, cited at paragraph 115 above, paragraph 29). As already stated above, the same applies where the fresh allegations in question
are based on evidence disclosed by the undertakings concerned in response to requests for information sent to them by the
Commission, at least where those undertakings could not reasonably infer the conclusions which the Commission intended to
draw from it (*Shell*, cited at paragraph 162 above, paragraph 56).

288   However, in the present case, in so far as the present plea may be inferred from the application, it appears merely to compare
the subject of each request for information after the statement of objections was issued with the paragraphs of the contested
decision relating to that subject in order to allege that the evidence disclosed in response to some of those requests for
information, namely those raising new questions as compared with the statement of objections, was used in the contested decision
without their being given the opportunity to comment thereon. In so doing the applicants manifestly do no more than advert,
in general and imprecise terms, to the possibility that some of the evidence disclosed in response to the requests for information
in question engendered new complaints in the contested decision, without at any stage explaining precisely how that evidence
adversely affected them.

289   Although that ground alone already suffices to justify rejecting the present plea, it should also be stated that none of the
arguments put forward by the applicants demonstrates that evidence disclosed in response to the requests for information in
question was used in the contested decision in infringement of the rights of the defence. Indeed, the Commission has not used
in the contested decision documents or information disclosed in response to the requests for information after the statement
of objections was issued which they consider raise new questions, namely those of 22 May, 11 July, 17 July, 8 August, 12 September,
and 8 November 1996 and 12 February, 13 February, 15 May, 19 June and 2 October 1997.

The request for information of 22 May 1996

290   As the applicants rightly state, it is apparent from the request for information of 22 May 1996 that its purpose was to elicit
information concerning the meetings of the TACA Principals, the TACA code of conduct, Transatlantic Associated Freight Conferences
and the correspondence between MSC and Hyundai.

291   Apart from the PWSC 95/8 minutes discussed above in the assessment of the specific pleas concerning the second abuse, it does
not appear that other evidence disclosed in response to the request for information of 22 May 1996 was used by the Commission
in infringement of the rights of the defence in support of its complaints in the contested decision.

292   Therefore, the applicants' arguments on that point must be rejected.

The request for information of 11 July 1996

293   It is apparent from the request for information of 22 May 1996 that it sought information about service contracts, market
conditions, the EIEIA and the extra capacity introduced on the market.

294   With regard, first, to service contracts, the applicants' responses to that request provided the Commission with detailed
information concerning the TACA service contracts and individual service contracts for 1996, in particular on price, unilateral
action, minimum quantity requirements and the transfer of cargo to TVRs by shippers party to service contracts.

295   The applicants submit first that the Commission used some of that information at paragraphs 127 to 155 of the contested decision.

296   Those paragraphs however, which appear in the section of the contested decision setting out the facts, merely describe the
mechanism of service contracts. Since that description does not in any case constitute the necessary basis of the complaints
referred to in the legal assessment of the contested decision, it cannot in itself adversely affect the applicants.

297   Next, the applicants point out that paragraphs 551 to 558 of the contested decision allege, in the context of the first abuse,
that they abused their dominant position by imposing restrictions on access to and the contents of service contracts. They
also point to the fact that the contested decision states, at paragraph 540, that service contracts constitute a barrier to
entry for the purposes of concluding that the TACA holds a dominant position and, at paragraph 564, that the TACA abused its
dominant position, in the context of the second abuse, by according Hyundai immediate access to service contracts.

298   First, in relation to the first abuse, it is not apparent from paragraphs 551 to 558 of the contested decision, which contain
the Commission's legal assessment on that point, that the evidence disclosed in response to the request for information of
11 July 1996 was used in support of that complaint. The Commission's analysis is essentially based on the terms of the TACA
agreement concerning service contracts, which were notified to the Commission as possible restrictions on competition within
the meaning of Article 85(1) of the Treaty, and the scope of which was clarified in response to various requests for information
which are not challenged under the present complaint. Finally, it should be noted that the statement of objections already
set out clearly, at paragraphs 73 to 87, 341 and 342, the abuse alleged in respect of service contracts so that the applicants
were in a position to comment in that regard.

299   Next, with regard to the barriers to entry constituted by service contracts, it suffices to note that the statement of objections
expressly mentions that point, at paragraph 331, amongst those establishing the existence of the TACA's dominant position.
The applicants cannot therefore maintain that there was an infringement of the rights of the defence on that point.

300   Finally, as regards Hyundai's immediate access to service contracts, paragraph 564 of the contested decision shows that, as
already stated above, the Commission did not use any evidence other than the PWSC 95/8 minutes in support of that complaint.
It is not in dispute that that document was disclosed by the applicants not in response to the request for information of
11 July 1996, but in response to those of 9 and 22 May 1996, discussed in the above assessment of the specific pleas concerning
the second abuse.

301   Second, with regard to market conditions, the applicants submit that their responses to the request for information of 11
July 1996 were used in the contested decision at paragraphs 85 to 88 on the shares of the relevant market for maritime transport,
at paragraph 533 concerning the TACA's collective dominant position and at paragraphs 217 to 221 concerning internal price
competition within the TACA.

302   It is true that the data on market shares mentioned in paragraphs 85 to 88 of the section of the contested decision setting
out the facts led the Commission to find, at paragraph 533, that the market shares held by the TACA in 1994, 1995 and 1996
on the trade in question gave rise to a strong presumption of a dominant position. However, paragraph 325 of the statement
of objections already stated that the TACA holds a dominant position having regard to its market share on the transatlantic
trade. Furthermore, the data on market share disclosed in response to the request of 11 July 1996 merely update the data previously
disclosed, in response to requests for information which have not been challenged.

303   As for the analysis of internal competition set out in paragraphs 217 to 222, in the course of which the Commission states
that independent action on the trade in question is insignificant, it was noted above at paragraph 244 that the statement
of objections already intimated at paragraphs 223 and 224 that independent action did not constitute proof of internal competition
and that the contested decision did not infringe the rights of the defence on that point.

304   Third, as regards the EIEIA, the applicants point out that the Commission describes that agreement at paragraphs 35 to 46
of the contested decision and concludes, at paragraphs 425 to 436, that it does not enable an exemption to be granted for
the collective fixing of inland rates.

305   Paragraphs 425 to 436 of the contested decision correspond exactly to paragraphs 269 to 277 of the statement of objections.
Thus, only the documents cited by the contested decision in footnote 124 at paragraphs 430, 434 and 435 in support of the
findings in relation to the EIEIA, namely the Interim Report of the Multimodal Group and the comments of the TACA Chairman
and of a member of the executive board of Hapag Lloyd, are referred to in footnote 70 at paragraph 271 and in paragraphs 275
and 276 of the statement of objections.

306   Moreover, it is apparent from paragraph 426 that the contested decision makes no finding on whether the EIEIA restricts competition,
so that the applicants' responses to the request for information in question cannot be relied upon against them in this regard.
It is true that the contested decision concludes that the EIEIA does not enable exemption to be granted for the collective
fixing of prices for inland transport provided as part of intermodal transport. However, according to the case-law, it is
for the applicants to show that an agreement meets the requirements of Article 85(3) of the Treaty (*VBVB and VBBB*, cited at paragraph 162 above, paragraph 52) and therefore to adduce all necessary evidence in support of their request.
Accordingly, even if the Commission had used a document supplied in response to a request for information in order to reject
their application for individual exemption, they cannot maintain that there has been an infringement of the rights of the
defence. In any event it does not appear that paragraphs 425 to 436 of the contested decision use any of the evidence disclosed
by the applicants in response to the request for information in question.

307   Fourth, with regard to the extra capacity introduced on the market, it suffices to state that the applicants themselves acknowledge
that the contested decision does not refer expressly to the responses they gave. The applicants are content to cite paragraphs
364 and 367 which, on their own admission, merely contain a general assertion that Regulation No 4056/86 is not intended to
deal with problems brought about by liner shipping operators as a result of uneconomic investment decisions.

308   On those grounds the applicants' arguments concerning the request for information of 11 July 1996 must be rejected in their
entirety.

The requests for information of 17 July and 8 August 1996

309   The requests for information of 17 July and 8 August 1996 concerned potential contracts between the TACA and the UASC and
APL lines with a view to their joining the TACA.

310   The applicants' responses to those requests for information were manifestly not used by the Commission in the contested decision,
however. The applicants admit as much themselves in any case, since in the context of the pleas concerning the application
of Article 86 of the Treaty, they complain precisely that the Commission did not take into account their responses on that
point whereas in their view those responses contradict the Commission's allegation that the TACA induced potential competitors
to join the TACA. Clearly, if the Commission chooses not to take account of the applicants' responses in the contested decision,
that cannot be a case of infringement of the rights of the defence; it can only - if anything - be insufficient proof of the
infringements alleged, which goes to the substance of the contested decision.

311   Therefore the applicants' arguments on that point must be rejected.

The request for information of 12 September 1996

312   The request for information of 12 September 1996 was sent not to the TACA but to members of the Canadian conferences, to elicit
information concerning the functioning of those conferences. The applicants allege that the evidence disclosed in response
to that request for information was used at paragraphs 265 to 273 of the contested decision, in which the Commission concludes
that the market share of the TACA parties for services provided through the Canadian Gateway should be aggregated with the
market share of the TACA parties for direct services and not treated as that of a competitor.

313   If those considerations were taken into account in determining the TACA's market share and therefore adversely affect the
applicants by contributing to the finding that they held a dominant position, which the applicants do not claim, it suffices
to point out that paragraphs 324 to 338 of the statement of objections explain fully why the TACA holds a dominant position.
The statement of objections emphasises the TACA's market share of the relevant trade at the outset in paragraph 325. Paragraphs
51 to 53 of the statement of objections expressly state that the TACA's market share via the Canadian ports must be taken
into account in determining the TACA's market share of the transatlantic trade.

314   It should also be noted that it was in response to the arguments put forward at paragraphs 9 to 26 of the response to the
statement of objections, namely that the TACA parties which are members of the Canadian conferences compete with the TACA,
that the Commission sent that request for information and set out its arguments in that regard at paragraphs 265 to 273 of
the contested decision. According to the case-law, taking account of an argument put forward by an undertaking during the
administrative procedure, without having given it the opportunity to express an opinion in that respect before the adoption
of the final decision, cannot as such constitute an infringement of defence rights, especially where taking account of the
argument does not alter the nature of the complaints against it (*Irish Sugar*, cited at paragraph 152 above, paragraph 34).

315   For all of these reasons, the applicants' arguments concerning the request for information of 12 September 1996 must be rejected.

The request for information of 8 November 1996

316   By the request for information of 8 November 1996, the Commission sought to obtain a copy of the service contracts relating
to the transatlantic trade for 1992, 1993, 1996 and 1997.

317   It suffices to note in this regard that the applicants merely refer in the application to the purpose of that request without
even comparing it with the relevant paragraphs of the contested decision or setting out other observations as to the complaints
they make.

318   In those circumstances, it cannot be found that there was an infringement of the rights of the defence on that point.

The request for information of 12 February 1997

319   By the request for information of 12 February 1997, the Commission sought information concerning the costs borne by the applicants
with regard to port-to-port maritime services.

320   It suffices to note in this regard that, as with the previous request for information of 8 November 1996, the applicants merely
refer in the application to the purpose of that request without even comparing it with the relevant paragraphs of the contested
decision or setting out other observations as to the complaints they make in that regard. It is furthermore not apparent from
an examination of the contested decision that the information disclosed in response to that request was used.

321   In those circumstances, it cannot be found that there was an infringement of the rights of the defence on that point.

The request for information of 13 February 1997

322   By the request for information of 13 February 1997, the Commission sought to elicit the applicants' average revenues per TEU
for the period from 1992 to 1996. The applicants submit that that data was used at paragraphs 316 to 319 of the contested
decision, in which the Commission found that a number of the TACA parties were able to increase average revenue per TEU without
suffering any loss in market share.

323   It is true that the data supplied in response to the request for information in question was used, as the applicants point
out, at paragraphs 316 to 319 in the section of the contested decision setting out the facts. However, even if it were shown
(and the applicants do not submit this) that the observations as to the applicants' average revenue per TEU support the complaint,
at paragraph 543, that the TACA parties were able to impose regular, albeit modest, price increases thus demonstrating, according
to the Commission, that they hold a dominant position on the relevant market, it is apparent from paragraphs 307 and 308 that
those observations were intended to answer the TACA parties' allegation, in their response to the statement of objections,
that the service contract rates for 1996 were lower than those for 1994 and that tariff rates were reduced in August 1996.

324   In those circumstances, the applicants cannot maintain that there has been an infringement of the rights of the defence on
that point.

The request for information of 15 May 1997

325   The request for information of 15 May 1997 sought information on agreements between the TACA parties, especially consortia
arrangements. The applicants note that the contested decision deals with those arrangements at paragraphs 181 to 198, which
refer to Annex IV of the contested decision, which lists all the agreements in force. They submit that paragraph 531 of the
contested decision relies on those agreements to establish the existence of further economic links between the TACA parties
justifying the assessment of their market position collectively for the purposes of Article 86 of the Treaty.

326   Paragraph 322 of the statement of objections already expressly stated, in the context of the assessment of the collective
dominant position held by the TACA, that the economic links between the TACA parties are reinforced by the consortia arrangements,
referring in that regard to the description of those agreements set out in paragraphs 94 to 106. Those paragraphs of the statement
of objections, and Annex 2 to which they refer, correspond essentially to paragraphs 181 to 198 and Annex IV of the contested
decision.

327   In those circumstances, the applicants cannot submit that they did not have an opportunity to comment on the complaint made
against them in the contested decision.

The request for information of 19 June 1997

328   Since the request for information of 19 June 1997 had the same purpose as that of 13 February 1997, for the reasons set out
above at paragraphs 322 to 324, the applicants cannot maintain that there has been an infringement of the rights of the defence
on that point.

The request for information of 2 October 1997

329   By the request for information of 2 October 1997, the Commission sought to obtain a copy of the TACA tariff.

330   It suffices to note in this regard that the applicants merely refer in the application to the purpose of that request without
even comparing it with the relevant paragraphs of the contested decision or setting out other observations as to the complaints
they make. Furthermore, since the tariff constitutes the very essence of the conference system established by the applicants
in respect of which they qualify for block exemption under Article 3 of Regulation No 4056/86, it cannot as such adversely
affect them.

331   Therefore, the applicants cannot maintain that there has been an infringement of the rights of the defence on that point.

d) Conclusion

332   It follows from the foregoing that the applicants' pleas seeking to prove that there were new allegations in the contested
decision can be upheld only to the extent that they allege that the Commission based the second abuse on documents on which
they were not afforded the opportunity to comment. The remainder of the applicants' pleas must be rejected.

*Part two: infringement of the right of access to the file*

333   In the second part of their pleas alleging infringement of the rights of the defence, the applicants advance three pleas by
which they submit that the Commission has infringed their right of access to the file. The first plea alleges failure to disclose
the minutes of meetings between the Commission and the complainants. The second plea alleges failure to disclose the minutes
or any other record of a meeting between the member of the Commission responsible for competition matters and the ESC. Finally,
the third plea alleges that the file is incomplete.

A –  *Preliminary observations*

334   According to the case-law, the right of access to the file in competition cases is intended to enable the addressees of statements
of objections to acquaint themselves with the evidence in the Commission's file so that, on the basis of that evidence, they
can express their views effectively on the conclusions reached by the Commission in its statement of objections (see, inter
alia, Case C-185/95 P *Baustahlgewebe* v *Commission* [1998] ECR I-8417, paragraph 89; Case C-51/92 P *Hercules Chemicals* v *Commission* [1999] ECR I-4235, paragraph 75; *Cimenteries CBR*, cited at paragraph 95 above, paragraph 38; Case T-30/91 *Solvay* v *Commission* [1995] ECR II-1775, paragraph 59; Case T-221/95 *Endemol* v *Commission* [1999] ECR II-1299, paragraph 65; *Cimenteries CBR*, cited at paragraph 172 above, paragraph 142; and Case T-23/99 *LR AF 1998* v *Commission* [2002] ECR II-1705, paragraph 169). Access to the file is thus one of the procedural safeguards intended to protect the rights
of the defence and to ensure, in particular, that the right to be heard can be exercised effectively (Case T-65/89 *BPB Industries and British Gypsum* v *Commission* [1993] ECR II-389, paragraph 30, and *LR AF 1998*, cited above, paragraph 169).

335   The Commission thus has an obligation to make available to the undertakings involved in proceedings under Article 85(1) or
Article 86 of the Treaty all documents, whether in their favour or otherwise, which it has obtained during the course of the
investigation, save where the business secrets of other undertakings, the internal documents of the Commission or other confidential
information are involved (Case T-175/95 *BASF* v *Commission* [1999] ECR II-1581, point 45).

336   It is, however, apparent from the case-law of the Court of Justice and the Court of First Instance that, in order to determine
the exact scope of the Commission's obligation and the legal consequences of an infringement thereof, a distinction must be
drawn between inculpatory evidence and exculpatory evidence.

337   With regard to inculpatory evidence, observance of the rights of the defence requires, according to the case-law, that the
undertaking concerned must have been able to express its views effectively on the evidence used by the Commission to support
its allegation of infringement (Case 322/81 *Michelin* v *Commission* [1983] ECR 3461, paragraph 7; *VBVB and VBBB*, cited at paragraph 162 above, paragraph 25; and *AKZO*, cited at paragraph 95 above, paragraphs 21 and 24). In that regard the obligation to allow access to the file relates merely
to the evidence ultimately relied on in the decision and not to all the complaints which the Commission may have expressed
at any stage of the administrative procedure.

338   According to the case-law, if the Commission is found to have relied in the contested decision on documents that were not
in the investigation file and were not communicated to the applicants, those documents should be excluded as evidence (*Cimenteries CBR*, cited at paragraph 172 above, paragraph 382). In that case it is necessary therefore to check whether the complaint made
in the final decision is sufficiently made out by the other inculpatory evidence relied on to which the applicants did have
access.

339   With regard to exculpatory evidence, it is apparent from the case-law that in the *inter partes* procedure laid down by the regulations on the application of Articles 85 and 86 of the Treaty, in particular Regulation No
17, Regulation No 1017/68 and Regulation No 4056/86, it cannot be for the Commission alone to decide which documents are of
use for the defence of the parties involved in a proceeding for infringement of the competition rules (*Solvay*, cited at paragraph 334 above, paragraph 81). In particular, having regard to the general principle of equality of arms,
it is not acceptable for the Commission alone to decide whether or not to use against the applicants documents to which they
did not have access, so that they were unable to decide whether or not to use them in their defence (*Solvay*, cited at paragraph 334 above, paragraph 83, and Case T-36/91 *ICI*, cited at paragraph 192 above, paragraph 111).

340   According to the case-law, where it is established that during the administrative procedure the Commission did not disclose
to the applicants documents which might have contained exculpatory evidence, there will be an infringement of the rights of
the defence only if it is shown that the administrative procedure would have had a different outcome if the applicant had
had access to the documents in question during that procedure (see, inter alia, Case T-7/89 *Hercules*, cited at paragraph 95 above, paragraph 56, and *Solvay*, cited at paragraph 334 above, paragraph 98). Where those documents are in the Commission's investigation file, such an infringement
of the rights of the defence is unconnected with the manner in which the undertaking concerned conducted itself during the
administrative procedure (*Solvay*, cited above, paragraph 96). By contrast, where the exculpatory documents in question are not in the Commission's investigation
file, an infringement of the rights of the defence may be found only if the applicant had expressly asked the Commission for
access to those documents. If the applicant does not do so, his right in that respect is barred in any action for annulment
brought against the final decision (*Cimenteries CBR*, cited at paragraph 172 above, paragraph 383).

341   It is in the light of those principles that the applicants' pleas under this part must be examined.

B –  *The plea alleging failure to disclose the minutes of the meetings between the Commission and the complainants*

1.     Arguments of the parties

342   The applicants submit that the Commission infringed the rights of the defence in refusing to provide them with any information
regarding the occurrence or subject-matter of oral exchanges between the Commission's staff and the complainants.

343   They state that, following their request to place on the file a telephone attendance note recording a conversation between
the Commission's staff and the complainants' legal advisers concerning the confidentiality of certain information contained
in the statement of objections, together with any other notes recording telephone conversations with the complainants, the
Commission informed them in a letter dated 7 August 1996 that no attendance note had been made of the telephone conversation
in question and that, in any event, the Commission was under no obligation under the case-law to make available that type
of note, which constituted a document purely internal to that institution.

344   The applicants maintain that the Commission had a duty to give them access to all documents concerning discussions between
the Commission and the complainants regarding substantive or procedural matters. They consider in this context that the medium
through which the Commission receives information or arguments from complainants should not determine the scope of their right
to be informed about such matters. If such information or documentation was obtained in written form, the correspondence with
the complainants would have been placed on the file and made available to the applicants. It is likely that such correspondence
would contain exculpatory material or at least be relevant to the applicants' defence. In a letter of 21 October 1996, the
Commission's Hearing Officer confirmed that the applicants would have a formal right to comment should the intervening parties
introduce new evidence or raise new issues or facts upon which the defendants have had no previous opportunity to comment.

345   The applicants consider that it cannot be claimed that an attendance note recording a conversation between the Commission
and the complainants constitutes a non-disclosable internal document. In so far as such a note records the existence of the
conversation, the contents of the complainants' comments, the contents of comments by staff of the Commission and any conclusions
drawn by them from those contacts, only the last item could fall within the category of confidential internal documents. The
remainder of the note would constitute a purely factual record of matters which should therefore be disclosed to the applicants.

346   The applicants consider that the judgments in Case C-310/93 P *BPB Industries and British Gypsum* v *Commission* [1995] ECR I-865 and *BPB Industries and British Gypsum*, cited at paragraph 334 above, relied on by the Commission in its letter of 7 August 1996 are irrelevant since they do not
address the issue whether the Commission is required to place on the file attendance notes recording conversations between
its staff and the complainants.

347   Consequently, the applicants consider that the rights of the defence were infringed since the file to which they were given
access was incomplete.

348   The Commission considers that it did not infringe the applicants' right of access to the file and therefore that the Court
should reject the complaint.

2.     Findings of the Court

349   In a letter of 7 August 1996 sent in reply to a letter from the TACA's representative of 1 August 1996, the Commission informed
the latter that it had not drawn up any minutes of the discussions that it had had with the complainants during the administrative
procedure, and the applicants did not contradict that.

350   Accordingly, the present plea amounts to a claim that, in competition matters, the right of access to the file for the undertakings
concerned requires the Commission to draw up such minutes.

351   According to the case-law cited at paragraph 334 above, the right of access to the file in competition cases is intended to
enable the addressees of statements of objections to acquaint themselves with the evidence in the Commission's file. There
is by contrast no general duty on the part of the Commission to draw up minutes of discussions in meetings or telephone conversations
with the complainants which take place in the course of the application of the Treaty's competition rules.

352   It is true that if the Commission intends to use in its decision inculpatory evidence provided orally by a complainant it
must make it available to the undertakings to which the statement of objections is addressed by creating a written document
to be placed in the file (see, to that effect, *Endemol*, cited at paragraph 334 above, paragraphs 83 to 91). The practice of using information provided orally by third parties cannot
be permitted to infringe the rights of the defence.

353   However, in the present case, the applicants merely require access, in a general and abstract way, to the minutes of discussions
between the Commission and third parties without stating how the inculpatory evidence relied upon by the Commission in the
contested decision was determined by those discussions.

354   According to the case-law, an infringement of the rights of the defence cannot be founded on a general argument but must be
examined in relation to the specific circumstances of each particular case (*Solvay*, cited at paragraph 334 above, paragraph 60). As already stated at paragraph 334 above, the right of access to the file in
competition cases is recognised solely so that the undertakings concerned can express their views effectively on the conclusions
reached by the Commission in its statement of objections. Since the applicants have not, subject to the specific plea considered
below, identified any complaint set out in the statement of objections and subsequently in the contested decision which was
based on evidence provided orally by the complainants and to which they did not have access, they cannot maintain that the
Commission infringed the rights of the defence on that point.

355   The only discussion mentioned by the applicants in support of the present complaint, which gave rise during the administrative
procedure to the request for access contained in the letter of 1 August 1996, concerns a telephone conversation between Commission
staff and the representative of the ESC which, it is not in dispute, was initiated by the applicants so that the Commission
could check whether information contained in the statement of objections was confidential. Given its purpose, such a telephone
conversation manifestly does not infringe the rights of defence, a fortiori since it was initiated by the applicants themselves.

356   In those circumstances, the applicants have adduced no evidence to show that the discussions with the complainants enabled
the Commission to substantiate certain complaints against them in the contested decision. Therefore, the fact that there is
no minute of those discussions in the file to which the applicants had access during the administrative procedure does not
amount to an infringement of the rights of the defence.

357   Contrary to the applicants' claim, it is not true that if the Commission had communicated with the complainants exclusively
in writing, that correspondence would necessarily have been in the file to which they had access. Where the Commission decides
on the basis of a complaint to initiate infringement proceedings, the undertakings concerned must respond not to the complaint
but to the statement of objections. According to the case-law cited at paragraph 337 above, matters put forward by the complainants
which are not used in the statement of objections do not constitute complaints to which the applicants have to respond. The
rights of the defence cannot therefore be infringed if the applicants were not given the opportunity to respond to them.

358   Furthermore, in so far as the applicants submit that certain exculpatory evidence was not disclosed to them, whilst they refer
in general terms to the possibility that such exculpatory evidence was provided to the Commission by third parties, at no
time, whether during the administrative procedure or in the course of the present action, have they specified the exculpatory
evidence sought or adduced the slightest indication that such evidence existed and therefore of its relevance for the purposes
of the present case. In those circumstances, since according to the case-law infringements of the rights of the defence must
be examined in relation to the specific circumstances of each particular case (Case T-36/91 *ICI*, cited at paragraph 192 above, paragraph 70), there can be no finding of infringement of the right of access to the file
on that point (see, to that effect, *Baustahlgewebe*, cited at paragraph 334 above, paragraph 93).

359   It follows from the foregoing that the present plea alleging failure to disclose the minutes of meetings between the Commission
and the complainants must be rejected.

C –  *The plea alleging failure to disclose the minutes or any other record of a meeting between the member of the Commission responsible
for competition matters and the ESC*

1.     Arguments of the parties

360   The applicants allege that the Commission infringed the rights of the defence during the procedure by refusing to disclose
to them the existence or subject-matter of contacts between it and the complainants and, in particular, by refusing to confirm
or deny a press report of a meeting between the complainants and the member of the Commission responsible for competition
matters which took place in December 1995 and at which the possibility of the TACA obtaining exemption for inland rate-fixing
was reportedly discussed. The applicants consider that that meeting may have had a material influence on the Commission's
position in that respect, and in particular on its decision to adopt a supplementary statement of objections on the withdrawal
of immunity. It was therefore vital to their defence to know what was discussed.

361   The applicants claim that, before that meeting was held in December 1995, the Commission had admitted in principle that an
agreement on equipment interchange would enable it to exempt their practice of inland transport price fixing as part of the
TACA. In the Maritime Transport Report it presented to the Council on 8 June 1994, the Commission took the view that a flexible
arrangement between shipowners for the exchange of containers would bring benefits for shippers and could render intermodal
rate-making authority eligible for individual exemption. The Commission even invited liner conferences to notify such arrangements
to it. The applicants therefore drafted an agreement on equipment interchange, the EIEIA, with the express intention of promoting
and facilitating the interchange of empty containers. The EIEIA is the kind of arrangement described in the report, and at
several meetings the Commission intimated that the EIEIA could in principle, and provided that the conditions for exemption
contained in Article 85(3) of the Treaty were satisfied, justify the grant of individual exemption for intermodal transport
price fixing. Similarly, during the interlocutory proceedings resulting in the order of the President of the Court of First
Instance of 22 November 1995 in Case T-395/94 R II *Atlantic Container Line and Others* v *Commission* [1995] ECR II-2893, the Commission, referring to the EIEIA, stated that the notification and implementation of arrangements
consistent with Article 85(3) of the Treaty and with the report of June 1994 would clearly render unnecessary any further
proceedings and that it had therefore taken no steps to prepare a decision withdrawing immunity.

362   On the other hand, in the supplementary statement of objections dated 1 March 1996 on withdrawal of indemnity, and without
the reasons for the change in the Commission's position being apparent from either the supplementary statement of objections
or the file, the Commission claims that the EIEIA could never, regardless of the benefits it could actually bring, make the
exercise of authority to fix intermodal transport rates eligible for exemption. The applicants state that, in response to
specific questions they put to the Commission asking whether the services and/or members of the Commission had held meetings
with shippers' organisations or their representatives in relation to the notification of the EIEIA or matters relating to
the change in the Commission's policy, the Commission merely indicated, by letters of 21 March and 10 April 1996, that no
meetings or formal discussions [had] taken place between officials of the Directorate-General for Competition and individual
shippers, shippers' organisations or their representatives, or indeed other third parties, in relation to the notification
of the EIEIA. However, the applicants point out that an article which appeared in the press in June 1996 reported a meeting
held in December 1995, that is, after notification of the EIEIA but before the supplementary statement of objections, between
the member of the Commission responsible for competition matters and one of the complainants, namely the ESC. There was discussion
of the ESC's document Liner Shipping - Time for Change, which referred to the TAA and the TACA and called for the withdrawal
of the exemption for liner conferences. The applicants explain that they put a number of specific questions to the Commission
because in the file there was no copy of the ESC's document and no indication that the meeting had taken place. They stress
that the Commission did not answer their questions, neither confirming nor denying that the meeting had taken place, and merely
indicated that the ESC document had not been placed on the file because it was a lobbying document and was publicly available.

363   The applicants point out that the Commission is under an obligation to make available to the undertaking concerned copies
of all documents which are or might be relevant to its defence, whether or not they are relied upon by the Commission as inculpatory
and whether or not they are clearly exculpatory (*Solvay*, cited at paragraph 334 above, Case T-36/91 *ICI*, cited at paragraph 192 above, and Case T-37/91 *ICI*, cited at paragraph 188 above). In accordance with the general principle that documents received from third parties must
be disclosed to the defence (*BPB Industries and British Gypsum*, cited at paragraph 346 above), the Commission must disclose to the undertaking concerned any information received by it
from complainants whether or not it relies on that information. Similarly, the *audi alteram partem* principle and the principle of equality of arms cannot be observed unless the undertaking is in a position to defend itself
against the whole of the case developed by the Commission and unless it has genuine access to the same information. Having
regard to the Commission's decision-making process, it cannot be maintained that discussions between the complainants and
the member of the Commission responsible for competition matters, who has a central role in determining competition policy
and who was actively involved in the progress of the present case, are of no interest to the defence.

364   The applicants submit that if a discussion concerning any of the issues in this case took place between the member of the
Commission responsible for competition matters and one of the complainants, information about such a discussion might be relevant
to their defence. According to the minutes, such a discussion took place in the course of the administrative procedure and
the ESC's position was that exemption ought not to be granted for intermodal authority under any circumstances. Moreover,
that meeting is the only occurrence which might have explained the change in the Commission's policy. It was therefore an
infringement of the applicants' rights of defence that the Commission refused to provide them with any of this information.
As a general point, it is not permissible for the Commission, including the member of the Commission responsible for competition
matters, not to be required to disclose to the undertakings concerned the fact that a meeting with the complainants took place,
its subject-matter and any documents or other information provided by the complainants.

365   The applicants maintain that it follows from admissions made by the Commission in its defence in Case T-18/97 concerning the
fact that a meeting between the member of the Commission responsible for competition matters and the ESC took place and the
subject-matter of that meeting that, as a matter of law, there was a clear infringement of the rights of the defence.

366   The applicants state that it is apparent from the case-law (*Solvay*, cited at paragraph 334 above, and Case T-36/91 *ICI*, cited at paragraph 192 above) that the defendant undertakings have a right of access to all relevant documents in the Commission's
possession, subject only to the protection of legitimate confidential information, and that relevance is for the undertakings,
and not the Commission, to determine. The notion of inculpatory or exculpatory documents cannot help to define the scope of
a defendant's right of access to the file.

367   The applicants claim that, contrary to the Commission's submission, they are therefore entitled to have access to information
received from third parties which has prompted the Commission to take a position against the applicants, even if it is not
expressly relied upon by the Commission in so doing.

368   Seen in that light, the information in the present case about the meeting was manifestly relevant to the applicants' defence.
First, it is apparent that the ESC sought to persuade the Commission to end inland rate-fixing. Second, it could be inferred
from the statements made by the member of the Commission responsible for competition that he was sympathetic to those representations.
Third, the adoption of the supplementary statement of objections after the meeting constituted a change in the Commission's
policy. Fourth, the supplementary statement of objections disregarded the agreement with the Commission concerning the method
of notification of the EIEIA and the encouragement given by the Commission to the introduction and development of the EIEIA.
The implication that the Commission was prompted (see the defence in Case T-18/97, paragraph 57) by the ESC at this meeting
to adopt the supplementary statement of objections confirms the importance of these issues to the rights of the defence.

369   The applicants point out that they would have had access to the ESC's representations had they been made in writing in the
normal way. The fact that the representations were made orally should not defeat their defence. It is also inconceivable that
the Commission does not have in its possession any notes or record of the meeting.

370   The applicants therefore maintain that the Commission should make available all notes and minutes of the meeting between the
Commission and the ESC and all notes and minutes of any other meetings or contacts between (i) any member of the Commission's
staff, the member of the Commission responsible for competition matters, members of his or her office, any other members or
member of any other member's office and (ii) any third party concerning any of the issues in the present case.

371   The Commission considers that it has not infringed the applicants' right of access to the file and therefore that the Court
should reject the present complaint.

2.     Findings of the Court

372   In so far as by the present plea the applicants allege in general terms that the Commission failed to disclose the minutes
of meetings between the Commission and third parties it must be rejected for the reasons set out in paragraphs 349 to 359
above.

373   It is necessary at this stage therefore to examine the present plea only in so far as it alleges that the Commission failed
to disclose to the applicants any information concerning a meeting between Mr Van Miert, the member of the Commission responsible
for competition matters at the time of the relevant facts, and the ESC, the shippers' association and intervening party in
the present action, during which the ESC gave the Commission a document entitled Liner Shipping - Time for Change (the meeting
in question).

374   According to the applicants, even if the information about the contested meeting, in particular the fact that it was held,
its purpose, the minutes drawn up on that occasion and the notes thereon, does not expressly support the Commission's complaints,
it is useful for their defence, having regard to the fact that that meeting influenced the Commission's decision not to grant
them an individual exemption in respect of the collective price-fixing agreement for inland transport services provided as
part of intermodal transport. In that regard, the applicants point out that shortly after that meeting, on 1 March 1996, the
Commission adopted a supplementary statement of objections withdrawing immunity from fines in respect of that agreement, whereas
before that meeting, following the notification of the EIEIA agreement, the Commission was favourably inclined in that regard.

375   By the present plea, the applicants thus submit essentially that the Commission should have given them access to evidence
which, even if it is not expressly used to support the complaints relating to the collective price-fixing agreement for inland
transport services provided as part of intermodal transport, led it to raise those complaints against them, that evidence
being useful for their defence since it is likely to show the reasons for which the Commission raised those complaints.

376   As a preliminary point, it must be remembered that access to the file is not an end in itself but is intended to protect the
rights of the defence (*Cimenteries CBR*, cited at paragraph 172 above, paragraph 156). In particular, with regard to access to inculpatory evidence, it is apparent
from the case-law cited at paragraph 337 above that observance of the rights of the defence requires only that the undertaking
concerned must have been able to express its views effectively on the evidence used by the Commission in the decision to support
its allegation of infringement. The right of access to the file is therefore observed if the undertaking concerned was given
the opportunity to comment on the complaints made against it after becoming acquainted with the inculpatory evidence used
by the Commission in support of those complaints, and that evidence must appear in the Commission's investigation file.

377   It follows that, in determining whether the right of access to inculpatory evidence in the file has been observed, the relevant
question is not why the Commission raised a complaint or what underlies that complaint but solely whether the complaint in
the final decision is based on inculpatory evidence which was disclosed to the undertakings which are the subject of the infringement
procedure. The right of access to the file cannot therefore be understood as intended to enable the undertakings concerned
to examine the process by which the Commission arrived at its conclusions (see, to that effect, the order in Joined Cases
142/84 and 156/84 *BAT and Reynolds* v *Commission* [1986] ECR 1899, paragraph 16). Since the right of access to the file is not an end in itself, but is intended to protect
the rights of the defence, the Commission is under no obligation to disclose to the undertakings concerned the inculpatory
evidence upon which it does not rely in its decision in support of the complaints.

378   It is in the light of those principles that the arguments put forward by the applicants in the context of the present plea
should be examined.

379   In so far, first, as the applicants allege that the Commission did not disclose to them even that the meeting in question
took place and its purpose, it should be noted that during the administrative procedure, notwithstanding the applicants' repeated
requests, the Commission systematically refused to confirm or deny, as is apparent from its letters of 15 March, 21 March,
10 April and 26 April 1996 to the TACA's representatives, that the meeting in question took place. However, in the context
of the present action, it asserts in its defence that it is no secret that that meeting took place, so that it is now not
in dispute between the parties that the meeting in question took place on 4 December 1995.

380   In response to the applicants' requests for information on that point, the Commission sent the TACA on 16 and 24 July 1996
two requests for information requiring the production of the document Liner Shipping - Time for Change cited by the applicants
in their requests for access to the file. However, it is not in dispute that the ESC handed over that document to Mr Van Miert
during the meeting in question, so that the Commission was in possession of that document when those two requests for information
were sent.

381   However, in the context of the present plea alleging infringement of the right of access to the file it is necessary merely
to check whether the applicants were able to express their views effectively on the evidence used by the Commission to support
its complaints - in the present case, the evidence leading to the refusal to grant an individual exemption for the collective
price-fixing agreement for inland transport services provided as part of intermodal transport.

382   Neither the fact that the meeting in question took place nor its purpose is such as to constitute evidence capable of substantiating
the complaints made in the contested decision. For the reasons set out above it is irrelevant, as regards access to the inculpatory
evidence contained in the Commission file, that disclosure of the fact that such a meeting had taken place and of its purpose
might have been useful for the applicants' defence during the administrative procedure. In any event, the applicants do not
maintain that the existence of the meeting or its purpose could have been used by them as exculpatory evidence.

383   Therefore observance of the TACA parties' right of access to the file did not require the Commission to inform the applicants
of the existence of the meeting in question and the purpose thereof.

384   Second, in so far as the applicants allege that the Commission did not disclose the minutes of the meeting in question and
any notes thereon, it should be noted at the outset that in response to a written question from the Court on that point the
Commission stated, without being contradicted by the applicants during the hearing, that its staff had kept no minutes or
notes of the meeting in question.

385   As stated above at paragraph 351, the right of access to the file in competition cases is intended solely to enable the addressees
of statements of objections to acquaint themselves with the evidence in the Commission's file. There is by contrast no general
duty on the part of the Commission to draw up minutes of meetings with the complainants which take place in the course of
the application of the Treaty's competition rules.

386   It is true that if the Commission intends to use in its decision inculpatory evidence disclosed by a complainant, even oral,
it must, as stated above at paragraph 352, make it available to the undertakings to which the statement of objections is addressed
by creating a written document to be placed in the file (see, to that effect, *Endemol*, cited at paragraph 334 above, paragraphs 83 to 91). However, in the present case, the applicants do not allege that the
Commission did not disclose to them evidence substantiating the complaints, but merely that it did not disclose evidence which
might have led it to raise certain complaints against them.

387   It suffices to point out that the right of access to the file is intended solely to enable the undertakings concerned to express
their views effectively on the evidence used by the Commission to support its complaints in the contested decision, in the
present case the evidence which led to the refusal to grant an individual exemption for the collective price-fixing agreement
for inland transport services provided as part of intermodal transport. Consequently, the inculpatory evidence supplied by
the ESC, which might have led the Commission to refuse to grant such an exemption, only had to be disclosed to the TACA parties
in the exercise of their right of access to the file if that evidence was in fact relied upon by the Commission in support
of the complaints on that point in the contested decision.

388   However, that is not the case.

389   First, the only document which has been shown to have been handed over in the course of the contested meeting is that entitled
Liner Shipping - Time for Change. It is not in dispute between the parties that the applicants had access to that document
during the exercise of their right of access to the file. Furthermore, it is not apparent from paragraphs 425 to 436 of the
contested decision, by which the Commission refuses to grant an individual exemption for the collective price-fixing agreement
for inland transport services provided as part of an intermodal transport operation, that that document was used in support
of the Commission's complaints. Furthermore, that document was a lobbying document, in which the complainant essentially claims
that the block exemption scheme for liner conferences laid down by Regulation No 4056/86 should be abolished. There can be
no doubt, and indeed it is not in dispute, that such a document does not *per se* contain any inculpatory evidence which could have been used in any relevant way by the Commission in support of the refusal
to grant an individual exemption for the price-fixing agreement for inland transport services provided as part of intermodal
transport.

390   Next, it is not apparent from paragraphs 425 to 436 of the contested decision that the refusal to grant an individual exemption
for the agreement in question is based, even in part, on inculpatory evidence which was provided perhaps orally by the ESC
to the Commission during the meeting in question and to which the applicants did not have access. According to paragraph 433
of the contested decision, the applicants made no attempt to show that joint price-fixing was indispensable to the EIEIA or
to any benefits which may flow from that arrangement. It is apparent from the contested decision that the Commission based
that finding on the Interim Report of the Multimodal Group presented to Mr Van Miert on 6 February 1996 (footnote 124 at paragraph
430), the comments of Mr Rakkenes, Chairman of the TACA and ACL, in the October 1995 edition of *American Shipper* (paragraph 434) and the comments of Mr Casjens, executive board member of Hapag Lloyd, reported in the *Journal of Commerce* of 6 December 1995 (paragraph 435). First, the applicants do not claim that that inculpatory evidence was provided by the
ESC to the Commission during the meeting in question, and second, they do not deny that they had access to that evidence in
the exercise of their right of access to the file, so that even if the Commission had relied on inculpatory evidence supplied
by the ESC at that meeting in support of the complaints in question, those complaints would continue to be based on other
evidence to which the applicants do not deny they were given access and the merits of which they do not dispute.

391   Furthermore, in so far as the applicants allege that the Commission was influenced by inculpatory evidence put forward by
the ESC during the meeting in question, without however relying upon it expressly in the statement of objections and then
in the contested decision, it must be observed that the applicants adduce no specific evidence whatsoever to show that such
evidence was put forward. Moreover, the rights of the defence were sufficiently protected by the fact that the applicants
were given the opportunity to comment on the inculpatory evidence mentioned in the statement of objections. The inculpatory
matters put forward by a complainant before the adoption of the statement of objections, whether mere arguments or documentary
evidence, if not relied on in the statement of objections do not constitute complaints to which the undertakings concerned
have to respond, so that they do not have to be disclosed to them in the exercise of their right of access to the file.

392   Contrary to the applicants' claim, it is not true that if the evidence provided by the ESC had been presented in writing rather
than orally at a meeting, it would necessarily have been in the file to which they had access. As already stated above at
paragraph 357, where the Commission decides on the basis of a complaint to initiate infringement proceedings the undertakings
concerned must respond not to the complaint but to the statement of objections. Matters set out in the complaint but not used
in the statement of objections do not constitute complaints to which the applicants have to respond. The rights of the defence
cannot therefore be infringed by the fact that the applicants were not given the opportunity to comment thereon.

393   Furthermore, according to the case-law, in a proceeding under Article 86 of the Treaty the Commission may in any event refuse
access to the correspondence with third parties by reason of its confidential nature, since an undertaking to which a statement
of objections has been addressed, and which occupies a dominant position in the market, may adopt retaliatory measures against
a competing undertaking, a supplier or a customer who has collaborated in the investigation carried out by the Commission
(Case T-65/89 *BPB Industries and British Gypsum*, cited at paragraph 334 above, paragraph 33, confirmed in Case C-310/93 P *BPB Industries and British Gypsum*, cited at paragraph 346 above, paragraph 26).

394   Finally, and in any event, the minutes or notes which the Commission may have made of the meeting with the complainant - *quod non* - would be internal documents which, according to settled case-law, do not in principle have to be disclosed to third parties
exercising their right of access to the file (Case T-65/89*BPB Industries and British Gypsum*, cited at paragraph 334 above, paragraph 33; *BASF*, cited at paragraph 335 above, paragraph 45; Joined Cases T-45/98 and T-47/98 *Krupp Thyssen Stainless and Acciai Speciali Terni* v *Commission* [2001] ECR II-3757, paragraphs 46 and 47; *Cimenteries CBR*, cited at paragraph 172 above, paragraphs 196 and 420; and *LR AF 1998*, cited at paragraph 334 above, paragraph 170). That restriction on access to internal documents is justified by the need
to ensure the proper functioning of the institution concerned when dealing with infringements of the Treaty competition rules.

395   In the light of the foregoing, it must be held that the Commission's failure to draw up minutes of the meeting in question
did not deprive the applicants of the opportunity to acquaint themselves, in the exercise of their right of access to the
file, with the inculpatory evidence on which the complaints made by the Commission in the contested decision are based.

396   Furthermore, the applicants do not claim that certain evidence relating to the meeting in question could have been used by
them as exculpatory evidence. In any event, even if the plea were to be interpreted in that way, the applicants do not identify
the exculpatory evidence in question and have not adduced any evidence of its existence and therefore of its usefulness for
the purposes of the present case. In those circumstances, since according to the case-law infringements of the rights of the
defence must be examined in relation to the specific circumstances of each particular case (Case T-36/91 *ICI*, cited at paragraph 192 above, paragraph 70), there can be no infringement of the right of access to the file on that point
(see, to that effect, *Baustahlgewebe*, cited at paragraph 334 above, paragraph 93).

397   In those circumstances, the present plea alleging infringement of the right of access to the file must be rejected.

D –  *The plea alleging that the file is incomplete*

1.     Arguments of the parties

398   Lastly, the applicants submit that the contested decision should be annulled for the sole reason that they have raised serious
doubt as to the completeness of the file, in so far as the materials absent from the file might explain the Commission's approach
in the contested decision.

399   The Commission considers that the present plea is generalised and contends that the Court should reject it for the same reasons
as it rejects the preceding pleas.

2.     Findings of the Court

400   As is apparent from the analysis of the preceding pleas, the applicants' submission that the Commission did not disclose to
them certain inculpatory evidence relied upon in support of the complaints mentioned in the contested decision, which was
provided to it orally by third parties in the course of meetings, is wrong. Accordingly, the applicants have failed to establish
that there is a serious doubt that the Commission's file is complete.

401   In any event, contrary to what the applicants claim, the Commission's reliance in the contested decision on inculpatory documents
that were not in the investigation file and were not disclosed to them does not in itself entail the annulment of that decision
as a whole. According to the case-law cited at paragraph 338 above, it is still necessary in that case to verify the extent
to which the complaints made in the final decision are sufficiently made out by the other inculpatory evidence relied on to
which the applicants did have access.

402   Therefore, the present plea must be rejected.

Part three: infringement of the principles of sound administration, objectivity and impartiality

403   Under the third part of the pleas alleging infringement of the rights of the defence, the applicants allege that the Commission
infringed the principles of sound administration, objectivity and impartiality, first, with regard to the conduct of the administrative
procedure, second, with regard to the assessment of the facts, evidence and relevant questions and third, with regard to the
assessment of the fines. The applicants claim that for these reasons the contested decision should be annulled.

404   As a preliminary point it should be noted that the guarantees afforded by the Community legal order in administrative proceedings
include, in particular, the principle of sound administration, which entails the duty of the competent institution to examine
carefully and impartially all the relevant aspects of the individual case (Case T-44/90 *La Cinq* v *Commission* [1992] ECR II-1, paragraph 86; Case T-7/92 *Asia Motor France and Others* v *Commission* [1993] ECR II-669, paragraph 34; Joined Cases T-528/93, T-542/93, T-543/93 and T-546/93 *Métropole Télévision and Others* v *Commission* [1996] ECR II-649, paragraph 93; and Case T-31/99 *ABB Asea Brown Boveri* v *Commission* [2002] ECR II-1881, paragraph 99).

405   It is therefore necessary in the present case to consider whether the applicants' complaints show that the Commission infringed
that principle.

E –  *The conduct of the administrative procedure*

1.     Arguments of the parties

406   The applicants consider that the conduct of the fact-finding procedure shows that the Commission prejudged the outcome of
its administrative investigation. In support of that complaint they point, first, to the fact that the Commission's statement
of objections was sent prematurely, and second, to the fact that the Commission began to draft the contested decision before
the conclusion of the fact-finding procedure. The applicants rely in that respect on the letter addressed to them by the Hearing
Officer two years before the adoption of the contested decision, on 12 November 1996, in which it was stated that members
of the Commission's staff were working on the draft decision.

407   The applicants point out that this prejudice of the outcome of the investigation is apparent from the threats of fines the
Commission made throughout the administrative procedure. In support of that complaint, the applicants refer first to the Commission's
statements, reported in the press, concerning the procedure for the withdrawal of immunity from fines in respect of collective
price-fixing for inland transport services as part of intermodal transport. The applicants claim that it is apparent from
those statements that the Commission had already shown at the time that it intended to impose fines on the applicants in the
TACA case, notwithstanding the suspension order of 10 March 1995 in Case T-395/94 R. Thus, in the press release issued on
the adoption of the statement of objections concerning the withdrawal of immunity, the Commission stated that the TACA parties
have chosen to notify an arrangement which, they clearly know, is unlawful following the decisions of the Commission. Furthermore,
as regards the allegations of abuse of a dominant position, the applicants refer to various articles and press releases which
show that the Commission regarded the imposition of fines under Article 86 of the Treaty as a means of circumventing the immunity
from the imposition of fines under Article 85 of the Treaty for which the applicants qualified as a result of notifying the
TACA.

408   The Commission contends that the Court should reject the applicants' arguments on that point.

2.     Findings of the Court

409   The applicants consider that the conduct of the administrative procedure shows that the Commission prejudged the outcome of
its investigation. They rely on the argument that the statement of objections was premature, on the fact that the drafting
of the contested decision began prior to the hearing before the Commission and on the threats of fines made by the Commission
during the administrative procedure.

a) The prematurity of the statement of objections

410   The applicants allege essentially that the further requests for information sent shortly before and after the adoption of
the statement of objections (the relevant requests for information) show that in the statement of objections the Commission
prejudged the final outcome of the investigation. They also point in this context to the large number of those requests and
of the questions contained therein.

411   First, as regards the applicants' allegation that the very fact of sending the relevant requests for information shows that
in the statement of objections the Commission prejudged the final outcome of the investigation, it has already been held above
at paragraph 116, in the course of examining the first part of the present pleas alleging infringement of the rights of the
defence, that since the statement of objections is not a measure recording the Commission's final assessment of the lawfulness
of the practices in question but a purely preparatory measure setting out the Commission's provisional findings, which it
may revisit in the final decision, the Commission is perfectly entitled, in order in particular to take account of the arguments
or other evidence put forward by the undertakings concerned, to continue with its factual investigation after the adoption
of the statement of objections by sending further requests for information with a view to withdrawing certain complaints or
adding others if appropriate.

412   Therefore, far from providing evidence of any prejudice on the part of the Commission against the applicants, the sending
by the Commission of the relevant requests for information constitutes conduct inherent in the adversarial nature of the administrative
procedure under the Treaty's competition rules, attesting, on the contrary, to the Commission's willingness to examine carefully
and impartially all the relevant aspects of the individual case in order, in particular, to be able to adopt a decision on
the applicants' application for exemption in full knowledge of the facts.

413   Consequently, the mere fact that in the present case the Commission sent the TACA parties numerous further requests for information
shortly before and after the adoption of the statement of objections does not demonstrate that the Commission infringed the
principles of sound administration, objectivity and impartiality.

414   Furthermore, the review of legality carried out by the Court in the context of an action for annulment on the basis of Article
173 of the Treaty is not of the statement of objections but of the final decision adopted thereafter. According to the case-law,
the statement of objections may not in any case be the subject of an action for annulment (*IBM*, cited at paragraph 96 above, paragraph 21). Therefore, even if the Commission had shown in the statement of objections that
it was prejudiced against the applicants, such prejudice could only vitiate the contested decision if it was manifested in
that decision. The applicants do not show that to be the case here (see, to that effect, *ABB Asea Brown Boveri*, cited at paragraph 404 above, paragraph 105).

415   Finally, and in any event, even if the prejudice alleged by the applicants were manifested in the contested decision, such
prejudice does not constitute an infringement of the rights of the defence capable of leading to annulment of the contested
decision but must be examined in connection with the review of the assessment of the evidence or of the statement of reasons
for the decision (see, to that effect, *ICI*, cited at paragraph 188 above, paragraph 72).

416   For those reasons, the applicants' arguments alleging that in the statement of objections the Commission prejudged the final
outcome of the investigation must be rejected.

417   Second, as regards the large number of requests for information, it is common ground between the parties that between 22 May
1996, two days before the adoption of the statement of objections, and 16 September 1998, when the contested decision was
adopted, the Commission sent 32 requests for information containing more than 100 questions to the TACA parties. It is also
common ground that several of those requests for information were sent during the period allotted to the TACA parties to reply
to the statement of objections, namely between 24 May 1996, when the statement of objections was adopted, and 6 September
1996, when the TACA parties sent their response to the statement of objections.

418   The sending of a large number of requests for information after the adoption of the statement of objections may affect the
effective exercise by the undertakings concerned of their right to comment on the complaints made against them. According
to the case-law cited at paragraph 404 above, it is for the Commission to ensure that the administrative procedure is conducted
with due care. It has been held that the Commission's requests for information must comply with the principle of proportionality
and the obligation imposed on an undertaking to supply information should not be a burden on that undertaking which is disproportionate
to the needs of the inquiry (*SEP*, cited at paragraph 119 above, paragraph 51).

419   Therefore it is necessary to consider whether in the present case the sending of the relevant requests for information imposed
a disproportionate burden on the applicants such as to infringe the rights of the defence. It is necessary in that regard
to take account of the content of those requests for information, the context in which they were sent and their purpose.

420   It is apparent from an analysis of the relevant requests for information that they can be grouped essentially into eight categories.

421   First, one request for information, that of 22 May 1996, was sent two days before the statement of objections. However, that
request sought to obtain mere clarification and further information in respect of the information disclosed by the applicants
on 9 May 1996 in response to a request for information of 8 March 1996, so that it cannot reasonably be considered to have
placed a disproportionate burden on the applicants. Furthermore, it is apparent that the fact that the request at issue was
sent two days before the adoption of the statement of objections arose from the applicants' own conduct since the information
which formed the subject of the questions in the relevant request should, according to the request for information of 8 March
1996, have been provided by 25 March 1996, but, because of various extensions of time sought by the applicants, was only finally
disclosed on 9 May 1996, two months after the Commission's initial request.

422   Second, four requests for information dated 16 October 1996 and 12 February, 2 June and 19 June 1997 sought information requested
but not provided in response to earlier requests or further details of information provided earlier, whilst four other requests
for information dated 27 January, 13 February, 15 May and 2 October 1997 sought an update of information provided earlier,
before the statement of objections was sent. In so far as the requests for information in question sought information requested
earlier, but not provided, it should be remembered that under Article 16(5) of Regulation No 4056/86 and the equivalent provisions
of Regulation No 17 and Regulation No 1017/68 the undertakings concerned are required to disclose fully the information requested
within the time-limit fixed by the Commission. Thus, in so far as those requests for information were the result of the applicants'
own failure to fulfil that obligation, the Commission was not at fault in sending them. Moreover, in so far as they merely
seek to clarify and update information previously supplied, such requests for information must be considered to be justified
by the needs of the inquiry and did not place a disproportionate burden on the applicants.

423   Third, nine requests for information dated 12 September, 16 September, 18 September, 9 October, 8 November and 15 November
1996 and 22 April, 26 May and 30 September 1997 respectively were intended to enable the Commission to examine the merits
of the arguments put forward by the applicants in their response to the statement of objections. Clearly, such requests for
information were justified by the needs of the inquiry, since they enabled the Commission to take account of the arguments
and information put forward by the applicants in response to the statement of objections in order to amend the complaints
made against them, if appropriate.

424   Fourth, five requests for information, those dated 11 July, 17 July and 8 August 1996 and 24 January and 19 June 1997, sought,
at least in part, information which was not the subject of requests for information before the adoption of the statement of
objections. Those requests for information concerned, inter alia, certain aspects of service contracts, contacts between the
TACA on the one hand and UASC and APL on the other with a view to their possible accession to the TACA, Hanjin's pricing practices
and the complaints of certain shippers in Ireland. However, and this is not challenged by the applicants, the information
sought by those requests for information was relevant to the assessment of the TACA practices in question, in particular so
as to verify the merits of the allegation of abuse of a dominant position appearing in the statement of objections. Those
requests for information were therefore justified by the needs of the inquiry.

425   Fifth, two requests for information dated 16 and 24 July 1996, sent in response to the allegations of infringement of the
right of access to the file, sought information about the document Liner Shipping - Time for Change. As has already been stated
above at paragraph 380, it is apparent from the Court file that the Commission was in possession of that document when it
sent the two requests for information in question. In those circumstances, those requests for information were not justified
by the needs of the inquiry.

426   Sixth, one request for information dated 5 December 1996 sought responses to questions asked at the hearing on 25 October
1996. There can be no dispute that such a request, intended to give the applicants the opportunity to continue in writing
the discussion initiated at the hearing, was justified by the needs of the inquiry.

427   Seventh, three requests for information dated 21 October 1997, 24 November 1997 and 18 March 1998 sought information relating
to the TACA parties' turnover. Since those requests for information were intended to enable the Commission to check that the
fines it intended to impose on those undertakings did not exceed the maximum amount permitted under Article 15(2) of Regulation
No 17, Article 22(2) of Regulation No 1017/68 and Article 19(2) of Regulation No 4056/86, they were in principle justified
by the needs of the inquiry (Case T-213/00 *CMA CGM and Others* v *Commission* [2003 ECR II-913, paragraph 490). In the present case, the applicants do not deny in any case that the Commission used the
information supplied in response in order to ensure that the fines imposed in the contested decision did not exceed the maximum
permitted amount.

428   Eighth, three requests for information dated 17 January, 17 February and 11 March 1997 concerned the hub and spoke system
notified on 10 January 1997 after the statement of objections was issued. There can be no question but that such requests
for information, which sought clarification of the agreements notified by the applicants with a view to obtaining individual
exemption under Article 85(3) of the Treaty, were justified by the needs of the inquiry since they enabled the Commission
to check whether the requirements laid down by that provision were met.

429   It follows from the foregoing that only two of the relevant requests for information, namely those dated 16 and 24 July 1996,
were not justified by the needs of the inquiry. However, that two requests for information out of a total of 32 sent over
a period of 22 months were not justified cannot have imposed a disproportionate burden on the applicants such as to affect
the effective exercise of their right to be heard.

430   Lastly, and in any event, even if the Commission had infringed the rights of the defence, that infringement would only entail
the annulment of the decision if, had the relevant requests for information not been sent, there was even a small chance that
the applicants could have brought about a different outcome to the administrative procedure (see, to that effect, *Hercules Chemicals*, cited at paragraph 95 above, paragraph 56, and *Cimenteries CBR*, cited at paragraph 172 above, paragraph 383). The applicants do not claim that that may have been the position in the present
case and adduce no evidence to that effect.

431   For those reasons, the applicants' arguments in support of the complaint that the Commission sent them a large number of requests
for information after the adoption of the statement of objections must be rejected.

432   It follows from all of the foregoing considerations that the applicants' plea alleging infringement of the principle of sound
administration on that point is unfounded.

b) The drafting of the contested decision

433   The applicants allege essentially that the Commission began to draft the contested decision before the completion of the administrative
investigation procedure.

434   It is common ground between the parties that the Commission began to draft the contested decision shortly after the hearing
with the TACA parties on 25 October 1996. In its letter of 12 November 1996, the Commission Hearing Officer informed the TACA
parties as follows:

As I understand it, the relevant Directorate is now drafting the proposed decision in the TACA case and the normal procedure
will apply.

435   Furthermore, it is true that, as the applicants point out, the Commission continued with the administrative investigation
procedure after the hearing with the TACA parties by sending further requests for information until March 1998. Since the
contested decision was adopted on 16 September 1998, it is clear that the Commission did begin to draft the contested decision
before the completion of the administrative investigation procedure.

436   However, contrary to the applicants' submission, such conduct does not infringe the principle of sound administration. On
the contrary, observance of that principle, which requires, inter alia, diligence on the part of the Commission in dealing
with the cases for which it is responsible, may mean that it must begin drafting its final decision before the end of the
administrative investigation procedure in order to ensure that the decision is adopted within a reasonable period having regard
to the particular circumstances of the case, and in particular its context, the conduct of the parties in the course of the
procedure, the importance of the case for the various undertakings involved and its complexity (*PVC II*, cited at paragraph 191 above, paragraphs 187 and 188; Joined Cases T-213/95 and T-18/96 *SCK and FNK* v *Commission* [1997] ECR II-1739, paragraph 56; and Case T-127/98 *UPS Europe* v *Commission* [1999] ECR II-2633, paragraph 38).

437   In the present case, it is not in dispute that the aspects of the TACA which were the subject of the administrative procedure
before the Commission raise complex factual and legal questions which meant that the Commission had to examine a large amount
of information provided by the TACA parties in their various notifications as well as in their response to the statement of
objections and in their replies to the requests for information.

438   In those circumstances, since the Commission received the TACA parties' response to the statement of objections on 6 September
1996, following 26 months of investigation after the notification of the TACA agreement on 5 July 1994, and had heard those
parties at the hearing on 25 October 1996, it had sufficient information at that time to begin drafting the contested decision,
especially in view of the fact that, of the requests for information sent after the hearing, only those dated 24 January,
15 May and 19 June 1997 concerning, respectively, some of Hanjin's pricing policies, consortia links between the TACA parties,
and the complaints of certain shippers in Ireland, sought information which had not been the subject of earlier requests for
information.

439   In any event, the applicants do not state how the requests for information sent after the hearing show that the Commission
was not in a position to begin drafting its final decision after the hearing.

440   Therefore, the applicants' arguments on that point must be rejected.

c) The threats of fines

441   The applicants submit first that certain statements made in the course of the procedure surrounding the adoption, on 26 November
1996, of the decision withdrawing from the TACA parties immunity from fines in respect of collective price-fixing for inland
transport services as part of intermodal transport show that, from that time, the Commission intended to impose high fines
on them.

442   The applicants point out first in this regard that when the President of the Court of First Instance ordered that the TAA
decision be suspended in so far as it prohibited collective price-fixing (order of 10 March 1995 in *Atlantic Container Line*, cited at paragraph 29 above, confirmed by the order of 19 July 1995 in *Commission* v *Atlantic Container Line*, cited at paragraph 29 above), the Commission stated in a press release dated 14 March 1995 that if the members of the TACA
lose their action on the merits, they risk facing heavy fines for continuing that practice.

443   Far from prejudging its final decision as to the imposition of fines on the TACA parties, the Commission by that statement
merely highlights, rightly, the legal effects attaching to an order of the President of the Court of First Instance making
a ruling in application of Articles 185 and 186 of the EC Treaty (now Articles 242 and 243 EC) in the context of an application
for the suspension of a Commission decision.

444   The purpose of the order of the Court of First Instance of 10 March 1995 in the TAA case (the order in *Atlantic Container Line*, cited at paragraph 29 above) was not to determine the legality of the TAA decision's prohibition of the collective price-fixing
agreement for inland transport services provided as part of intermodal transport, since that assessment falls exclusively
within the competence of the court deciding the case on the merits, but to suspend that prohibition. Consequently, until the
Court of First Instance had pronounced judgment on the merits, on 28 February 2002, the TAA decision's prohibition of the
agreement in question still stood, since only the enforcement of that prohibition was suspended.

445   In so far as it is not in dispute that the agreement between the TACA parties is essentially the same as the one which was
the subject of the order of 10 March 1995 in *Atlantic Container Line*, cited at paragraph 29 above, and that it was entered into, at least at first, between the same parties, the Commission was
right to point in the statement in question to the risk which the TACA parties faced of being fined for entering into that
agreement. As for the allusion in that statement to the large amount of the fines, it suffices to state that the Commission
merely pointed to a risk and not to a final decision in that regard. Furthermore, in so far as the threat made in the statement
in question of large fines is reflected in the contested decision, the fines imposed therein being said to be excessive, the
applicants' complaint must be assessed on its merits in the course of the Court's assessment of the amount of the fines in
the context of the exercise of its unlimited jurisdiction.

446   Next, the applicants refer to the statements of the member of the Commission responsible for competition matters, Mr Van Miert,
on 21 June 1995 at the time the statement of objections was issued, informing the TACA parties of the Commission's intention
to withdraw immunity from fines in respect of the agreement between the TACA parties providing for collective price-fixing
for inland transport services provided as part of intermodal transport.

447   It is true that Mr Van Miert stated there that the proposed decision should be a clear and unambiguous signal that the TACA
agreement is not acceptable to the Commission and that the longer the applicants took to find a solution to the problems identified
by the Commission, the higher the fines will be.

448   However, far from prejudging in those statements the Commission's final decision as to the imposition of fines on the TACA
parties, Mr Van Miert was merely highlighting, rightly, the legal effects attaching to a decision withdrawing immunity from
fines.

449   The purpose of the Commission's decision withdrawing immunity in the present case was not to impose fines on the TACA parties
or to commit the Commission to adopting a decision to that effect, but merely to enable it, by way of a precaution, to keep
that option open notwithstanding the TACA parties' notification, should the applicants qualify for immunity from fines in
respect of agreements falling within Regulation No 1017/68. It thus appears that the Commission's decision was largely motivated
by the fact that the successive notifications made by the applicants ought not to deprive it of the option to impose fines
for past conduct should it decide that one of the amended versions of the TACA could qualify for exemption.

450   Since under Article 22(2) of Regulation No 1017/68 the amount of the fines is based inter alia on the duration of the infringement,
the Commission was entitled to inform the TACA parties that any delay in adopting a solution to the problems identified by
it would result in an increase in the amount of the fines.

451   In any event, given that Regulation No 1017/68 does not provide for immunity from fines in respect of agreements covered by
it and that there is no general principle of Community law according to which notification of an agreement confers immunity
from fines on the notifying undertaking even where there is no express legislative provision for such immunity (*Atlantic Container Line*, cited at paragraph 44 above, paragraphs 48 and 53), the decision withdrawing immunity in the present case could in no way
affect the legal position of the TACA parties since, whether or not the Commission adopts a decision withdrawing immunity,
it has the power in any event to impose fines notwithstanding the TACA parties' notification of the collective price-fixing
agreement for inland transport services provided as part of intermodal transport.

452   On those grounds, the applicants' arguments on that point must be rejected.

453   Second, the applicants submit that it is apparent from various articles and press releases that the Commission regarded the
application of Article 86 of the Treaty to various TACA practices as a way of circumventing the immunity from fines which
they enjoyed under Article 85 of the Treaty.

454   However, whilst it is true that the articles and press releases referred to by the applicants show that the Commission may
have intended to impose fines on the TACA parties in respect of agreements notified by the applicants with a view to obtaining
individual exemption under Article 85(3) of the Treaty, it cannot be inferred from this that the Commission applied Article
86 of the Treaty to various TACA practices for the sole purpose of circumventing the immunity which its members enjoyed under
Article 85 of the Treaty. Since the applicants adduce no other specific evidence in support of their argument they have not
established the facts on which they base their complaint on that point.

455   In any event, even if the alleged aim of circumvention could be inferred from the various articles and press releases referred
to by the applicants, the question whether the Commission was entitled to impose fines on undertakings, which had notified
an agreement with a view to obtaining individual exemption under Article 85(3) of the Treaty, for an infringement of Article
86 of the Treaty goes to the merits of the application of Article 86 of the Treaty and of the fines imposed in respect thereof.
The applicants' argument is based on the premiss that any party which infringes Article 86 of the Treaty cannot qualify for
immunity from fines. However, if that premiss, which is in fact challenged by the applicants in their pleas relating to the
fines, is incorrect, the question of circumventing that immunity does not arise, since immunity under Article 86 of the Treaty
would have prevented any fines being imposed for an infringement of that provision. If, on the contrary, that premiss is correct,
the question whether the Commission was entitled to impose fines depends solely on whether there was an infringement of Article
86 of the Treaty, which is denied by the applicants in their pleas relating to that provision. Either the infringement of
Article 86 of the Treaty is made out to the requisite legal standard, in which case the Commission was entitled to impose
fines, or the infringement of Article 86 of the Treaty is not so made out, in which case the fines imposed under Article 86
of the Treaty must be set aside for that reason alone. The allegation of circumventing immunity under Article 85 of the Treaty
is therefore irrelevant.

456   Therefore, the applicants' arguments on that point must be rejected.

F –  *The assessment of the facts, evidence and relevant questions*

1.     Arguments of the parties

457   The applicants claim, first, that the Commission based numerous findings of fact and law in the contested decision on speculation,
supposition and presumption, rather than evidence or analysis. The contested decision used the words likely or unlikely on
47 occasions in connection with the examination of the relevant market (paragraphs 66 and 67), internal competition (paragraph
193), external competition (paragraphs 249, 252 and 258), potential competition (paragraph 290), the contents of service contracts
(paragraphs 490 and 494), the remuneration of freight forwarders (paragraph 510) and the dominant position (paragraphs 540
and 541). Those various passages in the contested decision are not based on any evidence. Whilst it may, in certain circumstances,
be legitimate for the Commission to balance the relevant considerations and determine an issue accordingly, the examples cited
in the application demonstrate no such balancing.

458   Second, the applicants claim that the Commission's rejection of their evidence and arguments demonstrates that it did not
address itself to the case with a mind open to all the evidence (Opinion of Advocate General Slynn in Case 86/82 *Hasselblad* v *Commission* [1984] ECR 883, 913).

459   They set out a number of examples from the contested decision in support of that complaint. First, as regards the examination
of internal competition (paragraphs 201 and 202), the applicants consider that the statement that the mere fact that there
are prices other than those laid down in the tariff is no more evidence of the existence of competition than it is of the
absence of competition shows that the Commission was not prepared to accept evidence of price competition. Second, as regards
non-price competition (paragraphs 242 and 522), the applicants criticise the Commission for not having explained why it did
not accept the evidence adduced by them. Third, as regards supply-side substitutability (paragraphs 280 to 282), the applicants
claim that the Commission applied a presumption of invalidity of the evidence adduced by them on the ground that the findings
of the Dynamar Report were coloured by the instructions given to the expert. The applicants observe that in the defence the
Commission does not seek to explain the grounds for its suspicion with regard to the Dynamar Report by reference to the correspondence
between the applicants and Dynamar concerning the preparation of that report, which is annexed to the application. Fourth,
regarding the allegations relating to price (paragraphs 308, 325, 543 and 589), the applicants criticise the Commission for
having carried out a fresh analysis of service contract rates in the contested decision without reference to the allegations
in the statement of objections and without replying to the arguments set out in their response to the statement of objections.
In particular, the contested decision does not address the question whether the Commission's own findings (that between 1993
and 1997 maritime rates increased by 8% and EC inland rates fell by 4%, unadjusted for inflation) were consistent with a finding
of a dominant position. The Commission's lack of confidence in its own analysis is apparent from the description of the contested
decision in the 1998 competition policy report (XXVIIIth Report on Competition Policy - 1998, paragraph 107), in which the Commission refers to the discredited allegations of the
complainants rather than to its own price analysis. Fifth, regarding dual-rate service contracts (paragraph 154), the applicants
criticise the Commission for failing to ask them to supply information on the allegation that the initiative for that type
of contract came from shippers party to such contracts. As regards this key aspect of the finding of abuse, it was not open
to the Commission to try to place the burden of proof on the applicants. Sixth, and last, as regards the history of conference
contracts (paragraphs 469 to 471), the applicants claim that the Commission upheld only one item of evidence adduced by them,
without addressing the others. They also observe that it is only in the defence, and not in the contested decision, that the
Commission has sought to explain the reasons for the wholesale rejection of that material.

460   Third, the applicants criticise the Commission for failing to take account in the contested decision of certain facts subsequent
to the statement of objections even though they disproved the contentions essential to the Commission's reasoning at the time
the statement of objections was adopted. In particular, the Commission maintained in the contested decision (paragraphs 296,
562, 566 and 567) the allegation in the statement of objections (paragraphs 108, 113, 229, 235 and 236) that the applicants
are not faced with significant potential competition, even though during the administrative procedure China Ocean Shipping
Co. (Cosco), Yangming, K Line (in February 1997) and Norasia Line (in June 1998) entered the transatlantic trade as independent
operators, whilst NOL (in May 1998) withdrew from the TACA in order to begin new business trading as APL. The applicants claim
that the Commission based its finding that the applicants abusively altered the structure of the market on the allegation
that potential competitors were induced to become members of the TACA.

461   The Commission contends that the Court should reject the applicants' arguments on that point.

2.     Findings of the Court

462   By the present complaints, the applicants allege first that the Commission based numerous findings of fact and law in the
contested decision on speculation, supposition and presumption, rather than evidence or analysis. Next they allege that it
rejected their evidence and arguments without an open mind. Finally, they allege that it failed to take account in the contested
decision of certain facts subsequent to the statement of objections even though they disproved the contentions essential to
the Commission's reasoning at the time the statement of objections was adopted.

463   The applicants thus claim essentially that the Commission lacked objectivity in assessing the facts, evidence and questions
relevant for the present case.

464   The lack of objectivity allegedly shown by the Commission on these various points, even if it were proven, does not constitute
an infringement of the rights of the defence capable of leading to annulment of the contested decision but must be placed
in the context of the review of the assessment of the evidence or of the statement of reasons for the decision (Case T-37/91
*ICI*, cited at paragraph 188 above, paragraph 72).

465   Most of the applicants' allegations amount to a complaint that there is insufficient evidence in support of the Commission's
allegations. That is so of the allegations concerning the use on 47 occasions of the words likely or unlikely in the decision,
the fact that the Commission was not prepared to accept evidence of price competition between the TACA parties, the failure
to take account of the findings of the Dynamar Report, the fact that the Commission carried out a fresh analysis of service
contract rates in the contested decision without further reference to the allegations in the statement of objections, the
failure to question the applicants about the fact that dual-rate service contracts were requested by the shippers, the fact
that the Commission upheld only one item of evidence concerning the history of conferences adduced by the applicants for the
purposes of determining the intention of the legislature on service contracts and the fact that recent entries to the transatlantic
trade contradict the Commission's allegations of the lack of potential competition.

466   The allegations to the effect that the Commission did not explain why it rejected the evidence of price competition and the
history of conferences adduced by the TACA parties challenge in effect the statement of reasons in the contested decision
on those points.

467   For those reasons, the applicants' arguments are not germane in the context of the present pleas alleging infringement of
the rights of the defence and must therefore be rejected.

G –  *The assessment of the fines*

1.     Arguments of the parties

468   The applicants allege that the circumstances in which fines were imposed in the present case reveal a lack of objectivity
on the part of the Commission. They point to the press coverage on that issue which refers to the existence of some opposition
within the Commission and on the part of certain Member States in view of the amount of the fines proposed by the Directorate-General
for Competition. The applicants also refer to the comments of a shipper to the effect that the fines are excessive. The applicants
state that they do not know whether, and if so to what extent, those factors were taken into account by the Commission before
the adoption of the contested decision.

469   The Commission contends that the Court should reject the applicants' arguments on that point.

2.     Findings of the Court

470   The applicants allege by the present complaint essentially that the circumstances in which fines were imposed on the TACA
parties reveal a lack of objectivity on the part of the Directorate-General for Competition.

471   First, as regards the alleged opposition of the Commission to the imposition of fines proposed by the Directorate-General
for Competition, even if the latter did infringe the principles of sound administration, objectivity and impartiality the
contested decision was adopted not by that directorate-general but by the College of Commissioners (see, to that effect, *ABB Asea Brown Boveri*, cited at paragraph 404 above, paragraph 104).

472   Next, as regards the opposition shown by some Member States to the amount of the fines proposed by the Directorate-General
for Competition, in application of the relevant provisions of the regulations applying Articles 85 and 86 of the Treaty concerning
co-operation with authorities of the Member States, the representatives of those Member States are consulted before the adoption
of any decision imposing fines for infringement of the competition rules by means of the consultative committees on agreements
and dominant positions set up by those regulations. In the present case, since the Commission adopted its decision on the
basis of Regulations No 17, No 1017/68 and No 4056/68, the three consultative committees set up by those regulations were
consulted. It is inherent in the decision-making process that where appropriate the Member States express reservations or
raise objections in respect of the Commission's decisions. In any event, in so far as those consultative committees simply
issue opinions, the Commission cannot infringe the principle of sound administration merely by departing from those opinions.

473   Furthermore, the opinion of a shipper as such is clearly irrelevant in assessing whether the Commission lacked objectivity.
It cannot be deduced from the opinion of a third party that the Commission was prejudiced against the applicants. The press
article cited by the applicants reports moreover that according to another shipper the TACA parties are perfectly able to
pay the fine imposed on them, given the profits they made over the last five years.

474   Lastly, the lack of objectivity allegedly shown by the Commission or the Directorate-General for Competition in assessing
the amount of the fines, even if it were proven, does not in any event constitute an infringement of the rights of the defence
capable of leading to annulment of the contested decision but must be placed in the context of the review of the assessment
of the amount of the fines and therefore will be examined with the pleas relating to that (see, to that effect, Case T-37/91
*ICI*, cited at paragraph 188 above, paragraph 72).

475   Consequently, the third plea concerning the assessment of the fines must be rejected in its entirety.

H –  *Conclusion on the third part*

476   It follows from the foregoing considerations that the third part of the present group of pleas must be rejected in its entirety.

*Conclusion on the pleas alleging infringement of the rights of the defence*

477   It follows from all the foregoing that the first part of the present group of pleas alleging infringement of the rights of
the defence, concerning the infringement of the right to be heard, must be upheld in so far as the applicants allege that
the Commission based the second abuse recorded in the contested decision on four documents on which they were not afforded
the opportunity to comment. The consequences to be drawn from that infringement in respect of the legality of the contested
decision depend however on the assessment of the merits of the Commission's findings in respect of the second abuse, which
are the subject of the applicants' pleas in relation to the allegation of infringement of Article 86 of the Treaty.

478   The remainder of the first part of the present group of pleas must be rejected. Furthermore, the second and third parts of
the present group of pleas alleging infringement of the rights of the defence relating to, respectively, infringement of the
right of access to the file and infringement of the principles of sound administration, objectivity and impartiality must
be rejected in their entirety.

II.    *The pleas alleging that there is no infringement of Article 85 of the Treaty and of Article 2 of Regulation No 1017/68 and
various failures to state reasons in that regard*

479   The pleas advanced by the applicants in this context may be divided essentially into three separate parts. The first part
concerns the assessments made in the contested decision concerning the price-fixing agreement for inland transport services.
The second part concerns the assessments made in the contested decision concerning the rules on service contracts. The third
and final part concerns the assessments made in the contested decision concerning the rules on the remuneration of freight
forwarders.

*Part one: the assessments made in the contested decision concerning the price-fixing agreement for inland transport*

480   By the pleas advanced under the present part the applicants submit, first, that the prohibition by Article 1 of the contested
decision of the agreement between the TACA parties fixing prices for inland transport services supplied within the territory
of the European Community to shippers in combination with other services as part of a multimodal transport operation for the
carriage of containerised cargo between northern Europe and the United States of America is incompatible with the order of
10 March 1995 in *Atlantic Container Line*, cited at paragraph 29 above. Second, the applicants submit that in the light inter alia of the cooperation agreements that
they concluded in order to improve the supply of inland transport services to shippers, namely the EIEIA agreement and the
hub and spoke system, the agreement in question satisfies the conditions for individual exemption under Article 85(3) of the
Treaty.

481   In reply to a question from the Court on that point, the applicants stated at the hearing however that having regard inter
alia to the *FEFC* judgment (cited at paragraph 196 above) and Commission Decision 2003/68/EC of 14 November 2002 relating to a proceeding pursuant
to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/37.396/D2 - Revised TACA) (OJ 2003 L 26, p.
53), they do not persist in the pleas advanced under the present part.

482   Therefore, it is no longer necessary to make a finding on the first part of the present group of pleas alleging that there
is no infringement of Article 85 of the Treaty and Article 2 of Regulation No 1017/68 and various failures to state reasons
in that regard.

*Part two: the assessments in the contested decision concerning the rules relating to service contracts*

483   The applicants' pleas under the second part are essentially of two types. By the first, they complain that by Article 3 of
the contested decision the Commission prohibited them from entering into conference service contracts, jointly within the
conference, with shippers, according to the voting procedures defined by the TACA agreement, referred to in the application
as conference service contract authority. By the second type of plea, the applicants complain that by Article 3 of the contested
decision the Commission prohibited certain rules set out in the TACA agreement relating to service contracts.

A –  *The TACA parties' conference service contract authority*

484   The applicants essentially advance two pleas relating to conference service contract authority. By the first, they submit
that the Commission was wrong to find in the contested decision that that power does not qualify for block exemption under
Article 3 of Regulation No 4056/86, whereas it is one of the traditional activities of conferences and is compatible with
the concept of uniform or common freight rates within the meaning of Article 1(3)(b) of Regulation No 4056/86. By the second
plea, the applicants complain that the Commission failed to take a decision under Article 85(3) of the Treaty on their application
for individual exemption for conference service contract authority.

1.     The block exemption under Article 3 of Regulation No 4056/86

a) Arguments of the parties

485   The applicants claim first that, contrary to the Commission's assertion at paragraph 464 of the contested decision, conference
service contract authority is a traditional activity of liner conferences, consistent with the concept of uniform or common
freight rates, which therefore qualifies for block exemption under Article 3 of Regulation No 4056/86. Since conference service
contract authority enjoys block exemption, the agreement as to the terms on which the conference members may exercise that
authority must also benefit from block exemption under Regulation No 4056/86. In the TAA decision, moreover, the Commission
did not discuss the application of the block exemption to joint service contracts.

486   The applicants point out that contractual arrangements between shippers and conferences for the carriage of cargo over a period
of time at a rate other than the conference rate form part of the traditional practices of liner conferences and the term
service contract was used by the US Federal Maritime Board as early as 1961.

487   The applicants gave details of such conference contracts in their response to the statement of objections (Part II, at pages
164 to 181) and they describe the traditional practices of liner conferences in their application. Those factors demonstrate
that there is no foundation for the Commission's argument that service contracts were only introduced on the entry into force
of the US Shipping Act and are not a traditional conference activity.

488   Second, the applicants submit that, contrary to the findings at paragraph 462 of the contested decision, conference service
contract authority is consistent with the existence of uniform or common freight rates within the meaning of Regulation No
4056/86.

489   According to the applicants it is clear from Regulation No 4056/86 that either (i) the definition of uniform or common freight
rates is sufficiently broad to encompass loyalty arrangements, TVRs and independent action, or (ii) the regulation permits
conference members to enter into various additional pricing arrangements with shippers, such as loyalty arrangements, TVRs
and independent action.

490   The applicants submit that the Commission advances no coherent theory as to the meaning of uniform or common freight rates.
It adopts a narrow definition of uniform or common which excludes conference service contract authority and puts forward artificial
arguments as to why loyalty arrangements, TVRs and independent action are to be distinguished from service contracts.

491   Furthermore, the applicants allege that the contested decision does not explain whether the services supplied under loyalty
arrangements, TVRs, independent action and individual service contracts constitute services which are materially different
from those normally provided to shippers paying the conference tariff rates within the meaning of paragraph 450 of the contested
decision.

492   The applicants argue first in this respect that the Commission accepts that conference members depart from conference tariffs
in certain circumstances, but does not reconcile that position with its definition of uniform or common freight rates. In
particular, it does not explain whether the services provided under loyalty arrangements, TVRs and independent action constitute
services which are materially different from those normally provided to shippers paying the conference tariff rates.

493   Next, the contested decision does not make it clear whether the services provided under individual service contracts - which
the Commission believes conferences should allow - are (or need to be) materially different from those normally provided to
shippers paying the conference tariff rates. If they are, the contested decision does not explain how the services provided
under conference service contracts are not. If, on the other hand, the services provided under individual service contracts
are not of the kind envisaged in paragraph 450 of the contested decision, that decision does not explain how individual service
contracts are compatible with the Commission's definition of uniform or common freight rates.

494   The Commission, supported by the ECTU, claims that it is unable to understand precisely what the applicants mean by the phrase
conference service contract authority. If what the applicants mean is that conference members may collectively enter into
service contracts with shippers, the contested decision does not find that possibility in itself to be restrictive of competition,
so the problem raised by the applicants does not arise.

b) Findings of the Court

495   The applicants submit essentially that the contested decision wrongly finds that the power of the TACA parties to enter into
conference service contracts, jointly within the conference and according to the voting procedures defined by the TACA, does
not qualify for block exemption under Article 3 of Regulation No 4056/86.

496   Before examining that question, however, it is necessary to determine whether the contested decision found that that authority
is in itself a restriction of competition within the meaning of Article 85(1) of the Treaty.

497   At paragraph 449 of the contested decision, the Commission states that the block exemption under Article 3 of Regulation No
4056/86 does not authorise ... joint service contracts, but the Commission accepted in the defence that the term joint service
contracts in the contested decision covers both conference service contracts and individual service contracts entered into
jointly by several carriers.

498   As the applicants claim, it could be inferred from that paragraph of the contested decision that the Commission considers
that the mere fact that a shipping conference enters into conference service contracts is in itself a restriction of competition
within the meaning of Article 85(1) of the Treaty which does not fall within the block exemption under Article 3 of Regulation
No 4056/86 and which, therefore, in the absence of individual exemption under Article 85(3) of the Treaty, is prohibited by
the first paragraph of that provision. That is all the more so given that the conclusion of conference service contracts is
in essence the conclusion of a horizontal price-fixing agreement. Such agreements, apart from being expressly prohibited by
Article 85(1)(a) of the Treaty, are clear infringements of Community competition law (Case T-14/89 *Montedipe* v *Commission* [1992] ECR II-1155, paragraph 265, and Case T-148/89 *Tréfilunion* v *Commission* [1995] ECR II-1063, paragraph 109), including in the maritime transport sector which falls within the scope of Regulation
No 4056/86 (*CMA CGM*, cited at paragraph 427 above, paragraphs 100 and 210).

499   However, the exact scope of the contested decision on that point must be determined having regard to its operative part and
also to the grounds which constitute its essential basis (Case T-138/89 *NBV and NVB* v *Commission* [1992] ECR II-2181, paragraph 31).

500   In Article 3 of the operative part of the contested decision, the Commission finds that the TACA parties infringed Article
85(1) of the Treaty by agreeing the terms and conditions on and under which they may enter into service contracts with shippers.
Similarly, in the grounds of the contested decision, the Commission states in equivalent terms, at paragraphs 379(c) and 607(b),
that it is the agreement as to the terms and conditions on and under which they may enter into service contracts with shippers
which has the object or effect of preventing, restricting or distorting competition within the meaning of Article 85(1) of
the Treaty.

501   The first observation to be made is that it is apparent from paragraphs 477 to 501 of the contested decision, concerning the
application of Article 85(3) of the Treaty to the TACA rules on service contracts, that the only terms and conditions examined
by the Commission are, first, the prohibition in 1994 and 1995 on entering into individual service contracts and, second,
the restrictions as to the availability and contents of service contracts, that is, according to paragraphs 489 to 501 of
the contested decision, the ban on contingency clauses, the ban on contracts lasting for more than a year (which was subsequently
extended to two and then three years), the ban on multiple contracts, liquidated damages, the confidentiality of service contracts
and the ban on independent action over service contracts. From its analysis the Commission concludes, at paragraph 502 of
the contested decision, that those terms and conditions do not qualify for individual exemption under Article 85(3) of the
Treaty. Similarly, it must be noted that at paragraph 149 of the contested decision the Commission lists as restrictions imposed
by the TACA parties on the contents of service contracts and the circumstances under which they may be concluded restrictions
as to duration, bans on contingency clauses and multiple contracts, obligations as to non-confidentiality and agreement as
to the level of liquidated damages for non-performance of the contract.

502   By contrast, the mere fact that conference service contracts are entered into jointly within the conference according to the
voting procedures defined by the TACA does not appear in the terms and conditions set out in paragraphs 477 to 501 of the
contested decision, even though the relevant provisions of the TACA agreement laying down those procedures for the conclusion
of conference service contracts were notified in the same way as most of the terms and conditions set out in paragraphs 477
to 501 of the contested decision in order to obtain individual exemption under Article 85(3) of the Treaty.

503   Second, at paragraph 445 of the contested decision the Commission states expressly in any event, in the course of its examination
of the service contracts in the light of Article 85(1) of the Treaty, that joint service contracts subject to the prohibition
laid down by that provision are those of the kind entered into by the TACA parties. In the preceding paragraphs, after noting
at paragraph 442 that in 1994 and 1995 the TACA parties banned the conclusion of individual service contracts, the Commission
states at paragraph 443 that joint service contracts to which two or more carriers are party may restrict competition inter
alia where there is an express or implied agreement between those carriers not individually to enter into a service contract
with that shipper.

504   In such a case the Commission considers, as it states at paragraph 445, that joint service contracts ... [have as] their object
or effect ... to restrict competition on price and other terms between competitors supplying the same service rather than
to offer a new service to shippers. It points out in particular in this regard at paragraph 446 that where the service being
supplied is capable of being supplied by an individual shipping line, in the absence of a joint service contract carriers
might offer such additional services as increased free time, extended credit and free documentation or discounts on services
provided in other trades. The Commission states however at paragraph 445 that the TACA have supplied no evidence that joint
service contracts result in additional benefits for shippers in comparison with the services that could be offered by individual
lines. On the contrary, at paragraphs 127 and 128 and paragraphs 145 to 148, in the section of the contested decision setting
out the facts where it describes the conference service contracts concluded by the TACA parties, the Commission refers at
length to the effects of the ban imposed by the TACA in 1994 and 1995 on the conclusion of individual service contracts and
in particular the fact that the conference service contracts entered into by the TACA offered few individualised services,
contrary to the situation prevailing prior to the entry into force of the TAA/TACA when the conclusion of individual service
contracts was possible.

505   Thus it is apparent from paragraphs 442 to 446 of the contested decision read together that the Commission considered that
the mere fact that the TACA parties entered into conference service contracts, jointly within the conference according to
the voting procedures defined by the TACA, restricts competition within the meaning of Article 85(1) of the Treaty only to
the extent that the same TACA parties were also prohibited from entering into individual service contracts, so that they could
only enter into conference service contracts, individual service contracts being wholly excluded.

506   Consequently, in the light of Article 3 of the operative part as interpreted in the light of the grounds set out at paragraphs
442 to 502, it is clear that where the contested decision states, at paragraph 449, that joint service contracts do not qualify
for block exemption under Article 3 of Regulation No 4056/86 and therefore, in the absence of individual exemption under Article
85(3) of the Treaty, are prohibited by Article 85(1), it refers solely to the TACA parties' ban on individual service contracts.

507   Hence in the contested decision the Commission does not consider that the power of the TACA parties to enter into conference
service contracts according to the voting procedures defined by the TACA constitutes in itself a restriction of competition
within the meaning of Article 85(1) of the Treaty, and therefore it does not prohibit that power. In any case the Commission
expressly confirmed, both in the defence and in its replies to the Court's written questions and at the hearing, that the
contested decision does not prohibit the TACA parties from entering into such conference service contracts. It should also
be noted that Decision 2003/68 on the revised TACA, in particular paragraph 66, indicates that the TACA parties continued
to offer conference service contracts after the contested decision was adopted.

508   Therefore, the present plea must be rejected as being devoid of purpose.

2.     Individual exemption under Article 85(3) of the Treaty

a) Arguments of the parties

509   The applicants allege that in their application for exemption of 5 July 1994 they requested individual exemption for the exercise
of conference service contract authority. Whilst that authority was found to be contrary to Article 85(1) of the Treaty and
not to fall within the block exemption under Article 3 of Regulation No 4056/86, the Commission did not consider the possibility
of individual exemption and Article 3 of the contested decision does not refer to their application for exemption.

510   The Commission, supported by the ECTU, repeats that it does not understand the term conference service contract authority
used by the applicants and contends that in any event the plea is unfounded.

b) Findings of the Court

511   In reply to a written question from the Court on that point, the applicants stated that having regard inter alia to Decision
2003/68, they do not persist with the present plea. It is no longer necessary therefore to rule on it.

B –  *The TACA rules on service contracts*

512   By the present pleas, the applicants challenge the Commission's findings in the contested decision concerning (i) the rules
as to the content of conference service contracts, (ii) the rules on the availability and contents of individual service contracts
and (iii) the prohibition on independent action on service contracts.

1.     The rules as to the content of conference service contracts

a) Arguments of the parties

513   The applicants allege first that because conference service contract authority is covered by the block exemption under Article
3 of Regulation No 4056/86 the TACA parties are necessarily entitled to agree upon the terms on which they may, as a conference,
enter into conference service contracts. Accordingly, the agreement of such terms by the TACA also falls within the scope
of the block exemption.

514   The applicants point out that the Commission does not address that issue in the contested decision. Consequently, they seek
the annulment of the contested decision on the ground that the finding that the block exemption does not apply to conference
service contract rules is predicated on the erroneous view that conference service contract authority is not covered by the
block exemption.

515   Next, the applicants point out that the Commission does not consider whether conference service contract authority satisfies
the conditions for the grant of individual exemption. The Commission cannot refuse to grant individual exemption for the TACA
rules governing the terms of individual service contracts without first carrying out that assessment.

516   The applicants therefore seek the annulment of the contested decision for lack of reasoning in so far as it refuses to grant
individual exemption for the TACA service contract rules.

517   In reply to the ECTU's assertion that it is difficult to conceive of circumstances where an individual exemption would be
available for joint service contracts, in any event, the applicants submit that that does not reflect the Commission's position
in the defence, which is that it is disposed to allow members of liner conferences to enter into joint service contracts.

518   The Commission, supported by the ECTU, submits that it does not understand what the applicants mean by conference service
contract authority and the rules governing conference service contracts. It contends that the Court should reject the present
plea.

b) Findings of the Court

519   By the present pleas, the applicants submit essentially, as they stated in reply to a written question from the Court on the
scope of their pleas concerning the infringement of Article 85 of the Treaty, that the power of the TACA parties to enter
into conference service contracts, jointly within the conference and according to the voting procedures defined by the TACA,
necessarily gives them the power to determine the content of those contracts. They consider that the contested decision does
not recognise that they have such a power.

520   It has already been stated above that, contrary to what the applicants claim, the contested decision does not prohibit the
TACA parties under Article 85 of the Treaty from entering into such conference service contracts. Nevertheless it is necessary
to determine whether, as the applicants claim, the contested decision prohibits them under that provision from freely determining
the content of those contracts within the context of the conference.

521   In Article 3 of the operative part of the contested decision the Commission finds that the TACA parties infringed Article
85(1) of the Treaty by agreeing the terms and conditions on and under which they may enter into service contracts with shippers.
As stated above, it is apparent from paragraphs 477 to 501 of the contested decision, concerning the application of Article
85(3) of the Treaty to the TACA rules on service contracts, that those terms and conditions include, besides the ban in 1994
and 1995 on entering into individual service contracts, certain restrictions as to the availability and contents of service
contracts, namely, according to paragraphs 489 to 501 of the contested decision, the ban on contingency clauses, the ban on
contracts lasting for more than a year (subsequently extended to two and then three years), the ban on multiple contracts,
liquidated damages, the confidentiality of service contracts and the ban on independent action over service contracts.

522   With regard to those last restrictions, paragraphs 472 to 502 of the contested decision do not distinguish between restrictions
in relation to individual service contracts and those in relation to conference service contracts. On the contrary, at paragraph
442 of the contested decision the Commission expressly states with regard to the application of Article 85(1) of the Treaty
that the terms and conditions laid down by the TACA rules continued to apply, notwithstanding the changes made to those rules,
to all service contracts entered into by the TACA parties (whether joint or individual). One of the restrictions identified
in paragraphs 487 to 501, the prohibition on independent action, is in any case, as is apparent from paragraphs 131 to 139
and 449, only likely to affect conference service contracts and not individual service contracts. Furthermore, when the Commission
finds, at paragraph 493, that the ban on multiple contracts means that a party to a joint service contract cannot enter into
individual service contracts, it expressly refers to a restriction on conference service contracts. Finally, paragraphs 472
to 502 form part of the section of the contested decision dealing with the application of Article 85(3) of the Treaty to joint
service contracts (XX. Joint service contracts - Application of Article 85(3).

523   In the light of those paragraphs and given that the term joint service contracts in the contested decision is, as the Commission
stated in its defence, capable of covering conference service contracts, the applicants are correct in saying that it may
be inferred from the contested decision that that decision prevents the TACA from freely determining the content of conference
service contracts.

524   However, the contested decision must be read as a whole. With regard to the application of Article 85(1) of the Treaty to
service contracts, the Commission - after stating at paragraph 445 that that provision applies to joint service contracts
of the kind entered into by the TACA parties, thereby, as held at paragraph 506 above, referring to the prohibition of individual
service contracts - states at paragraph 447 that Article 85(1) of the Treaty further applies to the agreement between the
TACA parties to place restrictions on the conditions under which individual service contracts may be entered into. Similarly,
with regard to the application of Article 85(3) of the Treaty, after finding that the block exemption laid down by Regulation
No 4056/86 does not apply to joint service contracts of the type entered into by the TACA parties, the Commission states at
paragraph 464 of the contested decision that it follows that that block exemption does not apply to restrictions on the availability
or content of individual service contracts.

525   It follows that, according to the contested decision, the restrictions as to the contents of service contracts identified
at paragraphs 487 to 501 only fall within Article 85(1) of the Treaty - and, failing application of the block exemption laid
down by Article 3 of Regulation No 4056/86, only require individual exemption under Article 85(3) of the Treaty - in so far
as they affect the terms and conditions of individual service contracts, either by determining the content of those contracts,
or by determining the conditions under which they are available.

526   Thus, with regard to the content of individual service contracts, it is apparent from paragraphs 487 to 501 of the contested
decision that it prohibits the TACA parties from imposing terms in those contracts providing for the ban on contingency clauses,
the ban on contracts lasting for more than a year (subsequently extended to two and then three years) and the amount of liquidated
damages. Similarly, with regard to the conditions under which individual service contracts may be entered into, it is apparent
from the same paragraphs that the contested decision prohibits the TACA parties, in applying the TACA rules on service contracts,
from requiring that the terms and conditions of individual service contracts be disclosed and, given the ban on multiple contracts
and independent action, from preventing the parties to a conference service contract from entering into individual service
contracts and carrying out independent action on conference service contracts.

527   By contrast, in so far as the terms of conference service contracts entered into by the TACA parties do not affect the content
or availability of individual service contracts, the contested decision does not prohibit those parties, without prejudice
to the application of Article 86 of the Treaty, from freely determining the content of those contracts within the context
of the conference, especially as to their duration or the amount of liquidated damages. It is true that some of the restrictions
identified at paragraphs 487 to 501 of the contested decision apply to the TACA parties which have entered into conference
service contracts; nevertheless, as stated above, those restrictions do not determine the content of such contracts, but,
at most, indirectly determine the conditions for the availability of individual service contracts or for the carrying out
of independent action.

528   Consequently, as the Commission stated, both in its written pleadings and in reply to the Court's written questions and at
the hearing in reply to specific questions on that point, just as the contested decision does not prohibit the TACA parties
under Article 85 of the Treaty from entering into conference service contracts, it does not prohibit them under that article
from freely determining the content of those contracts, since the Commission considers in the contested decision that the
power to enter into conference service contracts necessarily implies, subject to the application of Article 86 of the Treaty,
the power freely to determine the content of such contracts.

529   Therefore, the present pleas must be rejected as being devoid of purpose.

2.     The rules on the availability and content of individual service contracts

a) Arguments of the parties

530   The applicants submit that the Commission's statement at paragraph 464 of the contested decision that because joint service
contracts of the kind entered into by the TACA parties do not qualify for block exemption, neither does an agreement restricting
individual service contracts lacks reasoning and is illogical. The Commission does not explain why the exemption under Article
3 of Regulation No 4056/86 does not apply to the restrictions on the availability and content of individual service contracts.

531   The applicants note that the only apparent reason given in support of the Commission's position is that because Article 3
of Regulation No 4056/86 does not apply to conference service contract authority, an agreement restricting the content of
individual service contracts must also not qualify for block exemption. The applicants claim, however, that even if the block
exemption does not apply to conference service contract authority, the members of a liner conference are entitled to agree
not to enter into individual service contracts and to impose restrictions on the content of such contracts.

532   Furthermore, since the members of a conference are entitled to prohibit individual service contracts, it follows that any
relaxation of that prohibition does not constitute an unacceptable restriction of competition. Consequently, the applicants
consider that the finding that the block exemption does not apply to the rules on the availability and content of individual
service contracts is based on the erroneous view that the prohibition of such contracts is not covered by the block exemption.

533   The Commission, supported by the ECTU, considers that these pleas are unfounded.

b) Findings of the Court

534   By the present pleas, the applicants challenge the assessments made by the Commission concerning the application of the block
exemption laid down by Article 3 of Regulation No 4056/86 to the TACA rules on the availability and contents of individual
service contracts.

535   They claim, first, that the reasoning in paragraph 464 of the contested decision is illogical as regards the absence of block
exemption for the ban on individual service contracts and the restrictions on the availability and contents of such contracts.

536   The Court notes that at paragraph 464 of the contested decision the Commission found that since joint service contracts of
the kind entered into by the TACA parties are not one of the traditional conference activities which have been group-exempted,
since they were only introduced following the implementation of the US Shipping Act ... it also follows that restrictions
on the availability or content of individual service contracts are not group-exempted and must be shown to satisfy the conditions
of Article 85(3) of the ... Treaty ... if they are to qualify for individual exemption.

537   It is plain that, as the applicants maintain, there is no logic in the Commission's reasoning on this point. The fact that
joint service contracts entered into by the TACA are not traditional for the TACA cannot logically justify excluding restrictions
on the availability of individual contracts, including the outright ban on them in 1994 and 1995, and restrictions on their
contents, from the block exemption.

538   However, whilst the reasoning relied on in the contested decision in this respect is thus erroneous, the Court finds that,
for the reasons set out in paragraphs 1381 to 1385, in the context of the examination of the pleas concerning the alleged
failure to comply with the procedure laid down by Regulation No 4056/86, the Commission was entitled to find, in paragraph
464 of the contested decision, that the ban on individual service contracts in 1994 and 1995 and the restrictions on the availability
and contents of individual service contracts applied from 1996 are not covered by the block exemption.

539   This plea must therefore be rejected.

540   Secondly, the applicants submit that since the ban on individual service contracts enjoys block exemption any mitigation of
the ban must likewise enjoy that exemption.

541   The Court finds that, for the reasons set out below at paragraphs 1381 to 1385, in the examination of the pleas concerning
the alleged failure to comply with the procedure laid down by Regulation No 4056/86, the ban on individual service contracts
is not covered by the block exemption.

542   Consequently, as this plea is based on a false premiss it must be rejected on that ground.

3.     The prohibition of independent action on service contracts

a) Arguments of the parties

543   The applicants submit that the contested decision contains no reasoning to support the Commission's contention that the prohibition
of independent action on conference service contracts does not qualify for block exemption under Regulation No 4056/86 or
for individual exemption.

544   The Commission, supported by the ECTU, contends that that plea is unfounded.

b) Findings of the Court

545   As the applicants point out, paragraph 449 of the contested decision merely states that the prohibition of independent action
on conference service contracts does not qualify for block exemption under Article 3 of Regulation No 4056/86, without providing
any specific explanation.

546   However, in paragraphs 451 to 471 of the contested decision the Commission explained in detail why conference service contracts
are not covered by that exemption. Since the Commission found that conference service contracts do not fall within the block
exemption laid down by Article 3 of Regulation No 4056/86 because contract rates vary depending on the shipper and therefore
do not reflect common or uniform freight rates, it must follow that the ancillary prohibition on independent action on those
contracts which serves to ensure compliance with the rates to be applied in conference service contracts cannot qualify for
that block exemption for the same reason.

547   As for the grant of individual exemption under Article 85(3) of the Treaty, it suffices to note that at paragraph 500 the
contested decision states, first, that the applicants have not explained why this prohibition fulfils the conditions for the
grant of individual exemption and, second, why independent action on service contracts was allowed in the past. Furthermore,
paragraph 501 of the contested decision states that the prohibition of independent action on service contracts does not appear
to be indispensable given the existence of independent action on the tariff itself and the failure of that prohibition to
accord any benefit to consumers.

548   It follows that the contested decision provides the applicants with an adequate indication as to whether the contested decision
is well founded as regards the application of Regulation No 4056/86 and Article 85(3) of the Treaty to the prohibition of
independent action on service contracts or, on the contrary, whether it may be vitiated by a defect enabling its validity
to be challenged (Case T-49/95 *Van Megen Sports* v *Commission* [1996] ECR II-1799, paragraph 51).

549   The findings on these points in the contested decision are thus supported by an adequate statement of reasons and the present
plea alleging failure to state reasons must therefore be rejected.

*Part three: the assessments in the contested decision in relation to the rules on the remuneration of freight forwarders*

A –  *Arguments of the parties*

550   The applicants claim first that the contested decision does not take into account the significance, in legal terms, of the
history of the agreements between the conference members on maximum levels of freight-forwarder remuneration and the way in
which US law treats those agreements and for this reason, and because of the failure to provide an adequate statement of reasons
which is its corollary, Articles 2 and 4 of the contested decision should be annulled.

551   The Commission adopts a narrow interpretation of the phrase the fixing of rates and conditions of carriage in Article 3 of
Regulation No 4056/86 and its approach differs from that used by it elsewhere, in particular with regard to service contracts.
The practice of agreements fixing a ceiling for the remuneration of freight forwarders dates back to the beginning of the
20th century, not only in the United States but in other countries as well. In the United States conference members may agree
on the amount, level and terms of remuneration to be paid to freight forwarders.

552   Second, the applicants assert that there is a direct and necessary link between the freight rates and the amounts paid to
freight forwarders, so that the agreement on the maximum levels of freight-forwarder remuneration should be regarded as a
necessary and ancillary corollary of the agreement on freight rates which enjoys block exemption under Article 3 of Regulation
No 4056/86.

553   Third, the applicant in Case T-213/98 submits that the Commission has misunderstood the status of freight forwarders and their
contractual relationship with the carrier and his client (the shipper). The freight forwarder generally does not supply any
services directly to the shipping line; there is no contract between the forwarder and the line for the provision of any such
services and the freight forwarders' remuneration is not a payment for such services. Consequently, the Commission's assessment
of the agreement in question under Article 85(1) and Article 85(3) of the Treaty is flawed.

554   The applicant considers that the description in the contested decision of the *modus operandi* of freight forwarders in the market is inaccurate in one respect. In continental Europe the general rule is that, whilst
the freight forwarder acts as agent for his client (the shipper), he acts as principal for the carrier. The freight forwarder's
remuneration is therefore, in reality, a reduction in the freight rate in the form of a discount on the sum owed by the shipper
to the carrier under the contract of carriage. The TACA, which fixes the levels of freight-forwarder remuneration in continental
Europe, is thus an agreement setting the rates and conditions of carriage within the meaning of Article 3 of Regulation No
4056/86.

555   The Commission's assessment is based on the idea that freight forwarders are paid by the TACA members as the price of services
rendered by the former to the shipping companies. That is incorrect.

556   In the United Kingdom and Ireland the precise status of the freight forwarder varies from case to case. He may act purely
as agent, in which case the contract of carriage is between the shipping company and the shipper. In certain circumstances
he may undertake obligations to the shipping company.

557   In any event, the same errors of analysis apply, *mutatis mutandis*, to the Commission's assessment of the situation in the United Kingdom and Ireland. In particular, the fact that in those
countries no sums are paid to the freight forwarders confirms that the latter do not provide a distinct service to the shipping
companies and that the only services they do provide are to their clients (the shippers), who are the only ones to pay them.
It follows that in the United Kingdom and Ireland the rule against payment of a commission to freight forwarders is no more
than a rule prohibiting discounts on freight rates.

558   Fourth and finally, the applicant in Case T-213/98 adds that the contested decision lacks reasoning in that:

–       - the only intermediary services provided by freight forwarders in the situation under consideration are those supplied by
them to their clients (the shippers), whose agent they are;

–       - the contested decision contains no description of the services that freight forwarders supposedly provide for lines and
does not explain how those services differ from those provided to the shippers;

–       - the contested decision does not identify the contractual or other relationship between the lines and the freight forwarders
under which such services are supposed to be provided for the lines, since there is in fact no separate contract for such
services and the only contractual relationship between the freight forwarder and the line is the one in which, in continental
Europe, the freight forwarder acts as principal in relation to the contract of carriage with the line concerned.

559   The Commission, supported by the ECTU, contends that none of those pleas is well founded.

B –  *Findings of the Court*

560   By the present pleas, the applicants, who do not deny that the agreement in question restricts competition within the meaning
of Article 85(1) of the Treaty, claim essentially that the contested decision is flawed in several respects in that it finds
at paragraphs 509 to 511 that the agreement in question does not fall within the block exemption laid down by Article 3 of
Regulation No 4056/86.

561   The block exemption laid down by Article 3 of Regulation No 4056/86 applies to agreements fixing the rates and conditions
of carriage in the maritime sector which must, under Article 1(3)(b) of that regulation, apply uniform or common freight rates
... with respect to the provision of liner services.

562   It follows that in order to qualify for block exemption under Article 3 of Regulation No 4056/86, rate-fixing agreements between
members of a maritime conference must establish a uniform or common freight rate (*TAA*, paragraphs 138 to 143).

563   In the present case, as is apparent from paragraph 164 of the contested decision, the agreement in question consists in the
fact that, under Article 5(1)(c) of the TACA, the TACA parties agree on the amounts, levels or rates of brokerage and freight-forwarder
remuneration, including the terms and conditions for the payment of such sums and the designation of persons eligible to act
as brokers.

564   Such an agreement does not establish a freight rate within the meaning of Article 1(3)(b) of Regulation No 4056/86, but merely
fixes the levels of commission paid by the conference members to freight forwarders in consideration for the intermediary
transport services they provide as agents of the shippers. Such services, which according to paragraph 163 of the contested
decision consist in arranging the transport of goods and negotiating the terms and conditions on which the transport takes
place, together with completion of administrative formalities such as the preparation of documentation and customs clearance,
cannot be equated with maritime transport services as such, which are the subject of the freight rates falling within the
block exemption. Thus unlike the freight rate, which is paid by the shippers to the shipping companies, the commissions with
which the agreement in question is concerned are paid by the shipping companies to the shippers' agents.

565   In those circumstances, the Commission was entitled not to apply the block exemption laid down by Article 3 of Regulation
No 4056/86 to the agreement in question.

566   None of the pleas put forward by the applicants undermines that conclusion.

567   First, as regards the plea that there is a direct and necessary link between the freight rates and the amounts paid to freight
forwarders, whilst the applicants claim that such a link exists they do not explain what it consists of. As the Commission
rightly points out at paragraph 517 of the contested decision, the fact emphasised by the applicant in Case T-213/98 that
in the United Kingdom and Ireland the carriers do not pay commission to the freight forwarders suggests on the contrary that
the agreement in question is not indispensable for the fixing of freight rates.

568   Furthermore, and in any event, even if such a direct and necessary link were shown to exist, the agreement in question would
not fall within the block exemption laid down by Article 3 of Regulation No 4056/86. It is settled case-law that, having regard
to the general principle laid down by Article 85(1) of the Treaty that agreements restricting competition are prohibited,
provisions derogating therefrom in a regulation conferring block exemption must, by their nature, be strictly interpreted
(Case T-9/92 *Peugeot* v *Commission* [1993] ECR II-493, paragraph 37, and Joined Cases T-24/93 to T-26/93 and T-28/93 *Compagnie maritime belge transports and Others* v *Commission* [1996] ECR II-1201 (*CEWAL I*), paragraph 48). The scope of Regulation No 4056/86 is restricted by Article 1(2) thereof to maritime transport services
from or to ports. Consequently, the block exemption provided for under Article 3 of that regulation cannot be extended to
services which, even if they could be considered to be ancillary to or necessary for maritime transport from or to ports,
are not maritime transport services as such falling within the scope of Regulation No 4056/86. That is all the more so in
the present case where those services constitute a separate market on which the freight forwarders are, as is apparent from
paragraph 156 of the contested decision, in competition with other economic operators such as the NVOCCs (see, to that effect,
*FEFC*, cited at paragraph 196 above, paragraph 261).

569   Next, as regards the plea that the agreement in question reflects a traditional practice amongst conferences in the United
States and other countries as well, the application of the block exemption laid down by Article 3 of Regulation No 4056/86
to a particular agreement cannot depend on whether it is traditional, but depends above all on whether that agreement falls
within the scope of that block exemption. Furthermore, according to the case-law, national practices, even if common to all
the Member States, cannot be allowed to prevail in the application of the competition rules set out in the Treaty (*VBVB and VBBB*, cited at paragraph 162 above, paragraph 40). A fortiori, therefore, the practices of certain non-member States cannot dictate
the application of Community law (*FEFC*, cited at paragraph 196 above, paragraph 341).

570   It follows that the fact alleged by the applicants that the agreement in question reflects a traditional practice amongst
conferences in the United States and other countries as well cannot, by itself, show that the Commission was wrong to refuse
to apply the block exemption laid down by Article 3 of Regulation No 4056/86 to that agreement.

571   In so far as the applicants further allege failure to state reasons on that point, the present plea coincides with the specific
plea alleging failure to state reasons in respect of the failure to have regard to US law, which is the subject of separate
consideration at paragraphs 1396 to 1411 below.

572   As regards the plea made only by the applicant in Case T-213/98 that the remuneration paid to freight forwarders by carriers
constitutes not the price paid for services rendered but a discount on the freight rate, it suffices to note that that plea
is based on the false premiss that freight forwarders do not provide any services to the carriers. The Commission states at
paragraph 163 of the contested decision, without being contradicted by the applicant, that where the freight forwarders act
as agents of the shippers, their task consists in arranging the transport of goods and negotiating the terms and conditions
on which the transport takes place, together with completion of the administrative formalities. Such services clearly benefit
not only the shippers but also the carriers, since their purpose is to facilitate the conclusion and performance of the contract
of maritime transport.

573   The fact that in the United Kingdom and Ireland no commission is paid to freight forwarders by carriers, far from demonstrating
that freight forwarders provide no services to carriers, tends rather, as the applicant itself seems to recognise, to indicate
the existence in those Member States of an agreement prohibiting the payment of any commission which, in terms of Article
85(1) of the Treaty, may be more restrictive of competition than the agreement at issue.

574   Finally, as regards the same applicant's plea alleging failure to state reasons, its criticisms seek in fact to challenge
the merits of the Commission's findings in the contested decision in relation to the services provided by freight forwarders
and their legal status in relation to carriers and shippers. Such arguments, which for the reasons given above must be rejected,
are not germane to the issue of whether the Commission has complied with its obligation to state reasons (*PVC II*, cited at paragraph 191 above, paragraph 389).

575   In any event, even if the arguments put forward by the applicants in the present plea may be regarded as seeking to challenge
the statement of reasons in the contested decision, it should be borne in mind that it is settled case-law that although,
pursuant to Article 190 of the EC Treaty (now Article 253 EC), the Commission is bound to state the legal reasons on which
its decisions are based, mentioning the facts, law and considerations which have led it to adopt them, it is not required
to discuss all the issues of fact and law which have been raised during the administrative procedure (see, in particular,
Case 42/84 *Remia and Others* v *Commission* [1985] ECR 2545, paragraphs 26 and 44). At most the Commission is under an obligation, with regard to Article 190 of the
Treaty, to reply specifically only to the applicants' primary allegations made in the course of the administrative procedure
(*FEFC*, cited at paragraph 196 above, paragraph 426).

576   In the present case, during the administrative procedure, and in particular in the response to the statement of objections,
the applicant did not put forward any evidence to challenge the Commission's findings in the statement of objections in respect
of the services provided by the freight forwarders and their legal status in relation to the carriers and shippers. Clearly
the Commission cannot be criticised in terms of its obligation to state reasons for not having adopted a position in the contested
decision based on evidence which was not submitted to it before that decision was adopted.

577   For all of those reasons, the applicants' pleas in relation to the Commission's findings concerning the agreement relating
to the remuneration of freight forwarders must be rejected in their entirety.

*Conclusion on the pleas alleging that there is no infringement of Article 85 of the Treaty and of Article 2 of Regulation
No 1017/68 and various failures to state reasons in that regard*

578   It follows from the foregoing that the present pleas must be rejected in their entirety.

III. *Pleas alleging absence of infringement of Article 86 of the Treaty and various failures to state reasons in that regard*

579   These pleas are essentially developed in three parts. In the first part, the applicants deny that their position can be assessed
collectively. In the second part, they claim that the TACA members do not hold a collective dominant position. Last, in the
third part, they deny the two abuses of a dominant position of which the Commission accuses them in the contested decision.

*Preliminary observation on the admissibility of these pleas*

580   As a preliminary point, the Commission contends that the part of the applications devoted to Article 86 of the Treaty is inadmissible,
in that it seeks annulment of the findings of fact set out in the grounds of the contested decision (*NBV and NVB*, cited at paragraph 499 above).

581   It is clear, however, that by these pleas the applicants are not seeking annulment of the findings of fact set out in the
grounds of the contested decision but are challenging those findings in so far as they constitute the necessary support for
Articles 5 to 7 of the operative part of the contested decision, which they seek to have annulled and in which the Commission
found that the TACA parties had abused their dominant position by altering the competitive structure of the market so as to
reinforce the dominant position of the TACA and by placing restrictions on the availability and contents of service contracts,
and ordered them to put an end to the abuses.

582   The Commission's objection of inadmissibility of the application on this point must therefore be rejected as unfounded.

*Part one: the absence of a dominant position held collectively by the TACA parties*

583   The applicants deny that the position held by the TACA members can be assessed collectively. In support of this part of their
pleas, they claim that the Commission made errors of assessment as regards the economic links between the TACA parties and
the internal competition between those parties.

A –  *Pleas alleging incorrect assessment of the economic links between the TACA parties*

1.     Arguments of the parties

584   The applicants observe that at paragraphs 526 to 531 the contested decision identifies five links, namely the tariff, the
TACA enforcement provisions, the TACA secretariat, the publication of business plans and consortia arrangements. They submit
that those factors, whether taken individually or collectively, do not suffice to justify a collective assessment of their
position on the relevant market.

585   First, as regards the tariff, the applicants allege that the obligation in US law (under the United States Shipping Act) to
adhere to the tariff does not constitute an economic link such as to lead the applicants to adopt the same conduct on the
market, since US law permits members of a conference to depart from the tariff by taking independent action. A tariff comprises
both ordinary rates and various exceptions to those rates. The mechanisms for those exceptions are as lawful as the rates
themselves. The Commission's position comes down to saying that the members of every liner conference and price cartel should
be assessed collectively under Article 86 of the Treaty, which would entail recycling the evidence relevant to an assessment
under Article 85 of the Treaty for the purposes of drawing conclusions on the application of Article 86 of the Treaty.

586   Second, enforcement measures are normal within liner conferences and are viewed favourably by the United States Federal Maritime
Commission (the FMC) as a means of protecting competition because they are intended to prevent discrimination on the part
of conference members against shippers. Furthermore, provided that those measures do no more than ensure compliance with the
obligations laid down by the TACA, they cannot logically be considered to be a link in their own right. Last, and in any event,
that type of measure does not restrict competition between the TACA members.

587   Third, as regards the role of the TACA secretariat, the applicants point out, first, that it acts on the instructions of the
conference members in negotiating service contracts. It is not correct to say, as the Commission does, that the secretariat
participates in the negotiation of individual service contracts against the wishes of the shipper. Even where a shipper chooses
to involve the secretariat in the negotiation of individual service contracts, it very rarely participates in the negotiation
of commercial terms. Next, the applicants consider that the secretariat's role in enforcing service contracts is purely administrative
and has no bearing on the competitive position of the members. Similarly, the issuing of press releases is a routine administrative
function enabling conferences to communicate with shippers.

588   Fourth, the purpose of publishing a business plan is to announce changes to the tariff and conference service contract rates.
Since conference members are required to agree on a tariff, that periodic announcement cannot constitute a link in itself
and serve to present the conference members as having a common commercial strategy (paragraph 530 of the contested decision).
The applicants also assert that the business plan is a measure intended to contribute to the consultation process with the
shippers required by Article 5(1) of Regulation No 4056/86.

589   Fifth, the applicants do not participate in the same consortium. Furthermore, consortium agreements provide operational and
technical efficiencies which, as recognised in the fourth and sixth recitals in the preamble to Council Regulation (EEC) No
479/92 of 25 February 1992 on the application of Article 85(3) of the Treaty to certain categories of agreements, decisions
and concerted practices between liner shipping companies (consortia) (OJ 1992 L 55, p. 3), contribute to improving the competitiveness
of liner transport. As the Commission noted in its decision on the merger between P&O and Nedlloyd (Decision of 19 December
1996 declaring a concentration to be compatible with the common market (Case No IV/M.831 - P&O/Royal Nedlloyd), according
to Council Regulation (EEC) No 4064/89 (OJ 1997 C 110, p. 7), paragraph 65) competition takes place between the lines within
the consortia which compete by, firstly, marketing their services separately and, secondly, in the quality of their service
e.g. the availability of specialist equipment; the provision of logistic (e.g. container packing) and intermodal services
and by the speed and quality of documentation including data processing. Membership of consortium agreements is only relevant
as an economic link if the parties to the agreements adopt the same conduct on the market. That is not so in this case. On
the contrary, the TACA parties' membership of different consortia serves to increase internal competition between them.

590   Last, the applicant in Case T-212/98 claims that the Commission's finding that the links between itself and the other TACA
members are sufficiently strong to show collective dominance is based on a flawed assessment of the economic links between
them. The applicant's market share of the trade in question (less than 0.1%) and its turnover on that trade in 1996 compared
with that of other TACA members (only 1.2% of its turnover arose from that trade) show that it cannot have acted as a single
economic entity with the other applicants on the relevant market.

591   The Commission, supported by the ECTU, contends that the economic links identified in the contested decision demonstrate to
the requisite legal standard the collective nature of the position held by the TACA parties.

2.     Findings of the Court

592   By these pleas, the parties allege in substance that the economic links between the TACA parties identified in the contested
decision, whether taken individually or collectively, are not sufficient to justify a collective assessment of their position
on the relevant market.

593   By the subsequent pleas alleging incorrect assessment of the internal competition, which are examined below, the applicants
criticise the Commission for not having taken into account the significant competition between the TACA parties within the
conference, especially as regards prices. In those circumstances, these pleas must be taken as intended solely to criticise
the Commission for having considered that the links resulting from the existence of the conference are as such capable of
justifying a collective assessment of the position held by the TACA parties.

594   It has consistently been held that Article 86 of the Treaty is capable of applying to situations in which several undertakings
together hold a dominant position on the relevant market (Case C-393/92 *Almelo and Others* [1994] ECR I-1477, paragraph 43; Case C-96/94 *Centro Servizi Spediporto* [1995] ECR I-2883, paragraphs 32 and 33; Joined Cases C-140/94 to C-142/94 *DIP and Others* [1995] ECR I-3257, paragraphs 25 and 26; Joined Cases T-68/89, T-77/89 and T-78/89 *SIV and Others* v *Commission* (*Flat glass*) [1992] ECR II-1403, paragraph 358; and *CEWAL I*, cited at paragraph 568 above, paragraph 60).

595   In order to conclude that such a dominant position exists, the undertakings concerned must, according to the case-law, be
sufficiently linked between themselves to adopt the same line of action on the market (*Centro Servizi Spediporto*, cited at paragraph 594 above, paragraph 33; *DIP and Others*, cited at paragraph 594 above, paragraph 26; Joined Cases C-68/94 and C-30/95 *France and Others* v *Commission* (*Kali und Salz*) [1998] ECR I-1375, paragraph 221; Case C-309/99 *Wouters and Others* [2002] ECR I-1577, paragraph 113; and *CEWAL I*, cited at paragraph 568 above, paragraph 62). In that regard, it is necessary to examine the links or factors of economic
correlation between the undertakings concerned and to ascertain whether those links or factors allow them to act together
independently of their competitors, their customers and consumers (*Almelo*, cited at paragraph 594 above, paragraph 43; *Kali und Salz*, cited above, paragraph 221; Joined Cases C-395/96 P and C-396/96 P *Compagnie maritime belge transports and Others* v *Commission* (*CEWAL II*) [2000] ECR I-1365, paragraphs 41 and 42; and *Wouters*, cited above, paragraph 114).

596   At paragraph 525 of the contested decision, the Commission stated that the members of the TACA collectively enjoy a dominant
position by reason of the fact that they are bound together by a considerable number of economic links which has led to a
significant diminution of their ability to act independently of each other. The parties are agreed that at paragraphs 526
to 531 of the contested decision, the Commission relied on the following five economic links: the tariff (paragraph 526),
the enforcement provisions and penalties (paragraph 527), the secretariat (paragraphs 528 and 529), the annual business plans
(paragraphs 528 and 530) and the consortia arrangements (paragraph 531). Paragraph 528 of the contested decision states that
in the Commission's view the tariff and the enforcement provisions and penalties constitute restrictions on the TACA parties'
ability to act independently of each other [which] are intended to eliminate substantially price competition between them.
The Commission further stated at paragraph 528 of the contested decision that the TACA secretariat and the annual business
plans were measures which allowed the TACA parties to present [themselves] as a single united body and so diminish pressure
for price reductions from customers.

597   With the exception of the consortia arrangements, the links identified by the Commission, namely the tariff, the enforcement
provisions and penalties, the secretariat and the annual business plans, are the direct consequences of the activities carried
out by the applicants within the TACA and, accordingly, of their membership of it.

598   It is common ground that the TACA is a liner conference within the meaning of Article 1(3)(b) of Regulation No 4056/86. In
order to constitute a liner conference within the meaning of that provision, the undertakings concerned must necessarily establish
a certain number of links between them.

599   Article 1(3)(b) of Regulation No 4056/86 defines a liner conference as a group of two or more vessel-operating carriers which
provides international liner services for the carriage of cargo on a particular route or routes within specified geographical
limits and which has an agreement or arrangement, whatever its nature, within the framework of which they operate under uniform
or common freight rates and any other agreed conditions with respect to the provision of liner services.

600   The eighth recital in the preamble to that regulation states that such conferences have a stabilising effect, assuring shippers
of reliable services; ... they contribute generally to providing adequate efficient scheduled maritime transport services
and give fair consideration to the interests of users; ... such results cannot be obtained without the cooperation that shipping
companies promote within conferences in relation to rates and, where appropriate, availability of capacity or allocation of
cargo for shipment, and income; ... in most cases conferences continue to be subject to effective competition from both non-conference
scheduled services and, in certain circumstances, from tramp services and from other modes of transport; ... the mobility
of fleets, which is a characteristic feature of the structure of availability in the shipping field, subjects conferences
to constant competition which they are unable as a rule to eliminate as far as a substantial proportion of the shipping services
in question is concerned.

601   As the Court of Justice and the Court of First Instance have already held (*CEWAL II*, cited at paragraph 595 above, paragraphs 48 and 49; *Flat glass*, cited at paragraph 594 above, paragraph 359; and *CEWAL I*, cited at paragraph 568 above, paragraphs 63 to 66), it follows from those provisions that both by its nature and in the
light of its objectives, a liner conference, as defined by the Council for the purposes of qualification for block exemption
under Regulation No 4056/86, may be described as a collective entity which presents itself as such on the market vis-à-vis
both users and competitors. Furthermore, the Council has laid down in Regulation No 4056/86 the provisions necessary to avoid
a liner conference having effects incompatible with Article 86 of the Treaty. That does not in any way prejudge the question
whether, in a given situation, a liner conference has a dominant position on a particular market or, a fortiori, has abused
that position. As is clear from Article 8(2) of Regulation No 4056/86, it is by its conduct that a conference holding a dominant
position may produce effects which are incompatible with Article 86 of the Treaty.

602   In the light of the foregoing, it is appropriate to regard the links resulting from the existence of a liner conference within
the meaning of Article 1(3)(b) of Regulation No 4056/86 as being, in principle, capable of justifying a collective assessment
of the position on the relevant market of the members of that conference for the purposes of the application of Article 86
of the Treaty, in so far as those links are such as to allow them to adopt together, as a single entity which presents itself
as such on the market vis-à-vis users and competitors, the same line of conduct on that market.

603   None of the arguments put forward by the applicants in the context of these pleas is capable of upsetting that conclusion.

604   First, as regards the TACA's tariff, the applicants claim that the obligation in US law to comply with the tariff does not
constitute an economic link of such a kind as to lead them to adopt the same conduct on the market, since US law allows the
members of a conference to depart from the tariff in the context of independent action. The applicants further state that
a tariff has both ordinary rates and various exceptions to those rates.

605   In order to examine the merits of this plea, it is appropriate to recall that at paragraph 526 of the contested decision the
Commission expressed the view that the tariff constituted the first of the economic links between the TACA parties. It observed
that the TACA parties not only agreed to adhere to a tariff but were also required to do so by US law, failing which they
might be fined up to USD 25 000 for each violation. The Commission thus considers, according to paragraph 528 of the contested
decision, that the tariff is a restriction on the TACA members' ability to act independently of each other and is intended
to eliminate substantially price competition between them.

606   The very existence of a liner conference within the meaning of Article 1(3)(b) of Regulation No 4056/86, such as the TACA,
requires the application of a tariff providing for uniform or common freight rates.

607   Such a liner conference therefore presents itself as a single entity on the market since it fixes uniform or common freight
rates for all its members, in the sense that the same price will be charged for the carriage of the same cargo from point
A to point B, regardless of which shipowning member of the conference is responsible for carriage (*TAA*, paragraph 157).

608   The fact that the tariff provides for certain special rates, such as TVRs, in addition to the ordinary rates, is irrelevant,
since, as the Commission stated in respect of the special rates at paragraph 120 of the contested decision, and as the applicants
themselves accept, these special rates are also uniform or common rates forming an integral part of the tariff.

609   As regards the applicants' claim that US legislation requires that members of a liner conference be permitted to carry out
independent actions on the tariff rates, it should be emphasised that those independent actions constitute exceptions to the
principle of joint price-fixing (*TAA*, paragraph 307), so that they cannot, in principle, affect the uniform nature of the tariff rates and, accordingly, call
in question the collective assessment of the conference as resulting, together with other factors, from the tariff. As stated
above, the question whether in this case the independent actions and the other specific pricing practices of the TACA parties
are of such a kind as to call such an assessment in question is, as stated above, the subject of separate pleas.

610   Last, contrary to what the applicants claim, the fact that an agreement is prohibited by Article 85(1) of the Treaty does
not prevent the Commission from taking such an agreement into consideration in order to conclude, in the context of the application
of Article 86 of the Treaty, that the position of the undertakings concerned on the relevant market is a collective one. As
the Court of Justice has already held, an agreement, decision or concerted practice (whether or not covered by an exemption
under Article 85(3)) may, where it is implemented, result in the undertakings concerned being so linked as to their conduct
on a particular market that they present themselves on that market as a collective entity vis-à-vis their competitors, their
trading partners and consumers. The existence of a collective dominant position may therefore flow from the nature of the
terms of an agreement, from the way in which it is implemented and, consequently, from the links or factors which give rise
to a connection between undertakings which result from it (*CEWAL II*, cited at paragraph 595 above, paragraphs 44 and 45). As observed at paragraph 601 above that applies, according to the case-law,
to a liner conference within the meaning of Article 1(3)(b) of Regulation No 4056/86. It is common ground in this case that
the TACA is such a liner conference. Accordingly, the Commission was entitled to rely on such an agreement in order to conclude,
in the context of the application of Article 86 of the Treaty, that the position of the TACA parties on the relevant market
was a collective position.

611   It must therefore be concluded that the Commission was entitled to rely in particular on the TACA tariff in order to make
a collective assessment of the position of the TACA parties on the relevant market. The applicants' arguments on this point
must therefore be rejected.

612   Second, the applicants submit that the TACA enforcement provisions and penalties are normal within liner conferences and that
they are looked on favourably by the FMC as a means of protecting competition, since they are intended to prevent discriminatory
practices on the part of conference members vis-à-vis shippers. Furthermore, in so far as those measures serve merely to ensure
compliance with obligations laid down by the TACA, they cannot logically be regarded as a link in their own right.

613   It should be noted that at paragraph 527 of the contested decision the Commission stated that adherence to the TACA is ensured
by extensive enforcement provisions. Paragraph 21 of the contested decision states that Article 10 of the TACA provides for
the setting up of an Enforcement Authority which is responsible, acting on its own initiative or following a complaint, for
investigating any alleged breach of the agreement. The Commission observes at paragraph 22 of the contested decision that
the Enforcement Authority has unfettered access to all documents related to a carrier's activities in the trade and is authorised
to impose substantial fines for any breach of the agreement, in particular the price-fixing arrangements, and for any refusal
to allow access requested during an investigation. The Commission thus states at paragraph 527 of the contested decision that
these provisions are the most extensive policing arrangements ever seen by the Commission in the liner shipping sector.

614   Clearly, such enforcement provisions and penalties, intended primarily to ensure compliance with the tariff adopted by a liner
conference, are likely to reinforce the link established by that tariff, particularly when, as stated at paragraph 599 above,
the very existence of a liner conference within the meaning of Article 1(3)(b) of Regulation No 4056/86 requires the application
of a tariff providing for uniform or common freight rates, so that the existence of enforcement provisions and penalties to
ensure compliance therewith by the parties to the liner conference constitute measures necessary and, therefore, ancillary
to any liner conference within the meaning of that provision.

615   Contrary to what the applicants claim, it is immaterial in this regard that the FMC takes a positive view of the enforcement
provisions adopted by liner conferences. Those measures are singled out in the contested decision not as constituting an infringement
of the Treaty competition rules but as a factor likely to reinforce the link between the parties to the TACA resulting from
the tariff adopted by it. The existence of such a link, which may induce the Commission to make a collective assessment of
the position of the TACA parties, does not in itself imply any infringement of the Treaty competition rules. Only the abuse
of that position is capable of constituting such an infringement, at least when the position held collectively assumes dominance
on the relevant market (*CEWAL II*, cited at paragraph 595 above, paragraphs 37 to 39).

616   The fact, alleged by the applicants, that the enforcement provisions and penalties do not in themselves constitute a link
is irrelevant, since it has been found above that those measures were likely to reinforce the link established by the tariff.

617   The Commission was therefore entitled to rely in particular on the existence of enforcement provisions and penalties to make
a collective assessment of the position held by the TACA members on the relevant market.

618   Third, as regards the TACA secretariat the applicants emphasise, first of all, that for the purpose of negotiating service
contracts the secretariat acts on the instructions of the members of the conference and that even when a shipping agent chooses
to involve the secretariat in negotiating individual service contracts, the secretariat very rarely participates in the negotiation
of the trade terms. Furthermore, the secretariat's role in implementing the service contracts is purely administrative and
is not relevant as regards the members' competitive position.

619   At paragraph 528, however, the Commission stated that the TACA secretariat enabled the liner conference to present itself
on the market as a single united body. At paragraph 529, it pointed out that the TACA secretariat had extensive administrative
and financial functions, that it was authorised to act as agent for the TACA members by entering into transport contracts
on their behalf, that it had the right to attend service contract negotiations between shippers and members and that it issued
press notices on behalf of the parties.

620   Without there being any need to inquire into the precise role of the TACA secretariat in negotiating and implementing service
contracts, it is clear that the mere undisputed existence of a common administrative body having the capacity to represent
the TACA parties, in particular vis-à-vis shippers, is a factor capable of demonstrating that the TACA is in a position to
present itself as a single united body on the market, thus reflecting the links existing between the TACA parties as a result
of their activities as members of a liner conference within the meaning of Article 1(3)(b) of Regulation No 4056/86. It is
also apparent from the file before the Court that correspondence from shippers concerning the conclusion of service contracts
with the conference is addressed to the TACA secretariat.

621   The Commission was therefore entitled to rely on the existence of the TACA secretariat to make a collective assessment of
the TACA parties' position on the relevant market. The applicants' arguments on this point must therefore be rejected.

622   Fourth, as regards the TACA's annual business plans, the applicants maintain that, as they are intended to announce changes
in the tariff, they cannot in themselves constitute a link and serve to present the conference as having a common trading
strategy. Furthermore, the annual business plan is intended to contribute to the consultation process with the shippers required
by Article 5(1) of Regulation No 4056/86.

623   However, the Commission stated at paragraphs 528 and 530 of the contested decision that publication by the TACA of annual
business plans showed that the TACA parties were seen by shippers as having a single trading strategy on the market and thus
permitted the TACA to present itself on the market as a single united body.

624   It is clear that publication by the TACA of annual business plans, drawn up jointly by its members in the context of their
activities as a liner conference within the meaning of Article 1(3)(b) of Regulation No 4056/86, is a factor manifestly capable
of showing the TACA as a single body vis-à-vis third parties, thus reflecting the existence of the links existing between
the members of a liner conference within the meaning of that regulation. Contrary to the applicants' contentions, the annual
business plans therefore constitute in themselves a link which, owing precisely to the fact that they are published by the
TACA, is capable of presenting the TACA as a collective entity on the relevant market vis-à-vis its competitors and shippers.

625   That is borne out by the fact that, as the applicants themselves point out, the annual business plans are intended to contribute
to the process of consultation with shippers required by Article 5(1) of Regulation No 4056/86. According to that provision,
the purpose of those consultations is to seek solutions on general issues of principle concerning the rates, conditions and
quality of scheduled maritime transport services arising between users and the liner conference as a whole. Therefore, far
from contradicting the Commission's finding that publication of the annual business plans serves to enable the TACA to present
itself as a collective entity on the relevant market, the fact that publication is the consequence of an obligation imposed
on liner conferences by Regulation No 4056/86 is, on the contrary, likely to reinforce it.

626   In that regard, it should also be observed that publication of those annual business plans is identified in the contested
decision not as constituting a breach of the Treaty competition rules but as a factor likely to present the TACA as a collective
entity on the relevant market. The existence of such a collective entity does not in itself imply any breach of the Treaty
competition rules. Only the abuse by that collective entity of its position on the relevant market is susceptible of constituting
such an infringement, at least when the position thus held is a dominant position on the relevant market (*CEWAL II*, cited at paragraph 595 above, paragraphs 37 to 39).

627   The Commission was therefore entitled to rely in particular on the publication of the TACA's annual business plans in order
to make a collective assessment of the position held by the TACA parties on the relevant market. The applicants' arguments
on this point must therefore be rejected.

628   All those considerations show clearly that, in accordance with the case-law cited at paragraph 601 above, the tariff, the
enforcement provisions and penalties, the secretariat and the annual business plans of the TACA demonstrate to the requisite
legal standard the existence of substantial links between the TACA parties of such a kind as to justify a collective assessment
of their position on the relevant market.

629   Consequently, without there being any need to rule on the relevance of other links between the applicants resulting from the
conclusion of other agreements, such as consortia agreements, it must be concluded that the Commission was entitled to rely
on those factors, which result from the applicants' activities as parties to the TACA and, accordingly, from their membership
of a liner conference within the meaning of Article 1(3)(b) of Regulation No 4056/86, in order to make a collective assessment
of the TACA parties' position on the relevant market.

630   In the case of the applicant in Case T-212/98, that conclusion is not affected by the minimal nature of its market share or
of its turnover on the trade in question. Provided that the links serving to justify the collective assessment of the position
of the TACA parties result from their membership of the TACA, the position of each party to the TACA must, by the simple fact
of that membership, be assessed with that of the other parties to the TACA, since by that membership the applicant has bound
itself, as regards its conduct on a specific market, to the other parties which have joined the TACA, in such a way that they
present themselves on the market as a collective entity vis-à-vis their competitors, their trading partners and consumers
(*CEWAL II*, cited at paragraph 595 above, paragraph 44). In this case, the applicant does not dispute that it was a party to the TACA
during the relevant period.

631   Furthermore, it has been held that in order for the position of a number of undertakings to be assessed collectively on the
relevant market it is sufficient that they are able to adopt a common policy on that market. On the other hand, there is no
need to show that those undertakings have in fact all adopted that common policy in all circumstances (see, to that effect,
*Kali und Salz*, cited at paragraph 595 above, paragraph 221).

632   In those circumstances, the fact that, owing to its minimal position on the market, not every act carried out by the TACA
can be imputed to the applicant is of no relevance in the context of these pleas relating to the collective nature of the
position held by the TACA parties.

633   At most, the fact that one party to the TACA did not follow the conduct adopted by the other TACA parties might show that
that party to the TACA did not participate in an infringement of Article 86 of the Treaty, should it transpire that the conduct
adopted by the other TACA parties constituted an abuse for the purposes of that provision. Although the existence of a collective
dominant position may be deduced from the position which the economic entities concerned together hold on the market in question,
the abuse does not necessarily have to be the action of all the undertakings in question. It need only be capable of being
identified as one of the manifestations of such a joint dominant position (*Irish Sugar*, cited at paragraph 152 above, paragraph 66).

634   Accordingly, even if the applicant's market share or turnover on the trade in question was minimal during that period, it
must be considered that, regard being had to the tariff, the enforcement provisions and penalties, the secretariat and the
annual business plans of the TACA, that applicant was capable of forming together with the other TACA parties a single entity
on the relevant market.

635   It follows from all of those considerations that the pleas, complaints and arguments alleging incorrect assessment of the
economic links between the TACA parties must be rejected in their entirety.

636   The Court must none the less ascertain whether, as the applicants claim in the subsequent pleas, the evidence relating to
internal competition which they have adduced can show that the links identified in the contested decision do not in this case
justify a collective assessment of the dominant position held by the TACA parties.

B –  *Pleas alleging errors of assessment concerning internal competition between the parties to the TACA*

637   As regards internal competition between the TACA parties, the applicants claim, first of all, that in the contested decision
the Commission applied the wrong legal test. They go on to claim that the Commission incorrectly assessed internal price and
non-price competition between the TACA parties. Last, the applicants rely on various failures to state reasons in the contested
decision in those respects.

1.     Application in the contested decision of the wrong legal test

a)     Arguments of the parties

638   First of all, the applicants complain that the Commission did not consider whether the links between the TACA members led
to the existence of a single body operating on the market. In particular, they submit that the Commission did not define [those
links] by reference to their result, namely the establishment of a situation where a group of independent undertakings performs
as a single market entity (Opinion of Advocate General Fennelly in *CEWAL II* [2000] ECR I-1371, point 28).

639   In support of this complaint, the applicants claim that the Commission thus refers at paragraphs 528 and 530 of the contested
decision to their intentions and to the appearance of their actions, without proving the effect of those links on their conduct
on the market.

640   Second, they challenge the Commission's assertion at paragraph 522 of the contested decision that it follows from the judgment
in *Flat glass*, cited at paragraph 594 above, that the continued existence of a possible degree of competition between the parties does
not rule out the finding of a collective dominant position.

641   The applicants contend that the judgment in *Flat glass* does not contain that argument. The Court of First Instance merely held there that there is nothing, in principle, to prevent
two or more independent economic entities from being, on a specific market, united by such economic links that, by virtue
of that fact, together they hold a dominant position vis-à-vis the other operators on the same market (paragraph 358 of the
judgment). The applicants submit that that passage gives no indication of the degree of competition that would be compatible
with a finding of collective dominance.

642   The applicants claim that the Commission is seeking by its argument to develop a new test which makes the common tariff the
predominant factor justifying a finding of collective dominance, so that if the undertakings in question adopt the same general
approach, evidence of independent conduct on the market, including independent pricing, does not mean that there is no collective
dominant position. Since under Article 3 of Regulation No 4056/86 any liner conference must be based on a uniform or common
tariff, the Commission has applied a virtually irrebuttable presumption that the members of any liner conference, including
the TACA, are capable of having a collective dominant position. That argument also explains the Commission's reluctance to
address the evidence of actual competition.

643   The applicants assert that, on the contrary, it is apparent from Community case-law that the existence of a collective dominant
position presupposes a lack of competition between the undertakings concerned. At paragraph 34 of the judgment in *Centro Servizi Spediporto*, cited at paragraph 594 above, the Court of Justice held that national legislation which provides for the fixing of road-haulage
tariffs by the public authorities cannot be regarded as placing economic agents in a collective dominant position characterised
by the absence of competition between them (see also *DIP*, cited at paragraph 594 above, paragraph 27, and, as regards the Commission's practice, the Notice on the application of
the competition rules to access agreements in the telecommunications sector - framework, relevant markets and principles,
OJ 1998 C 265, p. 2, paragraphs 78 and 79). In his Opinion in *CEWAL II*, cited at paragraph 638 above, Advocate General Fennelly concluded that it emerges clearly from the case-law discussed above,
particularly *Centro Servizi Spediporto*, *DIP* and [*Kali* *und* *Salz*], that absence of competition between a number of putatively collective dominant undertakings is a salient feature of collective
dominance (point 34). That case-law is, moreover, consistent with generally accepted economic theories on collective dominance.

644   The applicants claim that it follows that, in order to determine whether there is a collective dominant position, it is necessary
to consider first whether the undertakings concerned have adopted a mutual pricing strategy and, if so, secondly whether the
extent and intensity of non-price competition are such as to negate a finding of collective dominance based on the existence
of a mutual pricing strategy (Opinion of Advocate General Fennelly in *CEWAL II*, cited at paragraph 638 above, paragraph 34). In this case, the applicants claim, the contested decision does not make that
twofold assessment.

645   Third, the applicants allege that the Commission failed to assess the main question, namely whether the applicants adopted
the same conduct on the market (*Almelo*, cited at paragraph 594 above, paragraph 42) and whether they constitute a single market entity (Opinion of Advocate General
Fennelly in *CEWAL II*, cited at paragraph 638 above, paragraph 28). The only conclusion drawn on this issue in the contested decision, at paragraph
525, is that the economic links between the TACA members have led to a significant diminution of [their] ability to act independently
of each other. That does not justify a finding that the applicants are capable of occupying a collective dominant position.
Contrary to the requirements of the case-law and the economic theories on the matter, the Commission does not purport to characterise
the effect of those links as the adoption of the same conduct on the market for all relevant aspects of competition on the
market. The claim in the defence that it was sufficient that the TACA members adopted substantially the same conduct cannot
therefore be upheld.

646   The applicants also observe, by way of conclusion, that the Commission's approach in diluting the same conduct test blurs
the distinction between Article 85 and Article 86 of the Treaty and in effect gives the Commission a discretion to determine
the circumstances in which Article 86 of the Treaty is to apply to the conduct of two or more undertakings. Whilst the Commission
has refused to define the scope of that discretion, it appears to consider that horizontal collusion may be worse than dominance
by a single undertaking and must, for that reason, fall within Article 86 of the Treaty.

647   The applicant in Case T-212/98 further claims that even if it could be regarded as occupying a collective dominant position
with the other TACA members for the sole reason that it is a TACA member, it does not follow that any action taken by one
or more TACA parties in relation to the transatlantic trade must necessarily be attributed to all TACA parties at any time.
Notwithstanding the fact that the abuses with which the applicants are charged fall wholly or partly outside the scope of
the TACA agreement, the Commission has failed to show that all of the TACA parties adopted the same conduct on the market
in relation to the issues addressed by the contested decision. The applicant claims that its weak position on the market at
the time of the facts makes it unlikely that there was the same conduct since it would have derived few advantages from that.
It emphasises, moreover, that as a new TACA member, it agreed to be bound by the clauses of the conference agreement as they
stood at the time of its joining.

648   The Commission, supported by the ECTU, claims that this plea should be rejected.

b)      Findings of the Court

649   By the arguments which they put forward in support of this plea, the applicants are essentially criticising the Commission
for having failed to establish to the requisite legal standard that the TACA members formed a single body which had adopted
the same conduct on the market, leading to the elimination of any competitive relationship between them.

650   The applicants correctly observe that the Commission did not establish in the contested decision that the TACA parties had
adopted the same conduct on the market in question, but only, as stated at paragraph 525, that the numerous economic links
identified at paragraphs 526 to 531, resulting on the one hand from the tariff, the enforcement provisions and penalties,
the secretariat and the TACA annual business plans and from the consortia agreements on the other had led to a significant
diminution of their ability to act independently of each other. The Commission also expressly stated, at paragraph 528 of
the contested decision, that the restrictions on the ability of the TACA members to act independently of each other as a result
of the tariff and the TACA enforcement provisions and penalties were intended to eliminate substantially price competition
between them. The Commission concludes in paragraph 522 of the contested decision that the continued existence of a possible
degree of competition between the parties does not rule out the finding of a collective dominant position.

651   It is therefore necessary to consider whether, as the applicants maintain, in order to assess collectively the position held
by a number of undertakings in the context of the application of Article 86 of the Treaty, the Commission is required to establish
that the undertakings concerned have adopted the same conduct leading to the elimination of any competitive relationship between
them.

652   It has been held that, in order for the position of a number of undertakings to be the subject of a collective assessment
on the relevant market, it must be shown that the undertakings concerned are together, in particular because of factors giving
rise to a connection between them, able to adopt a common policy on the market (*Kali und Salz*, cited at paragraph 595 above, paragraph 221). That is so if the undertakings are in a position to anticipate one another's
behaviour and are therefore strongly encouraged to align their conduct in the market, in particular in such a way as to maximise
their joint profits by restricting production with a view to increasing prices (Case T-102/96 *Gencor* v *Commission* [1999] ECR II-753, paragraph 276, and Case T-342/99 *Airtours* v *Commission* [2002] ECR II-2585, paragraph 60).

653   Although the possibility that one undertaking may align its conduct with that of one or more competitors necessarily implies
that competition between them is significantly restricted, such a possibility to align competitive conduct in no way implies
that competition between the undertakings concerned is completely eliminated. Furthermore, the existence of a collective dominant
position within the meaning of Article 86 of the Treaty presupposes the existence of economic links between two or more economic
entities which are, by definition, independent and, accordingly, capable of competing with one another, and not the existence
between the undertakings concerned of institutional links comparable to those existing between a parent company and its subsidiaries
(see, to that effect, *Flat glass*, cited at paragraph 594 above, paragraphs 357 and 358).

654   Consequently, although the lack of effective competition between operators alleged to be members of a dominant oligopoly is
a significant factor among those that must play a role in determining the existence of a collective dominant position (*Airtours*, cited at paragraph 652 above, paragraph 63; see also, to that effect, *Centro Servizi Spediporto*, cited at paragraph 594 above, paragraph 34, and *DIP*, cited at paragraph 594 above, paragraph 27), there can be no requirement, for the purpose of establishing the existence
of such a dominant position, that the elimination of effective competition must result in the elimination of all competition
between the undertakings concerned.

655   The applicants are therefore wrong to maintain that the existence of a collective dominant position within the meaning of
Article 86 of the Treaty essentially precludes any competition between the undertakings holding such a position and requires
the adoption by those undertakings of the same conduct for all aspects of competition on the relevant market.

656   The arguments whereby the applicant in Case T-212/98 alleges that, even if it could be regarded as holding together with the
other members of the TACA a dominant position solely by reason of its membership of the TACA, it does not follow that every
act carried out by two or more parties to the TACA concerning transatlantic traffic must necessarily be attributed to all
the parties of the TACA at any time have already been answered at paragraphs 630 to 634 above in the context of the preceding
pleas.

657   It follows from all the foregoing that this plea, alleging application of the wrong legal test must be rejected.

2.     Pleas alleging incorrect assessment of internal price and non-price competition

a)     Arguments of the parties

658   The applicants put forward two pleas. The first alleges incorrect assessment of internal price competition and the second
alleges incorrect assessment of internal non-price competition.

659   As regards, first, price competition, the applicants submit that the Commission's analysis of the evidence they adduced regarding
their individual pricing strategy is on economic and legal grounds inconsistent with a finding of a collective dominant position.

660   As a preliminary point, the applicants argue that it is necessary to distinguish between conference rates and independent
action rates. They explain that confe rence rates include tariff rates and conference service contract rates. Tariff rates
in turn comprise both ordinary rates, applicable for the transport of commodities falling within certain classes regardless
of quantity (class tariff rates), and TVRs, which relate to the transport of a given volume over a particular period. All
those rates are set by the members of the conference acting together. Independent action rates, by contrast, include independent
action both on ordinary rates or by way of TVR (time/volume rates, independent action, or TVRIA) and individual service contract
rates. They are negotiated directly between the shipper and one or (in the case of joint individual service contracts) more
conference members.

661   The applicants emphasise that both conference rates and independent action rates reflect competition in the market. Thus,
in agreeing on conference rates, the applicants must take account of competition from non-conference carriers, operators on
alternative routes, independent action and other modes of transport and of customer purchasing power. As a result of that
competition, the prevailing rates on the transatlantic trade are low, as the conclusions of the Drewry Report and the Mercer
Report show.

662   The applicants submit that in the case of liner conferences a finding that there is a common pricing strategy requires that
all or practically all cargo is carried by the conference at conference ordinary rates or conference service contract rates.
In this case, however, the applicants adopted an independent pricing policy in response to both internal and external competition.
The existence of internal competition is demonstrated by the existence of independent action, individual and joint service
contracts and contracts with NVOCCs. The applicants claim that to deny that internal competition exists is to find, as the
Commission implicitly does, that the members of a shipping conference must by definition be considered collectively, regardless
of evidence of price- or non-price competition between them. The applicants consider that the evidence described below shows
that they did not adopt the same price fixing behaviour on the market. The Commission has adduced no evidence to the contrary.

663   First, the applicants submit that, whilst it is true that independent action is often very short-term or provides a temporary
solution pending the negotiation of service contracts, such actions are evidence of internal price competition in that recourse
to independent actions, even for a short period, is an independent pricing decision. The applicants stress in particular the
possibility for each conference member to adopt the independent action taken by another member (by means of a me too). The
applicants claim that such actions are evidence of internal competition since they attest to the willingness of the member
electing to me too to compete with the member initiating the independent action. The right to me too is guaranteed by the
US Shipping Act.

664   The applicants further stress that the procedure governing independent action gives conferences a wide margin of discretion
to respond to internal and external competition. They point out in that respect that independent action on ordinary rates
must be notified to the conference secretariat, which in turn notifies all conference members and publishes it in the new
conference tariff, so that any shipper may benefit from that rate throughout its period of validity without having to ship
cargo with the member who took the initiative. The applicants stress that any conference member may offer its services at
the TVRIA provided it does so before that rate becomes effective and provided it obtains the consent of the initiator. The
applicants also observe that under the FMC regulations once a shipper accepts the rate it can no longer be revised, even if
subsequently the conference rate falls.

665   In this case, the applicants explain, there were numerous examples of independent action by the TACA members from 1994 to
1997 and they claim, on the basis of TVRIA data for 1996, that (i) in 1996, 8.3% of total cargo transported on the transatlantic
trade was at TVRIA rates; (ii) the applicants pursued different strategies on the subject (for example, whilst two TACA members
carried no cargo at TVRIA rates, two other members carried more than 20% of their total cargo at such rates; (iii) even if
they are unable to identify the volume of cargo carried in the context of an independent action on the ordinary rates, it
is clear that the total volume of cargo carried in that context is greater than that carried at TVRIA rates alone.

666   The applicants also state, relying on the statistics for 1996, that competition between the members of each of the consortia
to which the TACA members are party is characterised by independent action and me toos, which contradicts the assertion at
paragraph 198 of the contested decision that vessel-sharing agreements have the effect of reducing the number of independent
actions entered into by their members. The statement by an FMC official set out at paragraph 197 of the contested decision,
and on which the former assertion was based, does not represent the FMC's official position. The fact that a high number of
vessel-sharing agreements have been accepted by the FMC shows, however, that that body makes no link between the existence
of that type of agreement and the level of independent action activity engaged in by its members. The applicants take note
of the fact that in the defence this is considered to be a minor part of the contested decision, but maintain that the Commission
has adduced no evidence in support of that finding.

667   Lastly, the applicants challenge the relevance of the comparison, in Table 4 of the contested decision, between independent
actions on the transpacific trade and independent actions on transatlantic trades. They point out (i) that the Commission
provides no information as to the relative size of the two trades; (ii) that the Commission does not take account of the fact
that, in the TACA, each notification of independent action is counted as one independent action, regardless of the number
of tariff line items affected (in terms of commodities and routings), whilst on the Asia-bound transpacific trade independent
actions are recorded for each commodity and each routing affected; (iii) that in the case of the TACA, which contains ordinary
rates, independent action taken for one class may affect several commodities, whilst in the case of the transpacific trade,
which has one tariff per commodity, independent actions are generally undertaken with respect to a single commodity; and (iv)
that the Commission has not given the source for the data quoted. In support of their challenge, the applicants attach a statement
from Mr Conrad, the Deputy Executive Director of the Transpacific Stabilisation Agreement and former General Manager and Managing
Director of the Asia North America Eastbound Rate Agreement, explaining why Table 5 of the contested decision does not bear
the conclusions the Commission seeks to draw from it.

668   Second, the applicants point out that in 1996 they entered into a total of 92 individual and joint service contracts, representing
17.8% of all service contracts entered into by them and 15.3% of the total cargo transported by them in 1996. The applicants
also point out that the participation in joint service contracts demonstrates the different commercial policies followed by
each of the TACA members. Thus, whilst some members did not participate in any such contracts, seven participated in at least
one, and eight participated in more than 70. They point out that those service contracts do not need to be put to the vote
of the conference. Since almost all of the applicants entered into individual or joint service contracts, and did so to varying
degrees, the applicants claim that they do not understand the significance of the Commission's observation that slightly fewer
than half of the contracts were with proprietary shippers. The fact, highlighted by the Commission, that almost all service
contracts stipulate different prices is the product of individual strategies of individual carriers. Similarly, the fact that
certain shippers also ship part of their cargo under conference service contracts is a reflection of the willingness of the
individual carriers to pursue business as individual operators competing against the conference as a whole, other conference
members and companies outside the conference.

669   The applicants submit that the conclusion of those service contracts resulted in a reduction in the conference tariff. Thus,
the individual service contract entered into in 1996 by Hanjin with Wittwer Schwelm concerning the transport of vehicle spare
parts and chemicals, after prompting a me-too on the part of Ocean World Lines, an NVOCC, resulted in a reduction in ordinary
rates for various commodities of up to 17.7%. The applicants submitted this evidence to the Commission in the comments on
the statement of objections but the Commission disregarded it in the contested decision with no explanation.

670   Third, the applicants allege that the individual strategies adopted by the TACA members in relation to competition for the
transport of NVOCC cargo show that there was no collective dominant position. Thus it is apparent from figures given in the
application that (i) in 1994 seven of the then 16 members of the TACA competed for the carriage of NVOCC cargoes; (ii) in
1995, nine of the then 17 TACA members competed for the carriage of NVOCC cargoes; (iii) in 1996, 15 of the 17 TACA members
competed for the carriage of NVOCC cargoes; and (iv) in 1997, 16 of the 17 TACA members competed for the carriage of NVOCC
cargoes. Furthermore, the same data show that the share of each of the applicants of the total NVOCC cargo carried by the
conference varied considerably over the period in question, which again demonstrates the different policies pursued by each
of the TACA members in this area. Thus, for example, Hapag-Lloyd's share of total NVOCC cargo carried by the conference increased
between 1994 and 1997 from 0.9% to 9.6%, at the expense of the companies traditionally dealing with that type of cargo. The
explanation was given by the applicants' legal adviser in a letter to the Commission dated 3 May 1995, which states that:

In relation to full container load (FCL) cargo, however, some TACA parties have elected, as part of their overall corporate
business policy, planning, marketing and investment strategy, not to maintain large sales forces and/or extensive agency networks
to solicit cargo from the numerically great number of small and medium-sized proprietary shippers of FCL cargo. As a consequence,
such carriers tend to utilise and depend to a greater extent upon the [NVOCCs] to solicit and aggregate significant volumes
of FCL cargo. In distinction to such TACA parties, others have elected to maintain, and bear the fixed costs of, extensive
internal sales forces, customer service functions and agency networks. These carriers tend to deal to a much greater extent
directly with FCL proprietary shippers and therefore tend to view NVOCCs as competitive and rival carriers (since they too
are competing for proprietary shipper FCL cargo).

671   Those adopting the former approach include, for example, Cho Yang, whose share of the conference's NVOCC cargo fell from 19.5%
in 1994 to 8.3% in 1997. In the reply the applicants explain that these are former independent lines which do not possess
the marketing and sales infrastructures to compete effectively for proprietary shippers' business, and which relied on the
NVOCCs to provide that marketing and sales infrastructure. The applicants consider that those divergent policies in relation
to NVOCC cargo resulted in genuine competition between the TACA members, with members losing a significant share of that business
to other members.

672   In the light of those factors, the applicants challenge the allegation at paragraph 296 of the contested decision that the
majority of the TACA parties do not compete to participate in service contracts with NVOCCs. They point out that although
the Commission reproduces the letter of 3 May 1995 in footnote 55 at paragraph 151 of the contested decision, it ignored their
explanation. Furthermore, they criticise the Commission for basing its allegation on the data for 1995 alone without examining
the trends and developments in the market which reflect the individual strategies of each of the TACA parties. Finally, the
Commission appears to limit its allegation to NVOCC service contracts. As the data in the application show, Hapag-Lloyd carried
all of its NVOCC cargo in 1994, 1995 and 1996 under TVRs and was the only line to do so in 1994. In 1995 and 1996, several
applicants carried NVOCC cargo on the same basis. Since 1994, all NVOCC cargo carried by way of TVRs has been transported
not at a jointly-agreed rate but at a rate fixed by the lines acting individually under TVRIAs.

673   As for the Commission's critical observation that four TACA members carried the bulk of NVOCC cargo, this amounts to a claim
that the TACA members would only have sufficiently different strategies if they all did the same thing. The relevant issue
is rather whether the TACA members pursued different strategies in relation to NVOCC cargo, which they did. The foregoing
evidence shows that the carriage of NVOCC cargo changed considerably over time. Whether it was performed under service contracts
or by way of TVR is immaterial. It is the competition for such business which is relevant.

674   Second, the assessment of the evidence adduced by the applicants in relation to their individual strategies towards non-price
competition is incompatible on economic and legal grounds with a finding of a collective dominant position. In particular,
the applicants challenge the Commission's finding at paragraph 194 of the contested decision that the product on offer from
each carrier becomes indistinguishable from the others, notwithstanding the weight of evidence of non-price competition adduced
by them during the administrative procedure.

675   The applicants observe, as a preliminary point, that the services offered by carriers are not limited to the services expressly
included in service contracts but must also be understood to include value-added services, namely those governing the shipper's
selection, at the pre-contractual stage, of carriers to tender for the carriage of a particular cargo, of a particular carrier
to contract with, and of a specific carrier in the context of a conference or jointly agreed individual service contract.
The applicants consider that those competitive factors are reflected in conference service contracts, the demand of shippers
for specific services and value-added services.

676   First, the applicants stress that when a conference service contract is signed it is for the shipper to allocate its cargoes
between the participating carriers in accordance with its commercial judgment. Relying on the data given in the application,
the applicants claim that in the majority of cases the identity of the lead carrier changed from one year to the next and
that the proportion of cargo carried by the lead carrier varies considerably from one year to the next. It is not correct
to say, as the Commission claims on the basis of Annex V to the contested decision, that most of the switching of carriers
takes place within groups of carriers which are party to the same agreement. On the contrary, it is apparent from that annex
that the shippers' respective shares of the cargo carried by the lines belonging to each group changed considerably over the
years from 1994 to 1996. Since the conference service contract rates have been agreed pursuant to conference procedures, those
changes must be attributable to non-price competition.

677   Second, as regards the shippers' demand for specific services, the applicants claim that the shippers select carriers on the
basis of the specialised value-added services provided by them. There is, moreover, a wide range of services which, taken
in isolation or in combination with others, determine the shipper's choice of carrier.

678   In support of those claims the applicants refer, first, to the shippers' comments when they negotiated conference service
contracts with the conference secretariat. It is apparent in particular from the shippers' requests for a reduced rate from
carriers who, in their opinion, offer lower quality services that the shippers attach considerable importance to differences
in the levels of service provided by the carriers. The factors which influence differentiation relate to transit times, equipment
availability, slot availability, port calls, scope of service, sales service, and speed of loading. Second, the applicants
refer to the shippers' requirements in their invitations to tender, and to the carriers' responses to those invitations. Those
documents also show the range of specific services required of each individual carrier. The applicants stress that the fact
that, in the course of the administrative procedure, they sought to protect the confidentiality of those invitations to tender
so that the Commission could not ascertain the shippers' opinion does not in the least prevent the Commission from making
general enquiries. Third, the conference service contracts contain, in most cases, standard terms which require the carriers
to give collective service commitments as to the regularity of sailings, space aboard those sailings, port calls, transit
time and containers, and individual service commitments as regards advertised sailing schedules, safety and special services
or equipment. Furthermore, a significant number of service contracts concluded in 1995 contain service provisions which were
negotiated individually with the shippers. The application refers to 16 different clauses of that type. The statement at paragraph
146 of the contested decision that the Commission has been told that sales representatives of the lines claim they are not
allowed under the terms of the TAA/TACA to offer anything other than a standard service contract, namely a volume-related
contract without additional services is therefore unfounded. In any event, it should be recognised that factors taken into
account by a shipper when selecting a carrier do not generally take the form of terms of the contract since the shipper will
generally select on the basis of the value-added elements described above. Fourth, the applicants explain that in the case
of conference service contracts, the conference members compete on the basis of individual service offers. Thus, each shipper
will select a carrier for its own reasons. In reply to the Commission's criticism that the application sets out the applicants'
opinion on this point and not that of the shippers, the applicants claim that the Commission did not try to obtain evidence
from the shippers and that it also rejects the statements of the shippers, cited in the application. Fifth, and finally, the
applicants underline the existence of global cooperation contracts between carriers and shippers.

679   Thirdly, the applicants maintain that they pursue different individual strategies to meet the shippers' service requirements.
First, in the case of ocean services the TACA members compete on transit times and port calls, waiting and pick-up times,
particularly in the case of intermodal transport, and also on expected arrival times and demurrage notices. The figures show
conclusively the flaw in the Commission's argument that the TACA parties sought to determine the ports at which they would
or would not call. Second, the TACA members have made individual investments in specialised equipment and non-standardised
containers. Third, as regards port and inland services, the TACA members compete in terms of logistics, in particular with
regard to their ability to reposition containers in specific ports in response to shipper demand, and also as regards the
possibility of offering weekend services and special services in the case of late booking or delivery. Fourth, as regards
information technology, the applicants point out that they had to take individual steps to meet the shippers' requirements
in relation to electronic data interchange and internet services, particularly to provide them with immediate shipping information.
Fifth, the applicants offer different services in respect of customs clearance. Sixth, the applicants do not all offer the
same quality assurance. In particular, not all shipping lines have obtained ISO 9002 (quality management) certification. Seventh,
and lastly, the applicants emphasise the fact that they market their services by both traditional and electronic media on
an individual basis and that they do not advertise collectively as a conference or within consortia. Furthermore, their marketing
policy is intended to differentiate the services which each offers from those provided by other lines.

680   For all those reasons the applicants conclude that they provide distinct services and compete with each other to satisfy the
shippers' specific requirements. It is accordingly wrong to say that they have adopted the same conduct on the market and
present themselves on the market as a single entity.

681   The applicant in Case T-213/98 states that the particular facts in its individual case, which are not challenged by the Commission,
confirm that there is no collective dominant position. It claims that its commercial policy, and in particular the reasons
for which it joined the TACA in 1993, show that it acts autonomously in competition with the other TACA members, and so cannot
be regarded as forming a single economic entity with the other TACA members.

682   The applicant explains as a preliminary point that, contrary to the Commission's assertion at paragraph 293 of the contested
decision, its decision to become a member of the TACA was justified on commercial grounds. As a traditional carrier operating
on the transpacific and Europe-Asia trades, it had to become a global carrier in order to adapt to the increasing tendency
for customers to centralise their purchasing decisions at a regional level (North America, Europe) or even at the global level.
In the circumstances the applicant decided to develop its transport business on the transatlantic trade in order to supply
its existing customers with a single network (a one-stop shop) for the transport of their cargo around the world.

683   Given the losses incurred by the TACA members on that trade (see paragraph 590(b) of the contested decision), NYK took the
view that the introduction of an independent service would entail unreasonable risk. It therefore chose to enter the trade
by means of a consortium agreement with Hapag-Lloyd and NOL (Pacific Atlantic Express) to provide both a transpacific and
a transatlantic service. It acknowledges that its presence on the transatlantic trade remained limited. That was justified,
however, by the fact that its existing customers essentially required the transport of cargo on the transpacific trade and
it was difficult to anticipate the extent to which customers would be prepared to entrust it with the carriage of their cargo
on the transatlantic trade.

684   The applicant claims that the reason it then became a member of TAA/TACA is that its target customers in Europe and North
America used that conference for the transport of their cargo. It also emphasises that it traditionally operated from within
conferences and that its membership of the TACA was liable to promote stability on the trade in question in accordance with
the objective stated in the eighth recital in the preamble to Regulation No 4056/86. Finally, in so far as US law requires
that membership of a conference cannot be refused and results in access to all conference service contracts on the same conditions
as those enjoyed by other members, NYK simply took advantage of the opportunities open to it under US law to increase the
cargo transported on the trade in question as part of a new global service.

685   The factors which led it to become a member of the TACA also determined the independent commercial policy it pursued thereafter.
Hence, its commercial policy on the transatlantic trade was to concentrate on its existing customers on other trades. It claims
that the commercial benefits it could offer its customers were, first, the option of an all water service across the Atlantic
to the United States West Coast and the transpacific lines (via the Panama Canal) and, second, a non-conference Canadian ports
service.

686   Contrary to the Commission's insinuations (in paragraphs 293 et seq.) in the contested decision, TACA membership gives a carrier
no guarantee of success in entering a new trade. In the first place immediate access to TACA service contracts is no guarantee
of obtaining the cargo covered by those contracts since each carrier must persuade the shippers to entrust it with their cargo.
The Commission therefore wrongly concluded, at paragraph 564, that it was immediate access to conference service contracts
that induced Hyundai to become a member of TACA. The applicant stresses, however, that whilst its various commercial initiatives
enabled it to win some new customers and to enter new markets (for example, the personal effects market in the United Kingdom)
it also lost customers or was forced to withdraw from some markets for logistical reasons. The applicant points out that its
market share on the trade in question fell from 0.9% in 1994 to 0.6% in 1995 and 1996.

687   In those circumstances the applicant considers that the Commission cannot claim that the market share of TACA members did
not fluctuate over the period in question and that the absence of such fluctuation proves a lack of competition. In any event,
stable market shares do not necessarily imply that there is a lack of competition. In the shipping sector there is a natural
tendency for market share to reflect a line's capacity on a particular route. Furthermore, stable market shares may also be
explained by customer loyalty or customer switching. The applicant points out that the academic opinion quoted by the Commission
in the defence supports that argument since Scherer & Ross (*Industrial Market Structure and Economic Performance*, Houghton Mifflin, 1990) acknowledge the existence of frequent brand switching arising from absence of consumer preference.
In those circumstances, the applicant says, it matters little that maritime carriers engage in inefficient attempts to differentiate
products, as those authors claim.

688   The applicant further claims that at no time did it choose not to compete for cargo so that it would be easier for Hanjin
and Hyundai to establish themselves on the trade. There was no commercial justification for adopting such behaviour since
a refusal to supply customers would have risked losing their custom on other trades.

689   It adds that since entry to the conference cannot be refused and since there are no arrangements within the TACA framework
that effectively limit the capacity offered by each individual carrier, the conference cannot control capacity, particularly
that offered by independent carriers. It follows that, as regards a vital aspect of the relationship between supply and demand,
the TACA parties are unable to act as a single economic entity or eliminate potential competition.

690   As regards price competition in particular, the applicant states that, by comparison with the other TACA members, the relatively
small number of independent actions in relation to price that it has engaged in, including under TVRs and joint and individual
service contracts as set out in the tables in the common part of the application, should not be interpreted as evidence that
it has not exercised its freedom to compete independently on price. First, account should be taken of the fact that the figures,
which are expressed in absolute terms, should be understood in the context of its limited market share on the trade in question.
Second, those figures do not take account of its actions on the Canadian ports trade, on which it operates outside of any
conference. Similarly, whilst the amount of NVOCC cargo it transported may appear to be small, one of its main customers was
an NVOCC, and 25% of the westbound cargo which it carried in 1995 was from that customer. The applicant emphasises that more
than 30% of the westbound cargo it carried, including to the Canadian ports, was NVOCC cargo.

691   The Commission's reliance on the fact that the applicants form part of a shipping conference qualifying for block exemption
for maritime tariff fixing is irrelevant since the applicants have proved the existence of competition on other grounds. Indeed
the Commission has in any event acknowledged the existence of such competition within a consortium (see the P&O/Nedlloyd decision,
cited above). The applicants stress the fact that the TACA includes various consortia. Similarly, the Commission expressly
acknowledged the possibility, in the context of Commission Regulation (EC) No 870/95 of 20 April 1995 on the application of
Article 85(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping
companies (consortia) pursuant to Regulation No 479/92 (OJ 1995 L 89, p. 7, see the eighth recital of the preamble and the
second indent of Article 5), that there was effective competition between the conference members in terms of the services
provided, the existence of such competition being a precondition for the applicability of the block exemption regulation.

692   Finally, the contested decision does not address the issue of whether its involvement in the TACA has had an appreciable effect
on the relevant market so as to justify treating it as contributing to an abuse by a group of undertakings collectively holding
a dominant position.

693   The Commission, supported by the ECTU, contends that the arguments put forward by the applicants in support of these pleas
are unfounded and must therefore be rejected.

b)     Findings of the Court

694   By the arguments put forward in support of these pleas the applicants maintain, in essence, that the significant internal
competition between the TACA parties contradicts the finding of a collective dominant position.

695   Without prejudice to the question whether the existence of significant internal competition within a liner conference, within
the meaning of Regulation No 4056/86, is capable of affecting the stability of trade which justifies the application of the
block exemption provided for in that regulation and, accordingly, of leading the Commission to withdraw that exemption, the
applicants are right to argue that significant internal competition may also be capable of showing that in spite of the various
links or factors of correlation existing between the members of a liner conference they are not in a position to adopt the
same course of conduct on the market such as to give third parties the impression that they are a single entity and thus justify
a collective assessment of their position on the market under Article 86 of the Treaty.

696   In this case, the applicants adduce evidence relating to both price competition and non-price competition. In addition, the
applicant in Case T-213/98 puts forward a number of specific arguments.

1. Internal price competition

697   The applicants claim that the independent actions, service contracts and carriage of NVOCC cargo testify to the price competition
between TACA members. Essentially, they claim that the independent actions and individual service contracts lead to the application
of prices lower than the tariff, while the conference service contracts and the carriage of NVOCC cargo represent individual
commercial strategies, which some TACA members employ more than others.

698   As regards first the independent actions, namely the right under the US legislation for any member of a liner conference to
offer a price lower than the conference tariff, that option, imposed by the legislation of a non-member State, of derogating,
subject to certain conditions, from the tariff discipline of the price-fixing agreements for maritime transport constitutes
an exception to the principle of joint price-fixing by a conference (*TAA*, paragraph 307).

699   Next, it is clear from Article 13 of the TACA Agreement that in spite of its name independent action is, as the Commission
points out at paragraph 104 of the contested decision without being contradicted on that point by the applicants, supervised
and restricted by the rules of the conference, in the sense that the TACA secretariat must be informed before it is taken,
which affords the other members the opportunity to follow or to persuade the member concerned not to take that action. Independent
action is thus not part of normal competition, by virtue of which each operator must determine independently the policy which
he intends to adopt on the market, which strictly precludes any direct or indirect contact between economic operators the
object or effect of which is either to influence the conduct on the market of an actual or potential competitor or to disclose
to such a competitor the course of conduct which they themselves have decided to adopt or contemplate adopting on the market
(*TAA*, paragraph 307).

700   It is common ground between the parties, moreover, that, as the Commission stated at paragraphs 215 and 216 of the contested
decision, independent action may be exercised for very short periods and may be used as a stop-gap measure while service contract
negotiations are taking place.

701   Nor do the data provided by the applicants themselves belie the assertion at paragraph 221 of the contested decision that
the incidence of independent action remained insignificant on the transatlantic trade. Whilst the data show the number of
independent actions taken by TACA members on tariff prices, including TVRIAs, in 1994, 1995 and 1996, they do not show, for
the first two years, the quantities of freight carried in the context of those actions, so that they cannot be recognised
as having any probative value for the purpose of demonstrating the existence of significant internal competition. Quite to
the contrary, it is apparent from the data relating to 1996, the only data to indicate, as regards TVRIAs, the quantities
of freight carried in the context of independent actions, that during that year freight concerned by TVRIAs represented only
8.3% of total freight carried by the TACA parties, a relatively marginal quantity of that total.

702   Furthermore, the Commission established in Table 5 at paragraph 220 of the contested decision that the number of independent
actions on the transatlantic trade is insignificant compared with the number of independent actions on the transpacific trade.
Although the applicants dispute the method used by the Commission in calculating and comparing the number of independent actions
on the two trades concerned, and claim that the contested decision does not explain the lack of data on the respective size
of the two trades, they adduce no evidence capable of contradicting the conclusion drawn by the Commission that the number
of independent actions on the transatlantic trade is insignificant.

703   The arguments whereby the applicants seek to establish the existence of significant internal competition as a result of independent
actions must therefore be rejected.

704   Second, as regards service contracts, the Commission was right to observe at paragraph 224 of the contested decision that
such contracts cannot be relied on in order to demonstrate the existence of internal price competition. As conference service
contracts are concluded by joint agreement within the conference according to the voting procedures defined in the TACA, they
necessarily entail the collective fixing of a common price by all the members of the conference participating in the contract.
The applicants allege that certain TACA members participate in conference service contracts more often than others, but that
is immaterial because the shippers party to such contracts are in any event charged a common price for the carriage of their
freight regardless of which participating TACA member actually carries it.

705   Next, individual service contracts are admittedly a source of internal price competition but they were banned by the TACA
in 1994 and 1995. Consequently, they can be relied on by the applicants as evidence of the existence of internal competition
in respect of only one of the three years covered by the contested decision, 1996. Furthermore, it is apparent from the data
supplied by the applicants that in 1996 individual service contracts represented only 15.3% of the total freight carried by
the TACA. Those figures also make it clear that most of those individual service contracts were concluded jointly by a number
of carriers, with the consequence that internal price competition did not affect all the TACA parties. Lastly, as with independent
actions the conclusion and the negotiation of individual service contracts were regulated by Article 14 of the TACA, which,
as stated at paragraph 149 of the contested decision, placed certain restrictions on the contents of service contracts and
on the circumstances in which they might be concluded. At paragraph 447 of the contested decision the Commission stated, without
being contradicted by the applicants on this point, that such restrictions fell within Article 85(1) of the Treaty. It follows
that even where the individual service contracts were authorised by the TACA they did not represent normal competition.

706   As regards the applicants' allegation that the individual service contracts led to a reduction in the tariff, the applicants
have not established, for the commodities which they identify in their application, the existence of a causal link between
the individual service contracts and the reductions in the tariff decided on by the TACA, so that the facts on which that
allegation is based are not made out. Furthermore, the fact that the TACA decided to reduce the tariff in order to bring it
into line with the rates of the individual service contracts, far from casting doubt on the existence of a collective position,
tends to confirm it, since it reflects the ability of the TACA parties to react collectively to individual initiatives taken
by some of them with a view to extending to the whole conference the lower rates offered by them.

707   The arguments whereby the applicants seek to establish the existence of significant internal competition as a result of the
service contracts must therefore be rejected.

708   Last, as regards the carriage of NVOCC cargo, it is clear from the figures provided by the applicants for 1994, 1995 and 1996
that all NVOCC cargo was carried by the TACA parties either under TVRs or under service contracts. In response to a written
question put by the Court concerning TVRs, the applicants gave support for the assertion in their application that all cargo
covered by TVRs was in fact carried within the framework of independent actions and therefore constituted TVRIAs. Even though
it is established, however, that sole fact is insufficient to demonstrate the existence of significant internal price competition
within the TACA. First, in 1994, 1995 and 1996 NVOCC cargo represented only 12.5%, 14.5% and 15.1% of total cargo carried
by the TACA in those three years. Furthermore, the proportion of NVOCC cargo carried under TVRIAs represented only 1%, 4.5%
and 15.5% of total NVOCC cargo carried by the TACA parties in each of those years, the bulk of that cargo therefore being
carried under service contracts. It will be recalled that in 1994 and 1995 the TACA did not permit conclusion of individual
service contracts, so that during those two years NVOCC cargo carried under service contracts, which represented 99% and 94.5%
respectively of total NVOCC cargo in those two years, was carried under conference service contracts, which necessarily entail
the setting of common prices. The Commission states, moreover, without being contradicted by the parties on this point, that
70% of the NVOCC cargo carried under service contracts in 1996 was also carried under conference service contracts.

709   It is thus clear from the data provided by the applicants themselves that during the period covered by the contested decision
NVOCC cargo was essentially carried at common prices fixed by the conference. In that regard it is irrelevant, for the purpose
of demonstrating the existence of significant internal price competition, that certain TACA parties carry more NVOCC cargo
than others, since for virtually all their freight the NVOCCs are charged a price fixed in common by the conference.

710   The arguments whereby the applicants seek to establish the existence of significant internal competition as a result of the
carriage of NVOCC cargo must therefore be rejected.

711   It follows from the foregoing that none of the evidence adduced by the applicants, whether the taking of independent actions
on the tariff, the conclusion of conference service contracts or individual service contracts or the carriage of NVOCC cargo,
is capable of establishing the existence of significant internal price competition within the TACA. Even taken together, they
attest to competition far too marginal to refute the absence of internal price competition resulting from the common or uniform
tariff prices constituting the liner conference agreement within the meaning of Regulation No 4056/86.

712   However, it must still be ascertained whether the evidence adduced by the applicants in regard to internal non-price competition
is capable of upsetting that conclusion.

2. Internal non-price competition

713   For the purpose of demonstrating the existence of significant internal non-price competition the applicants claim essentially
first, that in conference service contracts the lead carrier and the proportion of freight carried by it each year vary from
year to year. Next, they allege that shippers have specific service requirements which lead them to select carriers on the
basis of the specialised services which they offer. Last, they maintain that the TACA parties pursue different individual
strategies in order to meet shippers' service requirements.

714   As a preliminary point, it should be noted that the existence of non-price competition between the members of a liner conference,
such as competition regarding the quality of service provided, is not in principle sufficient to negate the existence of a
collective dominant position based on links inferred from their common strategy on price-setting, unless the extent and intensity
of those alternative forms of competition is such as to preclude reasonable reliance on their common pricing policy as the
basis for establishing a single market entity (Opinion of Advocate General Fennelly in *CEWAL II*, cited at paragraph 638 above, point 34).

715   In this case, therefore, the applicants must adduce evidence not only of the fact that there is internal non-price competition
within the TACA but, especially, of the fact that any such internal competition is of such extent and intensity as to preclude
the TACA parties from being assessed collectively.

716   It is in the light of those considerations that the Court will consider the probative value of the evidence adduced on this
point by the applicants.

717   As regards first of all the arguments relating to conference service contracts, it should be observed that in order to determine
whether there is internal non-price competition the mere fact that the identity of the lead carrier carrying the shippers'
cargo varies from year to year is as such irrelevant unless account is also taken of the fact that each carrier is also a
party to the consortia agreements on the trade in question. As the Commission rightly observes at paragraph 232 of the contested
decision without being contradicted by the applicants on this point, where a carrier is party to a consortium agreement, such
as the VSA agreement between P&O, Nedlloyd, Sea-Land, Mærsk and OOCL, competition on service quality is excluded, since the
parties to such agreements share vessels and operate to a joint schedule. As consortia agreements are intended to standardise
the services offered by the shipping companies which are members of those consortia, the existence of internal competition
on services within the TACA is necessarily limited to the competition existing between the various consortia of which the
TACA is made up. Consequently, in order to demonstrate the existence of internal service quality competition within the TACA,
as the Commission states at paragraph 233 of the contested decision, the applicants must show that shippers moved their cargo
not just within one consortium but from one consortium to the other.

718   The Commission stated at that paragraph that the data provided by the applicants in their response to the statement of objections
and set out in part at Annex V to the contested decision revealed that the shares enjoyed by the groupings of carriers have
remained largely stable and ... , except in [a] few cases, the switching that has taken place has not been between groupings.

719   Although the applicants dispute that assessment, it must be observed that, apart from the fact that they first do so in the
reply, the data they provided in these actions to show changes in the lead carrier for some specific shippers, and also the
annual variations in the proportion of freight carried by those carriers, are essentially the same as those submitted to the
Commission in their response to the statement of objections. The data show clearly that, as the Commission stated at paragraph
233 of the contested decision, in most cases the changes in lead carrier took place within the same consortium. As for the
fact that the proportion of the freight of each of the shippers carried by each lead carrier varies from year to year, it
is sufficient to observe that in the absence of any indication as to the identity of the shipping companies carrying the remainder
of the freight, the data provided by the applicants do not make it possible to determine which consortium carried that freight.
In those circumstances, the data submitted by the applicants do not cast doubt on the finding in the contested decision that
changes in lead carrier take place as between shipping companies who are parties to the same consortium.

720   It follows that the evidence adduced by the applicants is not of such a kind as to demonstrate the existence of significant
internal service-quality competition in the context of conference service contracts.

721   The applicants' arguments on this point must therefore be rejected.

722   As regards, second, the arguments relating to shippers' requirements, it cannot be disputed that shippers demand a certain
level of quality in the transport services which the TACA parties supply. However, that sole fact is in itself not relevant
for the purpose of demonstrating the existence of internal non-price competition between the TACA parties, unless it is proved
that the shippers switch freight from one carrier to another specifically because of the different services offered by them.
However, the applicants do not provide such proof but merely produce a list of services required by shippers.

723   Furthermore, although the applicants assert, without evidence in support, that conference service contracts propose, in addition
to collective service undertakings by all the participating shipping companies, individual service undertakings by each of
those companies, they do not show that those individual undertakings are reflected in freight being switched from one shipping
line to another.

724   Lastly, the only examples of negotiated clauses submitted in the context of the application are all clauses negotiated by
the TACA which provide for collective undertakings capable of being offered by all the participating shipping lines. The Commission
was therefore right to state, at paragraph 242 of the contested decision, that few service contracts contained individually
tailored provisions relating to the type of services offered. Admittedly, the individual service contracts contain more special
clauses than the conference service contracts. However, individual service contracts were not authorised by the TACA until
1996. It is also clear from the data provided by the applicants, moreover, that in 1996 the freight carried by the TACA parties
under individual service contracts, including those made jointly by several carriers, represented only 15.3% of total freight
carried by the TACA, and that only a minority of those contracts were concluded individually by a single carrier.

725   In those circumstances, the data provided by the applicants are clearly incapable of upsetting the findings in the contested
decision on this point.

726   The applicants' arguments relating to the shippers' requirements must therefore be rejected.

727   As regards, third, the arguments relating to the individual strategy pursued by each TACA party, none of the data provided
by the applicants is capable of proving that the differences between the services offered to shippers had a significant effect
on the choice of shipping line chosen to carry their freight.

728   The applicants' arguments on this point are therefore irrelevant and must be rejected.

729   It thus follows from the foregoing that the evidence adduced by the applicants, in so far as it establishes the existence
of internal non-price competition, fails to show that that competition is of such extent and intensity as to be capable of
compensating for the absence of price competition resulting from the existence of uniform or common freight tariff rates.

3.The specific arguments put forward by the applicant in Case T-213/98

730   As regards, first, the argument that the applicant joined the TACA for its own commercial reasons and pursued an independent
policy within the TACA, the data it provided shows that its market share on the trade in question during the period covered
by the infringements found in the contested decision never exceeded 1%. Consequently, even if its allegations (for which,
incidentally, little evidence is provided) are correct as regards the independence of its commercial policy, the competition
which that shipping line brings to bear on the other TACA parties is not sufficient to represent a source of internal competition
of such extent and intensity as to be capable of casting doubt on the collective nature of the position held by the TACA parties
on the trade in question resulting from the links identified at paragraphs 525 to 531 of the contested decision.

731   As regards, second, the argument that stable market shares do not necessarily imply the complete absence of competition, as
they may also be explained by customer loyalty or compensatory customer transfers, it is sufficient to observe that the applicant
has put forward no evidence capable of demonstrating the existence of real competition. Quite the contrary: the fact emphasised
by the applicants in this argument that in the maritime sector there is a natural tendency for market shares to reflect the
capacities offered by the companies on each line is apt to confirm the absence of internal competition between the members
of a liner conference. In the light of the common tariff established by the conference, the applicants have no incentive to
introduce capacity in order to gain market share by adopting an aggressive pricing policy, since the introduction of new capacity
has no impact on prices. In those circumstances, the Commission was right to note, at paragraphs 233 and 239 of the contested
decision, that the fact that the shares of the TACA parties remained stable during the relevant period indicated an absence
of significant internal competition.

732   As regards, third, the argument that, in so far as access to the conference cannot be refused and there is no agreement within
the TACA to limit the capacity offered by each individual carrier, the TACA is not in a position to act as a collective entity
with regard to a vital aspect of the relationship between supply and demand, it must be observed that the mere fact that the
TACA has not concluded an agreement among its members dealing collectively with certain aspects of the commercial relations
between its members is irrelevant, since such a collective agreement exists in respect of other aspects of those commercial
relations and establishes to the requisite legal standard that the position of the TACA parties must be assessed collectively
under Article 86 of the Treaty. Hence, even in the absence of common rules on capacity any new member of the TACA must, by
virtue of its membership, comply with the collective rules fixed by the TACA, in particular as regards the tariff. In any
event, owing to the tariff introduced by the conference, the TACA has little interest in regulating capacity, since each member
is aware that any increase in or withdrawal of capacity will, in principle, have no effect on prices and therefore on its
market share.

733   As regards, fourth, the other arguments put forward by the applicant, it is sufficient to state that those arguments seek
to challenge not the collective assessment of the position held by the TACA parties but the existence of the abusive conduct
of which those parties are accused in the contested decision.

734   Those arguments are therefore of no relevance in the context of these pleas and, accordingly, must be rejected.

4.Conclusion on the extent of internal competition

735   In the light of all the foregoing, it must be concluded that the evidence adduced by the applicants in relation to internal
price and non-price competition does not show that the Commission made an error of assessment in relying on the existence
of a uniform or common tariff to find that price competition between the TACA parties was largely eliminated, so that those
parties are likely to adopt the same course of conduct on the market and their market position must therefore be assessed
collectively under Article 86 of the Treaty.

736   Consequently, all the arguments put forward by the applicants on this point must be rejected.

3.     Pleas alleging failure to state reasons

a)     Arguments of the parties

737   The applicants observe, first, that at paragraph 531 of the contested decision the Commission infers from the existence of
very close economic links between the TACA members that they are capable of occupying a collective dominant position, without
first establishing that the undertakings in question adopted the same conduct on the market. The applicants submit that the
defect is not made good by the references in the defence to the assessment of internal competition given at paragraphs 174
to 242 of the contested decision. The description of the facts given there does not support the proposition that the applicants
adopted the same conduct or that there was insufficient competition on price or in other respects.

738   Second, the applicants claim that, at paragraph 522 of the contested decision, the Commission does not seek to quantify or
explain the degree of internal competition which would be compatible with the finding of a collective dominant position. During
the administrative procedure the applicants adduced evidence of internal competition. In the absence of clear criteria there
is nothing in paragraph 522 which enables either the applicants or the Court of First Instance to know the Commission's reasons
for rejecting that evidence and to determine whether it is true that the maintenance of some competition does not preclude
the existence of a collective dominant position. They also claim that the Commission fails to identify the aspects of competition
which are relevant in determining whether a collective assessment is justified. The contested decision did not take into account
forms of non-price competition.

739   Third, the applicants consider that the Commission's analysis of competition between the TACA members lacks reasoning as regards
(i) its finding at paragraph 198 that consortia such as the vessel-sharing agreements of which the TACA parties are members
have the effect of reducing the number of independent actions entered into by their members; (ii) the absence of information
at paragraph 221 as to the respective sizes of the transpacific and transatlantic trades; and (iii) its decision to use the
data for a single year as the basis for concluding at paragraph 296 that the majority of TACA members do not compete to participate
in service contracts with NVOCCs.

740   The Commission, supported by the ECTU, contends that these pleas and arguments should be rejected.

b)     Findings of the Court

741   As regards, first, the plea criticising the Commission for not having found in the contested decision that the TACA parties
adopted the same conduct on the market in question, it is sufficient to observe that the applicants' arguments seek, in reality,
to challenge the merits of the assessments made by the Commission in that regard in the contested decision. Such arguments,
which must be rejected for the reasons stated at paragraphs 649 to 655 above, are irrelevant in the context of verification
of compliance with the obligation to state reasons (*PVC II*, cited at paragraph 191 above, paragraph 389).

742   In any event, the contested decision sets out at paragraphs 525 to 531 the grounds on which the Commission considered that
the TACA parties are together, because of factors giving rise to a connection between them, able to adopt a common policy
on the market (*Kali und Salz*, cited at paragraph 595 above, paragraph 221). In the same paragraphs the Commission sets out each of the five economic links
between the TACA parties which in its view justify a collective assessment of the position held by the TACA parties on the
market in question. Furthermore, in the context of that assessment, the Commission states expressly, at paragraph 525 of the
contested decision, that those links led to a significant diminution of the ability of the TACA parties to act independently
of each other. In that regard, it states at paragraph 528 of the contested decision, first, that the tariff and the enforcement
provisions and penalties were intended to eliminate substantially price competition between [the TACA parties], thus referring
by implication but without question to paragraphs 174 to 242, in which it examines the extent of internal competition between
the TACA parties, and, second, that the secretariat and the publication of annual business plans allowed the TACA parties
to present themselves on the market as a single united body. Those grounds give sufficient indication of the elements of fact
or of law on which the legal justification of the contested decision depends and of the considerations which led the Commission
to adopt it (see, in particular, *Remia*, cited at paragraph 575 above, paragraphs 26 and 44).

743   Furthermore, during the administrative procedure, and in particular in the response to the statement of objections, the applicants
did not claim that the collective assessment of the TACA parties' position on the relevant market under Article 86 of the
Treaty required the absence of any competitive relationship between them. In terms of compliance with the obligation to state
reasons, the Commission clearly cannot be criticised for not having replied in the contested decision to arguments which were
not raised before it was adopted (see, to that effect, *FEFC*, cited at paragraph 196 above, paragraph 427).

744   As regards, second, the plea alleging that the Commission did not quantify or explain in the contested decision the degree
of internal competition that would be compatible with the finding of a collective dominant position, the Commission examined
in detail at paragraphs 174 to 242 of the contested decision the degree of internal competition between the TACA parties.
It follows from those paragraphs of the contested decision that the Commission found that internal competition between the
TACA parties was limited, or indeed insignificant. In that regard, after examining the scope of the rules introduced by the
US Shipping Act (paragraphs 175 to 180), the Commission emphasised the effect produced by the other restrictive agreements
affecting transatlantic trade, in particular the consortia agreements (paragraphs 181 to 198). Then, at paragraphs 199 to
242, it examined each piece of evidence of internal competition adduced by the applicants during the administrative procedure
relating to the independent actions, the service contracts, the unilateral actions concerning service contracts, the TVRs,
the TVRIAs and competition on the services offered. The Commission then studied in turn the price discrimination practices
(paragraphs 203 to 213), the independent actions (paragraphs 214 to 222), the service contracts (paragraphs 223 to 233), the
fluctuation of market shares (paragraphs 234 to 239) and competition on quality (paragraphs 240 to 242). It was in this context
that, at the stage of the legal assessment, the Commission established at paragraph 525 of the contested decision that it
was necessary to make a collective assessment of the position held by the TACA parties under Article 86 of the Treaty, since
their ability to act independently of each other had been diminished.

745   It follows from the foregoing that in response to the evidence adduced by the TACA parties during the administrative procedure,
the Commission stated in the contested decision the reasons why in this case internal competition between the TACA parties
was insufficient to preclude a collective assessment of their position. In so doing, the Commission responded specifically
to the principal allegations made by the applicants in the course of the administrative procedure (*FEFC*, cited at paragraph 196 above, paragraph 426). Furthermore, contrary to the applicants' contention, the Commission examined
each of the aspects of internal competition that might be relevant, including not only the forms of price competition, at
paragraphs 199 to 222 of the contested decision, but also, at paragraphs 213 to 233 and 240 to 242, the forms of non-price
internal competition.

746   Admittedly, the Commission did not state in the contested decision what degree of internal competition might have made it
possible to preclude a collective assessment of the position held by the TACA parties. However, in order to state reasons
for its decision to the requisite legal standard, the Commission is only required to state clearly and precisely the reasons
on which its decision is based (*Remia*, cited at paragraph 575 above, paragraphs 26 and 44). On the other hand, it cannot be required to state the reasons which
it has not used and which are therefore purely hypothetical (see, to that effect, Case C-367/95 P *Commission* v *Sytraval and Brink's France* [1998] ECR I-1719, paragraph 64).

747   Consequently, as the Commission did not find in this case that internal competition within the TACA was sufficient to preclude
a collective assessment of the TACA, it was not required to state what degree of competition was required in order to preclude
such an assessment.

748   The plea alleging failure to state reasons in the contested decision on this point must therefore be rejected.

749   As regards, third, the plea alleging that the Commission did not provide sufficient reasons for the assertion at paragraph
198 of the contested decision that the consortia agreements of which the TACA parties are members have the effect of reducing
the number of independent actions entered into by the parties to those agreements, it is sufficient to observe that, according
to the actual wording of that paragraph, the assertion in question was made not by the Commission but by one of the TACA parties.
Compliance with the obligation to state reasons laid down in Article 190 of the Treaty cannot place the Commission under an
obligation to state reasons for the assertions of third parties, a fortiori when there is no indication in the contested decision
that the Commission relied on that assertion in reaching its conclusion that there was a collective dominant position.

750   The plea alleging failure to state reasons on this point must therefore be rejected.

751   As regards, fourth, the plea alleging the absence of data, at paragraph 221 of the contested decision, relating to the size
of the transpacific trade compared with the transatlantic trade, it is sufficient to observe that, in so far as the applicants
maintain that in the absence of those data the Commission was not entitled to find that the number of independent actions
on the transatlantic trade was comparatively insignificant compared with the number of independent actions on the transpacific
trade, they are in reality seeking to challenge the validity of the assessments made in the contested decision on this point.
Such an argument, which must be rejected for the reasons stated at paragraphs 698 to 703, is irrelevant in the context of
verification of compliance with the obligation to state reasons (*PVC II*, cited at paragraph 191 above, paragraph 389).

752   In any event, paragraphs 221 and 222 of the contested decision refer to the figures on which the Commission's analysis and
the conclusion drawn therefrom are based and therefore provide the applicants with an adequate indication as to whether the
contested decision is well founded or whether it may be vitiated by some defect enabling its validity to be challenged and
the Community judicature to review the legality of the decision (see, in particular, *Van Megen Sports*, cited at paragraph 548 above, paragraph 51).

753   The applicants' plea alleging failure to state reasons on this point must therefore be rejected.

754   As regards, fifth, the plea alleging that the Commission did not state at paragraph 150 of the contested decision its reasons
for choosing to rely on the service contracts for a single year in order to support its finding that a very large number of
service contracts with the NVOCCs had been concluded by the TACA parties which had formerly been unstructured members of the
TAA, the Commission was under no obligation to state its reasons for making that choice. For the purpose of complying with
the obligation to state reasons, provided that the Commission refers in the contested decision to the evidence on which its
analysis is based and also to the conclusions which it has drawn from that evidence, it provides the applicants, and that
is not disputed by them, with an adequate indication as to whether the contested decision is well founded or whether it may
be vitiated by some defect enabling its validity to be challenged and the Community judicature to review the legality of the
decision (see, in particular, *Van Megen Sports*, cited at paragraph 548 above, paragraph 51).

755   Furthermore, if the data relating to other years which the applicants put forward in the context of these actions were capable
of contradicting the conclusions drawn by the Commission on the basis of the single year used in the contested decision, it
would be for the Court to draw the consequences, not in terms of compliance with the obligation to state reasons but with
regard to the substance.

756   For those reasons, the plea alleging failure to state reasons on this point must be rejected.

C –  *Conclusion on the first part*

757   It follows from the foregoing that all the pleas put forward in the context of the first part relating to the absence of a
dominant position held collectively by the TACA parties must be rejected.

*Part two: the dominant nature of the position held by the TACA parties*

758   In this part of their pleas alleging that there was no infringement of Article 86 of the Treaty, the applicants first dispute
the definition of the relevant market used in the contested decision as the basis for the application of that provision. Next,
they deny that their position on the market is dominant. Last, they invoke a number of failures to state reasons on those
points.

D –  *Definition of the relevant market*

759   The applicants put forward a number of pleas and complaints concerning both the definition of the relevant market for services
and the definition of the relevant geographic market used in the contested decision as the basis for the application of Article
86 of the Treaty.

1.     The relevant market for services

760   At paragraph 519 of the contested decision, the Commission states that the relevant market for services for the purpose of
the application of Article 86 of the contested decision is described at paragraphs 60 to 75. After examining in those paragraphs
the various possibilities for substitution put forward by the applicants, the Commission concludes at paragraph 84 that the
relevant market for sea-transport services is the market for containerised liner shipping ... between ports in northern Europe
and ports in the United States and Canada.

761   The applicants put forward two types of pleas and complaints to challenge that definition. First, they deny that containerised
liner shipping constitutes the relevant market for services; and, second, they claim that the market includes, in addition
to the ports of northern Europe, the Mediterranean ports of southern Europe.

a) The relevant transport services

(1) Arguments of the parties

762   The applicants challenge at the outset the Commission's reliance on the decision of the Court of Justice in Case C-333/94
P *Tetra Pak* v *Commission* (*Tetra Pak II*) [1996] ECR I-5951 as authority for the proposition in the contested decision that stability of demand is the appropriate
basis for defining the relevant market. The Commission explains at paragraph 61 of the contested decision that in that judgment
the Court of Justice stated that the stability of demand for a certain product is the appropriate basis for defining a relevant
market and that the fact that different products are, to a marginal extent, interchangeable does not preclude the conclusion
that those products belong to separate product markets.

763   Firstly, the Court referred to a relevant criterion, which means that other criteria must also be taken into account in order
to determine the degree of substitution. Secondly, the Court did not hold in that judgment that stability of demand constituted
the appropriate basis for determining the relevant market, but assessed the question of stability of demand in the context
of product substitutability. Third, and finally, it is apparent from the Commission's findings at paragraph 69 of the contested
decision that, unlike the situation in *Tetra Pak II*, cited at paragraph 762 above, the volumes of cargo transported by container and bulk carriers respectively changed substantially
over time and that the interchangeability between bulk and container transport is not marginal in terms of volume.

764   In the context of this plea, the applicants complain essentially that the Commission decided, at paragraphs 62 to 75 and 84
of the contested decision, that the relevant market for services was that for containerised liner shipping excluding conventional
break bulk transport, refrigerated transport, air transport and transport by NVOCCs. They consider that the Commission's analysis
does not conform to the guidelines it adopted in the Notice on the definition of relevant market for the purposes of Community
competition law (OJ 1997 C 372, p. 5) as to demand-side and supply-side substitutability.

765   In the first place, the Commission erred in its analysis of demand-side substitution. In Case 85/76 *Hoffman-La Roche* v *Commission* [1979] ECR 461, paragraph 28, the Court held that the concept of the relevant market in fact implies that there can be effective
competition between the products which form part of it and this presupposes that there is a sufficient degree of interchangeability
between all the products forming part of the same market in so far as a specific use of such products is concerned.

766   The applicants complain first in general terms that the Commission failed to take account of the cumulative impact of the
various sources of competition in finding that each of those sources could be substituted for containerised transport only
in exceptional circumstances or for a limited range of goods. The applicants consider that for two products to be substitutable
they cannot be required to be interchangeable in the majority of cases. Such an argument would not take account of the wide
range of products and users with which the applicants deal. An operator carrying 50 different products, all of different value,
and thus facing competition from one or more other carriers, faces competition in respect of each such product.

767   Next, the applicants criticise the Commission for having relied on the notion of one-way substitutability in its assessment
of traditional transport (paragraphs 65, 68 and 74 and footnote 29) and refrigerated transport (paragraph 73), instead of
having regard to the sensitivity of the relative volumes of cargo carried by the two modes to their relative price as required
by the Notice on the definition of relevant market for the purposes of Community competition law, referred to above, and economic
doctrine. According to generally accepted economic principles, substitutability requires a symmetric (or two-way) relationship.
For example, if customers are switching from bulk to container transport at the existing relative price, an increase in the
relative price of the container mode would tend to slow down the rate of switching or would even, if the price change were
large enough, reverse the switching. The existence of bulk services is therefore a constraining factor in the pricing of container
services. The applicants therefore dispute the Commission's finding, at paragraph 67 of the contested decision, that once
a type of cargo regularly becomes containerised it is unlikely ever to be transported again as non-containerised cargo. The
applicants claim that a rigorous economic approach would require the Commission's statement to be qualified by the additional
words if containerisation continues to offer the same net benefits as it has in the past. Such an approach would require an
analysis of the sensitivity of demand to changes in the net benefits which shippers find attractive. The decision contains
no such analysis.

768   More specifically, the applicants allege that, in any event, the assessment of substitutability between container transport
and the other forms of transport referred to above is factually inaccurate.

769   Firstly, break bulk transport is substitutable for containerised transport and therefore forms part of the same market. That
substitutability was confirmed in an article published in August 1996 in the journal *American Shipper* quoting the comments of a manager of Mead Corporation, an American exporter of paper. On the eastbound transatlantic trade,
switching between bulk transport and container transport generally involves large volume products from specific regions of
the United States (for example, coffee, peanuts, apples and pears, lemons, etc). That substitution is particularly marked
in the case of low-value cargoes owing to the reduced rates offered by the operators of the different types of vessel. The
applicants note that, at paragraphs 217 and 218 of the contested decision, the Commission expressly accepts that substitutability
in the cases of coffee and peanuts. The applicants consider that their argument is confirmed by the Dynamar report (Appendix
25), which establishes such substitutability by reference to figures in the case of certain iron and steel and forestry products.
Contrary to the Commission's argument, the substitution of bulk transport remains possible even in the case of a shortage
of container capacity on the transatlantic trade.

770   The applicants conclude by criticising the Commission for not having taken account of events or shocks, as mentioned at paragraph
38 of the Notice on the definition of relevant market for the purposes of Community competition law, cited above, which requires
the Commission to analyse recent examples of actual substitution on the market. The applicants claim that the examples of
mutual substitution between break bulk and containerised transport constitute such examples, but were ignored by the Commission.

771   Second, the applicants allege that bulk refrigerated transport is also in direct competition with containerised transport,
as evidenced by the statements of break bulk providers of refrigerated services. Next, they point out that competition between
the two modes of transport further increases with the decision of certain container carriers such as Mærsk to increase their
refrigerated capacity. In support of that argument, the applicants cite a study by Drewry (*World Reefer Market Prospects and Modal Competition - pallets v containers v break bulk*, 1997) which, they say, confirms that on the trade between Europe and the United States of America some American fruit is
carried by container whilst some is carried by conventional refrigerated vessels. On that basis, the applicants conclude that
for at least some commodities containerised transport and bulk refrigerated transport are substitutable.

772   Third, the applicants claim that air transport is a possible alternative to sea transport for certain commodities. They rely
in that respect on a statement of the President of the Campbell Aviation Group acknowledging such substitution, in particular
as regards high-value, low-weight items. Similarly, in May 1998 the *Journal of Commerce* reported that about 10% to 15% of ocean freight volume transported by freight forwarders was being transferred to air transport.

773   Fourth, the applicants submit that NVOCCs represent a significant source of competition which should be taken into account
in defining the relevant market. They explain that they are referring solely to NVOCCs which do not operate vessels either
on the transatlantic trade or on other trades, as referred to at paragraph 159 of the contested decision. The applicants claim
that from the shipper's point of view there is no difference between NVOCCs and sea carriers, since both compete at the retail
level for the carriage of cargo of proprietary shippers (or freight forwarders). The applicants emphasise that NVOCCs are
able to exercise considerable bargaining power over the sea carriers. This is because of the considerable purchasing power
arising from the accumulation of volumes from individual shippers and because of the advantageous rates and services (port
calls, transit times, customs requirements etc.) they can obtain from sea carriers (whether conference members or not) in
the form of service contracts or TVRs. Given the NVOCCs' purchasing power, those rates are inevitably lower than those offered
to individual shippers by sea carriers for low-volume shipments.

774   The applicants argue that competition operates at three levels: first, carriers compete *inter se* for the NVOCCs' cargo on the basis of the rates and conditions they offer; second, the NVOCCs select the most competitive
carrier or carriers on the basis of the services and rates they offer; and third and finally the carriers also compete with
the NVOCCs for the cargo business of shippers or freight forwarders. It follows that the carriers and the NVOCCs are in direct
competition with each other. That competition is acknowledged by the NVOCCs themselves.

775   The applicants give a number of examples of the switching of cargo between the TACA members and the NVOCCs in support of their
argument. They also observe that the calculations as to the size of the market include sales by NVOCCs which consequently
reduce the applicants' sales. Thus, the volume of NVOCC cargo carried by TACA members under service contracts and TVRs increased
from 11.8% in 1994 to 14.4% in 1997.

776   The Commission's argument that because NVOCCs buy their ocean capacity from vessel operators they do not provide any service
different from the latter and must therefore be excluded from the relevant market confuses the intermediate market (sales
to NVOCCs) with the end-user market (sales to proprietary shippers). From the point of view of the end-user there is no doubt
that the services offered by the vessel operators and NVOCCs are similar and have a high degree of substitutability. The applicants
draw an analogy in this regard with the case of cable TV operators who buy some of their programmes from satellite TV companies
with whom they also compete in the supply of pay TV. The applicants add that in the case of intermodal transport, the transport
comprises different segments and levels of service. Accordingly, just as individual carriers buy in elements of the complete
intermodal service (such as inland transport and port services) from external suppliers, so the NVOCCs supply some elements
of the intermodal transport service themselves and buy in others.

777   Last, the applicants point out that the Commission fails to explain why it considers that the NVOCCs are not part of the relevant
market when at paragraph 22 of Commission Decision of 21 December 1994 relating to a proceeding pursuant to Article 85 of
the EC Treaty, IV/33.218 - Far Eastern Freight Conference, OJ 1994 L 378, p. 17), the Commission found that NVOCCs offer the
same services as liner shipping companies which offer multimodal services, but instead of operating vessels they charter slots
from vessel-operating carriers.

778   In the second place, the applicants complain that the Commission did not take account of supply-side substitution, contrary
to point 20 of its Notice on the definition of relevant market for the purposes of Community competition law, cited above.
At paragraph 75 of the contested decision, the Commission refers, for its treatment of that issue, to paragraphs 278 to 282.
Those paragraphs of the contested decision are not concerned with supply-side substitution, however, but with potential competition.
The applicants claim that those two questions are economically and legally distinct and should not be confused. Moreover,
the statement at paragraph 305 of the contested decision that the Commission does not accept that the vast majority of customers
of the TACA parties regard bulk transport as substitutable for carriage on a fully-containerised vessel is based on a single
piece of evidence. That evidence, an advertisement for ACL which describes the special equipment available on its vessels,
also demonstrates the existence of supply-side substitutability as a container operator would only advertise in this way if
it was seeking to encourage switching to its services.

779   The applicants submit that fleet mobility, referred to in the eighth recital of the preamble to Regulation No 4056/86, is
compatible with a high degree of supply-side substitutability. It is in any case apparent from the Dynamar report that in
1996 non-containerised operators on the transatlantic trade via the Canadian Gateway were potentially able to increase their
carriage of containers by about 200 000 TEU for minimal cost, both westbound and eastbound. This represented 15% of the applicants'
capacity and was available without the need to adapt or modify their vessels. In Case 6/72 *Europemballage and Continental Can* v *Commission* [1973] ECR 215, the Court annulled the Commission decision for failing to take supply-side substitution into account, noting
that a dominant position on the market for light metal containers for meat and fish cannot be decisive, as long as it has
not been proved that competitors from other sectors of the market for light metal containers are not in a position to enter
this market, by a simple adaptation, with sufficient strength to create a serious counterweight (paragraph 33).

780   The Commission, supported by the ECTU, contends that the applicants' pleas are unfounded.

(2) Findings of the Court

781   The applicants maintain that the definition of the relevant market for services used by the Commission in the contested decision
is the consequence of an incorrect assessment of both demand-side substitution and supply-side substitution.

(i) Demand-side substitution

782   The applicants claim that air transport, traditional liner transport (break bulk) and the NVOCCs are substitutable for container
shipping transport. They also criticise the Commission for having failed to take account of the cumulative effect of those
sources of competition.

Air transport services

783   Although the applicants did not maintain in their response to the statement of objections that air transport services are
substitutable for container liner services, they now claim that for certain goods air transport services are a possible alternative
to sea transport. They rely in that regard on a statement by the President of the Campbell Aviation Group and on an extract
from the *Journal of Commerce* of May 1998.

784   In the contested decision, the Commission states at paragraph 62 that air transport forms a separate market from containerised
liner shipping for the reason, inter alia, that it has not been shown that a substantial proportion of the goods carried by
container could easily be switched to air transport. The Commission observed (in the same paragraph) that on the North Atlantic,
air transport for cargo is up to 20 times more expensive than maritime transport and up to nine times faster.

785   The evidence put forward by the applicants in this action is clearly not capable of showing that those statements are inaccurate.

786   Thus, far from contradicting the Commission's conclusions, the statement of the President of the Campbell Aviation Group,
made by a representative of the aeronautics industry, expressly asserts that the alleged substitution concerns lightweight
high-value items, such as computer components.

787   The article in the *Journal of Commerce* of May 1998, apart from being anecdotal, merely states the fact, not otherwise supported, that some forwarding agents have
switched 10% to 15% of their ocean freight to air transport for an unspecified category of products. In those circumstances,
no particular probative value can be placed on that document.

788   Therefore the evidence put forward by the applicants does not show that the Commission made an error of assessment in concluding
that demand for air transport concerned limited quantities of high-value-added lightweight goods and that air transport was
a separate market from containerised liner shipping (see, to that effect, *TAA*, paragraph 279).

789   The arguments put forward by the applicants on this point must therefore be rejected.

Break bulk shipping

790   As regards, first, break bulk shipping transport, the applicants maintain first of all that the exclusion of this transport
from the relevant market is wrongly based on the concept of one-way substitutability.

791   In that regard, the Court notes that at paragraph 65 of the contested decision the Commission considered that, in order to
determine the competitive conditions on the relevant market, it was necessary to consider the effect of substitutability from
carriage in container to carriage in bulk, substitution from bulk to container being irrelevant. The same reasoning is followed
at paragraph 73 in respect of refrigerated services: the Commission observes that although refrigerated containers may be
substitutable for bulk refrigerated services, that does not mean that bulk refrigerated services are substitutable for refrigerated
container services. The Commission stated at paragraph 68 that as the degree of containerisation increases, shippers of non-containerised
cargoes turn towards containerised services but once those shippers have become accustomed to shipping in containers they
do not revert to non-containerised shipping. Such examples of one-way substitutability are not uncommon.

792   It is apparent from the contested decision that that situation is due to the fact that shippers become accustomed to shipping
in smaller but more frequent quantities and realise that once cargo has been loaded into a container, it is easier to ship
onwards from the port of delivery to the ultimate consignee using multimodal transport (paragraph 67). Smaller shipments lead
to reduced inventory costs and reduce the risks of damage and pilferage (paragraph 70). Almost all cargo can be shipped in
containers; thus, in mature markets, such as the northern Europe/USA or the northern Europe/Far East markets, the process
of change towards containerised shipping is more or less complete and few, if any, non-containerised cargoes are left which
are capable of being shipped in containers (paragraph 66).

793   In this case, although the applicants dispute the Commission's conclusions at paragraphs 65 and 73 of the contested decision
on one-way substitutability, they do not dispute the factual findings at paragraphs 66 to 70 on the underlying phenomenon
of gradual freight containerisation. They do no more than claim that an increase in the cost of transport by container will
tend to slow down the rate at which shippers switch to that mode of transport or even, if the change in price is sufficiently
great, will reverse the trend. They maintain that the existence of bulk transport services will then be a constraining factor
when fixing the price of container transport services. However, while it is true that a significant change in the price of
container transport might, at least in theory, encourage some shippers to use bulk transport instead, the applicants adduce
no firm evidence to support their allegation.

794   In those circumstances, the Court finds that the substitution of containerised transport for break bulk transport, once put
into effect, is definitive (see, to that effect, *TAA*, paragraph 281).

795   The Commission was therefore entitled to conclude that that substitution was irrelevant for the purpose of defining the relevant
market. The substitution does not show that, from the shippers' point of view, the two modes of transport in question are
substitutable for each other but merely reflects a phenomenon of cargo containerisation, leading to the emergence of a separate
new market in which break bulk transport is not regarded as substitutable for the services provided by container transporters.
Consequently, it must be concluded that the Commission did not make an error of assessment in basing its analysis of the relevant
market on the concept of one-way substitutability.

796   Second, the applicants maintain that bulk transport, including refrigerated bulk transport, is substitutable for containerised
transport.

797   As regards, first, non-refrigerated bulk transport, the applicants support their argument by reference to the existence of
such substitution on the eastbound transatlantic trade for goods transported in large quantities originating in specific regions
of the United States of America, such as, for example, coffee, peanuts, apples, pears or lemons. The applicants rely in that
regard on the findings of a Dynamar report, which establishes, on the basis of figures, the existence of such substitution
in the case of certain iron and steel products and forestry products. They also refer to an article published in August 1996
by the magazine *American Shipper*, quoting a manager of Mead Corporation, a United States paper exporter.

798   According to the case-law, the market to be taken into consideration comprises all the products which, with respect to their
characteristics, are particularly suitable for satisfying constant needs and are only to a limited extent interchangeable
with other products (*Michelin*, cited at paragraph 337 above, paragraph 37).

799   As the Court of Justice has already held, stability of demand for a particular product is therefore a relevant criterion for
defining a relevant market, so that the mere fact that different products are, to a marginal extent, interchangeable does
not preclude the conclusion that those products belong to separate product markets (*Tetra Pak II*, cited at paragraph 762 above, paragraphs 13 to 15; see also *TAA*, paragraph 273).

800   In this case, the Commission was therefore correct to rely at paragraph 68 of the contested decision on that decision of the
Court of Justice in order to find, at paragraphs 64 to 74 of the contested decision, that the fact that other forms of sea
transport may, for a limited number of cargoes, provide marginal competition on the market for transport services by container
does not mean that they can be regarded as belonging to the same market.

801   Contrary to the applicants' contention, the reference to a relevant criterion at paragraph 15 of *Tetra Pak II*, cited at paragraph 762 above, means not that other criteria must also be taken into account in order to determine the degree
of substitution, but that the Commission is entitled to rely on that criterion in order to conclude that separate markets
exist. In any event, in this case it is apparent from paragraph 75 of the contested decision that the Commission did not confine
itself to studying demand-side substitution but that it also ascertained whether the examples of supply-side substitution
given by the applicants were capable of calling its analysis in question. The Commission therefore did not base its assessments
on a single criterion.

802   However, it is still necessary to ascertain whether the Commission was correct to find in this case that bulk transport provided
only marginal competition for transport by container.

803   In that regard, it is apparent that, in the context of these actions, the applicants are in essence merely reiterating the
arguments developed during the administrative procedure in their response to the statement of objections. They have not really
challenged the grounds on which those arguments were rejected by the Commission at paragraphs 64 to 74 of the contested decision.
It follows from those paragraphs, first, that for the great majority of categories of cargoes and users of containerised liner
services, the other forms of break bulk liner services do not represent a foreseeable replacement solution on the trade in
question and, second, that once a type of cargo is regularly containerised, there is virtually no prospect of its ever being
carried in any other form. In that context, the Commission concludes, at paragraph 74, that while it is possible that in exceptional
circumstances some substitution may occur between break bulk and container transport, it has not been demonstrated that there
is any lasting changeover from container towards bulk for the vast majority of cases.

804   None of the evidence put forward by the applicants in these actions is capable of showing that those findings are incorrect.

805   Thus, the statement of a manager of a shipper concerning a specific product, paper, cannot reasonably establish the existence
of a high degree of substitution between the two transport services for a wide category of goods. In their written submissions,
moreover, the applicants expressly recognise that the alleged substitution is significant only in respect of low-value cargoes
owing to the reduced rates offered by the operators of the various types of vessels.

806   Next, the data set out in the application for the purpose of showing that certain cargoes, such as fertilisers and certain
iron and steel products, are carried by both types of transport, do not prove that shippers switch their cargoes between those
two types of transport. In that regard, the Commission stated at paragraph 71, without being contradicted by the applicants,
that:

In this context, it is not important that certain commodities may still travel by either means: the essential question for
determining demand substitutability is whether the choice of mode is made on the basis of the characteristics of the mode.
Thus, the fact that some steel products may travel by bulk and others by container does not show that the two modes are substitutable,
since it does not take into account the diverse nature (and value) of steel products [or] the delivery requirements of customers.

807   Furthermore, at paragraphs 217 and 219 of the contested decision the Commission observed, again without being contradicted
by the applicants, that the existence of a certain substitution for products such as coffee, peanuts and paper, for which
it accepts that there is some residual competition from bulk carriers, was the result of independent action by TACA members.
The Commission was right to conclude, at paragraph 72, that, far from showing that bulk transport should be included in the
relevant market, those examples demonstrated the ability of the TACA parties to discriminate on price so as to attract marginal
products away from bulk carriers without affecting freight rates generally, and that there was no evidence that bulk carriers
were likewise able to discriminate as between customers.

808   With reference to the applicants' allegation that paragraph 69 of the contested decision, where the Commission states that,
according to Drewry (*Global container Markets - Prospects and Profitability in a High Growth Era*, London, 1996), the proportion of containerised freight rose substantially between 1980 and 1994, going from 20.7% to 41.6%,
and is forecast to reach 53.8% by 2000, demonstrates the instability of demand, it is sufficient to recall that, as the Commission
correctly concluded at paragraph 65 of the contested decision, that substitution is irrelevant in determining the relevant
market: the sole question is not to what extent containerised freight can be substituted for other forms of transport but,
on the contrary, to what extent, once that substitution has been effected, the other forms of transport can be substituted
for containerised freight if the price of containerised freight rises significantly.

809   Having regard to the foregoing, none of the evidence put forward by the applicants is capable of calling in question the Commission's
finding that, for the great majority of categories of cargoes and customers of the companies providing containerised services,
bulk transport is not a reasonable replacement solution for containerised transport (see, to that effect, *TAA*, paragraph 273).

810   As regards, second, bulk refrigerated transport services, the applicants observe that that substitution is borne out by the
statements of the traditional operators of refrigerated transport services, by the fact that competition between the two forms
of transport is increasing even more with the decision of certain container shippers, such as Mærsk, to increase their refrigerated
capacity and by the fact that, on trade between Europe and the United States of America, some American fruit is carried both
by containers and by traditional refrigerated vessels.

811   It is thus apparent that in these proceedings the applicants are merely repeating, in essence, the evidence put forward during
the administrative procedure in their response to the statement of objections. They have not really challenged the grounds
on which that evidence was rejected by the Commission at paragraph 73 of the contested decision, where it is stated that although
that evidence shows that refrigerated containers are substitutable for bulk refrigerated services, it does not show that bulk
refrigerated services are substitutable for refrigerated container services. Furthermore, the Commission found at that part
of the contested decision, first, that containerised refrigerated transport services offer some advantages, such as reduced
volume and speed of transfer to other modes of transport, and, second, that a wider range of products can travel in containerised
refrigerated transport than can travel as bulk refrigerated cargoes.

812   The evidence adduced by the applicants in the context of these actions does not show that those findings are incorrect.

813   As the Commission rightly observes at paragraph 73 of the contested decision, the evidence in question at the most confirms
the phenomenon of the gradual containerisation of refrigerated transport and in no way shows that bulk refrigerated services
are substitutable for refrigerated container services. As stated at paragraph 795 above, only proof of such substitution would
be capable of demonstrating that both types of refrigerated transport belong to the same market.

814   Thus, the statements of the operators of bulk refrigerated transport services cited by the applicants merely emphasise that
containerisation [is] the biggest threat to the traditional refrigerated cargo trades, but make no mention of the fact that
bulk refrigerated transport services are substitutable for refrigerated container transport services. In any event, even if
those statements might be so interpreted, they cannot seriously be regarded as proof of the existence of a significant substitution.

815   Likewise, the fact that container carriers are installing containerised refrigerated capacity proves not that bulk refrigerated
transport services are substitutable for containerised refrigerated transport services but only that there is a phenomenon
of containerisation of refrigerated transport services.

816   Last, the fact that certain products are carried both in containers and in bulk does not establish that shippers switch between
those two modes of transport and therefore does not prove that bulk refrigerated transport services are for a significant
part substitutable for containerised refrigerated transport services: at the most, it highlights the phenomenon that refrigerated
freight is becoming containerised.

817   On those grounds, it must therefore be concluded that the applicants have not adduced evidence capable of calling in question
the Commission's findings that bulk refrigerated transport services are substitutable for containerised transport services.

NVOCCs

818   The applicants maintain that the NVOCCs which do not operate vessels on any trade represent a significant source of competition
which must be taken into account for the purposes of defining the relevant market. They also maintain that the decision is
not reasoned to the requisite standard on this point, since it does not state why the NVOCCs are not part of the relevant
market.

819   It is common ground that the NVOCCs which do not operate vessels on any trade obtain their maritime transport services, as
the Commission states at paragraph 159 of the contested decision, from the TACA parties in the same way as shippers, that
is, either at tariff rates or, more usually, on the basis of a conference service contract.

820   As those operators do not themselves provide any maritime transport services of their own, but obtain services from the TACA
parties, they do not, as the Commission points out at paragraphs 160 and 161 of the contested decision, compete with maritime
carriers as regards the quality and price of the maritime transport service provided. It is true that the NVOCCs in question
may have a certain purchasing power and may therefore obtain lower prices in the service contracts than those paid by other
shippers. However, as the Commission states at paragraph 161 of the contested decision, those prices are in any event still
fixed by the TACA parties.

821   Furthermore, since they do not themselves provide maritime transport services on the trade in question, NVOCCs which do not
operate vessels on any trade do not bring any capacity of their own to the market, but, like the shippers, merely obtain capacity
provided by the maritime carriers.

822   Consequently, the Commission was entitled to conclude that NVOCCs which did not operate vessels on any trade were not part
of the same market as the TACA parties. The grounds set out at paragraphs 159 to 161 of the contested decision also containing
sufficient reasoning on that point.

823   The parties' arguments on that point must therefore be rejected.

Consideration of the cumulative effect of sources of competition

824   Last, the applicants complain that the Commission ignored the cumulative effect of the various sources of competition when
it considered that each of the sources could be substituted for containerised transport only in exceptional circumstances
and for a limited number of products. Thus, according to the applicants, an operator carrying 50 different products, each
of a different value, and therefore facing competition from one or another alternative shipper, faces competition for all
of its products.

825   However, as the Commission rightly observes at paragraphs 72, 203 to 213 and 534 to 537 of the contested decision, shippers
which discriminate between the various categories of cargo by applying significantly different prices (since transport costs
vary, depending on the goods, from one to five for the same transport service) are capable of limiting the effects of marginal
competition for the transport of specific categories of cargo. Furthermore, the applicants' argument that since they face
a different source of competition for each category of goods, they face competition for all their services, does not stand
up. Not only have the applicants failed to establish that they faced competition from other forms of transport in respect
of each category of cargo and therefore for the entire range of their services, but, moreover, it follows from the foregoing
that the Commission established to the requisite legal standard that, for the great majority of categories of cargoes and
users, the other transport services were not substitutable for containerised maritime transport services (see, to that effect,
*TAA*, paragraph 282).

826   The complaint alleging failure to take into account the cumulative effect of the various sources of competition must therefore
be rejected.

(ii) Supply-side substitution

827   The applicants submit that the Commission did not examine the possibility of supply-side substitution, but only the separate
issue of whether the TACA parties were subject to certain potential competition. They further maintain that the mobility of
fleets, which is recognised in the eighth recital of the preamble to Regulation No 4056/86, is compatible with a high degree
of supply-side substitution. It is also apparent from the Dynamar report that in 1996 non-containerised operators active on
the transatlantic trade via Canadian ports were potentially capable of increasing at a minimal cost their transport of containers
by approximately 200 000 TEU on both westbound and eastbound trades, representing 15% of the applicants' capacity, without
any need to adapt or alter their vessels.

828   As regards, first, the allegation that the Commission failed to examine in the contested decision the question of supply-side
substitution, it has been held that in order to be able to be regarded as constituting a separate market, the products in
question must be distinguishable not only by the mere fact of their use but also by specific production characteristics which
render them particularly appropriate for that purpose (*Europemballage and Continental Can*, cited at paragraph 779 above, paragraph 33).

829   Accordingly, in this case, for the purpose of defining the relevant market, the Commission was required to ascertain whether
operators of vessels other than container carriers could, by a mere technical adaptation, convert their vessels to carry containers
or increase the number of containers carried and thus present themselves on the container freight market with sufficient weight
to constitute a serious counterbalance to container freight carriers (supply-side substitution).

830   In that regard, at paragraph 75 of the contested decision, the Commission refers for examination of the question of supply-side
substitution to paragraphs 278 to 282.

831   That reference is incorrect. At those paragraphs, which form the first part of the section of the contested decision devoted
to potential competition, the Commission does not examine the possibilities of supply-side substitution, but merely makes
certain preliminary observations about the probative value of the Dynamar report (*The Transatlantic Trade - An overview of the carrying capacity/potential of non-TACA members*, 1996) on which the TACA parties relied in support of their response to the statement of objections on that point. Essentially,
the Commission states that, the TACA parties not having provided it with the instructions given to Dynamar concerning the
preparation of the report, it infers that the conclusions of the report were coloured by those instructions.

832   Later in the same section of the contested decision devoted to potential competition, however, at paragraphs 300 to 305, the
Commission examines the competition from non-container vessels, so that paragraph 75 must be taken to refer to those paragraphs.

833   The Court agrees with the applicants that none of those paragraphs deals expressly with the question of supply-side substitution.
At that point in the contested decision, the Commission does not examine the capacity of non-container vessels to be adapted
to carry containers or to increase the number of containers carried but, as expressly stated at paragraph 301, only studies
the question whether the operators of those vessels have the potential to compete to a significant extent with fully containerised
vessels in the sense, first, that they are capable of competing economically and on even terms with the TACA parties and,
second, that customers regard carriage by those operators as being functionally interchangeable with carriage on a fully containerised
vessel. Following its analysis, the Commission concludes that such significant potential competition does not exist. On the
first point, it emphasises at paragraphs 302 to 304 of the contested decision that the technical characteristics and performance
of non-fully containerised vessels are significantly different from those of fully containerised vessels and that the operators
of such vessels do not possess the same fleets of containers as operators of fully containerised vessels and generally do
not have the same land-side facilities. On the second point, it states at paragraph 305 of the contested decision that, from
the customers' point of view, bulk or neo-bulk vessels are not substitutable for container vessels.

834   Although potential competition and supply-side substitution are conceptually different issues, as the Commission expressly
accepts in the defence, those issues overlap in part, as the distinction lies primarily in whether the restriction of competition
is immediate or not. It follows that most of the evidence at paragraphs 302 to 304 of the contested decision is capable of
justifying both the absence of significant potential competition and the absence of supply-side substitution. Thus, as regards
the technical characteristics of non-fully containerised vessels, the Commission expressly states at paragraph 303 that some
of those vessels militate against supply-side conversion, owing to the additional expenditure required to carry containers
on vessels which were not specifically built as container vessels. Nor can it be disputed that the absence of a significant
container fleet or sufficient land-side facilities are significant obstacles to the rapid conversion of non-fully containerised
vessels to fully containerised vessels.

835   It is also apparent from paragraph 300 of the contested decision that the purpose of the assessments made by the Commission
at paragraphs 302 to 304 is to reject the applicants' argument based on the Dynamar report, which they also use to support
these complaints, that operators of non-fully containerised vessels could adapt those vessels in order to carry containers
or increase the number of containers carried.

836   In those circumstances, it must be accepted that the question of supply-side substitution is examined by implication, but
unquestionably, at paragraphs 302 to 304 of the contested decision. The applicants' complaint on that point must therefore
be rejected.

837   As regards, second, the evidence adduced by the applicants in order to demonstrate the existence of supply-side substitution,
it must be emphasised, as stated above, that in the context of these proceedings the applicants essentially confine themselves
to reiterating the arguments taken from the Dynamar report which they developed during the administrative procedure in their
response to the statement of objections. The applicants have not challenged the grounds on which those arguments were rejected
by the Commission at paragraphs 302 to 304 of the contested decision.

838   At the very most, the applicants claim that the assertion at paragraph 305 of the contested decision that the vast majority
of customers of the TACA parties do not regard carriage in bulk as substitutable for container transport is supported by only
one piece of evidence, an advertisement for ACL which is reproduced in that paragraph.

839   However, that criticism is irrelevant in the context of the examination of these complaints concerning the assessment of supply-side
substitution. The assertion at paragraph 305 of the contested decision does not concern supply-side substitution but demand-side
substitution.

840   In any event, contrary to the applicants' allegation, that assertion is not based solely on an advertisement for ACL. It is
apparent from paragraph 69 of the contested decision that the Commission's assessments concerning the possibilities of substitution
between containerised transport and bulk transport are essentially based on the Drewry report (*Global Container Markets - Prospects and Profitability in a High Growth Era*, London, 1996). Furthermore, as stated at paragraph 803 above, the applicants have not really challenged the arguments which
the Commission sets out at paragraphs 64 to 74 to demonstrate that lack of substitution.

841   As regards the argument derived from the fact that the mobility of fleets is recognised in the eighth recital of the preamble
to Regulation No 4056/86, in that recital the Council states that conferences continue to be subject to effective competition
from both non-conference scheduled services and, in certain circumstances, from tramp services and from other modes of transport;
... the mobility of fleets, which is a characteristic feature of the structure of availability in the shipping field, subjects
conferences to constant competition which they are unable as a rule to eliminate as far as a substantial proportion of the
shipping services in question is concerned. Thus, it is clear from the wording of that recital that the Council relies on
fleet mobility not in order to establish that non-containerised vessels may increase their container capacity but in order
to show that the liner operators which are parties to a liner conference on a given trade are, in principle, subject to potential
competition from containerised vessels active on other trades. Furthermore, and in any event, the Commission stated at paragraphs
289 to 299 of the contested decision, without being contradicted by the applicants on that point, that fleet mobility had
scarcely any prospect of being effective on the transatlantic trade. In those circumstances, the applicants cannot derive
any argument from the fact that fleet mobility is recognised by Regulation No 4056/86 as a ground for challenging the definition
of the relevant market for services employed in the contested decision.

842   The applicants' arguments concerning supply-side substitution must therefore be rejected.

b) Geographical scope of the services in question

(1) Arguments of the parties

843   The applicants maintain that the definition of the relevant geographic market at paragraph 84 of the contested decision as
being the market for sea-transport services between northern Europe and the United States and Canada is inaccurate in that
it excludes the Mediterranean ports of southern Europe (paragraphs 76 to 83 of the contested decision).

844   They make the preliminary observation that, contrary to what is suggested at paragraph 77 of the contested decision, they
did not claim during the administrative procedure that the ports of Turkey, Lebanon, Israel, Cyprus, Egypt, Libya, Tunisia,
Algeria and Morocco are substitutable for northern European ports. They go on to plead as follows.

845   First, they repeat that their criticism of the Commission is founded on its rejection, at paragraph 76 of the contested decision,
of the proposition that the Mediterranean ports are substitutable on the basis of one-way substitutability. They refer to
the criticisms put forward in connection with the definition of the relevant service market, but stress in particular that
the Commission has not shown how the evidence that the northern European ports were substitutable for the southern European
ports did not also demonstrate that ports in both regions were substitutes for each other. The applicants consider that in
dismissing the evidence of substitutability presented by them in their response to the statement of objections, the Commission
places on them the burden of proving that the ports of southern Europe are substitutable for the ports of northern Europe,
even though the correct definition of the relevant market is a precondition for a finding of a dominant position. It was for
the Commission to send the necessary requests for information to the shippers, since the applicants are not able to obtain
the relevant evidence.

846   Secondly, the applicants allege that the Commission's findings at paragraphs 80 and 82 that Mediterranean ports are inadequate
and subject to infrastructural limitations are inconsistent with the facts.

847   First, it is apparent from the specialist press that southern European ports are increasingly perceived to be substitutable
for those of northern Europe. Thus, it has been reported that many carriers believe that it makes more sense to stop in Mediterranean
ports to link the Europe/Asia services with those of Europe/North America. Furthermore, the Mediterranean ports themselves
consider that their services compete with the northern European ports and put forward as evidence in support an advertisement
for the Port of Marseilles Authority. The applicants also claim that the volume of cargo on the Europe/US trade handled by
the southern European ports increased substantially between 1994 and 1997.

848   Second, the attitude of the sea carriers also shows that the ports of southern Europe are substitutable for those of northern
Europe. One applicant carried out a survey which concludes that the ports of southern Europe compete favourably with those
of northern Europe in terms of efficiency, that conferences have traditionally existed (SEAC and USSEC) on the trade between
southern Europe and the United States of America and that independent lines such as Lykes and Evergreen have increased their
services from southern European ports.

849   Third, and finally, it is apparent from the behaviour of the shippers that the southern European ports are substitutable for
those of northern Europe. Thus, in one invitation to tender the shipper expressly states that the Mediterranean ports can
be considered as loading ports without any preference from our side. Furthermore, a number of shippers switched part of their
cargo from northern European ports to those of southern Europe. There is no basis for the claim in the defence that evidence
was submitted belatedly.

850   The Commission, supported by the ECTU, contends that the definition of the relevant geographic market in the contested decision
is correct and supported by adequate reasoning. It therefore concludes that the applicants' pleas and arguments on this point
should be rejected.

(2) Findings of the Court

851   The applicants criticise the Commission for having excluded the Mediterranean ports from its definition of the relevant market
for services at paragraph 84 of the contested decision, whereas transport services on the transatlantic route provided from
the ports of northern Europe and those provided from the Mediterranean ports of southern Europe are substitutable.

852   By that argument, the applicants are disputing the geographical component of the transport services constituting the relevant
market. That component refers to the question of the determination of the points of origin and of destination of the transport
services concerning the transatlantic route (*TAA*, paragraph 293).

853   As the Commission rightly observes, that question is separate from the question of the definition of the relevant geographic
market, which in this case is given at paragraph 519 of the contested decision and which is intended to determine the territory
on which the undertakings concerned are engaged in the supply of the services in question, on which conditions of competition
are also sufficiently homogeneous and which may be distinguished from neighbouring geographical areas because, in particular,
the conditions of competition there are significantly different (see, to that effect, Case 27/76 *United Brands* v*Commission* [1978] ECR 207, paragraph 11, and Case T-65/96 *Kish Glass* v *Commission* [2000] ECR II-1885, paragraph 81).

854   First, the applicants criticise the Commission for having determined the geographical component of the relevant market by
wrongly relying on the concept of one-way substitutability, in the sense that it took the view that the ports of northern
Europe were substitutable for those of southern Europe but not vice versa. They claim that the Commission has failed to demonstrate
how the evidence showing that the ports of northern Europe were substitutable for the ports of southern Europe did not at
the same time show that the ports of both regions were substitutable for each other.

855   It should be noted that at paragraphs 76 to 83 of the contested decision, the Commission excluded the Mediterranean ports
of southern Europe from the geographical component of the relevant market for services because, as stated at paragraph 76,
while northern European ports are for some shippers substitutable for some Mediterranean ports, very few, if any, shippers
find that Mediterranean ports are substitutable for northern European ports.

856   It is thus quite clear from paragraph 76 of the contested decision that, contrary to what the applicants suggest, the Commission
did not find that the ports of northern Europe were substitutable for the Mediterranean ports of southern Europe but only
that for some shippers northern European ports were substitutable for some Mediterranean ports of southern Europe.

857   Although that in itself provides sufficient ground to reject this complaint, it must also be emphasised that even if the Commission
had established that the ports of northern Europe were substitutable for the Mediterranean ports of southern Europe, it would
not have been required, in order to justify the exclusion of the Mediterranean ports of southern Europe from the relevant
market, to establish the reasons for which the evidence proving that substitutability did not show that the Mediterranean
ports of southern Europe were substitutable for those of northern Europe.

858   The TACA is an agreement governing the conditions of maritime container transport to the United States not from the European
ports on the Mediterranean but from the ports of northern Europe and, more particularly, as stated at paragraph 14 of the
contested decision, from the ports situated in latitudes between Bayonne and the Cape of Norway and points in Europe served
via those ports, apart from Spain and Portugal. For the purpose of determining the geographical component of the relevant
market for services, with a view to examining such an agreement from the aspect of competition law, the only relevant question
is therefore whether a shipper consigning freight from northern Europe to the United States of America could easily substitute
for the services offered from the ports of northern Europe the services offered from the Mediterranean ports of southern Europe
to the United States of America. The reasons for which a shipper consigning freight from the Mediterranean ports of southern
Europe to the United States of America might substitute the ports of northern Europe are manifestly irrelevant.

859   Contrary to what the applicants claim, that does not constitute a reversal of the burden of proof. It follows from the contested
decision that, in order to exclude the Mediterranean ports of southern Europe from the relevant market on the ground that
no shipper consigned from northern Europe to the European ports of the Mediterranean significant quantities of freight whose
final destination was North America, the Commission relies on evidence in a number of respects, namely:

–       - the fact that the TACA parties which are also VSA parties operate two to three round-trip rail shuttles a week between Milan
and Rotterdam (paragraph 80);

–       - the fact that, according to the Drewry report (*Global Container Markets*, London, 1996), even for Europe/Far East services, Mediterranean ports do not appear to be substitutable (paragraph 82);

–       - the fact that, for certain categories of goods, the TACA parties may limit the effect of marginal competition from other
means of transport by offering lower prices without affecting prices generally (paragraph 83).

860   According to paragraph 80 of the contested decision, the Commission considers that this evidence outweighs the evidence put
forward by the TACA parties, which claimed, essentially, that shippers transferred some 8 000 to 10 000 TEU of freight from
northern Europe to the European ports of the Mediterranean.

861   It follows from the foregoing that the Commission did indeed assume the burden of proof which it must bear in connection with
the prior definition of the relevant market for the purpose of applying Article 86 of the Treaty.

862   For those reasons, these complaints alleging incorrect reliance on the concept of one-way substitutability must be rejected.

863   Second, the applicants claim that the Commission's assertions at paragraphs 80 and 82 of the contested decision concerning
the inadequacy and the infrastructural limitations of the Mediterranean ports of southern Europe are contradicted by the facts.
They maintain that the evidence which they adduce in the application shows that the Mediterranean ports of southern Europe
are increasingly seen as substitutable for the ports of northern Europe.

864   It cannot be denied that there is a certain substitutability between the maritime transport services provided under the TACA
and the regular container transport services on the transatlantic line offered from or to the Mediterranean ports of southern
Europe (*TAA*, paragraph 296). However, it is not the complete absence of substitutability that justifies excluding the latter services
from the services of the relevant market but the fact that that substitutability is extremely limited.

865   At paragraph 80 of the contested decision, the Commission states that the TACA parties have provided no evidence that any
shipper has sent material quantities of cargo to Mediterranean ports from northern Europe with North America as the ultimate
destination. The Commission observes at paragraph 79 of the contested decision that the alleged substitution of 8 000 to 10
000 TEU of freight from the northern European ports to the Mediterranean ports of southern Europe asserted by the applicants
during the administrative procedure would, according to the applicants' own figures, have the effect only of increasing the
total market by 2%, with the consequence that the TACA parties' market share would be reduced by approximately 1%.

866   As stated at paragraph 799 above, it is settled case-law that the existence of marginal substitutability does not prevent
the conclusion that there are separate markets (*Tetra Pak II*, cited at paragraph 762 above, paragraphs 13 to 15, and *TAA*, paragraph 273).

867   The applicants have manifestly failed to provide evidence in these actions capable of showing that, for shippers in northern
Europe, which constitutes the target area for the services provided by the TACA members, the services offered by the Mediterranean
ports of southern Europe represent a reasonable alternative solution.

868   First, the applicants rely on the existence of transfers of freight from the ports of northern Europe to the Mediterranean
ports of southern Europe. They rely in that regard on transfers by 13 shippers between 1996 and 1998, on the call for bids
from one shipper in which the shipper states that it has no preference between the ports of northern Europe and the European
Mediterranean ports and on the data provided by P&O Nedlloyd on the ports from which it provides services to its customers.

869   However, although the applicants claim, on the basis of those data, that there are transfers of freight from the ports of
northern Europe to the Mediterranean ports of southern Europe, they do not at any point contend that those transfers are substantial.
As stated above, it was not the complete absence of transfers that led the Commission, at paragraph 80 of the contested decision,
to exclude the European ports of the Mediterranean from the relevant market but the fact that those transfers do not relate
to significant quantities.

870   Furthermore, it is clear upon examining the data provided by the applicants that they do not establish the existence of substantial
transfers.

871   Thus, as regards, first of all, the examples of transfers made by 13 shippers, the data provided by the applicants reveal,
at the most, transfers relating to a volume of 7 900 TEU over three years. It is apparent from Table 2 at paragraph 85 of
the contested decision that in 1996 alone the TACA transported 1 429 090 TEU on the trade between northern Europe and the
United States of America, so that the alleged transfers represent a minute quantity of the relevant market. Nor is it possible
to draw the slightest relevant conclusion from the data in question, since they do not indicate either the place of establishment
of the shipper or, in particular, the destination of the goods. Second, as regards the call for bids referred to in the application,
it is sufficient to state that it relates to a single contract for services made by a single shipper and it cannot therefore
be considered to have any particular probative value. As regards, last, the data from Nedlloyd concerning a single carrier,
it must be observed that, as the Commission rightly observes, they have no probative value, since they merely indicate, for
certain shippers who are customers of P&O Nedlloyd, the variations in the freight carried from the European ports of the Mediterranean
between 1995 and 1996, without specifying the variations in total freight carried from the ports of northern Europe and from
the Mediterranean ports of southern Europe. In those circumstances, it is impossible to establish on the basis of those data
whether the variations in freight result from transfers from the ports of northern Europe or from a variation in volumes of
exports to the United States of America.

872   Second, the applicants claim that the volume of freight relating to the trade between Europe and the United States of America
which is handled in the Mediterranean ports of southern Europe increased substantially over the period from 1994 to 1997.

873   In that regard, it should be pointed out that although the data provided by the applicants on that point indisputably show
such an increase, they do not prove that the increase was the result of transfers of freight from the northern Europe ports
and not of other factors, such as an increase in exports to the United States (*TAA*, paragraph 297).

874   Third, the applicants submit that a study prepared by one of them concludes that the ports of southern Europe compete favourably
with those of northern Europe in terms of efficiency. In that connection, they also claim that conferences have traditionally
existed on the trade between southern Europe and the United States of America and that independent lines such as Lykes and
Evergreen have increased their services from southern European Mediterranean ports.

875   However, those data fail to show that, from the shippers' point of view, the Mediterranean ports of southern Europe are substitutable
to a significant extent for the ports of northern Europe. Thus, the study produced by the applicants merely examines the productivity
of the European ports on the Mediterranean and that of the ports of northern Europe, without at any point examining their
substitutability. Such a study is therefore of no relevance for the purpose of challenging the definition of the relevant
market in the contested decision. Although the other evidence adduced by the applicants does indeed show that a certain quantity
of freight for destinations in the United States of America is carried from the Mediterranean ports of southern Europe, it
does not in any way prove the existence of transfers of freight by shippers from the ports of northern Europe to the Mediterranean
ports of southern Europe.

876   Fourth, and last, the applicants refer to certain articles from the specialist press which state, first, that many carriers
believe it makes more sense to stop in the Mediterranean ports of southern Europe in order to link Europe/Asia services with
Europe/North America services and, second, that the operators of the Mediterranean ports of southern Europe consider that
their services are competitive with the ports of northern Europe.

877   However, the impressions of shippers, as reported in the specialist press, concerning the Far East/North American link cannot
reasonably serve to undermine the opposite conclusions drawn by the Drewry report (*Global Container Markets*, London, 1996), reproduced at paragraph 82 of the contested decision, to the effect that Mediterranean ports [of southern
Europe] do not appear to be substitutable for northern European ports even for Europe/Far East services. In any event, the
press articles quoted by the applicants merely describe the increase in the trade in the Mediterranean ports of southern Europe,
without in any way demonstrating that that increase is due to transfers of freight by shippers from northern Europe.

878   As regards the fact that the Mediterranean ports of southern Europe claim to be competitive with the ports of northern Europe,
it is sufficient to observe that the only supporting evidence adduced by the applicants is an advertisement for the Port of
Marseilles Authority, the terms of which, having regard to its purpose, clearly cannot undermine the conclusions drawn by
the Commission on the basis of the Drewry report.

879   It follows from the foregoing that the applicants have not established the existence of significant freight transfers from
the ports of northern Europe to the Mediterranean ports of southern Europe.

880   Furthermore, the Commission stated in the contested decision, without being contradicted by the applicants, first, at paragraph
80, that the TACA parties which are also VSA parties operated two to three round-trip rail shuttles a week between Milan and
Rotterdam and, second, at paragraph 83, that for certain categories of goods the TACA parties could limit the effect of marginal
competition from other means of transport by offering lower prices without necessarily affecting prices generally. In its
written submissions before the Court, the Commission also made the relevant point that the TACA's land tariff extends to Croatia.
Such circumstances amount to serious evidence, as the Commission rightly states, of the inadequacy of the Mediterranean ports
in southern Europe for shipments to North America and that they are therefore not substitutable for northern European ports.

881   Last, and in any event, as stated above, the applicants submitted during the administrative procedure that if the freight
transported from the European Mediterranean ports were included in the relevant market, that would have the effect of increasing
the total market by 2%. However, at paragraph 79 of the contested decision the Commission stated, without being contradicted
by the applicants, that since they do not include in the TACA market share cargo carried by the TACA parties on trades falling
outside the geographic scope of the TACA, this would decrease the TACA parties' share of the relevant market by approximately
1%. To that extent, in so far as these complaints seek, by disputing the definition of the relevant market, to call in question
the dominant nature of the position held by the TACA parties on that market, they are invalid.

882   For all those reasons, the applicants' arguments concerning the geographical scope of the relevant market in the contested
decision must therefore be rejected.

c) Conclusion on the relevant market for services

883   It follows from all of the foregoing that the complaints raised by the applicants in respect of the definition of the relevant
market for services in the contested decision must be rejected in their entirety.

2. The relevant geographic market

a) Arguments of the parties

884   The applicants submit that the Commission's position with regard to the definition of the relevant geographic market is inconsistent.
The Commission defined the geographic market at paragraph 84 of the contested decision as the sea routes between the ports
of northern Europe and those of the United States of America and Canada, whereas at paragraph 519 it states that the geographic
market consists of the area in which the maritime transport services are marketed, that is, in this case the catchment areas
of the ports in northern Europe and that such a geographic market is commensurate with the scope of the TACA's inland tariff.
In those circumstances the applicants do not understand the conclusion at paragraph 91 that inland transport services between
northern Europe and the United States as part of intermodal transport do not form part of the market for maritime transport
services. If the relevant market includes those inland transport services it is undeniable that the applicants did not occupy
a dominant position.

885   The Commission, supported by the ECTU, contends that this plea is unfounded.

b)Findings of the Court

886   As a preliminary point, contrary to the applicants' contention, the definition of the relevant geographic market accepted
by the Commission in this case is set out not at paragraph 84 but at paragraph 519 of the contested decision. As stated at
paragraphs 851 to 852 above, at paragraph 84 of the contested decision the Commission does not define the relevant geographic
market but only the geographical component of the relevant maritime services.

887   At paragraph 519 of the contested decision, the Commission states that the relevant geographic market for the maritime transport
services [consists] of the area in which the maritime transport services defined above are marketed, that is, in this case,
the catchment areas of the ports in northern Europe and specifies that such a geographic market is commensurate with the scope
of the TACA's inland tariff.

888   It is true, as the applicants observe, that at paragraph 91 of the contested decision the Commission states that the land
transport services in question, namely those undertaken within the territory of the Community which shippers acquire together
with other services as part of a multimodal transport operation for the carriage of containerised cargo between northern Europe
and the United States of America ... do not form part of the market for maritime transport services.

889   Contrary to what the applicants maintain, however, there is no inconsistency there. Paragraphs 91 and 519 of the contested
decision relate to different markets for services, namely the relevant market for land transport services and the relevant
market for maritime transport services. The fact that the geographic markets for these services overlap in part, since they
both cover the geographical area in which the TACA's land transport services are provided, cannot logically mean that the
relevant land and maritime services are substitutable for one another and therefore belong to the same market for services.
There is nothing to prevent the same geographical area from covering two separate markets for services.

890   As the reasoning in the contested decision is not inconsistent on this point, this complaint must be rejected.

As a preliminary point, contrary to the applicants' contention, the definition of the relevant geographic market accepted
by the Commission in this case is set out not at paragraph 84 but at paragraph 519 of the contested decision. As stated at
paragraphs 851 to 852 above, at paragraph 84 of the contested decision the Commission does not define the relevant geographic
market but only the geographical component of the relevant maritime services.

3. Conclusion on the definition of the relevant market

891   It follows from all the foregoing that the applicants' pleas and arguments concerning the definition of the relevant market
for services in the contested decision for the purposes of the application of Article 86 of the Treaty must be rejected in
their entirety.

E –  *The existence of a dominant position on the relevant market*

892   In this part of their pleas alleging that there has been no infringement of Article 86 of the Treaty, the applicants deny
that the TACA parties held a dominant position on the relevant market during the period covered by the contested decision.
In that regard, they maintain that the Commission made an incorrect analysis not only of their market shares but also of effective
external competition, potential competition, internal competition and developments in rates on the relevant trade. The applicants
further allege that there are certain defects in the reasoning on the last point.

1. The market share held by the TACA parties

(a) Arguments of the parties

893   The applicants' first plea is that the Commission made an error of law in finding, at paragraph 533 of the contested decision,
that a market share of some 60% in 1994, 1995 and 1996 gives rise to a strong presumption of a dominant position. They maintain
that the Commission's analysis of the data on the TACA parties' market shares is inaccurate and incomplete.

894   First, the applicants allege that the market share data used by the Commission do not cover a sufficiently long period (only
three years). The Court has recognised the importance of the persistence of a significant market share over time before a
finding of a dominant position can be made (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 41). Although the Court has not specified the required time it is apparent from
the legal literature (Bellamy and Child, *Common Market Law of Competition*, 4th edition, paragraph 9 024) that a period of five years would probably be sufficient, but that a period of less than three
years, especially in a dynamic market, might be considered too short for a high market share to be indicative of a dominant
position.

895   Second, the applicants submit that the Commission has not compared the position of the parties to that of the independent
companies. Where an undertaking with a small market share is able to meet the demands of those clients who wish to break away
from the undertaking with the largest share, the latter will not be an unavoidable trading partner within the meaning of the
judgment in *Hoffman-La Roche* (cited at paragraph 765 above) and therefore in a dominant position. The judgment states that an undertaking which has a
very large market share and holds it for some time, by means of the volume of production and the scale of the supply which
it stands for - without those having much smaller market shares being able to meet rapidly the demand from those who would
like to break away from the undertaking which has the largest market share - is by virtue of that share in a position of strength
which makes it an unavoidable trading partner and which, already because of this, secures for it, at the very least during
relatively long periods, that freedom of action which is the special feature of a dominant position (paragraph 41). The applicants
also stress that assessment of market shares in isolation without considering the market shares of principal competitors results
in ignoring, first, the constraints of potential competition (even though they have adduced considerable evidence of the existence
of such competition) and, second, the nature of the competitive dynamics in the market.

896   Third, the applicants submit that the Commission cannot base the conclusion that there is a dominant position solely on the
existence of a market share in excess of 50%. That presumption, based on paragraph 60 of *AKZO*, cited at paragraph 95 above, for the purposes of a finding of individual dominance is irrelevant in the case of collective
dominance. In the latter case an assessment of the applicants' total market share should also take account of the existence
of internal competition between the undertakings concerned. The *AKZO* presumption would only be legitimate where there is no such internal competition. The Court of Justice has upheld this point
of view, in the context of Community merger control, in *Kali und Salz* (cited at paragraph 595 above), paragraph 226, where it held that a market share of approximately 60% [divided between the
individual undertakings as 23% and 37% respectively] cannot of itself point conclusively to the existence of a collective
dominant position on the part of those undertakings. Furthermore, in making decisions on merger control the Commission has
itself considered that asymmetrical market shares and output levels make the adoption of a common market strategy unlikely.
In this case, the market shares of the applicants in 1996 varied from 9.6% in the case of Sea-Land to 0.1% in the case of
NOL and their individual capacity utilisation differed considerably.

897   Fourth, the applicants stress that according to the Commission's practice in relation to both the law on agreements (Commission
Decision 87/500/EEC of 29 July 1987 relating to a proceeding under Article 86 of the EEC Treaty, IV/32.279 - BBI/Boosey &
Hawkes: Interim measures, OJ 1987 L 286, p. 36, paragraph 18) and the law on merger control (Commission Decision 91/251/EEC
of 12 April 1991 declaring the compatibility with the common market of a concentration, Case No IV/MO42 - Alcatel/Telettra,
OJ 1991 L 122, p. 48) a high market share does not create a presumption of dominance. Furthermore, liner conferences typically
have a relatively high market share in order to exercise the stabilising role accorded to them by Regulation No 4056/86. The
applicants consider in this respect that, because Regulation No 4056/86 contains a provision under which the Commission may
apply Article 86 of the Treaty to liner conferences, it is not legitimate to presume, on the basis of a relatively high total
market share, that a liner conference has a dominant position.

898   The applicants' second plea is that even if the Commission was entitled to consider the TACA parties collectively the applicants'
collective market share is inconsistent with a finding of collective dominance.

899   First, the applicants allege that as TACA parties their market share for the years from 1994 to 1997 on the relevant market
as defined by the Commission was, contrary to what was indicated in paragraph 85 and Table 2 of the contested decision, 58.1%,
57.6%, 56.2% and 54.3%. The applicants explain that the difference between the market shares relied on in the contested decision
and those given by the applicants is accounted for by the different approach to transport via the Canadian ports. The applicants
claim that transport by individual TACA members via the Canadian Gateway falls outside the scope of the TACA and is not therefore
to be aggregated with cargo transported by the applicants on the direct trades.

900   Second, the applicants allege that on the correctly defined relevant market, the market share of the TACA parties is substantially
below that stated in the contested decision. The market share of the TACA parties on that market is 47.2%, 46.4% or even less
than 40% depending on the case, once account is taken on the demand side of break bulk and refrigerated services respectively,
the Mediterranean ports and the NVOCCs. The data relating to air transport are not available but if they had been, the applicants'
market share would have been still less than those figures. Furthermore, if account were taken of the possibility of supply-side
substitution, their market share would be 43.3% (including NVOCC cargo). Those figures are based on their own data for 1995
in respect of demand-side substitutability and for 1996 in respect of supply-side substitutability. The applicants claim that
the imperfections due to the limited nature of those data operate in any case to their disadvantage, since more information
on cargo transported in containers and in break bulk would diminish their market share still more.

901   The applicant in Case T-213/98 further submits that the Commission cannot dismiss as irrelevant the fact that the TACA's market
share fell in 1997 (paragraph 533 of the contested decision) without examining the reasons for the fall. If it was due to
pressure of competition on the TACA that fact would be relevant in assessing the TACA's position on the relevant market.

902   The Commission, supported by the ECTU, contends that these pleas are unfounded.

(b) Findings of the Court

903   In essence, by these pleas and complaints the applicants deny that their market share on the transatlantic trade is of such
a kind as to give it a dominant position on that market.

904   However, it must be stated at the outset that it is apparent from the contested decision that the Commission did not rely
solely on the fact that the applicants had such a market share to support its finding of a dominant position. At paragraph
533 of the contested decision the Commission states expressly that the TACA parties' market share gives rise to a strong presumption
of a dominant position. Furthermore, according to paragraphs 534 to 549 of the contested decision, the Commission finds that
this presumption is borne out by other factors, namely:

–       - the fact that the TACA maintains a discriminatory price structure, since the Commission considers at paragraphs 534 to 537
that the system of pricing differentiated, in particular, according to the value of the products or quantities, the purpose
of which is to maximise revenues, is normally found only in market situations where one or more undertakings has a substantial
degree of market power;

–       - the limited possibilities for customers to switch to other providers, since the Commission considers that that situation
is the consequence of the capacities held by the TACA (paragraph 539), the existence of service contracts (paragraph 540),
the price leadership of the TACA (paragraphs 541 and 548), the role of follower of competitors on prices (paragraphs 541 and
544), the TACA's capacity to impose regular, albeit modest, price increases during the relevant period (paragraph 543) and
the substantial barriers to entry on the trade (paragraphs 545 to 547).

905   Consequently, as the Commission did not base its finding that the TACA parties hold a dominant position on the relevant trade
solely on their market shares on that trade, the applicants' present pleas and complaints must be taken to criticise the Commission
for having inferred a strong presumption of a dominant position from such market shares.

906   In this case, the Commission stated in the contested decision, at paragraph 533, that the TACA parties had approximately 60%
of the relevant market in 1994, 1995 and 1996, that is, as stated at paragraphs 592 and 594, during the period covered by
the infringements of Article 86 of the Treaty established in the contested decision. The Commission also observed that this
market share reached 70% in the most important segment of the market, namely, as indicated in Table 3 at paragraph 86, to
which paragraph 533 makes reference, the segment of trade between northern Europe and the east coast of the United States
of America, and in the segment of trade between northern Europe and the west coast of the United States of America.

907   As the Commission has rightly observed, such a market share is likely to give the TACA parties the power to prevent the maintenance
of effective competition on the relevant market by providing them with the possibility of engaging in independent conduct
to a significant extent vis-à-vis their competitors and shippers, thus conferring on them a dominant position within the meaning
of Article 86 of the Treaty (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 38). It has been held that although the existence of a dominant position may be
the outcome of a number of factors which, considered separately, would not necessarily be determinative, in the absence of
exceptional circumstances extremely large market shares are in themselves evidence of the existence of a dominant position
(*CEWAL I*, cited at paragraph 568 above, paragraph 76 and the case-law cited there). Market shares of more than 50% have been held
to constitute extremely large market shares (*AKZO*, cited at paragraph 95 above, paragraph 60; Case T-30/89 *Hilti* v *Commission* [1991] ECR II-1439, paragraph 89; and Case T-83/91 *Tetra Pak* v *Commission* [1994] ECR II-755, paragraph 109). Thus, the Court of First Instance has already held that a market share of between 70%
and 80% is in itself a clear indication of the existence of a dominant position (*Hilti*, cited above, paragraph 92).

908   In those circumstances, it must be held that the Commission was entitled to conclude, at paragraph 533 of the contested decision,
that the fact that the TACA parties held a market share of 60% on the trade in question gave rise to a strong presumption
of a dominant position.

909   None of the pleas and arguments put forward by the applicants in these proceedings is capable of upsetting that conclusion.

910   As regards, first, the allegation that the data relating to market shares relied on in the contested decision are inaccurate,
the applicants begin by criticising the Commission for having wrongly included the shipments made by the TACA parties via
the Canadian ports.

911   In that regard, the Court observes that at paragraphs 265 to 273 of the contested decision the Commission considered that
the TACA parties' market share for services provided via the Canadian ports should be added to the share they held for direct
services and not treated as though it belonged to a competitor. Consequently, for the purpose of determining the TACA parties'
share of the relevant market during the period covered by the contested decision, the Commission took account, as indicated
at paragraphs 85 and 533 of the contested decision, of the TACA parties' freight passing through the Canadian ports.

912   Without its being necessary at this stage to decide whether the Commission was wrong to take account of the freight passing
through the Canadian ports in order to determine the TACA parties' share of the relevant market, since that question is the
subject of separate pleas examined later in the context of the examination of external competition, it should be observed
that in any event the TACA parties' market share between 1994 and 1996, as calculated by the applicants and omitting that
freight, is only slightly less than that indicated in the contested decision, since it comes to 58.1%, 57.6% and 56.2% for
the years in question, instead of 60.6%, 61.5% and 59.8%.

913   A market share of 56% is quite clearly still an extremely high market share which, as held in the case-law cited above, is
in itself, in the absence of exceptional circumstances, proof of the existence of a dominant position.

914   In those circumstances, even on the assumption that it is well founded, the applicants' complaint must be regarded as irrelevant.

915   Next, the complaint that on the relevant market as defined by the applicants the TACA parties' market share is below 50%,
and indeed below 40%, is entirely unfounded, as the applicants' complaints concerning the definition of the relevant market
have been rejected above.

916   The plea alleging that the calculation of the TACA parties' market share is inaccurate must therefore be rejected.

917   As regards, second, the plea alleging that the analysis of the TACA parties' market share is incomplete and incorrect, the
applicants begin by complaining that the Commission did not examine those market shares over a sufficiently long period.

918   The Court observes that at paragraph 533 of the contested decision, the Commission states that the TACA parties held a market
share of some 60% in 1994, 1995 and 1996, that is, as may be seen from paragraphs 592 and 594 of the contested decision, during
the three years corresponding to the period covered by the infringements of Article 86 of the Treaty established in the contested
decision. At the same paragraph, the Commission states that the contested decision does not consider whether that market share
was maintained in 1997.

919   Admittedly, a high market share held over a very short period may not, in certain circumstances, suffice to give rise to a
presumption of a dominant position.

920   In this case, however, the holding of a market share in the order of 60% over a period of three years, corresponding to the
first three years of the operation of the TACA agreement, cannot be regarded as prima facie insufficient to give rise to a
presumption of a dominant position. Furthermore, although the applicants maintain generally that a period of three years is
insufficient, they do not explain how that is so in this case.

921   Contrary to the applicants' contention, moreover, the TACA parties did not hold a market share as large as that established
in the contested decision for just three years. As the Court held in *TAA* (paragraph 326), the TAA, to which the TACA succeeded in 1994, had, on the transatlantic trade between northern Europe and
the United States of America, a market share of some 75% in 1992 and 65% to 70% in 1993. Since in 1992 and 1993 the TAA consisted
of most of the TACA parties, the TAA/TACA parties held a market share in excess of 60% for at least five years. In their written
submissions to the Court, the applicants themselves have accepted that holding a high market share for five years was sufficient
to give rise to a presumption of a dominant position.

922   It follows that the applicants are wrong to maintain that the presumption of a dominant position referred to in the contested
decision was based on data relating to too short a period.

923   Furthermore, in so far as by this complaint the applicants are criticising the Commission for not having taken account of
the reduction in the market share held by the TACA parties after 1996, that complaint coincides with the pleas and arguments
relating to the examination of potential competition examined later. A significant reduction in the TACA parties' market share
after 1996 might indicate the existence of significant potential competition between 1994 and 1996 which might in appropriate
circumstances call in question the existence of a dominant position during that period. That question is dealt with later,
at paragraphs 1009 to 1037.

924   Next, as regards the complaint that the Commission failed to examine the position of the TACA parties' competitors, it should
be observed that at paragraphs 538 to 544 of the contested decision the Commission stated that the presumption of a dominant
position resulting from the market share held by the TACA parties during the relevant period was confirmed by the limited
opportunities which their customers had of switching to alternative suppliers. The Commission observed at paragraph 539 of
the contested decision that between 1993 and 1995 the TACA parties held over 70% of available capacity on the direct northern
Europe/United States of America trades, while their largest competitor, Evergreen, held 11% of available capacity, and that
there was no reason why those figures should change in 1996. As regards the other main competitors, the Commission referred
at the same paragraph to the analysis made at paragraphs 244 to 264 of the contested decision.

925   Whilst that shows that for the purpose of establishing that the TACA parties held a dominant position on the relevant market
the Commission assessed the position of their competitors by reference not to their market shares but to the share of available
capacity on the relevant market held by those competitors, it cannot be inferred on that ground alone that the Commission
failed, as the applicants maintain, to consider the position of the TACA parties' competitors by comparison with the TACA
parties.

926   The applicants themselves have stated in their written submissions to the Court that on the maritime transport market, market
shares in principle reflect capacity.

927   Furthermore, at paragraphs 244 to 264, to which paragraph 539 makes express reference, the Commission studies in detail the
competitive position of each of the TACA's competitors with a market share of over 1%, namely, in addition to Evergreen, Lykes,
Atlantic Cargo Service, Independent Container Line and Carol Line. In that context, the Commission considers not only the
market share of each of those competitors but also all other relevant matters, in particular their capacity and the other
agreements by which they are bound, in order to assess the intensity of the competition from that source.

928   The Commission also emphasised, at paragraphs 540 to 544 and 548 of the contested decision, the foreclosing effect caused
by the contracts for services and the fact that the TACA parties' competitors set their rates by reference to the TACA and
are therefore price takers.

929   Contrary to the applicants' claims, it follows that the Commission did indeed examine in the contested decision the position
of the TACA parties' competitors and that it was therefore in a position to assess, in accordance with the case-law (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 48) whether those competitors were in a position to provide effective competition
for the TACA parties.

930   The complaint alleging failure to examine the position of the TACA parties' competitors must therefore be rejected.

931   As regards the complaint that, unlike the situation prevailing in the case of an individual dominant position, a market share
in excess of 50% cannot suffice to found a presumption of a collective dominant position, it has been held that the concept
of a dominant position relates to a position of economic strength which enables the entity holding that position to prevent
effective competition on the relevant market by affording it the power to behave to an appreciable extent independently of
its competitors, its customers and ultimately of consumers (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 38).

932   It is quite clear that an entity which holds more than 50% of the market, whether it is an individual entity or a collective
entity, is capable of enjoying such independence.

933   As the applicants rightly observe, a collective entity is of course composed of undertakings between which a certain amount
of competition may subsist and whose market shares may be somewhat asymmetrical. However, although such a circumstance is
capable where appropriate of precluding a collective assessment of the position of those undertakings on the relevant market
(see, to that effect, *Kali und Salz*, cited at paragraph 595 above, paragraphs 226 and 233), it is of no relevance for the purpose of determining whether that
collective position is dominant. The dominant nature of a market position is to be assessed by reference to the degree of
dependence vis-à-vis competitors, customers and suppliers, so that only the latter factors relating to external competition
must be taken into account.

934   In any event, in this case the market share held by the TACA throughout the relevant period was significantly in excess of
the market share threshold of 50%. In the contested decision, the Commission established that the TACA parties had a market
share of approximately 60%. Furthermore, at paragraph 533 of the contested decision, the Commission stated that on the most
important segment of the relevant market the TACA's market share was approximately 70% during the relevant period. Last, as
stated above, according to the data supplied by the applicants themselves in support of their actions the TACA's market share
is still more than 56%.

935   In those circumstances, it must be held that, even accepting the applicants' misplaced argument that the market share threshold
from which the existence of a collective dominant position may be inferred is higher than in the case of a simple individual
dominant position, that would be so in this case.

936   The applicants' complaint on this point must therefore be rejected.

937   As regards, last, the argument that liner conferences must have high market shares in order to play the stabilising role imputed
to them by Regulation No 4056/86, it is clear that a liner conference by its nature restricts competition between its members
and can attain the stabilising objective imputed to it by Regulation No 4056/86 only if it has an appreciable market share.
The fact that Regulation No 4056/86 provides for a block exemption for liner conferences does not therefore justify the automatic
conclusion that any liner conference holding a 50% market share does not satisfy the fourth condition of Article 85(3) of
the Treaty, namely the elimination of competition (*TAA*, paragraph 324).

938   It cannot be inferred, however, that in the area of maritime transport the fact that a liner conference holds a high market
share is not an indication of the existence of a dominant position.

939   Although eliminating competition may preclude the application of the block exemption provided for by Regulation No 4056/86,
the mere holding of a dominant position has no effect in that regard. As the concept of eliminating competition is narrower
than that of the existence or acquisition of a dominant position, an undertaking holding such a position is capable of benefiting
from an exemption (*United Brands*, cited at paragraph 853 above, paragraph 113; *Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 39; and *TAA*, paragraph 330). Thus, under Article 8 of Regulation No 4056/86, it is only where a liner conference abuses its dominant
position that the Commission may withdraw the benefit of the block exemption provided for in that regulation. Furthermore,
unlike the possibility of eliminating competition, the mere holding of a dominant position is not in itself prohibited by
the competition rules laid down in the Treaty, since only the abuse of that position is prohibited.

940   It follows that, even in the area of maritime transport, the fact of holding a high market share is capable of indicating
the existence of a dominant position within the meaning of Article 86 of the Treaty.

941   This argument based on Regulation No 4056/86 must therefore be rejected.

942   It follows from the foregoing that the pleas and complaints relating to the market share held by the TACA parties must be
rejected in their entirety.

2. Effective external competition

(a) Arguments of the parties

943   By this plea, the applicants allege that the contested decision, at paragraphs 243 to 275 (Section X: External competition)
and paragraphs 543 and 566 (Section XXIII: Assessment under Article 86), erroneously concludes that they eliminated actual
external competition. In the alternative the applicants claim that as the Commission stated during the written procedure that
the second abuse identified by the contested decision did not eliminate actual external competition, that should be borne
in mind in assessing the proportionality of the fines imposed.

944   The applicants submit first that in finding that the TACA parties' aggregate market share was relatively stable the Commission
failed to recognise that a small numerical change in market share could give rise to a substantial change in freight movement.
Thus, when Evergreen increased its market share by 1.2% from 1994 to 1995, this represented an increase in freight of 36 466
TEU. The applicants add that there are more than 20 independent operators of containerised vessels on the northern Europe-USA
trade which cumulatively exert competitive pressure on the TACA parties.

945   Second, the rate of increase in cargo transported by other carriers from 1994 to 1996 and from 1994 to 1997 exceeded theirs.
For example, on the westbound trade for the period 1994 to 1996 cargo transported by the TACA fell by 8.3% whilst that of
other carriers increased by 6.7%. The applicants also point out that newcomers to the market have significantly increased
their share in the carriage of certain commodities. Furthermore, the capacity offered by independent carriers on that trade
increased by 41% between July 1996 and July 1997, and between July 1995 and July 1997 the increase was 47%. That increase
is accounted for by the arrival in the market in February 1997 of Cosco, K Line and Yangming.

946   Third, the applicants stress the significance of competition from the independent container carriers Evergreen and Lykes on
the direct transatlantic trade.

947   Competition between the applicants and Evergreen is evidenced by the switching by shippers of all or part of their cargo from
the TACA to Evergreen and by the gain in market share of the latter between 1994 and 1996 from 10.8% to 12%. Furthermore,
in October 1997 Evergreen announced plans to invest in the construction of 25 new vessels. That answers the allegation at
paragraph 251 of the contested decision that the pressure from Evergreen is limited by the fact that given the current high
capacity-utilisation levels in the transatlantic trade, Evergreen could only compete to win market share by introducing new
vessels. In any event, the applicants claim, even if it were not to invest in any new capacity, Evergreen has the potential
to increase its capacity on the transatlantic trade at no extra cost simply by transferring vessels from other trades.

948   The applicants consider that competition against the TACA from Lykes is also evidenced by the switching of cargo from the
applicants to Lykes and the volume of cargo carried by Lykes on that trade between 1994 and 1996. In response to the Commission's
allegation that many of the examples of switching do not relate to all of the shippers' requirements, the applicants argue
that such switching shows that shippers regard non-TACA lines as offering effective competition against the conference since
shippers often split their requirements in this way precisely in order to exert greater pressure when negotiating rates.

949   Third, the applicants stress the existence of competition from cargo transported via the Canadian ports, whether by TACA members
operating on that trade (ACL, DSR-Senator, Hapag-Lloyd, MSC, Mærsk, NOL, NYK, OOCL, P&O Nedlloyd, POL and Sea-Land) or by
non-members (CAST and Canadia Maritime, Bolt Canada Line and Norasia). The cargo passing through the Canadian ports to destinations
in the United States is not subject to collective rate-fixing authority, so that the TACA members operating on that line do
so as independent carriers. The applicants claim that the competition from carriers operating through the Canadian ports is
recognised by industry commentators and is demonstrated by the examples of shippers who elected between 1993 and 1998 to switch
cargo from TACA members to other carriers operating via the Canadian ports.

950   The competition from TACA members is evidenced by the fact that the rates charged on the trade via the Canadian ports and
the rates charged on the direct trades are different. Moreover, the shippers themselves confirm the existence of that competition
since they treat the TACA carriers operating via the Canadian ports as independent carriers. The applicants claim that those
factors contradict the findings at paragraphs 269 and 270 of the contested decision.

951   As regards competition from non-member carriers, the applicants claim that, contrary to the suggestion at paragraph 268 of
the contested decision, the Canadian authorities are in no way preoccupied with competitive conditions on the northern Europe/Canada
trade. In an order relating to the merger between CAST and CP Ships, the Canadian Federal Court of Appeal found that competition
would not be reduced by that merger because of the intensity of competition on the trade, as evidenced by the announcement
by Sea-Land, Mærsk and P&O Nedlloyd that they would also enter the trade. The applicants go on to stress the strong competition
exerted by the group made up of CP Ships, Bolt Canada Line and Norasia. The CP Ships group has a capacity of 85 000 TEU and
a fleet of 46 ships, and is a powerful competitor on the trade via the Canadian ports. Cargo moved to the US also represents
a significant proportion of the total volume of freight carried by it. Moreover, Canada Maritime intends to increase its presence
on the trade following the acquisition of new containers. Bolt Canada Line operates three ships on the trade. Finally, Norasia,
which is based in Switzerland, launched a new service between northern Europe and Canada in June 1998. Norasia's ships have
a capacity of 1 388 TEU and its aim is to differentiate itself from the competition by calling at just three ports.

952   The Commission, supported by the ECTU, contends that these pleas and complaints are unfounded.

(b) Findings of the Court

953   The applicants deny that the TACA eliminated effective external competition. They claim that the TACA has a significant number
of competitors whose market share increased during the relevant period, that the market share of those competitors increased
more than the TACA's did and that the capacity offered by independent shipping lines increased following the entry on to the
market of Cosco, K Line and Yangming. Furthermore, some shippers switched all or some of their freight from the TACA to Evergreen
and Lykes and Evergreen is in a position to increase its capacity in the future. The applicant in Case T-213/98 denies that
the TACA leadership in pricing matters is capable of being an indication of a dominant position in the area of maritime transport.
The applicants further maintain that the Commission incorrectly assessed the competition from the freight shipped via the
Canadian ports.

954   As a preliminary point, it should be observed that the Commission did not find in the contested decision that effective external
competition for the TACA was eliminated, but only that it was limited. At paragraph 538 of the contested decision, the Commission
states that one of the factors demonstrating TACA's dominant position is the limited ability of its customers to switch to
alternative suppliers, making the TACA an unavoidable trading partner even for its disaffected customers. The Commission mentions
the following factors in relation to external competition: the fact that the TACA has 70% of available capacity on the direct
trade between northern Europe and the United States of America, while its main competitor has 11%, the foreclosing effect
created by the contracts for services, the leadership of the TACA and the role of taker played by its competitors in pricing
matters and the regular, albeit modest, price increases imposed by the TACA between 1994 and 1996.

955   It follows that it is not the complete absence of competition that led the Commission to conclude that a dominant position
existed but the weakness of external competition. It must be further borne in mind that, according to the case-law, a dominant
position does not necessarily preclude some competition, but enables the undertaking which profits by it, if not to determine,
at least to have an appreciable influence on the conditions under which the competition will develop, and in any case to act
largely in disregard of it so long as such conduct does not operate to its detriment (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 39).

956   In that context, it is therefore necessary to consider whether the pleas and complaints raised by the applicants in respect
of the analysis of external competition in the contested decision show not only that external competition exists but also
that it is significant.

(1) The number of competitors of the TACA parties and the increase in their market share

957   The applicants claim that the TACA faced cumulative competition from some 20 shipping lines and that the increase in their
market share, albeit modest, reflected high quantities in terms of volume.

958   As regards, first, the number of competitors, it has already been stated at paragraphs 927 to 929 that at paragraphs 244 to
262 of the contested decision the Commission examined the competitive position of five carriers independent of the TACA, namely
Evergreen, Lykes, Atlantic Cargo Service, Independent Container Line and Carol Line. The Commission considered that these
undertakings were the TACA's five main competitors. At paragraph 244 of the contested decision, the Commission states that
the individual market shares of these competitors in 1995 were 10.2%, 5.7%, 3.2%, 2.7% and 1%.

959   It is true, as the applicants observe, that the Commission did not examine the position held by the other 12 competitors active
on the relevant market.

960   However, it is common ground between the parties that during the relevant period none of the other competitors held a market
share higher than 1%. It cannot seriously be denied that a shipping line with a market share of below 1% is not in a position
to offer significant competition to the TACA parties. Nor do the applicants dispute the Commission's findings at paragraphs
253 to 263 of the contested decision that the applicants faced no effective competition from Atlantic Cargo Service, Independent
Container Line and Carol Line, although those undertakings held market shares of between 2% and 3%. Furthermore, it has consistently
been held that the weaker and smaller the competitors, the less they are in a position to provide real competition for the
dominant undertaking (*United Brands*, cited at paragraph 853 above, paragraphs 111 and 112, *Hoffmann-La Roche*, cited at paragraph 765 above, paragraphs 51 to 58, and *TAA*, paragraph 341). As regards the relevant market, the Court of First Instance has thus already held that none of the independent
companies was able, on account of smaller market shares and more limited resources than Evergreen, to supply sufficient services
to subject TAA members to real competition (*TAA*, paragraph 343).

961   Furthermore, even taking into account the cumulative position held by the competitors in question, the data provided by the
applicants themselves show that those competitors taken together represented at the most 2.3% of the relevant market in 1996.
Such a market share is clearly not capable of providing significant competition for an entity holding 60% of the market. Nor
do the applicants explain how the alleged cumulative pressure from the competitors in question actually affected the position
held by the TACA parties.

962   It follows that the Commission was therefore right not to take account of competitors whose market share was below 1% in determining
whether the TACA parties held a dominant position on the relevant market. The applicants' complaint on this point must therefore
be rejected.

963   Second, the allegation that a modest increase in market share reflects large quantities in terms of volume is manifestly unfounded.
The fact that an undertaking increases its sales volumes is in itself of no relevance for the purpose of assessing its competitive
position by comparison with the other operators active on the market in question if the increase in sales volume is not compared
with the overall volume of the market in order to determine the share which it represents in that market.

964   The applicants' complaint on this point must therefore be rejected.

(2) The rate of increase in the volume of freight carried by the TACA's competitors

965   The applicants maintain that the TACA parties' competitors succeeded in taking a significant part of the increase in demand
between 1994 and 1996. Between 1994 and 1996 the volume of freight carried by the TACA rose by 2%, whereas that carried by
its competitors rose by 11%.

966   It must be observed, however, that in spite of that the TACA's market share remained essentially at the same level during
the three years covered by the contested decision. Accordingly, even if the TACA parties' competitors increased the volume
of freight carried, they were not in a position to gain significant market shares to the detriment of the TACA parties.

967   It must be borne in mind, moreover, that, as stated above, the market share held by the TACA parties remained high. Thus,
even on the applicants' estimates, the TACA parties' market share between 1994 and 1996 remained at over 56%, while the market
share of Evergreen, the TACA parties' largest competitor, did not exceed 12%. Such a gap between the market share held by
the TACA parties and that held by its main competitor is clearly a significant indication of the existence of a dominant position
(*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 48), particularly when the nearest competitors held marginal market shares (*United Brands*, cited at paragraph 853 above, paragraphs 111 and 112, *Hoffmann-La Roche*, cited at paragraph 765 above, paragraphs 51 to 58, and *TAA*, paragraph 341).

968   As regards the alleged circumstance that the capacities offered by the TACA parties' competitors increased following the entry
on to the market of Cosco, K Line and Yangming, it is sufficient to observe that, since those independent shipping lines entered
the market after the period covered by the contested decision, it is of no relevance when considering the existence of effective
external competition.

969   For those reasons, the applicants' complaints on this point must be rejected.

(3) The effective competition from Evergreen and Lykes

970   In order to demonstrate the external competition which they faced from Evergreen and Lykes the applicants submit first that
freight was switched to those shipping lines and second that Evergreen is in a position to increase its capacity.

971   It should be observed that Evergreen is the only independent company with a relatively high market share - 10.5% in 1995,
according to paragraph 244 of the contested decision. However, as may be seen from paragraphs 249, 250, 539 and 544 of the
contested decision, a number of factors are likely to result in a significant reduction in the competition which Evergreen
was able to provide for the TACA members. Thus, Evergreen's market share is five times lower than the market share of the
TACA parties. It follows from paragraph 539 of the contested decision, moreover, that between 1993 and 1995 Evergreen had
11% of the capacity available on the direct trade between northern Europe and the United Sates of America, while the TACA
parties held more than 70%. It is also common ground that Evergreen was a party to the Eurocorde agreement, to the Southern
Europe America Conference and to agreements on the non-utilisation of capacity such as the Transpacific Stabilisation Agreement
and the Europe Asia Trades Agreement, to which certain TACA parties were also party, which indicates a community of interests
with the applicants. It should also be borne in mind that Evergreen was initially supposed to participate in the TAA, the
TACA's predecessor, and that even though it remained independent the Court of First Instance has already found that it none
the less maintained regular contacts with certain TAA members and was very well informed of the TAA's price policy, which
enabled it to modify its tariff schedule in order to follow, with a slight difference, the changes made by the parties to
the TAA (*TAA*, paragraph 342). At paragraph 249 of the contested decision the Commission thus found, and the applicants have adduced no
firm evidence capable of upsetting that finding, that Evergreen had announced price rises identical to the TACA's for 1996
and that it had therefore to be regarded as a follower of the TACA on price matters.

972   In those circumstances, it is apparent that Evergreen, which was the only independent company with a certain power on the
market for scheduled transport services on the transatlantic route, was not in fact able to exert real competitive pressure
on the TACA members (see, to that effect, *TAA*, paragraph 342).

973   As regards Lykes, the second largest independent operator on the relevant market, it is apparent from paragraph 244 of the
contested decision that its share of the relevant market in 1995 was only 5.7%. Furthermore, at paragraph 252 the Commission
stated, without being contradicted by the applicants on that point, that Lykes had filed for bankruptcy protection under US
law in 1995, thereby inhibiting its commercial freedom on the relevant market.

974   It follows that neither Evergreen nor Lykes was capable of bringing significant external competition to bear on the TACA parties.

975   None of the evidence adduced by the applicants in these proceedings is capable of upsetting that finding.

976   As regards the allegation that certain shippers switched freight to Evergreen and Lykes, it is sufficient to observe that
although the data provided by the applicants unquestionably show that some competition was provided by those independent shipping
lines, a fact which, moreover, is not disputed by the Commission, they do not show that that competition related to significant
quantities of freight. Furthermore, at paragraph 544 of the contested decision, the Commission stated, without being contradicted
by the applicants on that point, that examination of the examples chosen by the TACA parties in their response to the statement
of objections, most of which are identical to those submitted in these proceedings, showed that the switching to Evergreen
which occurred represented only a portion, and sometimes only a very small portion, of that shipper's requirements.

977   As regards the possibility that Evergreen would increase its capacities in 1997, the fact that Evergreen envisaged increasing
its capacities after the period covered by the contested decision does not prove the existence of effective external competition
over the period covered by the decision, but at most, should it do so, the existence of some potential competition. The applicants'
argument is therefore irrelevant for the purpose of challenging the findings in the contested decision concerning effective
external competition. In any event, the data provided by the applicants do not make it possible to determine the share represented
by the increases in capacity decided on by Evergreen compared with all capacity available on the relevant market and, accordingly,
have no probative value.

978   Consequently, the applicants' complaints relating to the effective external competition brought to bear by Evergreen and Lykes
must be rejected.

(4) The TACA's leadership in pricing matters and the role of follower played by the independent competitors

979   Although the applicants do not really dispute the TACA's leadership in pricing matters established at paragraphs 249, 541
and 548 of the contested decision, the applicant in Case T-213/98 submits that the Commission cannot infer that that situation
points to a dominant position, since the fact that the non-conference shipping lines tend to follow the TACA by using the
uniform tariff as a reference point is one of the aspects of the stability to which the conferences contribute in maritime
transport.

980   It is indeed true, as the applicants observe, that the leadership held by liner conferences in pricing matters can allow them
to ensure the objective of trade stability envisaged by Regulation No 4056/86. However, it cannot be inferred that the TACA's
leadership in pricing matters does not for that reason point to the existence of a dominant position within the meaning of
Article 86 of the Treaty.

981   As stated at paragraphs 937 to 940 above, in the context of the examination of the market shares held by the TACA parties,
holding a dominant position is not in itself prohibited by Article 86 of the Treaty and does not prevent the grant of an exemption
under Article 85(3) of the Treaty. Furthermore, it has consistently been held that the existence of a dominant position may
be inferred from any objective factor showing that the undertaking in question has the capacity to behave independently of
its customers, competitors and suppliers, including factors positive in themselves, such as the existence of effective research
and development programmes (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 48). Therefore, the fact that TACA's leadership in pricing matters contributes to
the objective of stabilisation of the trade cannot prevent the Commission from relying on it in order to establish the existence
of a dominant position.

982   The applicants' complaints on these points must therefore be rejected.

(5) Competition from the Canadian Gateway

983   The applicants maintain that freight shipped via the Canadian ports, either by the TACA parties operating on that trade or
by shipping lines which are not parties to the TACA, provides significant external competition for the TACA parties. They
maintain that freight passing through the Canadian ports for destinations in the United States of America is not subject to
joint tariff setting, so that the TACA parties operating on that trade do so as independent carriers. They also claim that
the competition from freight passing through the Canadian ports is recognised by the specialist press and demonstrated by
the incidences between 1993 and 1998 of freight being switched by shippers from TACA parties to other carriers operating on
the trade via the Canadian ports.

984   Before examining these arguments, it should be observed that in the contested decision the Commission did not find that freight
to or from the United States of America passing through the Canadian ports did not provide the TACA parties with any competition,
but only that the competition was relatively limited. At paragraph 265 of the contested decision the Commission concedes that
freight originating in or destined for the mid-west of the United States of America may travel to and from northern Europe
either by United States ports or by Canadian ports, mainly Montreal and Halifax. The Commission also notes that Canadian Gateway
freight does not fall within the scope of either United States or Canadian antitrust exemptions. Consequently, it accepts
at paragraph 266 of the contested decision that for certain shippers the Canadian Gateway may be substitutable for United
States east coast ports.

985   However, as may be seen from paragraphs 269 to 272 of the contested decision, the Commission is of the view that this competition
remains limited because, first, a number of members of the Canadian conferences, namely OOCL, Hapag Lloyd, ACL and POL, are
also TACA parties and, second, the members of the Canadian conferences are informed of the TACA parties' price-setting practices.
It therefore concludes, at paragraph 273 of the contested decision, that the market share of the TACA parties for services
provided through the Canadian Gateway should be aggregated with the market share of the TACA parties for direct services and
not treated as a distinct competitor. Accordingly, paragraphs 85 and 533 of the contested decision indicate that the data
relating to market share on which the Commission based its presumption of a dominant position include freight passing through
the Canadian ports.

986   It must be emphasised that none of the evidence adduced by the applicants in the context of these proceedings is capable of
upsetting those findings by demonstrating the existence of significant competition from freight passing through the Canadian
ports.

987   As regards, first, the competition from the TACA members operating via the Canadian Gateway, the applicants submit data intended
to show that the rates charged by those members on the direct trade are different from those applicable on the trade via the
Canadian ports.

988   However, those data are irrelevant, since the different rates charged on the direct trade and on the trade via the Canadian
ports may be explained by other reasons, to do with the nature of the services provided on the two routes. As the Commission
rightly states at paragraph 270 of the contested decision, it is a question of the cross-price elasticity between the two
services and not the level of price ...; the TACA parties have provided no evidence of the degree of cross-price elasticity
between the two routes. Furthermore, at paragraph 269 of the contested decision the Commission stated, without being contradicted
by the applicants, that Hapag Lloyd, ACL and POL did not offer separate services on the Canadian Gateway, since the same slots
were used for direct shipments and for shipments via the Canadian ports. As the Commission rightly observes at the same paragraph,
it is unrealistic to believe that one line will compete with itself to sell the same slot depending on the inland route of
the cargo. Although some competition may exist, that competition is likely to be diminished because some of the TACA parties
also have a significant influence on competitive conditions on the trades between northern Europe and Canada.

989   The Commission was therefore right to consider that the TACA parties operating via the Canadian Gateway did not provide significant
external competition for the TACA parties operating on the direct trade in question.

990   As regards, second, the competition from the shipping lines which are not TACA members, the applicants submit that CP Ships
carries significant quantities of freight via the Canadian Gateway and that it intends to increase its presence in the future.
Bolt Canada Line is also active on that trade, with three vessels, and Norasia began a new service between northern Europe
and Canada in 1998.

991   It is clear that although those factors unquestionably attest to the existence of a degree of competition from the Canadian
Gateway for the direct trade to the United States of America, which, moreover, is not disputed, they are not capable of invalidating
the Commission's conclusion that that competition is limited.

992   First of all, even though the freight passing through the Canadian Gateway was included by the Commission in the relevant
market, it represents a relatively modest part of the total freight shipped between northern Europe and the United States
of America. It is apparent from the data set out at paragraph 85 of the contested decision that the freight passing through
the Canadian ports to the United States of America or to northern Europe represents between 15% and 17% of all freight carried
between northern Europe and the United States of America. In those circumstances, the competition which the Canadian conferences,
which have only a part of the freight passing through the Canadian Gateway, provide for the carriers operating on the direct
trade is necessarily limited.

993   Next, the applicants did not deny that the Canadian conferences, even though they do not enjoy exemption on collective price
fixing, follow the pricing practices of the TACA on the transatlantic trade, as the Commission states at paragraphs 271 and
272 of the contested decision. Therefore, even if the Canadian conferences were capable of bringing significant competitive
pressure to bear on the TACA, it is clear that they essentially declined to do so.

994   Last, none of the evidence adduced by the applicants is conclusive. Thus, the increased capacity envisaged by CP Ships and
that introduced by Norasia in 1998 do not show that there was real external competition during the period covered by the contested
decision. Moreover, the presence of three vessels owned by Bolt Canada Line, in the absence of any details of its market share,
is purely anecdotal. As regards the freight carried by CP Ships, the applicants merely provide a range of disparate data intended
to emphasise the importance of that shipping line, without its being possible to infer therefrom the volume of freight which
it carries on the segment in question and the market share which that volume represents.

995   Consequently, the Commission was entitled to consider that the non-TACA shipping lines operating via the Canadian Gateway
did not provide significant external competition for the TACA parties on the trade in question.

996   As regards, third, the fact that freight was switched from the TACA to members of the Canadian conferences, the majority of
examples given by the applicants relate to years before or after the period covered by the contested decision. Furthermore,
although those data establish that certain shippers switched part of their cargo to the Canadian conferences, thus demonstrating
the existence - which is not disputed - of some competition from the Canadian Gateway, they do not establish that that competition
is significant. Quite to the contrary, it follows from a comparison of those data with the data set out at paragraph 85 of
the contested decision that the examples of cargo-switching provided by the applicants represent marginal quantities not exceeding
0.8%, 0.9% and 2.3% of all freight passing through the Canadian ports in 1994, 1995 and 1996.

997   The applicants' complaints relating to the failure to take the effective external competition from the Canadian Gateway into
account must therefore be rejected.

(6) Conclusion on effective external competition

998   It follows from the foregoing that all the pleas and arguments put forward by the applicants concerning the assessment of
external competition must be rejected.

3. Potential competition

(a) Arguments of the parties

999   The applicants allege that the Commission erred in finding, at paragraphs 276 to 306 of the contested decision, that the TACA
members eliminated effective potential competition. In the alternative, in so far as the Commission now recognises that potential
competition has not been eliminated, the applicants claim that that fact should be taken into account in assessing the gravity
of the second abuse identified by the contested decision and the proportionality of the fines imposed.

1000 The applicants allege first that the entry costs to the transatlantic trade are not as high as the Commission claims. The
Commission's conclusions at paragraphs 288 and 545 are contradicted by the Dynamar Report, according to which the initial
investment in establishing an operating service is about USD 355 million, whilst a niche service would only require an investment
of USD 100 million, in either case considerably less than the USD 500 million claimed in the contested decision. According
to the same report, by space-chartering a newly-established carrier could commence service as a niche operator for an investment
of USD 21 million. Furthermore, the necessary investment could also be reduced by the redeployment of vessels from other trades
or by leasing. The Commission's allegation that the figures cited in the contested decision concern the situation where the
entrant wishes to offer a level of service comparable to that of the TACA parties disregards the fact that several of the
TACA members do not own the vessels they operate but charter space from other operators (see paragraph 182 of the contested
decision). Consequently, the comparability of the service does not depend on the fact of vessel ownership.

1001 Secondly, the applicants submit that the recent entry into the market of several shipping lines operating independently demonstrates
that the TACA members were subject to potential competition during the period covered by the contested decision. The applicants
refer in this respect to the appearance of K Line, Yangming and Cosco in February 1997 and of APL and Mitsui in March 1998
by chartering space from Lykes, and to the new service from Compagnie Générale Maritime from Philadelphia from 2 December
1997. The applicants claim that those events show that the Commission made an error of fact in finding at paragraph 113 of
the statement of objections that the TACA parties do not face any effective potential competition on the ground that APL,
Mitsui, Yangming and K Line will probably enter the route in question by joining the TACA. It is irrelevant in that respect
that APL and Mitsui are members of New World Alliance since that fact does not affect their competition with the TACA.

1002 Thirdly, the applicants deny that service contracts form a barrier to entry to the market (paragraphs 135, 225 and 564 of
the contested decision). The evidence they put forward shows that the majority of shippers do not satisfy all of their requirements
under a single service contract. Shippers often exceed the minimum quantity commitments laid down by service contracts by
more than 60%, which proves that they retain the option to ship cargo with other carriers at competitive rates. The applicants
also deny that the foreclosing effect of service contracts is greater at the beginning of the year. Furthermore, Cosco, K
Line and Yangming successfully entered the market in February 1997 and rapidly built up market share.

1003 Fourthly, the applicants point out that since 1997 a number of them (Hanjin, NOL, Cho Yang, DSR-Senator, TMM, Tecomar and
Hyundai) have resigned from the TACA to operate as independents on the transatlantic trade.

1004 The applicant in Case T-213/98 also claims, separately, that the TACA parties are not capable of eliminating competition.

1005 It is clear from the provisions of Regulation No 4056/86 (see the eighth recital) that as long as some competition, either
actual or potential, is present, the benefits of conferences for shippers and consumers justify the restrictions inherent
in conference agreements and that any excess of market power could be controlled through the Commission's powers under Article
7(2)(b)(i). In those circumstances it would be illogical for the Commission to be able to categorise as an abuse the mere
enlargement of an existing conference by the addition of new member lines so long as competition in the relevant market is
not eliminated. The Commission confuses the elimination of competition with the elimination of a source of potential competition
(Hanjin and Hyundai). The facts show that after Hanjin and Hyundai joined the TACA, competition in the market prevented the
TACA from exercising any market power.

1006 The applicant in Case T-213/98 further submits that the lines operating on other trades can enter the transatlantic trade
by achieving economies of scale. They stress that lines may use their operational and administrative infrastructures on other
trades, take over lines operating on the transatlantic trade or merge with them and that most of the major carriers are engaged
in a process of network expansion, completing their main east-west trades and extending into north-south ones.

1007 The applicant concludes that in those circumstances the TACA parties are not able to eliminate competition. An illustration
of that is that the market shares of the TACA and non-TACA lines on the trade fluctuated continuously between 1996 and 1998
and that independent lines entered the market (Cosco, Yangming and K Line). The applicant also refers to the competition from
the Mediterranean ports for the carriage of goods originating in or destined for Spain, Italy, southern and central France
and other regions of southern Europe (Switzerland, Austria, the Czech Republic etc.). It claims that in such cases the longer
sea haul is compensated for by a shorter inland haul. It also stresses the competition from the Canadian Gateway. Contrary
to the assertion in paragraph 269 of the contested decision it is not unusual for undertakings to position themselves on the
market in such a way that their products compete with each other. The applicant also notes that the proceedings before the
Canadian authorities concerning the acquisition of CAST referred to at paragraph 268 of the contested decision say nothing
about the competition of CP Ships, CAST and OOCL on the US market. Furthermore, entry to the transatlantic trade does not
necessarily require vessels of 4 000 TEU, as asserted by paragraph 287, since that is a relatively short route.

1008 The Commission, supported by the ECTU, contends that this plea is unfounded.

(b) Findings of the Court

1009 The applicants contend that the Commission erred in finding that the TACA members eliminated potential competition. First,
they allege that the costs of entry on to the transatlantic trade are not as high as the Commission claims. Second, they maintain
that a number of shipping lines have recently entered the trade in question as lines independent of the TACA. Third, they
deny that service contracts constitute an obstacle to entry on to the market. Fourth, and last, they claim that a number of
them resigned from the TACA after 1997. At the hearing the applicants stated, however, in response to a question put by the
Court on the last point, that they were not claiming that those withdrawals were evidence of the existence of significant
potential competition for the TACA parties and, accordingly, there is no need to examine that complaint.

1010 It should be observed, as a preliminary point, that, contrary to what the applicants allege, the Commission did not find in
the contested decision that the potential competition faced by the TACA parties was eliminated, but only that it was limited.
At paragraph 538 of the contested decision, the Commission states that one of the elements demonstrating TACA's dominant position
is the limited ability of its customers to switch to alternative suppliers, which makes the TACA an unavoidable trading partner
even for its disaffected customers. The Commission states in regard to potential competition that the barriers to entry are
substantial, owing to the high costs of market entry (paragraph 545), the reduced mobility of the fleets on the trade in question
- that is, the reduced opportunities for actual competitors to increase their capacity or for potential competitors to enter
the trade (paragraph 546) - and the specialised nature of the vessels (paragraph 547).

1011 It follows that it is not the complete absence of potential competition that led the Commission to conclude that a dominant
position existed but rather the fact that it is weak.

1012 In that context, it is appropriate to consider whether the pleas and arguments put forward by the applicants in respect of
the analysis of potential competition in the contested decision demonstrate, in addition to the existence of such potential
competition, that it was significant.

(1) The costs of market entry

1013 At paragraph 545 of the contested decision the Commission states that the investment necessary to enter the market may vary
between USD 400 million and USD 2 billion. Thus, at paragraph 288 the Commission states that an investment in the region of
USD 500 million is necessary in order to be able to provide a fixed-day weekly service calling at three or four ports in northern
Europe and the same in the United States; such a service requires a fleet of five vessels of similar speed and capacity together
with a complement of containers of three times the capacity of the fleet.

1014 It must be held that none of the arguments put forward by the applicants in these proceedings is capable of upsetting those
findings in the contested decision.

1015 As regards, first, the argument that the Dynamar report concludes that the initial investment to set up an operational service
by a shipowner is approximately USD 355 million, it is sufficient to observe that such an amount, although lower than the
estimates in the contested decision, is none the less still considerable. Furthermore, the Commission has indicated, without
being contradicted on this point by the applicants, that the estimates made in the Dynamar report did not take account of
the sunk costs which do not accrue until the second year.

1016 Nor, contrary to the contention of the applicant in Case T-213/98, does the Commission assert that entry on to the transatlantic
trade requires vessels of 4 000 TEU. At paragraph 287 of the contested decision, the Commission merely observes that the costs
savings per slot are 30% to 40% for a 4 000 TEU ship as against a 2 500 TEU ship.

1017 As regards, next, the other estimates, all below USD 355 million, submitted by the applicants on the basis of the Dynamar
report, those estimates concern the setting up of niche services on the basis of vessel-leasing agreements. In order to assess
the importance of the barriers to entry on the relevant market, it is necessary to determine the essential costs of setting
up a service of a level comparable with that of the TACA parties. Only in such a situation might a newcomer be in a position
to subject the TACA parties to significant competition. Since it is common ground that the TACA parties do not confine their
activities to niche services but are active globally on all the trade in question, the data provided by the applicants are
irrelevant. Furthermore, although it is true, as the applicants emphasise, that certain TACA parties operate their liner services
by chartering space on vessels belonging to other TACA parties, new independent entrants who do not wish to join the TACA
cannot avail themselves of that opportunity to the same extent as TACA parties, since competition external to the TACA is
limited. In any event, the applicants stated at the hearing that it was not possible to determine the cost of entering the
market by means of space chartering, since that cost depended on the terms negotiated with the charterer.

1018 As regards, last, the argument that a new entrant could reduce the necessary investment by redeploying vessels operating on
other trades, the Commission stated in the contested decision that the mobility of fleets recognised by Regulation No 4056/86
was limited on the trade in question. First, the Commission observed at paragraph 287 of the contested decision that the special
features of the transatlantic trade substantially reduced the likelihood of potential competition, emphasising in that regard
that this trade was a high-volume trade and needed regular, high-capacity services, which meant a large number of big, modern
vessels providing a weekly service, calling at a sufficient number of ports. Second, the Commission stated at paragraph 290
of the contested decision that almost all of the major liner shipping companies were already present on the transatlantic
trade. Third, it stated at paragraphs 291 to 298 that between 1993 and 1995 every significant potential competitor had entered
this trade by joining the TACA. Fourth, the Commission stated at paragraph 299 that the cost of withdrawing from the transatlantic
trade, with the resultant damage to reputation and to competitive positions elsewhere, and lower prospects of returning to
the trade, reduced the incentive to enter. Fifth, and last, it observed at paragraph 547 that it was necessary to deploy vessels
of a relatively high standard and specialised in the carriage of containers.

1019 As the applicants have not challenged any of those assessments in the contested decision it must be taken as established that
fleet mobility is limited on the trade in question.

1020 The argument that a new entrant could reduce the costs of entry on to the market by deploying vessels active on other trades
must therefore be rejected.

1021 On those grounds, all the applicants' arguments relating to the costs of entry on to the market must be rejected.

(2) Recent non-TACA entries to the relevant market

1022 The applicants state that a number of shipping lines entered the transatlantic trade between 1997 and 1998 without joining
the TACA.

1023 It is common ground between the parties that K Line, Yangming and Cosco entered the trade in question on 16 February 1997
under consortium agreements. Likewise, it is not disputed that APL and Mitsui entered the trade in March 1998 on the basis
of space-chartering agreements with Lykes, while Compagnie Générale Maritime introduced a new service from Philadelphia on
2 December 1997.

1024 It is clear that these entries on to the market directly contradict the Commission's finding in the statement of objections
- or in the course of the period during which, according to the contested decision, the TACA parties held a dominant position
on the relevant market - that, in view of the links existing between the TACA parties on other trades, it was probable that
if those shipping lines entered the transatlantic trade, they would do so by becoming members of the TACA.

1025 Contrary to what the Commission maintains, the fact that all these entries took place after the period covered by the contested
decision is irrelevant. Potential competition must not be confused with actual external competition. By definition, potential
competition refers to a competitive pressure which has not materialised at the time of the events in question but which may
be foreseen in the short or medium term, on the basis of precise and consistent indicia, with some degree of certainty at
the time of those events. In fact, during the administrative procedure, the applicants produced various articles from the
specialist press stating that APL and Cosco intended to enter the market in the short term.

1026 However, the fact that a number of shipping lines, in spite of their links with the TACA parties on other trades, entered
the transatlantic trade outside the TACA between 1997 and 1998 does not necessarily show that those lines represented significant
potential competition during the period covered by the contested decision.

1027 In that regard, the Commission stated at paragraph 264 of the contested decision, without being contradicted by the parties
on that point, that on the basis of the capacity on the trade in mid-1995, the new capacity represented by the Cosco-K Line-Yangming
consortium would have given Cosco a 2.8% share of eastbound capacity and 2.7% of westbound capacity on the direct trades and
2.3% and 2.2% respectively on the trades including Canadian trades, while the other lines would each have had exactly half
that capacity. As regards the entry of Mitsui and APL, the Commission stated at paragraph 244 of the contested decision, again
without being contradicted by the applicants, that these two new operators entered the transatlantic trade without introducing
any new capacity.

1028 Furthermore, the Commission stated at paragraph 249 of the contested decision, without being contradicted by the applicants
on this point, that the independent competitors were likely to follow the TACA's leadership on prices. In its written submissions,
the applicant in Case T-213/98 itself stated, moreover, that this tendency to follow the prices fixed by the TACA was one
of the aspects of the stability recognised by Regulation No 4056/86 to which liner conferences contribute in the area of maritime
transport.

1029 In those circumstances, the Commission was entitled to consider that K Line, Yangming, Cosco, APL and Mitisui were not likely
to constitute a source of significant potential competition for the TACA parties.

1030 The applicants' arguments on this point must therefore be rejected.

(3) Service contracts

1031 The applicants deny that service contracts form a barrier to entry to the market. They claim that the majority of shippers
do not satisfy all of their requirements under a single service contract. Shippers often exceed the minimum quantity commitments
laid down by service contracts by more than 60%, which proves that they retain the flexibility to ship cargo with other carriers
at competitive rates.

1032 It is common ground between the parties that a service contract, whether individual or joint, is a contract in which a shipper
makes a commitment to provide a certain minimum quantity of cargo over a fixed period and the conference or carrier commits
to a certain rate and to a defined service level. The Commission stated at paragraph 135 of the contested decision that shippers
would normally seek a service contract for as great a volume as they thought they were reasonably likely to acquire, since
that allowed them to get a bigger discount from the tariff rate. For that reason, the Commission considers, at paragraph 540
of the contested decision, that shippers who require regular maritime transport services over a period of one year or more
are unlikely to switch part of their requirements to smaller carriers, since this would reduce their minimum volume commitment
under a service contract with the conference and lead to a smaller discount.

1033 Far from invalidating those assertions, the figures submitted by the applicants in these proceedings confirm them on all points.
It follows from those data that, during the three years covered by the contested decision, the volumes of freight forming
the subject-matter of a minimum commitment under a service contract represented, respectively, 59.2% (1994), 60.6% (1995)
and 61.2% (1996) of the total freight carried by the shippers indicated by the applicants. Even if those data do not concern
all the shippers and do not appear to be limited to the relevant market, in so far as the applicants submit them as being
representative of the conduct of all shippers, it may be inferred that approximately 60% of the freight carried on the relevant
market was covered by an obligation for a carrier to carry minimum quantities under a service contract. Having regard to the
market share of approximately 60% held by the TACA parties on the trade in question during the period covered by the contested
decision, it may be inferred that approximately 36% of that freight was linked with the TACA parties.

1034 It must be held that such a threshold of dependence is capable of significantly restricting access by competitors to the relevant
market (see, to that effect, Case T-9/93 *Schöller* v *Commission* [1995] ECR II-1611, paragraph 81). Admittedly, as the service contracts do not, in legal terms, impose an exclusive service
obligation, a shipper is in principle free to switch the quantities covered by such a contract to another carrier. However,
in so far as compliance with the obligation to carry minimum quantities is sanctioned by the payment of significant standard
compensation, the service contracts are manifestly capable of providing an incentive for shippers to give priority to having
the quantities concerned carried by the carrier with which they have entered into a contract.

1035 For those reasons, the Commission was entitled to consider that the service contracts constituted a barrier to significant
entry by potential competitors.

1036 The applicants' arguments on this point must therefore be rejected.

(4) Conclusion on potential competition

1037 It follows from all of the above considerations that the applicants' pleas and arguments relating to potential competition
must be rejected.

4. Internal competition within the TACA

(a) Arguments of the parties

1038 The applicants complain that the Commission failed to take into account competition between the TACA members when analysing
their collective power on the relevant market.

1039 They assert that even if it were legitimate to assess the undertakings in question collectively, evidence of internal competition
on pricing or otherwise is relevant in assessing their capacity for collective action independently of competitors (whether
internal or external), customers and consumers. The applicants consider that internal competition acts as a restraint on the
collective action of the undertakings concerned. For example, internal price competition inhibits the undertakings from collectively
setting prices at abnormally high levels. The Commission has admitted that the collective dominance of the TACA members does
not exclude the possibility of individual departures from the common commercial strategy. It should therefore take account
of such departures in assessing whether the undertakings in question hold a dominant position. The applicants here refer to
the evidence adduced above at the stage of assessing collective dominance.

1040 The Commission, supported by the ECTU, claims that this plea should be rejected.

(b) Findings of the Court

1041 It was stated at paragraph 735 above that the degree of internal competition between the TACA parties did not make it possible
to preclude a collective assessment of the position held by those parties on the relevant market. By these pleas, the applicants
none the less contend that internal competition between the TACA parties was sufficient to negate their dominant position
on that market.

1042 In that regard, it is sufficient to observe that, in accordance with the case-law (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 38), the question whether the TACA parties together hold a dominant position on
the transatlantic trade depends solely on the capacity of those parties to conduct themselves independently by reference to
the external competitive pressure resulting, in particular, from the activities of their non-conference competitors and of
shippers. Therefore, although the degree of internal competition between the undertakings in question is capable, where it
exists, of precluding a collective assessment of their position on the relevant market (*Kali und Salz*, cited at paragraph 595 above, paragraph 233), it is of no relevance when determining whether that collective position is
a dominant one.

1043 As the applicants maintain, internal competition among undertakings whose position has been the subject of a collective assessment
may have the effect of restricting the extent of the price increases decided by those undertakings. None the less if such
price increases are decided by those undertakings in complete independence without having to take account of external competitive
pressure, they must be regarded as constituting the act of undertakings together holding a dominant position. At the most,
if the internal competition in question should have the effect of restricting the extent of those price increases, the prices
thus set might prove not to be excessive and therefore not to constitute an abuse within the meaning of Article 86 of the
Treaty. The applicants' argument therefore shows that they are confusing the existence of a dominant position with its abuse.

1044 The applicants' arguments relating to internal competition between the TACA parties must therefore be rejected.

5. The development of rates on the trade in question

(a) Arguments of the parties

1045 The applicants allege that the development of rates on the transatlantic trade is inconsistent with a finding of dominance.

1046 First, the applicants claim that if they had not faced external competition they would have had no incentive to carry cargo
otherwise than at the conference's ordinary tariff under TVRs or service contracts. The volume and proportion of cargo carried
by the TACA at ordinary rates fell consistently between 1994 and 1997. Conversely, the volume and proportion of cargo carried
at TVRs and under all service contracts (conference, joint and individual contracts) increased during that period. Furthermore,
the volume and proportion of cargo carried under conference service contracts fell in 1996 and 1997 by comparison with 1994,
whilst the volume of cargo carried under joint and individual service contracts increased. The applicants also stress the
fact that service contract rates payable in 1996 and 1997 represented a larger discount on the ordinary tariff than that payable
in 1994. They infer from this that conference service contract rates decreased between 1994 and 1997.

1047 The applicants note that the Commission confines itself to claiming that TVRs and service contracts are not in themselves
evidence of external competition. The Commission does not explain, however, why the volume and proportion of cargo carried
under the ordinary tariff decreased or why the volume and proportion of cargo moving under TVRIAs and individual service contracts
increased in the relevant period.

1048 The Commission confines itself in the defence to criticising the Mercer Report for concluding that rate cutting in a competitive
liner shipping trade may occur in advance of actual cost reductions. However, the Commission does not deny the existence of
anticipatory rate cutting, but nevertheless rejects the inference that there is intense price competition on the market. The
rejection of this inference is based on a hypothesis for which there is no support, namely that the applicants' rates were
excessive.

1049 The Commission's finding that in the first quarter of 1995 40% of all TACA cargo moved at the tariff rate does not distinguish
between conference class tariff rates and other rates which appear in the tariff, namely TVRs and independent action.

1050 Second, the applicants claim that analysis of the rates in 75% of their service contracts demonstrates that between 1993 and
1998 westbound rates in European currencies fell on average by over 15% (when adjusted for inflation).

1051 As for the method they used, contrary to the Commission's allegation the results of that analysis are expressed not only in
national currencies but also in US dollars. The figures have also been weighted according to the minimum quantity commitment
in each contract to reflect the relative significance of each service contract to the overall assessment. Contrary to the
Commission's criticisms, that weighting does not disguise the effect of their market power on smaller shippers. Finally, the
applicants have rightly adjusted the rate data in order to reflect the general level of inflation and deflation in the value
of the relevant currencies to which they and the shippers were subject during the relevant period.

1052 The downward trend identified in their analysis confirms the pressure on rates exerted between 1983 and 1993. The report by
Drewry Shipping Consultants (*Global Container Markets, Prospects and Profitability in a High Growth Era*, London, 1996) states in this connection that transatlantic rates had fallen in real terms.

1053 In the contested decision (paragraph 324 and Table 11), the Commission concludes as a result of its analysis of the evolution
of rates that over a five-year period (1993 to 1997) maritime transport rates increased by 8% whilst those for inland transport
in the Community fell by 4%. The Commission does not provide any explanation, however, for the discrepancy between that finding
and the allegation made by the complainant (the ESC) and mentioned in paragraphs 118 and 119 of the statement of objections
that the increases imposed in 1995 give an overall increase over a period of three years in excess of 80%. Furthermore, the
applicants point to the contrast between the conclusions at paragraph 324 and Table 11, on the one hand, and those in paragraphs
325 and 328, on the other, which refer to the most market dominance and substantial rate rises on both ... routes.

1054 In the defence the Commission questions whether price comparisons serve any useful purpose in the case of undertakings in
a monopoly position unless it is shown that in a competitive market the rates would have been lower than those of the undertakings
in question. However, in the contested decision, the Commission relies on an analysis of rate changes to support its finding
of dominance but at the same time fails to show that in a competitive market rates would have been lower.

1055 The applicants also consider that the method adopted in the rate analysis at paragraphs 320 to 328 of the contested decision
is flawed for several reasons. First, the sample of service contracts was too small: the service contracts examined concerned
10 shippers out of a total of 500 and the largest number of shippers surveyed for any one period was eight. Furthermore, the
Commission does not explain the basis on which it selected those 10 shippers as opposed to any other shippers which might
have satisfied its selection criteria. Second, the volume of cargo carried under the service contracts analysed represents
a relatively small quantity of the total cargo carried by the applicants (the volume of cargo of the 10 shippers chosen represents
6.4% of the total cargo carried by the applicants under service contracts in 1993, 5.1% in 1994 and 7% in 1995). Third, the
percentage increases are not weighted to take account of the relative importance (in terms of volume) of the service contracts
examined. Fourth, the choice of 1992 as the base year lacks objectivity since that was the year in which rates on the transatlantic
trade fell dramatically. Fifth, the analysis does not take account of ancillary freight charges.

1056 In any event, even if the Commission's study were reliable, the applicants consider that it does not demonstrate the existence
of a dominant position. For example, the Commission finds that from 1993 to 1997 ocean rates increased by 8% (Table 11 in
the contested decision) and inland rates fell by 4%. Those movements take no account of inflation, however.

1057 The Commission's analysis of rate developments based on the data supplied by the applicants as part of their study of 75 TACA
member service contracts is also flawed because the data are not adjusted for inflation, are not weighted by reference to
volume and exclude surcharges and terminal handling charges. Furthermore, contrary to the Commission's own methodology, it
omits the shippers which had entered into service contracts in 1993 and service contracts or TVRs in 1996.

1058 The applicants also complain that the Commission has not disclosed the arithmetical method or the raw data used to calculate
the rate increases for service contracts at paragraphs 320 to 328 (Annex VI to the decision contains only the results of those
calculations). Next, they complain that the Commission's analysis of price variations in TAA/TACA service contracts at paragraph
320 of the contested decision is based on a small fraction of the conference's service contracts and takes no account of inflation.

1059 The applicant in Case T-213/98 submits a number of further pleas alleging error of assessment and/or in the reasoning.

1060 First, the Commission cannot use price differentiation based on the value of the goods to support a presumption of dominance
(paragraph 534 of the contested decision) since this is a long-established practice in the maritime sector which is expressly
required by the Unctad Code (Article 12(b)). Similarly, the Commission's statement that in a less concentrated market transport
rates are fixed on the basis of the actual costs, in line with market forces (paragraph 535) is incorrect because varying
prices may be justified on the basis of customers' ability to pay, as is frequently the case in the air transport sector.
In any event, the lack of a link between differentiated prices and dominance is shown by the fact that almost all lines, on
all trades, offer tariffs which differ according to the value of the commodity.

1061 Second, the Commission relied on the fact that the currency adjustment factor (CAF) adopted by the TACA discriminated on the
basis of the port of destination or embarkation (paragraph 536 of the contested decision). The applicant points out first
that the Commission's reasoning is confused and contradictory, since after stating that the differences in CAF cannot be economically
justified, the Commission nevertheless states that the contested decision does not address the issue whether the TACA parties'
agreement on CAF meets the conditions of Article 4 of Regulation No 4056/86, which is precisely the provision dealing with
the issue of whether there is economic justification for different CAFs. The applicant further criticises the Commission for
not explaining why an alleged discrimination in 1997 is relevant in determining whether there was a dominant position between
1994 and 1996.

1062 Third, the applicant criticises the Commission for relying on the fact that the TACA was able to exercise price leadership
(paragraphs 541 and 542 of the contested decision). As the Commission acknowledged at paragraph 329 of the contested decision,
the fact that the lines which are not members of a conference tend to follow the conference by adopting the uniform rate which
serves as a reference point for the market constitutes a source of stability to which conferences contribute in the maritime
transport sector. In those circumstances, the fact that the TACA agreement was one of the most restrictive or that the TACA
acquired a reputation as a price leader are irrelevant in determining whether the TACA is in a dominant position. The same
is true of the statement at paragraph 548 that, because of that leadership, it is unlikely that any competitor would risk
destabilising the market by competing aggressively against the TACA on price.

1063 The Commission, supported by the ECTU, contends that these pleas are unfounded.

(b) Findings of the Court

1064 By these pleas, the applicants claim that the development of rates on the transatlantic trade is incompatible with the existence
of a dominant position. In that regard they state, first, that the quantity of freight carried at the ordinary rates provided
for in the tariff has consistently fallen in favour of TVRs and service contracts and, second, that the rates charged by the
TACA fell during the relevant period.

(1) The proportion represented by freight carried at the ordinary rates compared with freight carried under TVRs and service
contracts

1065 It is not disputed that, during the period covered by the contested decision, some 60% of the freight carried by the TACA
was shipped under TVRs and service contracts. In its written submissions to the Court, the Commission itself recognised that
this amounted to a considerable share. It is common ground that TVRs and service contracts allow the members of a liner conference
to grant their customers reductions on the ordinary tariff rates. As stated at paragraphs 457 and 459 of the contested decision,
although the TVRs result in all shippers being granted a reduction on a common and uniform basis according to volumes and
quantities carried, service contracts are capable of leading to such reductions being granted on an individual basis according
to the terms negotiated between the conference and the shipper concerned.

1066 It may be taken as established, therefore, that during the period covered by the contested decision more than half the freight
carried by the TACA parties was carried at reduced rates compared with the highest rates of the TACA tariff.

1067 Contrary to what the applicants claim, however, that circumstance does not in itself show that the TACA parties did not hold
a dominant position during the period in question. The fact that an undertaking grants rebates to its customers does not in
any event indicate that it does not enjoy a dominant position on the relevant market. As the Commission rightly stated at
the hearing in response to a question put by the Court on this point, it is often the case that an undertaking holding a dominant
position on a given market grants rebates to its customers, for example, in order to pass on savings in efficiency and economies
of scale or in order to ensure their loyalty (see, in particular, *Hoffmann-La Roche*, cited at paragraph 765 above, paragraphs 90 and 91, and *Michelin*, cited at paragraph 337 above, paragraph 71). The existence of a dominant position has more to do with an undertaking's ability
to fix its prices in complete independence, without having to take external competitive pressure into account, than with the
ability to fix the highest prices.

1068 In the present case, therefore, without its being necessary to adjudicate on the precise nature of the rebates granted by
the TACA parties, it must be held that, in order to challenge the dominant nature of their position on the relevant market,
the applicants cannot rely on the fact that the TACA parties grant rebates to shippers under TVRs or service contracts.

1069 On the contrary, in the contested decision the Commission established that the rebates granted under TVRs and service contracts
confirmed the dominant position held by the TACA parties, because they reflected their ability to discriminate between shippers
on prices.

1070 Thus, at paragraphs 203 to 213 of the contested decision, the Commission stated that the TACA parties aimed to charge what
each different shipper would bear, in order to enhance revenues without increasing costs. In that regard, the Commission observed
that the TACA parties practised three degrees of discrimination. Under the first, according to paragraph 206, a customer pays
a specific price for a specific unit or service and a different price for subsequent units or services. According to paragraph
207, the second, which takes the form of TVRs and service contracts, involves setting prices on the basis of the quantity
purchased. Last, the third, under which the tariff is divided into codes and independent actions are taken, consists, according
to paragraphs 208 to 213, in separating customers into several classes and in setting a different price for each customer
class.

1071 At paragraph 534 of the contested decision, the Commission expressed the view that that ability to discriminate was capable
of confirming the dominant position inferred from the market shares of the TACA parties. The Commission observes first of
all that the TACA tariff for maritime transport services sets different rates for different products on a basis related to
their value, that although the range of tariffs is considerably narrower than the range of commodity values, prices can vary
as much as five-fold and that in other words, although the cost of transporting a container is almost entirely unrelated to
the type of goods transported, freight rates are up to five times higher for high value commodities than for low value commodities.
As stated at paragraph 535 of the contested decision:

This system of differentiated pricing, the purpose of which is to maximise revenues, is normally only found in market situations
where one or more undertakings has a substantial degree of market power. In transport markets where there was no significant
concentration of market power, the transport price would probably be fixed by reference to the type of service on offer and
not by reference to the goods transported, on the basis of the actual costs in line with market forces.

1072 Next, at paragraphs 536 and 537, the Commission states that a further example of discrimination imposed by the TACA relates
to CAFs, which vary considerably according to the ports of destination and of origin.

1073 Those findings are not called in question by the circumstance underlined by the applicant in Case T-213/98 that almost all
liner companies offer on all trades prices which vary according to the value of the goods. The applicant itself stated that
one of the aspects of the stability envisaged by Regulation No 4056/86 to which the liner conferences contribute in the area
of maritime transport was the fact that shipping lines which are not members of a conference tended to follow the conference
by using the uniform tariff as a market reference point. Thus, on the trade in question, the Commission states at paragraph
548 of the contested decision, without being contradicted by the applicants on that point, that the fact that the TACA is
the price leader makes it unlikely that any competitor would wish to risk destabilising the market by competing aggressively
against the TACA on price.

1074 In those circumstances, the fact that on other trades shipping companies not in a dominant position adopt, like the dominant
companies, a discriminatory tariff policy vis-à-vis shippers does not show that price discrimination is not a relevant criterion
on which to establish the existence of a dominant position on a given market, but at the most reveals that the non-dominant
companies tend to follow the tariff policy of the dominant companies.

1075 The circumstance, alleged by the same applicant, that the discriminatory nature of the CAF referred to at paragraph 536 of
the contested decision is based on figures relating to 1997, a year which came after the period covered by the contested decision,
is irrelevant. Since the Commission does not state in the operative part of the contested decision that that discrimination
is prohibited, but merely refers to it as an example of the TACA parties' ability to discriminate on prices, an ability which
is not disputed by the parties, the Commission was at liberty to rely on figures subsequent to the period covered by the contested
decision to illustrate its argument.

1076 In so far as the applicant alleges that the contested decision is incorrectly reasoned, moreover, it is sufficient to observe
that the allegations on that point coincide with the pleas alleging error of assessment and that they therefore seek to challenge
the merits of the assessment made in the contested decision (*Commission* v *Sytraval and Brink's France*, cited at paragraph 746 above, paragraph 67). Those allegations are therefore of no relevance in the context of the assessment
of compliance with the obligation to state reasons (*FEFC*, cited at paragraph 196 above, paragraphs 425 and 431).

1077 It follows that none of the evidence adduced by the applicants based on the existence of discounts on the highest tariff rates
is capable of upsetting the Commission's finding that the position held on the relevant market by the TACA parties was a dominant
one.

(2) The increase in the rates charged by the TACA parties

1078 By these pleas, the applicants dispute the results of a survey of price movements in the maritime and Community inland legs
of TAA/TACA service contracts from 1992 to 1997, which are set out at paragraphs 320 to 328 of the contested decision (the
service contract rates survey). At paragraph 324 of the contested decision, the Commission states that the clearest conclusion
to be drawn from the survey is that the price increases from 1993 to 1996 in the maritime legs of the journey are 10.4 percentage
points greater than increases for the Community inland legs.

1079 It follows from the contested decision that the Commission relied on those results for its assertion, at paragraph 543, that
the limited opportunities for shippers to switch to the TACA's competitors were demonstrated by the fact that the TACA had
been in a position to impose regular, albeit, modest price increases over the period 1994 to 1996, in stark contrast to the
two other world arterial trades.

1080 The Court agrees with the applicants that the results of the service contract price survey are somewhat inconclusive. While
it is true that, for the period 1993 to 1996, the survey finds an increase in the maritime rate of 15.5 percentage points
against an increase of only 5.1 percentage points in the inland rate, it does not emerge from the contested decision that
the survey specifically examines price movements during the period covered by the contested decision, namely 1994 to 1996.
It cannot be inferred from the other results presented by the survey that price movements during that period were the same
as between 1993 and 1996. Thus, for the period 1992 to 1996, the survey finds that the maritime tariff rose less than the
inland tariff, whereas for the period 1992 to 1997 the increase in the maritime tariff is slightly higher than the increase
in the inland tariff. It is clear that no conclusions can be drawn from these varying results for the purpose of establishing
the existence of a dominant position.

1081 However, whatever the flaws in that survey, it must be noted that the Commission's finding at paragraph 543 of the contested
decision that the TACA parties imposed regular price increases is also based on the results of another survey set out at paragraphs
307 to 319 of the contested decision, before those of the service contracts price survey. Following that survey, of movements
in average TACA revenue per TEU between 1992 and 1996 (the average revenue survey), the Commission concludes, as stated at
paragraphs 318 and 319, first, that taken as an average, the TACA parties increased their revenues per TEU (that is, the average
price paid by shippers for the maritime transport of 1 TEU) between 1992 and 1996 by 8% eastbound and 18% westbound and, second,
that a number of TACA parties have been able to increase average revenues per TEU substantially without suffering any loss
in market share. Furthermore, paragraphs 314, 315 and 317 of the contested decision indicate that the increase in average
revenue would have been even more substantial if the TACA parties had not been forced by the FMC to reduce their 1995 tariff
and service contract rates to 1994 levels.

1082 It is significant that the applicants do not dispute the results of the average revenue survey. In those circumstances, it
must be taken as established that the finding at paragraph 543 of the contested decision that the TACA parties imposed regular
price increases is sufficiently supported in the contested decision by the average revenue survey.

1083 Consequently, the fact that the results of the service contract rate survey do not support the finding at paragraph 543, if
established, is irrelevant.

1084 In any event, the finding at paragraph 543 of the contested decision that the TACA parties imposed regular price increases
is only one of the many factors used at paragraphs 532 to 549 of the contested decision to demonstrate the existence of a
dominant position. Although the ability to impose regular price increases unquestionably constitutes a factor capable of pointing
to the existence of a dominant position, it is by no means an indispensable factor, as the independence which a dominant undertaking
enjoys in pricing matters has more to do with the ability to set prices without having to take account of the reaction of
competitors, customers and suppliers than with the ability to increase prices (see, to that effect, *AKZO*, cited at paragraph 95 above, paragraphs 70 to 72).

1085 In this case, it must be held that it follows from an examination of the foregoing pleas and arguments that the dominant position
of the TACA parties is sufficiently made out by the other evidence relied on in the contested decision, which relates not
only to their extremely high market share but also to their ability to discriminate on prices and to the absence of effective
external competition as evidenced by their share of available capacity on the trade in question, by the foreclosure effect
created by the service contracts, by the TACA's leadership in pricing matters and by the role of follower played by their
competitors in pricing matters.

1086 On those grounds, the applicants' pleas and arguments relating to movements in rates on the trade in question must be rejected.

6. Conclusion on the pleas relating to the existence of a dominant position on the relevant market

1087 It follows from all of the foregoing considerations that the applicants' pleas relating to the existence of a dominant position
held by the TACA parties must be rejected in their entirety.

C - Conclusion on the second part

1088 For the reasons set out above, all of the pleas and arguments relating to the second part, concerning the dominant nature
of the position held by the TACA parties, must be rejected.

*Part three: no abuse*

1089 By their pleas under the present part, the applicants challenge the Commission's two findings of abuse recorded in the contested
decision, namely, the placing of restrictions on the availability and content of service contracts and the alteration of the
competitive structure of the market.

A - The first abuse: placing restrictions on the availability and content of service contracts

1090 The applicants' pleas and arguments against the contested decision in respect of the first abuse are of two types. First,
the applicants allege that each of the practices constituting that abuse is objectively justified. Second, they submit that
the contested decision does not contain an adequate statement of reasons in various regards.

1. Objective justification of the practices constituting the first abuse

(a) Arguments of the parties

1091 The applicants allege first in relation to conference service contracts that the terms imposed by the TACA relating to contingency
clauses, the duration of service contracts, the prohibition of multiple contracts and the level of liquidated damages, referred
to in paragraph 556 of the contested decision, are justified on objective grounds. They deny that those terms are justified
simply because they are in their own interests. They consider that their objective nature is shown by the numerous references
to the situation in US law. The fact that the TACA parties notified a revised version of their agreement no longer containing
the unfair conditions and other restrictions of competition identified by the contested decision in relation to service contracts
reflects not a lack of belief on the part of the applicants in the validity of their agreement, but their desire to bring
the dispute with the Commission to an end.

1092 First, in relation to contingency clauses, the applicants state that that type of clause generally provides that if the tariff
rate drops below the shipper's service contract rate, or if the conference enters into another service contract with a smaller
volume commitment and a lower rate, the shipper which signed the first contract is automatically entitled to the lower rate.

1093 The applicants claim that the prohibition of contingency clauses is justified by the need to preserve stable rates and services.
Contingency clauses are liable to undermine the stabilising role of liner conferences which is precisely the objective of
block exemption under Regulation No 4056/86. Thus, during a dispute between Lykes and a shippers' association in 1995, the
US authorities recognised that contingency clauses could be anti-competitive in that they might encourage Lykes not to grant
favourable rates to competitors of the shippers' association in question. It is also clear from the settled case-law of the
US authorities that most-favoured nation clauses are anti-competitive. It is therefore inaccurate to claim that it is an exception
for that type of clause to be held to be anti-competitive.

1094 Second, as regards the duration of contracts, the applicants state first that the provision in the TACA is that the TACA members
undertake to maintain a stable price for at least one calendar year, enabling both carrier and shipper to plan forward and
to budget revenue and expenditure. That benefit is consistent with those described by paragraph 473 of the contested decision.
Next, the clause in question results in administrative efficiency for the carriers and contributes to equality of treatment
between shippers in the same position. Furthermore, the period of one year imposed by the TACA is in line with the usual practice
in relation to service contracts, due to the fact that, given the changing conditions in international liner trades and the
trend towards lower rates, shippers are reluctant to commit to a specific minimum volume at a stated rate for more than one
year. Finally, the Commission has not shown that terms of one, two or three years under the TACA have had any appreciable
restrictive effect on competition. The Commission claims at paragraphs 225 and 564 of the contested decision that service
contracts act as effective barriers to entry, and this would be even more so were carriers and shippers at liberty to enter
into service contracts for a duration exceeding that permitted under the TACA.

1095 Third, in relation to multiple contracts, the applicants point out that the TACA prohibits a carrier from entering into several
service contracts with the same shipper only where those contracts cover, in whole or in part, the transportation of the same
cargo over the same route or any segment of the same route. The applicants claim that that prohibition accords with general
commercial practice. First, they point out that if such contracts were permitted it would in fact amount to allowing the TACA
parties to amend conference contracts unilaterally. Next, a conflict of interest would arise if a party were permitted to
negotiate and agree on a conference contract and subsequently to breach that contract by entering into its own contract with
the same shipper for the same cargo but on different terms. It is the applicants' view that conference carriers should be
required to choose whether to participate in a conference contract or to establish a TVR or to take independent action or
(since 1996) to conclude their own individual (or joint individual) service contract. Lastly, the applicants note that service
contracts (whether conference or individual) may be amended, so that a term imposed by the TACA does not irrevocably bind
the parties. For example, the parties could decide to add further commodities or destinations.

1096 Fourth, as regards liquidated damages the applicants consider that it is inherent in the right to enter into conference service
contracts that the parties be permitted to provide for the legal consequences of any breach of obligations under such contracts.
They stress that liquidated damages clauses are a pre-estimate of the loss suffered by the carrier in the case of non-performance
by the shipper of its minimum quantity commitment under the service contract. The reasonableness of such clauses is borne
out by the 10th recital to Regulation No 4056/86, which provides that conference members may agree to impose penalties on
users who seek by improper means to evade the obligations of loyalty required in exchange for the rebates, reduced freight
rates or commission granted to them by the conference. The applicants further claim that liquidated damages clauses are lawful
under US law. In particular, FMC Circular 1-89 states that damages should be meaningful so as to prevent the use of service
contracts to avoid the tariff. Lastly, the applicants observe that if a contract does not provide for liquidated damages,
a carrier has no option in the event of a breach by the shipper but to re-rate the cargo moving under the contract at the
conference tariff, which would represent a higher amount than the liquidated damages provided for in the TACA.

1097 Second, the applicants submit that the prohibition of individual service contracts is an objectively justifiable conference
practice.

1098 In the first place, the requirement under Regulation No 4056/86 that a liner conference operate under uniform or common freight
rates (Article 1(3)(b)), and to fix rates and conditions of carriage (Article 3), entitles (but does not require) the members
of the liner conference to prohibit individual service contracts. The applicants consider that the prohibition of individual
service contracts is a traditional conference mechanism to preserve the integrity and uniformity of the tariff. Thus, since
1 January 1999, when confidential individual service contracts were introduced by the TACA parties, rates on the transatlantic
trade fell sharply (by 21% eastbound and by 14% westbound compared with the year before). The Commission does not explain
how an unfettered right to enter into individual service contracts would be compatible with the requirement to operate uniform
or common freight rates.

1099 Secondly, the applicants note that conferences operating on the transatlantic trade have traditionally prohibited their members
from entering into individual service contracts. Thus, paragraph 126 of the contested decision acknowledged that those conferences
never openly permitted individual service contracts until their introduction by the TACA parties in 1996. Restrictions on
entering into individual service contracts remain the rule rather than the exception on other trades.

1100 Thirdly, the applicants consider that the prohibition of individual service contracts is consistent with US law. Section 4(a)(7)
of the US Shipping Act permits the prohibition of the use of service contracts by conference members. That situation was not
altered by the settlement agreement of 1995, in which the FMC did not provide that as a matter of US law conferences must
permit individual service contracts; rather it required the TACA parties to permit individual service contracts in 1996. It
did not, on the other hand, require that such contracts be permitted in 1997 and subsequent years, so that the applicants
would have been entitled in accordance with the terms of the settlement agreement to prohibit individual service contracts.

1101 Third, as regards the application of the conference rules on service contracts to individual service contracts, the applicants
allege that when they authorised individual service contracts in 1996 they were permitted under the terms of the US Shipping
Act (section 4(a)(7)) to regulate or prohibit their use. The application of the TACA rules on individual service contracts
was therefore lawful under US law. Furthermore, the application of the TACA service contract rules to individual service contracts
was a requirement of the settlement agreement with the FMC in 1995. The FMC's order required that the TACA permit individual
service contracts for 1996 and provided that such contracts must be made subject to the TACA rules (namely, Article 14.2 of
the TACA).

1102 Fourth, as regards the confidentiality of individual service contracts, the applicants claim that the disclosure of the essential
terms of individual service contracts (including those agreed jointly) is obligatory under US law (section 8(c) of the US
Shipping Act). Although the essential terms listed in the US legislation do not include the name of the shipper, any well-informed
operator in the maritime carrier trade would be able to deduce the shipper's identity from the published terms (that is, from
the distances moved, the commodity involved, the minimum volume, the line-haul rate, the duration, service commitments and
the liquidated damages for non-performance). In those circumstances, the applicants consider that the mutual disclosure of
information on individual service contracts may be reasonable given the conditions of transparency arising from the US Shipping
Act.

1103 The applicant in Case T-213/98 submits that a dominant undertaking does not, in the absence of some additional factor, commit
an abuse by adopting commercial practices that could be adopted by non-dominant undertakings (*Hoffmann-La Roche*, cited at paragraph 765) unless those practices have the effect of reinforcing its dominance or reducing the level of competition
on the market. The practices in question in relation to service contracts are also adopted by independent lines, and further,
the Commission has not shown that those practices reinforced the alleged dominance of the TACA parties. Moreover, as regards
the prohibition on individual service contracts, the applicant points to its initiatives on tariffs during the relevant period,
in the form of independent action, TVRs and Canadian Gateway services.

1104 The Commission, supported by the ECTU, considers that those pleas and arguments are unfounded.

(b) Findings of the Court

1105 In order to assess the present pleas and arguments, by which the applicants submit that the practices constituting the first
abuse are objectively justified, it should be recalled that, under Article 6 of the operative part of the contested decision,
the Commission found that the TACA parties abused their collective dominant position by entering into an agreement placing
restrictions on the availability and content of service contracts.

1106 It is apparent from paragraphs 551 to 558 of the contested decision, as the Commission confirmed at the hearing in reply to
questions from the Court, that the first abuse is made up of the following practices:

–       - the outright prohibition of individual service contracts in 1994 and 1995 (paragraphs 554 and 557) and, where they were
authorised with effect from 1996, the application of certain terms and conditions collectively agreed by the TACA (paragraphs
554 to 556) and the mutual disclosure of their terms (paragraph 552);

–       - the application in conference service contracts of certain terms collectively agreed by the TACA (paragraphs 554 to 556).

1107 It is apparent from paragraph 556 of the contested decision that the terms in question collectively agreed by the TACA are
those concerning the prohibition of contingency clauses, the duration of service contracts, the ban on multiple contracts
and the amount of liquidated damages. Those terms are laid down by Article 14(2) of the TACA.

1108 The applicants claim that each of those practices is objectively justified in the light of Article 86 of the Treaty. They
put forward essentially three types of justification concerning, respectively, the need for those practices in order to meet
certain objectives, their conformity with standard practice in the maritime transport sector and their conformity with US
law.

1109 Before considering those grounds for justification, it must be noted at the outset that there is no exception to the principle
in Community competition law prohibiting abuse of a dominant position. Unlike Article 85 of the Treaty, Article 86 of the
Treaty does not allow undertakings in a dominant position to seek to obtain exemption for their abusive practices (Case 66/86
*Ahmed Saeed Flugreisen and Silver Line Reisebüro* [1989] ECR 803, paragraph 32, and *CEWAL I*, cited at paragraph 568 above, paragraph 152). Furthermore, according to the case-law, dominant undertakings have a special
responsibility not to allow their conduct to impair genuine undistorted competition on the common market (*Michelin*, cited at paragraph 337 above, paragraph 57, and *Irish Sugar*, cited at paragraph 152 above, paragraph 112). Consequently, there can be no exceptions to the prohibition of abuse by dominant
undertakings.

1110 It is in the light of those principles that the grounds for justification put forward by the applicants in the present actions
must be assessed.

(1) Justifications on the basis of the necessity of certain of the practices in question

1111 The applicants submit that the prohibition of individual service contracts, restrictions as to duration and the prohibition
of contingency clauses are necessary to maintain the stability of uniform or common freight rates qualifying for block exemption
under Article 3 of Regulation No 4056/86. They also submit that the restrictions as to duration are necessary to ensure equality
between shippers and to improve administrative efficiency. Finally, the applicants consider that the prohibition on multiple
contracts and the liquidated damages clause are necessary, essentially, to preserve the integrity of conference service contracts.

1112 However, because Article 86 of the Treaty does not provide for any exemption, abusive practices are prohibited regardless
of the advantages which may accrue to the perpetrators of such practices or to third parties.

1113 It is true that, according to the case-law, the fact that an undertaking is in a dominant position cannot disentitle it from
protecting its own commercial interests if they are attacked, and that such an undertaking must be conceded the right to take
such reasonable steps as it deems appropriate to protect its interests, provided however that the purpose of such behaviour
is not to strengthen this dominant position and abuse it (see, for example, *United Brands*, cited at paragraph 853 above, paragraph 189; *CEWAL I*, cited at paragraph 568 above, paragraphs 107 and 146; and *Irish Sugar*, cited at paragraph 152 above, paragraph 112). It follows therefore that a dominant undertaking may seek to rely on grounds
to justify the practices it adopts.

1114 However, the justifications permitted by the case-law in respect of Article 86 of the Treaty cannot result in creating exemptions
from the application of that provision. The sole purpose of those grounds of justification is to enable a dominant undertaking
to show not that the practices in question should be permitted because they confer certain advantages, but only that the purpose
of those practices is reasonably to protect its commercial interests in the face of action taken by certain third parties
and that they do not therefore in fact constitute an abuse.

1115 In the present case the justifications put forward by the applicants seek to demonstrate not that the practices in question
concerning service contracts do not constitute an abuse, but only that those practices are necessary in order to achieve certain
benefits, namely preserving the stability of uniform or common freight rates and the integrity of conference service contracts,
maintaining equality between shippers and improving administrative efficiency. According to the applicants, the need for the
conference practices in question relates not to the action of third parties threatening the TACA's commercial interests, but
to the risk that the TACA's own members may, by their conduct, infringe the rules adopted by the conference, such as the collective
price-fixing agreement setting a uniform or common freight rate and conference service contracts, or the efficient functioning
thereof.

1116 It follows that, by the present justifications, the applicants thus seek in fact to obtain an exemption for the abuse in question
on the ground that those practices are necessary to achieve certain advantages resulting from the conference system.

1117 Although that is sufficient reason to reject all of the justifications alleging that the rules in question are necessary,
it must also be stated that even if such justifications could be upheld under Article 86 of the Treaty, the applicants fail
to show why the practices in question are necessary to bring about the alleged advantages.

1118 Thus, with regard to the alleged need to maintain the stability of the uniform or common freight rates, the mere fact that
the collective agreement of those rates qualifies for block exemption under Article 3 of Regulation No 4056/86 cannot by itself
justify the practices in question with regard to Article 86 of the Treaty. First, Article 8(2) of Regulation No 4056/86 expressly
provides that Article 86 of the Treaty applies to the conduct of maritime conferences qualifying for block exemption laid
down by Article 3 of that regulation (*CEWAL I*, cited at paragraph 568 above, paragraph 64). Second, having regard to the wholly exceptional nature of the block exemption
provided for by Article 3 of that regulation, it cannot be applied beyond its sphere of application (see, to that effect,
*FEFC*, cited at paragraph 196 above, paragraph 254).

1119 A fortiori, with regard to the alleged necessity not to infringe conference service contracts, the applicants cannot rely
on that objective to justify the restrictive practices in question under Article 86 of the Treaty when conference service
contracts are not, for the reasons set out below at paragraphs 1381 to 1385, covered by the block exemption provided for in
Article 3 of Regulation No 4056/86. It should also be noted, as regards the liquidated damages clause, that whilst, as the
applicants rightly point out, the 10th recital in the preamble to Regulation No 4056/86 states that conference members may
agree to impose penalties on [shippers] who seek by improper means to evade the obligations of loyalty required in exchange
for the rebates, reduced freight rates or commission granted to them by the conference, nothing in the regulation lays down
the amount of those penalties that the conference may impose. It is apparent from paragraph 556 of the contested decision
that only the penalty as set by the TACA parties, namely USD 250 per TEU, is regarded as abusive in that decision.

1120 As for the alleged need to ensure equality between shippers and to improve administrative efficiency, it suffices to note
that in the light of their special responsibility not to allow their conduct to impair competition, the onus is on the dominant
undertakings to behave in a way which is proportionate to the objectives they seek to achieve. Clearly, no ground based on
the TACA's internal administrative organisation can justify an infringement of Article 86 of the Treaty. Similarly, in relation
to the alleged need to ensure equality between shippers, the applicants cannot rely on their desire to avoid infringing Article
86(c) of the Treaty, which prohibits dominant undertakings from imposing discriminatory terms on their commercial partners,
in order to justify another infringement of Article 86 of the Treaty.

1121 Finally, and in any event, the applicants cannot rely on the fact that certain TACA parties might fail to fulfil the obligations
arising from the agreement fixing uniform or common freight rates or conference service contracts to justify under Article
86 of the Treaty practices intended to prevent such failures. The simple fact that compliance with the agreement fixing rates
and conference service contracts deprives the practices on service contracts in question of all practical effect suffices
to show that those practices are not necessary (see, to that effect, *FEFC*, cited at paragraph 196 above, paragraph 389).

1122 The justifications based on the alleged advantages produced by the practices on service contracts in question must therefore
be rejected.

(2) Justifications based on the conformity of certain practices in question with standard practice in the maritime transport
sector

1123 The applicants submit that the prohibition of individual service contracts and the restrictions on duration conform to standard
practice in the sector.

1124 However, conduct cannot cease to be abusive merely because it is the standard practice in a particular sector; to hold otherwise
would deprive Article 86 of the Treaty of any effect. Dominant undertakings within the meaning of Article 86 of the Treaty
have a special responsibility not to allow their conduct to impair genuine undistorted competition on the relevant market
(*Michelin*, cited at paragraph 337 above, paragraph 57). Contrary to the submission of the applicant in Case T-213/98, that responsibility
is not limited solely to conduct likely to reinforce the dominance of the undertaking concerned or reduce the level of competition
on the market, since Article 86 of the Treaty concerns not only practices which hinder effective competition but also those
which, as in this case, may cause damage to consumers directly (*Europemballage and Continental Can*, cited at paragraph 779 above, paragraph 26).

1125 Even if the practices on service contracts in question represent the standard practice of maritime carriers, therefore, Article
86 of the Treaty prevented the TACA parties, given their special responsibility as a collective dominant unit on the transatlantic
trade, from adopting such practices, notwithstanding the fact that they were adopted by most, if not all, of their competitors.

1126 That conclusion cannot be undermined by the fact that under Article 86(d) of the Treaty making the conclusion of contracts
subject to acceptance by the other parties of supplementary obligations is only prohibited where those obligations by their
nature or according to commercial usage have no connection with the subject of those contracts. The need to take account of
commercial usage in that context comes from the analysis of tied sales, since the finding that such sales exist necessarily
requires that the circumstances be determined in which commercial sales are not tied. For the reasons set out above however,
reference to commercial usage in that context cannot be extended to other abuses in order to justify them, particularly where
their purpose is precisely to strengthen a dominant position and abuse it (*United Brands*, cited at paragraph 853 above, paragraph 189).

1127 Consequently, the justifications based on commercial usage must be rejected.

(3) Justifications based on the conformity of some of the practices in question with US law

1128 The applicants submit that the liquidated damages clause, the prohibition of contingency clauses, the prohibition of individual
service contracts, the application of collectively agreed terms by the conference to individual service contracts and the
mutual disclosure of the terms of service contracts are practices which comply with US law.

1129 It must be noted at the outset that the TACA, as a liner conference operating on the transatlantic trade, is governed both
by Community competition law under Articles 85 and 86 of the Treaty and by US law, in particular the US Shipping Act. It follows
that the TACA parties must ensure that their conduct on the market in question complies not only with Community competition
law but also with US law.

1130 According to the case-law, Articles 85 and 86 of the Treaty apply only to anti-competitive conduct in which undertakings engage
on their own initiative. If anti-competitive conduct is required of undertakings by national law or if the latter creates
a legal framework eliminating any possibility of competitive conduct on their part, Articles 85 and 86 of the Treaty do not
apply. In such a situation, the restriction of competition is not attributable, as is implied by those provisions, to the
autonomous conduct of the undertakings. Articles 85 and 86 of the Treaty may apply, by contrast, if it is found that the national
legislation does not preclude undertakings from engaging in autonomous conduct which prevents, restricts or distorts competition
(Joined Cases C-359/95 P and C-379/95 P *Commission and France* v *Ladbroke Racing* [1997] ECR I-6265, paragraph 33; Case C-198/01 *Consorzia Industrie Fiammiferi* 2003] ECR I-8055, paragraphs 52 to 55, and Case C-207/01 *Altair Chimica* [2003] ECR I-8875, paragraphs 30, 35 and 36; Case T-111/96 *ITT Promédia* v *Commission* [1998] ECR II-2937, paragraph 96; *Irish Sugar*, cited at paragraph 152 above, paragraph 130; Case T-513/93 *Consiglio Nazionale degli Spedizionieri Doganali* v *Commission* [2000] ECR II-1807, paragraphs 58 and 59; and Case T-154/98 *Asia Motor France and Others* v *Commission* [2000] ECR II-3453, paragraphs 78 to 91). Consequently, if a national law merely allows, encourages or makes it easier for
undertakings to engage in autonomous anti-competitive conduct, those undertakings remain subject to the Treaty competition
rules (see inter alia Joined Cases 89/85, 104/85, 114/85, 116/85, 117/85 and 125/85 to 129/85 *Ahlström* v *Commission* [1988] ECR 5193, paragraph 20, and *Consorzia Industrie Fiammiferi*, cited above, paragraph 56).

1131 In this case, in so far as the applicants point out that certain of the practices mentioned are permitted or even made easier
by US law, it is therefore to be observed that that circumstance alone has no bearing on the application of Article 86 of
the Treaty to those practices, since in such a case it remains possible for the TACA parties to adapt their conduct to comply
with both Community competition law and US law.

1132 Thus, with regard to the liquidated damages clause, the fact that such clauses are permissible in US law cannot serve to justify
them for the purposes of Article 86 of the Treaty, especially as it is apparent from paragraph 556 of the contested decision
that only the amount of the liquidated damages as fixed by the TACA parties, rather than the inclusion of such a clause itself,
is regarded as an abuse in that decision.

1133 Similarly, with regard to the prohibition of contingency clauses, it is sufficient to observe that the applicants' complaint
may be rejected in view of the fact that they merely allege that, according to US case-law, contingency clauses are likely
to be anti-competitive, so that prohibiting them is permitted; they do not submit however that the prohibition is required.

1134 Finally, as regards the practices on individual service contracts, it is not in dispute between the parties that the lifting
of the ban on individual service contracts in 1996 gives effect to the FMC's order of 4 April 1995 terminating the proceedings
instituted in the United States against the TACA practices, in particular the excessive level of its tariff rates, after the
TACA parties undertook to reduce the 1995 tariff rates to 1994 levels. That order states inter alia that:

... the proposed settlement agreement ... is approved on the condition that the TACA agreement is amended by adding a new
Article 14.4 reading as follows:

...

Notwithstanding the provisions of Article 14.3 any Party, either individually or jointly with another Party or Parties, may
enter into an individual Contract with any shipper or shipper's association for the transportation of cargo within the trade;
provided that such Contract [must]:

(i) commence no sooner than January 1, 1996, and terminate on or before December 31, 1996 ...

(ii) comply with the Contract Guidelines contained in Article 14.2(a) - (h).

1135 The applicants submit that the FMC order does not show that the prohibition of individual service contracts in 1994 and 1995
is contrary to US law, since the order did not prevent the TACA parties from reintroducing the prohibition with effect from
1997.

1136 It is true, as the applicants submit, that it is apparent from the terms of the FMC order that it only provided for the lifting
of the ban on individual service contracts in respect of 1996.

1137 That fact is however irrelevant for the purposes of the present plea. At most, it shows that US law permitted the TACA parties
to prohibit individual service contracts in 1994 and 1995 or to reintroduce that prohibition from 1997. In accordance with
the case-law cited above at paragraph 1130, such a fact does not show that the practice in question is lawful under Article
86 of the Treaty, since nothing prevented the TACA parties from laying down such a prohibition in 1994 and 1995 or from not
proceeding to reintroduce it with effect from 1997.

1138 Furthermore, it is not in dispute that the TACA parties did not re-introduce the prohibition of individual service contracts
after 1996, which is sufficient to show that that prohibition was not necessary in order to comply with US law.

1139 Consequently, the applicants cannot rely on the FMC order as objective justification for the prohibition of individual service
contracts from 1996.

1140 In so far as the applicants allege that some of the practices concerned are required by US law, it may be remarked that having
regard to the fact, emphasised above, that the TACA parties are subject as regards their activities on the transatlantic trade
to both Community competition law and US law it is possible that conduct prohibited by Community law is required by US law,
so that in order to comply with Community law the TACA parties have no other choice than to infringe US law. Article 9 of
Regulation No 4056/86 expressly envisages such situations of conflict with the law of a third country, moreover. According
to that provision, in such a case it is for the Commission to undertake negotiations with the third country concerned in order
to reconcile as far as possible the interests involved.

1141 In this case, however, it must first be determined to what extent the practices in question are in fact the result of legal
obligations imposed on the TACA.

1142 As regards the application to individual service contracts of the rules collectively agreed by the conference, the applicants
are right to point out that the FMC order referred to at paragraph 1134 above stated expressly in its operative part that
the TACA parties could enter into individual service contracts provided that they comply with Article 14(2) of the TACA, from
which it is apparent that the application of those rules to individual service contracts was not only permitted but also required
by the FMC.

1143 In order to assess the scope of the FMC order in that regard, however, it is necessary to consider its nature and purpose.

1144 As regards, first, the nature of the FMC order, it must be emphasised that it is not an abstract legislative measure of general
application, but a judicial decision the purpose of which is to approve a draft agreement concluded between the TACA parties
and the FMC in order to bring an end to dispute proceedings commenced by the FMC.

1145 It follows that the obligations laid down by that order are not wholly attributable to circumstances external to the applicants.
First, the order originates in the TACA parties' own conduct, in the present case the fact that they charged excessive prices
to the detriment of the shippers, and second, its terms result, as is apparent from the documents produced by the applicants
in reply to a written question from the Court on that point, from negotiations with the FMC in which the TACA parties were
involved.

1146 It is true that it is apparent from the Court's file that the application of Article 14(2) of the TACA to individual service
contracts was added by the FMC in the final stage of the proceedings as a condition for approval of the draft settlement agreement
submitted to it. The Commission was therefore wrong to submit at the hearing that the application of the rules collectively
agreed by the TACA to individual service contracts was negotiated between the TACA parties and the FMC.

1147 However, it remains apparent from the grounds of the order that whilst that condition of approval was not negotiated between
the TACA parties and the FMC it was not unilaterally imposed by the latter. The FMC expressly made that condition subject
to acceptance by the TACA parties, which occurred on 9 March 1995 by the notification to the FMC of an amended version of
the TACA. Although the refusal to accept that condition within the allotted period would, according to the order, have resulted
in the draft settlement agreement lapsing, the TACA parties accepted it on their own initiative, taking account of the various
interests involved. It should be noted moreover that in any event the lapsing of the draft settlement agreement would not
have prejudiced the outcome of the FMC's proceedings as to the legality of the TACA practices in question.

1148 Next, as regards the purpose of the FMC order, the condition of approval imposed by the FMC was essentially intended not to
apply the TACA rules to individual service contracts, but to remove the TACA's ban on entering into such contracts, and thereby
responded to the fear expressed by shippers following the publication of the draft settlement agreement that the TACA parties
would compensate for the reduction in the 1995 tariff rates by excessive increases in the 1996 tariff rates. According to
the FMC, the increased competition resulting from the introduction of individual service contracts on the trade deprived the
TACA parties of any such possibility.

1149 In the light of that objective, it appears that, rather than being a considered objective, the application of the TACA rules
to individual service contracts was inserted by the FMC in order to enable the TACA's customers to enter into individual service
contracts on the same basis as conference service contracts. Moreover, none of the grounds of the order indicates that the
FMC considered that the application of the rules collectively agreed by the TACA on individual service contracts was indispensable
for achieving the objective sought and, therefore, that failure by the TACA parties to apply such rules necessarily would
have constituted an infringement of that order. As the intervener rightly observed at the hearing, Decision 2003/68, in particular
paragraphs 24(2) and 64, makes it clear that the revised TACA in no way now restricts the freedom of the TACA parties to enter
into individual service contracts with shippers on terms freely agreed by the parties to such contracts.

1150 For all of those reasons, the Court finds that the FMC order in no way required the applicants to apply the TACA rules to
individual service contracts from 1996. Consequently, the applicants' complaint in that respect being based on a false premiss,
it must be rejected.

1151 As regards the mutual disclosure of the terms of service contracts, it is apparent from paragraph 498, to which paragraph
551 refers, and paragraph 552 of the contested decision that the abuse of which the Commission complains concerns the fact
that the TACA parties disclosed the existence of individual service contracts and the content of those contracts to shipping
companies that were not party thereto.

1152 However, it is not in dispute between the parties that the US Shipping Act requires the TACA parties to notify their individual
service contracts to the FMC, which must also be given a summary of the essential terms of those contracts, that is, according
to the legislation in force at the time of the relevant facts, the clauses on the origin and destination port ranges or geographic
areas, the commodity or commodities involved, the minimum volume, the line-haul rate, the duration, the service commitments
and the liquidated damages for non-performance, if any. The summary is then published by the FMC. The Commission does not
deny that the summary includes all the relevant information contained in the essential terms, so that, since it is published,
it is available to the public, including not only the shippers but also all TACA parties. As the Commission pointed out at
paragraph 112 of the contested decision, the TACA parties are required by US law to offer the same terms to all shippers in
the same situation.

1153 In those circumstances, therefore, the Court finds that, contrary to what the applicants have maintained, the practice in
question is not required by US law. The US legislation does not require the TACA parties to mutually disclose the availability
and content of their individual service contracts; it merely requires them to notify such contracts to the FMC, which then
publishes a summary of their essential terms.

1154 Nevertheless, it should be noted that the result of the publication in the United States of such a summary is that the content
of the essential terms of individual service contracts is in the public domain. That being so, the Commission was wrong to
take the TACA parties to task, in paragraph 552 of the contested decision, for having agreed to disclose such information
to each other. Since the content of the essential terms is published, communication between the TACA parties of the availability
and content of their individual service contracts constitutes an exchange of public information. It has been held that such
a system for exchanging information cannot infringe the Treaty competition rules (see inter alia Case T-35/92 *John Deere* v *Commission* [1994] ECR II-957, paragraph 81, upheld on appeal in Case C-7/95 P *John Deere* v *Commission* [1998] ECR I-3111, paragraphs 89 and 90).

1155 In response to the written questions from the Court on that point the Commission argued, however, that the TACA parties mutually
disclosed additional information over and above that to be published under the US Shipping Act. Pressed on that point at the
hearing, however, the Commission admitted that the only clause of individual service contracts which does not need to be published
as an essential term under US law is that concerning the identity of the shipper or shippers concerned.

1156 However, as the applicants rightly pointed out in their written pleadings, the identity of the shipper or shippers concerned
may easily be inferred by the TACA parties from the essential terms published in accordance with US law. Since the TACA parties
have access, in respect of each individual service contract concluded by one of them, to information such as the port ranges
or geographic areas, the commodities involved and the service commitments, it may reasonably be considered that, given the
numerous links between them within the shipping conference, they are able to determine the identity of the shipper or shippers
bound by the service contracts in question. The Commission moreover did not challenge that fact, going only so far as to claim
that the identity of the shipper or shippers concerned was disclosed by the TACA parties prior to the publication of the essential
terms. That claim, put forward for the first time at the hearing, is unsupported by any evidence in the file, and so cannot
be held to have been made out.

1157 It follows therefore that during the period covered by the contested decision each of the TACA parties was in a position,
owing to the publication provided for under US law of the essential terms of individual service contracts, to know of the
existence of the individual service contracts entered into by one of their members and all the relevant terms of those contracts.

1158 In those circumstances, the contested decision wrongly found that the applicants agreed on the mutual disclosure of the availability
and content of individual service contracts.

1159 Consequently, the applicants' complaints on that point must be upheld.

2. The statement of reasons in the contested decision with regard to the first abuse

(a) Arguments of the parties

1160 The applicants make four criticisms of the reasoning in the contested decision concerning conference service contracts.

1161 The first is that the contested decision does not explain why the members of a conference should not be permitted to determine
the terms on which they exercise the power to enter into conference service contracts (conference service contract authority),
when the exercise of that power is itself compatible with Community law.

1162 The applicants point out that whilst the Commission finds that conference service contract authority does not fall within
the scope of Regulation No 4056/86 it does not rule out the possibility of individual exemption for such authority. The applicants
refer here to paragraph 582 of the contested decision, which states that this Decision does not require shippers to renegotiate
their joint service contracts, nor does it impose any deadline within which any re-negotiation should take place. Since the
members of a conference may together agree to enter into conference service contracts, they must also be permitted to determine
the terms on which they may enter into such contracts. If this is not the Commission's position it should explain why the
applicants' agreement on those terms constitutes an abuse of a dominant position.

1163 In their reply the applicants note the Commission's assertion in the defence that the first finding of abuse in the contested
decision relates not to the agreement on the terms on which conference service contract authority was exercised but to the
restrictions on entering into individual service contracts (or joint individual service contracts) either at all or except
on terms collectively agreed.

1164 The second criticism is that there is no reasoning in the contested decision to support the statement that the terms imposed
by Article 14.2 of the TACA, to which paragraph 556 of the contested decision refers (namely, contingency clauses, the duration
of service contracts, the prohibition of multiple contracts and the amount of liquidated damages), are unfair within the meaning
of Article 86(a) of the Treaty. The Commission does not explain why an agreement as to the terms of conference service contracts
is an abuse of a dominant position. Furthermore, there is no analysis of those terms and there is no consideration of the
commercial or economic context in which the terms have been agreed. In any case, the Commission does not explain the relevance
of the appraisal made under Article 85(3) of the Treaty, referred to in paragraph 551 of the contested decision.

1165 The third criticism concerns the fact that the contested decision does not explain why the terms on which the applicants supplied
services were unreasonable. It has been held that a refusal to deal is only abusive if it is not objectively justified. The
contested decision contains no such analysis but merely states at paragraphs 553 and 554 that, as a result of the rules contained
in Article 14 of the TACA, service contracts were not available other than in accordance with those rules.

1166 The applicants' fourth criticism is that, contrary to what was indicated in the judgment in *Flat glass*, cited at paragraph 594 above, paragraph 360, the Commission has recycled findings made under Article 85 of the Treaty for
the purposes of a finding of abuse under Article 86 of the Treaty. As the contested decision acknowledges at paragraph 551,
the first abuse found consists in the same conduct alleged to constitute the infringement of Article 85 of the Treaty which
is more fully described at paragraphs 487 to 502. It is apparent from this reference that, from the Commission's point of
view, because the service contract terms do not have sufficient positive benefits, in terms of improving the production or
distribution of services or promoting technical or economic progress, to satisfy the conditions for individual exemption set
out at paragraphs 487 to 502, those terms are also abusive and unreasonable within the meaning of Article 86 of the Treaty.

1167 The applicants argue, in the reply, that that reasoning constitutes an error of law. They submit that an assessment of a practice
with respect to the conditions for the grant of individual exemption under Article 85(3) of the Treaty cannot, without more,
constitute reasoning sufficient to justify the conclusion that that practice is also an abuse within the meaning of Article
86 of the Treaty. Given that the legal tests for the application of Articles 85 and 86 of the Treaty are different and serve
different economic goals, a mere reference to the reasoning used in relation to Article 85 of the Treaty cannot constitute
sufficient reasoning for a finding of abuse under Article 86 of the Treaty. The contested decision does not, any more than
the defence, contain any reasoned explanation as to why those restrictions on competition amount to an abuse within the meaning
of Article 86(a) and (b) of the Treaty.

1168 The applicants consider that the Advocate General's Opinion in *CEWAL II*, cited at paragraph 595 above, is irrelevant here. At points 28 and 35 of the Opinion, the Advocate General addressed not
the issue of reliance on the reasoning used in relation to Article 85(3) of the Treaty in finding an abuse under Article 86,
but the separate issue of whether, in order to establish the economic links necessary for the purpose of a collective assessment,
the Commission may rely on facts capable of amounting to an agreement or a concerted practice under Article 85 of the Treaty.

1169 The Commission, supported by the ECTU, considers that the contested decision contains a sufficient statement of reasons on
all of those points and therefore contends that the Court should reject the applicants' pleas and arguments on this point.

(b) Findings of the Court

1170 By the present pleas and complaints the applicants submit that the contested decision does not explain why the conditions
for the exercise of conference service contract authority are contrary to Article 86 of the Treaty. Furthermore, they allege
essentially that the Commission does not explain to the required legal standard why the practices constituting the first abuse
are an abuse within the meaning of Article 86 of the Treaty and are not objectively justified.

1171 As regards first the complaint alleging failure to explain why the conditions for the exercise of conference service contract
authority constitute an abuse, it has already been stated above at paragraphs 1106 and 1107 that, in respect of conference
service contracts, the first abuse according to the contested decision consisted in the fact that the TACA parties applied
to those service contracts certain terms laid down by Article 14(2) of the TACA, namely, according to paragraph 556 of the
contested decision, those concerning the prohibition of contingency clauses, the duration of service contracts, the ban on
multiple contracts and the amount of liquidated damages.

1172 It follows that, contrary to the applicants' submission, the contested decision does not state that the mere fact of collectively
agreeing the conditions for the exercise of conference service contract authority is in itself an abuse, but only that the
application of some of those conditions laid down by the TACA is abusive.

1173 The applicants' complaint in that regard is thus without purpose.

1174 Second, with regard to the complaint alleging failure to state reasons as to why the practices constituting the first abuse
are an abuse, the applicants complain that in the contested decision the Commission did not explain why those practices fall
within Article 86 of the Treaty, but recycled the reasoning adopted to exclude those practices from Article 85(3) of the Treaty.

1175 As a preliminary point it should be noted that, as is apparent from the express terms of their application, the applicants
are merely relying on infringement of Article 190 of the Treaty, in the sense that the contested decision is vitiated by a
failure to state any or adequate reasons. Contrary to the applicants' suggestion at the hearing in reply to a question from
the Court, it cannot therefore be accepted that by the present complaint the applicants also seek to criticise the Commission
for having erred in its reasoning in that regard. Such a plea, which goes to the substantive legality of the contested decision
and as such is concerned with infringement of a rule of law relating to the application of the Treaty, should not be confused
with the separate plea alleging absence of reasons or inadequacy of the reasons stated, which concerns the infringement of
essential procedural requirements (*Commission* v *Sytraval and Brink's France*, cited at paragraph 746 above, paragraph 67). Therefore, if a plea alleging an error of reasoning is to be inferred from
the terms of the reply, it must be declared inadmissible, as a new plea, under Article 48(2) of the Rules of Procedure.

1176 In the present case, in order to assess the merits of the applicants' complaint it is therefore only necessary to consider
whether the contested decision contains an adequate statement of reasons as to why the practices constituting the first abuse
are an abuse.

1177 According to Article 6 of the operative part of the contested decision, the first abuse consisted in the fact that the TACA
parties entered into an agreement placing restrictions on the availability of service contracts and their content. As was
stated above at paragraphs 1106 and 1107, it is apparent from paragraphs 551 to 558 of the contested decision that the first
abuse consists in the outright prohibition of individual service contracts in 1994 and 1995 and, when they were authorised
with effect from 1996, in the application therein of certain terms and conditions collectively agreed by the TACA and the
mutual disclosure of their terms, and in the application of certain terms collectively agreed by the TACA to conference service
contracts.

1178 Contrary to the applicants' submission, the contested decision does not recycle the grounds set out at paragraphs 487 to 502
justifying the refusal to grant individual exemption under Article 85(3) of the Treaty to those practices as the reasoning
for finding that those practices are an abuse. Under paragraph 551 of the contested decision, on which the applicants base
their recycling allegation, the Commission merely states:

The importance to shippers of service contracts is examined in some detail in recitals (122) to (126) and recitals (472) to
(476). The TACA parties have an agreement between themselves to impose a number of restrictions on the contents of the service
contracts and, in the past, have agreed that they will not enter into individual service contracts. One of the purposes of
imposing these restrictions has been to prevent price competition (see recital (479)). These restrictions are more fully described
in recitals (487) to (502).

1179 It is thus apparent from the express wording of the last sentence of that paragraph that the reference to paragraphs 487 to
502 concerns not the grounds justifying the refusal to grant individual exemption but the full description given therein of
the restrictions on the content of service contracts imposed by the TACA rules. The applicants' allegations of recycling are
therefore unfounded on that ground alone.

1180 However, it is still necessary to consider whether the contested decision contains an adequate statement of reasons as to
why the practices in question constitute an abuse.

1181 In paragraph 553 of the contested decision, the Commission states that an agreement to place restrictions on the availability
and content of service contracts amounts to a refusal to supply services other than in accordance with unfair terms and a
restriction on the supply of transport products so that such an agreement falls within Article 86(a) and (b) of the Treaty.
Next, in paragraph 554 of the contested decision, the Commission states with regard to the prohibition of individual service
contracts that the effect of the prohibition was that the TACA parties refused in 1995 to supply services adapted to the needs
of individual customers, in accordance with the individual capabilities of individual carriers, since this refusal deprives
the shippers of any additional services which individual TACA parties may have been in a position to offer. As regards the
application to individual service contracts (from 1996) and conference service contracts of certain conditions collectively
agreed by the TACA parties, the Commission states in the same paragraph that the TACA parties have refused to supply shippers
with maritime and inland transport services pursuant to a service contract except on the basis of certain terms which have
been chosen by the TACA parties collectively. A similar point appears in paragraph 555 of the contested decision.

1182 It is thus apparent from the terms of the contested decision that the Commission considered, in that decision, that the practices
constituting the first abuse are an abuse within the meaning of Article 86 of the Treaty because they are unfair and restrict
the supply of transport products to the extent that the purpose of those practices was, for the reasons set out at paragraphs
554 and 555 of the contested decision, to restrict the availability and content of service contracts.

1183 Such a statement of reasons, which mentions the type of abuse prohibited by Article 86 of the Treaty, which includes the practices
in question, and gives specific reasons as to why those practices constitute such an abuse clearly provides the applicants
with an adequate indication as to whether the decision is well founded or whether it may be vitiated by some defect enabling
its validity to be challenged, and enables the Community judicature to review the legality of the contested decision (*Van Megen Sports*, cited at paragraph 548 above, paragraph 51).

1184 Consequently, the contested decision is supported by an adequate statement of reasons on that point.

1185 The present plea must therefore be rejected.

1186 Finally, as regards the statement of reasons as to whether the practices constituting the first abuse are objectively justifiable,
it has been held that where the Commission finds that an undertaking has abused its dominant position it is for the undertaking
in question to justify by reference to objective factors, if it may, the abuses alleged against it (Case 395/87 *Tournier* [1989] ECR 2521, paragraph 38).

1187 In their response to the statement of objections the applicants did not put forward any evidence to justify the abuse alleged
against them by the Commission in the statement of objections in relation to service contracts.

1188 Clearly the Commission cannot be criticised in terms of its obligation to state reasons for not having adopted a position
in the contested decision based on evidence which was not submitted to it before that decision was adopted, but which is put
forward for the first time during the present proceedings (*FEFC*, cited at paragraph 196 above, paragraphs 426 and 427).

1189 Consequently, the applicants' complaint on that point must be rejected.

3. Conclusion on the first abuse

1190 It follows from all those considerations that the applicants' pleas and complaints in relation to the first abuse must be
upheld only in so far as they concern the mutual disclosure by the TACA parties of the availability and content of service
contracts. The remainder of the present pleas and complaints must be rejected.

1191 As a result, Article 6 of the operative part of the contested decision in so far as it applies to the mutual disclosure by
the TACA parties of the availability and content of service contracts and, consequently, Article 7 thereof in so far as it
requires the applicants to put an end forthwith to, and to refrain in the future from, any action having the same object or
effect should be annulled.

B - The second abuse: the abusive alteration of the competitive structure of the market

1192 The applicants put forward four types of pleas and complaints against the findings of the contested decision in relation to
the second abuse. The first concerns the evidence of the practices constituting the second abuse. The second concerns the
appreciable effect of those practices. The third concerns their duration. The fourth and final type concerns the question
whether Hanjin and Hyundai may be held responsible for those practices.

1. The evidence for the practices constituting the second abuse

(a) Arguments of the parties

(1) Preliminary observations

1193 As a preliminary point, the applicants note that the second abuse identified in the contested decision is based entirely on
the finding that the conference actively induced two lines, Hanjin and Hyundai, to join the TACA.

1194 The applicants claim, however, that the Commission advances a new argument in the defence to the effect that in addition to
the events surrounding the admission to the TACA of Hanjin and Hyundai (which are only illustrations), the applicants adopted
a policy to neutralise competition and expressed a willingness to provide inducements in order to alter the structure of the
market.

1195 The applicants submit that Article 86 of the Treaty does not apply in such circumstances and that *Europemballage and Continental Can* (cited at paragraph 779 above), on which the Commission relies at paragraphs 559 and 560 of the contested decision, is not
authority for the application of Article 86 of the Treaty to the policy or willingness of the TACA members. In the absence
of evidence of improper coercion of the new member to join the conference, it should be concluded that the new member joined
the conference on the basis of its assessment of its commercial interests. In contrast to a merger situation (as in the judgment
just cited), the parties to a liner conference remain free to compete on price and other matters and to leave the conference
upon expiry of the agreed notice period. If the structure of competition is seriously impeded by the admission of new members
to the conference, the Commission is empowered to withdraw the benefit of the block exemption pursuant to Article 7 and/or
Article 8 of Regulation No 4056/86.

1196 The Commission does not explain how the policy to neutralise competition or the supposed willingness to offer inducements
to the carriers to enter the transatlantic trade as parties to the TACA had any adverse consequences on the market. As the
Court of Justice has made clear, abuse is an objective concept which envisages practices which may cause damage to consumers
or to the competitive structure of the market (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 91, *Europemballage and Continental Can*, cited at paragraph 779 above, paragraph 26, and *BPB Industries and British Gypsum*, cited at paragraph 346 above, paragraph 70). In any event the applicants consider that the Commission has not demonstrated
that the TACA policy to neutralise competition had any effect on the structure of competition.

1197 The applicant in Case T-213/98 observes that admission to and departure from liner conference membership is not at all exceptional.
The Commission's analysis in the present case could have the effect of freezing the existing membership, contrary to the objectives
of Regulation No 4056/86. Furthermore, open conferences governed by US law are obliged to admit new members whilst closed
conferences must also admit new members provided they fulfil certain objective criteria, pursuant to Article 1(1) of the Unctad
Code.

1198 The applicant in Case T-213/98 essentially criticises the Commission for failing to identify clearly in the contested decision
the conduct alleged to have constituted the abuse. It claims that Article 5 of the contested decision may be read as suggesting
that the abuse complained of consists either in the admission of Hanjin and Hyundai as TACA members or in the measures taken
by the applicants to induce those two lines to join the TACA, or in both.

1199 The first case is unsound in principle: conferences cannot be legally required to admit any new applicant and be found to
have committed an abuse in doing so. In order to fulfil their function of providing stability pursuant to Regulation No 4056/86,
the conferences must hold a sufficient level of market share. On the facts, the admission of lines such as Hanjin and Hyundai
could not have appreciably affected competition since their combined market share barely exceeds 1%. Furthermore, the Commission
cannot infer from the fact that the admission of those two lines eliminated this source of competition (paragraph 566) that
the TACA intended to eliminate price competition. The applicant points out that independent lines entered the market subsequently.

1200 The second case logically implies that the admission of Hyundai and Hanjin to the TACA does not in itself constitute a prerequisite
for the finding of abuse. The Commission has not explained how the alleged inducements in the second case altered the structure
of the market. Indeed the Commission attaches no significance to the form which the inducement took. In any event, if the
inducements given by the liner conferences to encourage admissions amount to an abuse, the applicant wonders how the conferences
could increase their membership whilst also providing the benefits foreseen in Regulation No 4056/86 for their members and
for the trade in general.

1201 The applicant in Case T-213/98 states that its observations in relation to the first and second cases apply equally to the
third case.

1202 In the reply the applicant in Case T-213/98 adopts the arguments of the other applicants concerning the Commission's new case
as to the nature of the second abuse. It claims that the Commission provides no details of the policy or the willingness of
the TACA parties to eliminate competition and does not produce a single document in support of its case. The applicant asserts
that it had no such policy or willingness and points out that its admission to the TACA occurred shortly before that of Hanjin.
In any event, the Commission's new case must be rejected for the simple reason that it is not the abuse identified in Article
5 of the contested decision.

1203 The Commission stresses that the second abuse which it alleges the applicants committed is extremely serious in that it seeks
to eliminate potential competition by inducing potential competitors to enter the market as TACA parties. The events surrounding
the admission of Hanjin and Hyundai to the conference are only illustrations of the TACA parties' policy. The contested decision
gives other examples of inducements offered by the TACA to potential competitors, not confined to Hanjin and Hyundai, such
as dual-rate contracts and the fact that the former structured members of the TAA refrained from competing for NVOCC service
contracts (paragraph 565). Accordingly, even if the applicants succeeded in proving that the conference did not induce Hyundai
and Hanjin to join the TACA, that would not be sufficient to counter the second abuse identified by the contested decision.

1204 The Commission submits that the open conferences doctrine does not prevent conference members from seeking dispensation from
the FMC from the obligation to accept any new member where a carrier is not proposing to use its own vessels on the trade.
Furthermore, in the light of the Unctad Liner Code, the Commission interprets Regulation No 4056/86 as permitting (without
requiring) closed liner conferences. One of the grounds for refusing a new member permitted by the Code is that the new member
is not introducing its own vessels. To the extent that Article 7.1 of the TACA expressly borrows from the wording of the Unctad
Code in describing the conditions under which new members may be admitted, the Commission considers that it is pertinent to
point out that new TACA parties such as Hyundai and Hanjin have entered the trade without introducing their own tonnage.

1205 In any event, the Commission considers that the open conferences doctrine is irrelevant in the present case as the contested
decision does not find that the TACA parties committed an abuse in admitting new members. There may well be circumstances
in which a conference occupies so strong a position that any addition to its numbers may constitute an abuse. That is not
so in the present case, however. The contested decision finds only that the TACA parties embarked on a course of conduct specifically
designed to subvert potential competition by inducing lines to join TACA which would otherwise have acted independently. That
strategy echoed the two-tier tariff structure in issue in the TAA case.

1206 The ECTU submits that to prevent or delay the entry of independent competitors is one of the most serious abuses of a dominant
position as it is likely to undermine the structure of competition by preventing the emergence of effective competition.

1207 The ECTU submits that the Commission's approach is in line with the case-law of the Court of Justice. The Court has already
held in *Europemballage and Continental Can*, cited at paragraph 779, that conduct which leads to the strengthening of a dominant position is caught by Article 86 of
the Treaty because it is capable of having an adverse effect on the structure of actual competition. The Court considers that
the means and procedure used for that purpose by the dominant undertaking are unimportant. In the *CEWAL* judgments, cited above, the Court of Justice also upheld those principles in applying the competition rules to the maritime
transport sector (*CEWAL I*, cited at paragraph 568 above, paragraphs 106 and 107, and *CEWAL II*, cited at paragraph 595 above, paragraphs 112 to 114).

1208 The ECTU argues that it does not matter that the behaviour in question does not lead to a further increase, or leads to a
decline, in market share of the dominant undertaking (*CEWAL I*, cited at paragraph 568 above, paragraph 77). Indeed, in the absence of the TACA's abusive conduct, competition would have
been more effective and the TACA's dominance would have been reduced. Similarly, the ECTU considers that it is immaterial
that the shippers had requested some of the allegedly abusive practices (such as dual-rate contracts). Besides the point that
that allegation has no factual basis, it is established that it is no defence that anti-competitive pricing policies were
negotiated by dominant undertakings in response to customers' demands where there is evidence of intent to commit an abuse
(Commission Decision 91/300/EEC of 19 December 1990 relating to a proceeding under Article 86 of the EEC Treaty, IV/33.133-D,
Soda-ash - ICI, OJ 1991 L 152, p. 40).

1209 The exemption laid down in Article 3 of Regulation No 4056/86 is far-reaching in that it permits collective price fixing for
an indefinite period. In those circumstances it is for the Commission to examine carefully the conduct of the parties to such
legalised cartels in order to establish that the conditions for such an exemption are satisfied at all times and that the
parties do not abuse a position of dominance.

(2) The measures specifically addressed to Hanjin and Hyundai

1210 The applicants' first complaint is that, contrary to the findings at paragraphs 563 and 564 of the contested decision, the
facts concerning the entry by Hanjin and Hyundai to the transatlantic trade and the contacts between the TACA and other operators
concerning the possible entry of those operators into the trade are inconsistent with a finding of abuse in that they show
that the TACA members did not induce potential competitors to enter the transatlantic trade by joining the TACA.

1211 The applicants stress that in admitting Hanjin and Hyundai to the conference the TACA members acted strictly in accordance
with their obligations under US law. Under section 5(b) of the US Shipping Act the TACA is an open conference which admits
new members on the basis of the reasonable and equal terms set out in Article 7(1) of the TACA. In support of their assertions,
the applicants attach a statement of Mr Benner, a former General Counsel to the FMC, in which he states that he is unaware
of any support or precedent for the Commission's claim in the defence that the applicants could have applied to the FMC for
permission not to admit an ocean carrier as a member of the conference where the applicant carrier was not proposing to use
its own vessels on the trade covered by the conference.

1212 As regards, first, Hanjin's membership, the applicants dispute the findings in paragraphs 563 and 564 of the contested decision
to the effect that before it became a party to the TACA, Hanjin requested details of all relevant documents and statistics
by TACA (including tariff, service contracts, port call, lifting and performance) (letter from Hanjin to the TACA dated 19
August 1994) and that the statement of the TACA secretariat demonstrates a collective willingness to enable Hanjin to build
up a market share consistent with its slot capacity in the trade (TACA secretariat briefing of 15 February 1996).

1213 The first contact between Hanjin and the TACA was on 23 August 1994, the date of that line's application for membership. It
is apparent from that document that (i) Hanjin's application for membership was made following discussions with its partners
in the Tricon consortium (DSR-Senator and Cho Yang Shipping) and not with the TACA members; (ii) its application for admission
was made pursuant to the open conference doctrine of US law; (iii) Hanjin's request for information was motivated by the need
to prepare its commercial activity; and (iv) much of the information requested was publicly available. The applicants point
out that in its letter in reply dated 24 August 1994 the TACA secretariat stated that the information requested by Hanjin
would not be made available to it until after it had joined the conference on 31 August 1994. It is also clear from that document
that the TACA was aware of its obligations under the open conference doctrine in US law. Following that exchange of correspondence
Hanjin joined the TACA with effect from 31 August 1994. On 1 September 1994 the TACA sent it a copy of the eastbound tariff,
as well as further information over the following days.

1214 On the basis of that information the applicants submit that the Commission wrongly concluded at paragraph 563 of the contested
decision that the disclosure of information to Hanjin constituted a powerful inducement to Hanjin to enter the transatlantic
trade. It is apparent from Hanjin's letter of 23 August 1994 that it had already decided to join the conference. Indeed, it
is illogical for the Commission to find that a request by Hanjin for information can have served as an inducement to it to
join the TACA without considering when and in what context the conference responded to that request.

1215 Furthermore, the applicants submit that under the open conference doctrine, US law required the conference to supply Hanjin
with information concerning the tariff and service contracts. The applicants attach the statement of Mr Benner in that connection
in which he states that there is no lawful basis in US law for a new conference member to be precluded from participating
in existing conference service contracts. It was therefore entirely legitimate for a new member to seek the kind of information
Hanjin requested in its membership application.

1216 The Commission appears to concede that the conference did not provide Hanjin with the information requested by it before it
became a party to the conference when it states in the defence that the letter of 24 August 1994 indicated that the information
desired by Hanjin would not be provided unless and until Hanjin became a party to the TACA.

1217 The applicants point out that since the letter dated 30 January 1996 from the Chairman of TACA to Hanjin, reproduced in part
at paragraph 561 of the contested decision, was written 17 months after Hanjin had joined the conference in August 1994 it
could not logically have been concerned with the issue of Hanjin's entry to the transatlantic trade. The applicants claim
that the letter addresses the steps proposed by Hanjin, as a TACA member already present on the transatlantic trade, which
were perceived to constitute a threat to the conference's stabilising role. The letter in question is thus more concerned
with Hanjin's expansion as an operator on the relevant trade.

1218 It is in that context that the secretariat briefing paper of 15 February 1996 should be understood. The applicants explain
that it follows the letter of 30 January 1996 from the TACA Chairman. It was drafted by the British secretariat for a meeting
which took place on 29 February 1996 between the Chairman and Managing Director of the conference and Hanjin's executives.
The purpose of the paper was to respond to Hanjin's price policy by setting out the possible options for fixing its competing
prices within the conference structure without undermining the stabilising role of the conference. In any event the applicants
do not see how that statement of the TACA secretariat, drafted some 17 months after Hanjin joined the TACA, could have induced
Hanjin to take that step.

1219 Second, as regards the admission of Hyundai, the applicants dispute the finding at paragraph 564 of the contested decision
that Hyundai's ability to participate immediately in conference service contracts would have acted as a powerful inducement
to Hyundai to enter the transatlantic trade as a party to the TACA.

1220 The applicants maintain that the first contact from Hyundai concerning its entry to the transatlantic trade took place with
an independent line, concerning a proposed vessel space-chartering arrangement in a three-way partnership also involving another
independent line. However, those negotiations broke down. Shortly before that breakdown Hyundai also contacted MSC in May
1995 with a view to entering into a chartering arrangement. It was in the course of those negotiations that, in June 1995,
the question of Hyundai's membership of the conference arose (letter of 19 June 1995). The applicants claim that the first
contact between Hyundai and the conference was in a telephone call in late July 1995. On 30 August 1995 Hyundai enquired about
the possibility of participating in existing conference service contracts for the remainder of 1995. With effect from 11 September
1995 Hyundai became a member of the conference. It is apparent from the TACA internal communication of 29 September 1995 that
Hyundai chose to be included in all 1995 conference service contracts.

1221 The applicants submit that it is apparent from those documents that (i) Hyundai's first choice was to enter the transatlantic
trade through an arrangement with an independent line, not with the TACA; (ii) the discussions to that end fell through for
reasons unrelated to the conference; (iii) following that breakdown, Hyundai entered into discussions with MSC, a TACA member,
with a view to entering into a space-charter arrangement; (iv) once the terms of the arrangement with MSC were clear, Hyundai
contacted the conference in late July 1995 with a view to joining the TACA; (v) Hyundai's arrangement with MSC was signed
a month before it became a member of the conference; (vi) although the membership application was lodged in July 1995, it
was not until 30 August 1995 that Hyundai first raised the question of its participation in 1995 conference service contracts
and (vii) in response to that enquiry, Hyundai was informed that it was entitled to participate in those contracts.

1222 The applicants claim that there is therefore no evidence that the conference encouraged Hyundai to join the TACA or that the
latter induced it to do so by permitting it to participate in conference service contracts. On the contrary, it is apparent
from the foregoing that the first contacts concerning membership were initiated by Hyundai and that it was on Hyundai's instructions
that the TACA included it in conference service contracts.

1223 The applicants further submit that US law requires the TACA parties to admit Hyundai to existing conference service contracts.
Under the open conference doctrine, the TACA had no ground for opposing Hyundai's decision to participate in service contracts
on the same terms as other conference members from the date of its membership. The applicants refer here to the statement
of Mr Benner mentioned above.

1224 Thirdly, as regards the admission of other potential competitors, the applicants claim, first, that although United Arab Shipping
Company (UASC) had some contact with the TACA in June 1996 with a view to possible membership, it did not join the TACA and
did not enter the transatlantic trade, and, second, APL had no contact with the TACA about membership. In 1998, NOL resigned
from the conference and purchased APL. NOL now operates as a non-conference carrier under APL's name. Lastly, in February
1997 Cosco, Yangming and K Line entered the transatlantic trade not as TACA parties but as independents.

1225 Finally, the applicant in Case T-213/98 denies that it was party to, or had any knowledge of, any inducements to encourage
Hanjin or Hyundai to join the TACA. The applicant only became a TACA member in 1993, shortly before Hanjin in 1994. More specifically,
it rejects the allegation at paragraph 293 that it was allowed by certain arrangements with the TACA parties to enter and
obtain a foothold in the market without facing the competition which would normally be expected in such circumstances.

1226 It also alleges that the Commission's argument in the defence is flawed because it makes it practically impossible for any
conference to increase its membership without committing an abuse. It is standard commercial practice in the course of membership
negotiations for the partners to offer inducements. The applicant fails to understand why the Commission now seeks to prohibit
conferences from persuading non-member lines to become members even though Regulation No 4056/86 recognises the advantages
of liner conferences. It stresses that in the present case, the market share of the TACA is less than that of many other conferences
and it repeats that the admission of Hanjin and Hyundai resulted in only a slight increase in that market share. In reply
to the allegation that the TACA ceded market share to Hanjin (paragraphs 533 and 535 of the contested decision), the applicant
again points out that, even if such behaviour were proven, it could not be held to be an abuse since Regulation No 4056/86
permits freight-sharing arrangements; there is no reason why that type of inducement could not be offered to a candidate member
prior to its admission, as it can be after admission. The applicant claims that such an approach would ruin the negotiation
process.

1227 In reply to the ECTU's submissions, the applicants repeat that there is no evidence that the TACA attempted to persuade independent
lines to join the conference. They also note that the ECTU refers to a document from 1992 as evidence of the TACA's alleged
intention to eliminate independent competitors. They consider that the contested decision contains no finding to the effect
that the TACA maintained its dominant position.

1228 The Commission maintains as regards, first, Hanjin's membership that it is clear that that line was able to enter the relevant
market independently, since it was not a party to any conference agreements. Contrary to the applicants' submission, Hanjin's
letter of 19 August 1994 makes it clear not that it had decided to join the TACA but merely that it had decided to enter the
trade in question.

1229 The Commission considers that the letter from the TACA of 24 August 1994 confirms that Hanjin had not made up its mind at
the time of its request for information and that further discussions concerning [Hanjin's] membership can be held. The letter
also makes it clear that the information desired by Hanjin will not be provided unless and until Hanjin becomes a party to
the TACA. Some of the information concerned the contents of existing service contracts, the volumes carried and the performance
of the TACA parties, which is confidential and commercially sensitive information the disclosure of which would have enabled
Hanjin to identify a significant part of the customer base of the TACA parties. The Commission considers that that information
exceeds what was necessary for a shipping line wishing to become a conference member. It maintains that knowledge of the willingness
of the TACA parties to disclose such information to Hanjin on its entry to the TACA operated as an additional inducement to
Hanjin to join the conference.

1230 The Commission considers that the secretariat briefing paper of 15 February 1996 demonstrates that there was a collective
willingness on the part of the TACA members to cede market share to Hanjin. That collective willingness was an inducement
to Hanjin to join the TACA. The same attitude is apparent from the letter from the Chairman of the TACA on 30 January 1996.
Although that letter dates from 1996 it remains relevant in that it records the situation as it then was. The Commission points
out that, contrary to the applicants' explanation, the statement of the TACA Chairman offering help to every line concerned
trying to enter the market is hard to read as not applying to lines wishing to enter the trade.

1231 The Commission takes the view that even in the context of a block-exempted liner conference, it cannot be considered normal
commercial behaviour for members of the conference to work together to ensure that new entrants are able to obtain a level
of market share sufficient to sustain their operations at the expense of the members of the conference. In the context of
the TACA, such a guarantee can only have made sense if the view was that the benefits of elimination of potential competition
would outweigh the loss of market share.

1232 Second, as regards Hyundai's admission the Commission considers that the fact that Hyundai considered entering into partnership
with an independent line cannot disprove the suggestion that the willingness of the TACA parties to admit Hyundai to service
contracts would have acted as a powerful inducement to it in weighing up its options. As far as the contacts with MSC are
concerned, the applicants admitted in their response to the statement of objections that Hyundai's decision to charter space
from MSC was related to its decision to join the TACA. Furthermore, the Commission denies the suggestion that US law requires
the immediate admission of all new members of a conference to service contracts.

1233 Third, as regards the admission of other operators, the Commission considers that UASC and APL were not in any way comparable
to Hanjin and Hyundai as potential competitors. Furthermore, in the first place it would have been surprising if the UASC
and APL had joined the TACA after the adoption of the statement of objections in May 1996, and secondly the evidence the applicants
presented concerning contacts between UASC, APL and the conference would appear to be incomplete since it does not deal with
the discussions which took place within the TACA secretariat or between the TACA secretariat and the TACA parties.

(3) The general measures addressed to all potential competitors

(i) Dual-rate service contracts

1234 The applicants' second complaint is that the Commission's finding at paragraph 565 of the contested decision that the applicants'
dual-rate service contracts acted as an inducement to new entrants to join the conference is vitiated by errors of fact and
assessment.

1235 The applicants submit that in each case the dual-rate service contract has been at the shipper's request, based on its perception
of the different service capabilities of the carriers concerned. It is apparent from paragraph 450 of the contested decision
that the Commission itself accepted that the shippers may be offered different rates where varying qualities of service are
provided. Contrary to the Commission's assertion at paragraph 154 of the contested decision, the applicants consider that
the exchanges of correspondence between the shippers and carriers at the time the service contracts were negotiated are evidence
for their allegations. The Commission did not ask the applicants to furnish such evidence. The applicants cannot be criticised
for not having done so on their own initiative since they had no reason to suppose that the Commission had any concerns as
to the way in which the service contracts were negotiated. The applicants point out that that question was the subject of
a meeting with the Commission on 3 May 1995 (six months before the admission of Hyundai), when the Commission raised no objections
on that point.

1236 In any event, the applicants deny that dual-rate contracts induced potential competitors to join the conference. They point
out that a minority of conference service contracts contained dual-rate tariffs, that there was no prior agreement between
the applicants as to the identity of the parties to whom shippers would pay lower rates and that there was no prior agreement
as to the size of any rate differential.

1237 The applicants note that in the infringement period, only Hanjin and Hyundai joined the conference. There is no evidence in
the contested decision that dual-rate conference service contracts acted as an inducement to those two companies to join the
TACA.

1238 In Hanjin's case, the correspondence referred to above contains no indication of any such inducement. Furthermore, of all
the cargo carried by Hanjin under service contracts in 1995 and 1996 only 5.5% and 6.9% respectively was carried by it under
dual-rate service contracts.

1239 In the case of Hyundai, the evidence shows that when that line was informed of the existence of dual-rate tariff structures
in service contracts prior to joining the conference, it was told clearly that all carriers had the same status within the
conference, with the same rights and obligations (letter of 8 September 1995). Furthermore, it is clear from an e-mail of
2 October 1995 from the TACA secretariat at the time of Hyundai's joining that whenever a service contract contained a dual
rate, Hyundai would join at the higher rate. Lastly, the applicants point out that of all the cargo carried by Hyundai under
service contracts in 1995 and 1996 only 7% and 14.7% respectively was carried by it under dual-rate service contracts.

1240 The applicants also find it surprising that the ECTU makes no observation on the evidence adduced by the applicants to show
that dual-rate contracts were requested by shippers.

1241 The Commission maintains its findings at paragraphs 565 and 152 of the contested decision that in 1995 almost a third of the
TACA's service contracts contained a dual rate structure.

1242 The Commission observes that the applicants attempt to minimise the incidence of such dual-rate service contracts by including
in their calculations service contracts with NVOCCs. The traditional members of the conference were rarely party to service
contracts with NVOCCs in 1996 (and not at all in 1995). It was not therefore necessary for such contracts to contain dual
rates. In any event, the fact that a minority of conference service contracts contain a dual rate is irrelevant, according
to the Commission. Shippers might have one service contract with one (or more) member(s) at one rate and another contract
with one (or more) other member(s) at another rate. In such circumstances there was no need for dual-rate contracts.

1243 The Commission's review of service contracts for 1995 also shows that the differential between the dual rates was in most
cases either USD 50 or USD 100. Since the contracts were put to the vote of the conference, the Commission considers that
the applicants' contention that there was no prior agreement as to the size of the differential has no force.

1244 The Commission repeats that no evidence has been provided that the initiative for dual-rate contracts came from the shippers.
The continuation of dual rates only emerged after the Commission had asked for copies of the service contracts. In any event,
most of the requests the applicants cite appear to be for the continuation of dual-rate contracts from the previous year and
not for the insertion of such a provision in a new contract. It would be extraordinary if the prevalence of dual-rate contracts
could result solely from the shippers' independent perceptions of the different service qualities offered by the TACA parties.

1245 As for the applicants' allegation that neither Hyundai nor Hanjin was induced to join the TACA by such contracts, the Commission
observes that those contracts were just one of the inducements offered by the TACA. It claims that in 1995, 68.5% of Hanjin's
total carriage under service contracts was carried pursuant either to a dual-rate contract or to a contract with an NVOCC.
In the same year, the equivalent figure for Hyundai was 73%.

(ii) Service contracts with NVOCCs

1246 The applicants' third complaint is that the Commission's finding at paragraphs 150 and 565 of the contested decision that
the former structured TAA members did not compete for service contracts with NVOCCs is unsupported by the facts.

1247 The applicants make the preliminary observation that the Commission does not explain the basis for the view expressed in footnote
53 to the contested decision that Cho Yang, DSR-Senator, MSC, Hanjin, POL, Tecomar and TMM were former unstructured members
of the TAA.

1248 Moreover, there is no evidence in the contested decision of any agreement or concerted practice between the traditional conference
parties to reserve NVOCC service contract business to traditional independent lines. The Commission merely relies on a comparison
of the carriage effected by former independent TACA parties under NVOCC service contracts with that of the traditional TACA
parties. The applicants consider that the letter from POL to Hanjin dated 28 December 1995 does not prove that service contracts
with NVOCCs were reserved by the traditional conference members to new entrants and traditional independent lines since it
is a letter from a former independent to a new entrant.

1249 The applicants stress that the decision to carry NVOCC cargo is a unilateral one made independently by each applicant. They
point here to the explanation they gave to the Commission during the administrative procedure, reproduced at footnote 55 to
the contested decision.

1250 The applicants observe that whilst in 1994 and 1995 the traditional conference members (with the exception of Hapag-Lloyd)
concentrated on the carriage of the cargo of proprietary shippers, from 1996 almost all of the applicants carried NVOCC cargo.
Thus, in 1996 and 1997 the traditional conference members carried 22% and 29% respectively of all NVOCC cargo. In those circumstances
the applicants consider that the Commission has not adduced a firm, precise and consistent body of evidence of the existence
of a prior concertation and has not established that that concertation constitutes the only plausible explanation of the applicants'
NVOCC carriage.

1251 The Commission, supported by the ECTU, observes that the applicants conceded by implication in their application that the
traditional conference members did not compete for NVOCC service contracts in 1994 and 1995.

1252 The Commission adds that the applicants attempt to conflate the NVOCC service contracts in question in the contested decision
with NVOCC cargo carried under the tariff. The evidence shows that in 1996 the formerly independent members of the TACA carried
94.7% of all NVOCC goods carried pursuant to a TACA service contract. Since the value of the transatlantic NVOCC market in
1995 was in excess of USD 300 million it is not a plausible explanation that the traditional conference members decided unilaterally
that that business was not worth pursuing. The Commission considers that those factors show that contracts with NVOCCs were
reserved to the non-traditional members and to new entrants to the market.

1253 As regards the commercial reasons cited by the applicants, the Commission understands that the traditional TACA conference
members did not compete for NVOCC cargo because they regarded the NVOCCs as competitors. The applicants do not explain, however,
why those same members now convey a substantial part of all cargo carried under service contracts with NVOCCs. The applicants'
explanations are thus not credible. The Commission considers that the change in business strategy of the traditional TACA
conference members has come about because of the measures taken by the Commission to reduce the effect of the anti-competitive
practices of the TACA parties.

1254 Lastly, the Commission points to the terms of the letter from POL to Hanjin dated 28 December 1995 concerning service contracts
with NVOCCs, which is set out at paragraph 180 of the contested decision. Far from addressing a purely bilateral issue between
POL and Hanjin, the letter stresses that the whole issue of NVOCCs was very delicate and sensitive and required handling with
full harmony in the TACA, collectively and without individualism, so as to maintain the position so carefully built up by
the group throughout the years. That is far from suggesting an issue which was of no concern to the conference as a whole.

(b) Findings of the Court

1255 Before examining the present pleas concerning the evidence of the practices constituting the second abuse, it should be noted
that in Article 5 of the operative part of the contested decision the Commission found that the TACA abused its dominant position
by altering the competitive structure of the market so as to reinforce the dominant position of the [TACA].

1256 It is apparent from paragraph 562 of the contested decision that, in the Commission's view, the intention of the TACA parties
was ... to ensure that if a potential competitor wished to enter the market it would only do [so] after it had become a party
of the TACA. The Commission states at paragraph 563 of the contested decision that the TACA parties actively took measures
to assist those potential competitors successfully to enter the market as parties to the TACA. In paragraph 566 of the contested
decision, the Commission states that:

Each of these acts would have constituted inducements to potential competitors to enter the transatlantic trade, not as independent
carriers but as parties to the TACA. In so far as the existence of potential competition may have worked as a restraint on
the TACA's market power (theory of contestable markets), the elimination of this source of competition would have worked in
two ways: the elimination of potential competition and the anticipatory elimination of actual competition. The Commission
considers that such behaviour, which was not disclosed in the Application for Exemption, has damaged the competitive structure
of the market and amounted to an abuse of the TACA parties' collective dominant position in 1994, 1995 and 1996.

1257 It is apparent in this connection from paragraphs 563 to 565 of the contested decision that the Commission identifies specific
measures intended to induce Hanjin and Hyundai and general measures intended to induce all potential competitors. According
to paragraphs 563 and 564, the first consist in the disclosure to Hanjin of confidential information concerning the TACA,
the collective willingness of the TACA parties to allow Hanjin to build up a market share consistent with its slot capacity
on the trade and the immediate participation of Hyundai in conference service contracts. As for the general measures, it is
apparent from paragraph 565 that they consist in the conclusion of a large number of dual-rate service contracts and in the
fact that the former structured TAA members did not compete for certain service contracts with NVOCCs.

1258 By the present pleas, the applicants challenge both the specific measures to induce Hanjin and Hyundai and the general measures
to induce all potential competitors.

(1) The specific measures to induce Hanjin and Hyundai

1259 The applicants consider essentially that the Commission misread the facts surrounding the accession of Hanjin and Hyundai
to the TACA. They submit first that US law required the TACA parties to admit Hanjin and Hyundai. Next, they submit that they
did not induce Hanjin and Hyundai to enter the TACA but that they freely chose to apply for membership.

(i) The obligations under US law

1260 The applicants stress that in admitting Hanjin and Hyundai to the conference the TACA acted strictly in accordance with its
obligations under US law. They submit that under section 5(b) of the US Shipping Act the TACA is an open conference which
admits new members on the basis of the reasonable and equal terms set out in Article 7(1) of the TACA.

1261 The present plea is based on the premiss that the contested decision alleges that the TACA parties abused their collective
dominant position by admitting new members to the conference.

1262 It is true that, according to the case-law, abuse of a dominant position within the meaning of Article 86 of the Treaty may
occur if an undertaking in a dominant position strengthens that position in such a way that the degree of dominance reached
substantially fetters competition, so that only undertakings remain in the market whose behaviour depends on the dominant
one (*Europemballage and Continental Can*, cited at paragraph 779 above, paragraph 26). It is thus possible in certain circumstances, as the Commission rightly points
out in its pleadings, for the fact that a liner conference in a dominant position accepts new members to constitute an abuse
in itself.

1263 However, that is not the abuse recorded in the contested decision in the present case. As already stated above, it is apparent
from paragraphs 562 to 566 of the contested decision, as the Commission confirmed in its written pleadings and at the hearing
in reply to a question from the Court in that regard, that the second abuse recorded in that decision consisted not in the
fact that certain potential competitors joined the TACA between 1994 and 1996, but in the fact that the TACA parties took
certain measures to induce those potential competitors to join the TACA, the contested decision finding solely that the TACA
embarked on a course of conduct specifically designed to subvert potential competition by inducing lines to join the TACA
which would otherwise have entered the market as independent lines in competition with the conference.

1264 Furthermore, in paragraph 576 of the contested decision the Commission expressly states that whilst the contested decision
addresses certain steps taken by the TACA parties to induce potential competitors to enter the market as parties to the TACA,
it does not address and therefore does not prejudice the ability of liner conferences whose activities fall within the scope
of the group exemption contained in Article 3 of Regulation (EEC) No 4056/86 to admit new members on the same terms as existing
members or the ability of the members of such liner conferences to exchange information necessary for the purposes of the
activities falling within the scope of that group exemption.

1265 It follows that the contested decision does not criticise the TACA parties for accepting new conference members, but solely
for adopting certain measures with a view to inducing such new membership.

1266 Whilst the applicants submit by the present plea that US law requires them to accept any new member of the conference, they
do not submit that it requires them to adopt measures inducing parties to join.

1267 Consequently, the arguments advanced under the present plea relating to US law are irrelevant and must therefore be rejected.

(ii) Evidence of the measures addressed to Hanjin and Hyundai

1268 The applicants allege that the TACA parties did not induce Hanjin and Hyundai to enter the conference. They consider that
the abuse recorded on that point has not been proved to the requisite legal standard.

1269 It is common ground that Hanjin and Hyundai joined the TACA with effect from 31 August 1994 and 11 September 1995 respectively.

1270 It is not in dispute that before joining the TACA Hanjin and Hyundai did not operate on the transatlantic trade and that their
maritime transport activities were carried out on other trades, not as members of liner conferences, but as independent lines.
At paragraph 563 of the contested decision the Commission thus stated, without being contradicted by the applicants, that
in their reply to the statement of objections in the TAA case the applicants portrayed Hanjin and Hyundai as independent shipowners
which exerted significant competitive pressure on the TAA parties because they threatened to enter that trade.

1271 It follows that the Commission was entitled to consider in the contested decision that Hanjin and Hyundai represented a source
of potential competition for the TACA parties, to the extent that those lines, as independent lines on other trades, were
likely to enter the transatlantic trade without joining the TACA. Since Hanjin and Hyundai did join the TACA, however, it
must be found that the source of potential competition which they represented was thereby eliminated.

1272 However, as stated above at paragraph 1265, the second abuse recorded in that decision consisted not in the fact that Hanjin
and Hyundai joined the TACA, but in the fact that the TACA parties took measures to induce them to become members of the conference
rather than entering transatlantic trade as independent lines.

1273 Consequently, in order to determine whether the Commission was right to find that the elimination of potential competition
resulting from the admission of Hanjin and Hyundai to the TACA was the result of abusive conduct on the part of the TACA parties,
it is necessary to consider whether in the contested decision the Commission established to the requisite legal standard that
those TACA parties adopted measures to induce Hanjin and Hyundai to join the conference.

Hanjin's accession to the TACA

1274 In the contested decision the Commission considered that Hanjin was induced by the TACA parties to join the conference, first,
according to paragraph 563, by the disclosure of confidential information contained in the documents and statistics produced
by the TACA and, second, according to paragraph 564, by the collective willingness of the TACA parties to enable it to build
up a market share consistent with its slot capacity on the trade. It is apparent from those paragraphs that the Commission
considers that those measures of inducement are demonstrated by Hanjin's letter to the TACA of 19 August 1994 and by the TACA
briefing paper of 15 February 1996 respectively.

1275 It has already been held, at the end of the discussion of the pleas alleging infringement of the rights of the defence at
paragraph 187 above, that Hanjin's letter of 19 August 1994 and the TACA briefing paper of 15 February 1996 were used by the
Commission in contravention of the applicants' rights of defence and that consequently those inculpatory documents must be
excluded as evidence.

1276 In so far as the allegation that the TACA induced Hanjin to join the conference by the abovementioned measures is based entirely
on those two documents, which the Commission confirmed to be the case at the hearing in reply to a question from the Court
in that regard, that allegation in the contested decision must therefore be regarded as unsubstantiated by any evidence.

1277 Furthermore, in so far as the Commission seeks to use the letter of 30 January 1996 from the TACA to prove those measures
of inducement addressed to Hanjin, to which the contested decision refers in general terms at paragraph 561, it must also
be found that for the reasons set out in relation to the pleas alleging infringement of the rights of the defence, since that
letter was used in breach of the rights of the defence it must likewise be excluded as evidence.

1278 It follows that in so far as the second abuse consists in the fact that the TACA parties adopted specific measures to induce
Hanjin to join the conference it has not been proved to the requisite legal standard.

1279 In any event, it must be held that, contrary to the Commission's submission, neither Hanjin's letter of 19 August 1994 nor
the TACA briefing paper of 15 February 1996 shows that Hanjin's accession to the TACA is not the result of an autonomous decision
but was induced by the abovementioned measures adopted by the TACA parties.

1280 First, as regards the letter of 19 August 1994, the Commission found at paragraph 563 of the contested decision that in that
letter Hanjin requested details of all relevant documents and statistics by TACA (including tariff, service contracts, port
call, lifting and performance). In paragraph 563 of the contested decision the Commission considers that the disclosure of
[such] information, much of which constitutes confidential business secrets of significant value (customer identities, prices,
transport patterns) and is not necessary for enabling a shipping line to become a member of a liner shipping conference engaged
in activities falling within the scope of the group exemption, would have acted as a powerful inducement to Hanjin to enter
the transatlantic trade as a party to the TACA and not as an independent carrier.

1281 Before considering the merits of those assessments in the contested decision, it must first be observed that Hanjin's letter
of 19 August 1994 contains that company's application to join the TACA. In that letter Hanjin informs the TACA that a slot-chartering
agreement with DSR-Senator and Cho Yang, its partners in the Tricon consortium, was entered into for that purpose, so that
Hanjin will be able to use the capacity already available on the trade rather than using its own vessels. Hanjin therefore
proposes to the TACA to continue with its required notification of the Commission and the FMC, whilst raising certain questions
pertaining to its admission.

1282 The Commission cannot validly maintain that that letter merely states Hanjin's intention not to join the TACA, but to enter
the transatlantic trade. Whilst it is true that the slot-chartering agreement entered into with DSR-Senator and Cho Yang did
not perhaps prejudice Hanjin's capacity to operate on the transatlantic trade as an independent line, the terms of the correspondence
produced by the applicants concerning Hanjin's admission to the TACA do not justify the conclusion that that option was the
one chosen by Hanjin when the letter of 19 August 1994 was sent. Thus, Hanjin expressly states in the letter that it is applying
for membership of the [TACA] as filed with the FMC and the European Commission. Furthermore, Hanjin concludes the letter by
stating that it hopes to receive a positive response to the questions raised in its membership application. It should also
be noted that Hanjin's letter was interpreted in that way by the TACA. By a fax of 24 August 1994 the TACA acknowledged receipt
of Hanjin's application for membership, whilst by letter of the same date the TACA informed Hanjin of the admission procedure.
In addition, by fax of 24 August 1994 the TACA Chairman congratulated Hanjin on its decision to join the TACA and asked it
to contact its legal adviser in order for its admission to be notified to the appropriate authorities. Furthermore, since
the letter of 19 August 1994 was addressed to the TACA, it is difficult to believe that its purpose could have been to inform
the latter that Hanjin wished to enter the market as an independent line.

1283 It is therefore established that the letter of 19 August 1994 constitutes Hanjin's application for membership of the TACA.

1284 The Commission adduces no evidence to show that the TACA made any approach to Hanjin before 19 August 1994. Thus, the Court's
file does not contain any correspondence prior to that date regarding Hanjin's admission and the content of the subsequent
correspondence contains no evidence that Hanjin's application for membership was induced by the TACA.

1285 In those circumstances, it does not appear that Hanjin's decision to become a member of the TACA was induced by the TACA parties.

1286 It is true, as the Commission points out at paragraph 563 of the contested decision, that by the letter of 19 August 1994
Hanjin requested details of all relevant documents and statistics by TACA relating to the tariff, service contracts, port
call, lifting and performance.

1287 However, it must be remembered that the Commission stated at paragraph 576 that the contested decision did not prejudice the
ability of liner conferences whose activities fell within the scope of the group exemption contained in Article 3 of Regulation
No 4056/86 to admit new members on the same terms as existing members or the ability of the members of such liner conferences
to exchange information necessary for the purposes of the activities falling within the scope of that exemption. Indeed, as
the Commission confirmed at the hearing, the contested decision does not challenge the new admissions to the TACA *per se* but the fact that the TACA parties adopted certain measures to induce potential competitors to become conference members.
If the disclosure of the information necessary for the exercise of the activities falling within Article 3 of Regulation No
4056/86 was considered to constitute an inducement to join the TACA, the assumption would be that it is the admission to the
TACA itself which constitutes the abuse. In such a case the measure of inducement imputed to the TACA would reside in the
very fact that the new TACA members qualified for the block exemption laid down by Regulation No 4056/86, which authorises
restrictions on competition the exceptional nature of which has already been emphasised by the Court of First Instance (*TAA*, paragraph 146).

1288 In the present case, it is not in dispute that Hanjin obtained the information sought in the letter of 19 August 1994 after
it joined the conference. It is apparent from the letter from the TACA to Hanjin of 24 August 1994, the terms of which are
not challenged by the Commission, that the information in question was made available to Hanjin during the meeting which took
place after 1 September 1994.

1289 Under Article 3 of Regulation No 4056/86 the members of a liner conference qualify for block exemption in respect of agreements
fixing uniform or common freight rates and in respect of agreements on the coordination of shipping timetables, sailing dates
or dates of calls, determination of the frequency of sailings or calls, coordination or allocation of sailings or calls, regulation
of the carrying capacity offered by each member and allocation of cargo or revenue among members.

1290 The Commission does not explain why disclosure of the information sought by Hanjin in the present case concerning the tariff,
service contracts, port call, lifting and performance was not necessary for the exercise of those activities falling within
Article 3 of Regulation No 4056/86 and therefore was not required to enable Hanjin to join on the same conditions as the existing
members. The disclosure of information relating to the tariff seems inherent in the conclusion of any agreement fixing uniform
or common freight rates. It is not in dispute that, as the contested decision states at paragraph 99, the tariff is published.
Similarly, the conclusion of agreements coordinating timetables and the frequency of port calls or their allocation requires
a priori the communication by conference members of certain information on port calls. As for the disclosure of information
on service contracts, lifting and performance, it may appear prima facie necessary for the conclusion of agreements regulating
capacity or the allocation of cargo or revenue.

1291 Again in respect of service contracts, as the Commission confirmed at the hearing, the contested decision does not prohibit
the TACA parties from entering into conference service contracts. In order to take part in such contracts, all new TACA members
must be party to information concerning them.

1292 Accordingly, the Commission has not established to the requisite legal standard that the disclosure by the TACA parties of
confidential information to Hanjin was a measure intended to induce that line to join the conference, by allowing it access
to information which is not necessary for the exercise of activities covered by the block exemption.

1293 Consequently, the applicants' complaints on that point must be upheld.

1294 Second, as regards the TACA briefing paper of 15 February 1996, the Commission states at paragraph 564 of the contested decision
that that paper demonstrated a collective willingness to enable Hanjin to build up a market share consistent with its slot
capacity in the trade .... According to the Commission, such a willingness on the part of the other TACA parties would have
substantially reduced the commercial risks of entering a new market and thereby acted as an inducement to Hanjin to enter
the transatlantic trade as a party to the TACA.

1295 However, the TACA briefing paper of 15 February 1996, which postdates by more than 17 months Hanjin's admission to the TACA,
does not relate to that admission, but concerns the solutions to be applied to a dispute between the TACA and Hanjin as a
conference member.

1296 It is apparent from the Court's file that that briefing paper follows the letter of 30 January 1996 from the TACA, in which
the conference Chairman, Mr Rakkenes, expressed concern to Hanjin about recent price initiatives taken by that TACA party
on the transatlantic trade. In the letter the TACA Chairman informed Hanjin that a price war would be likely to destroy the
foundation upon which the TACA was built. For that reason he proposed to call a meeting shortly of the Hanjin directors, before
concluding, in a passage of the letter cited at paragraphs 292 and 561 of the contested decision,

As I have said to every line concerned trying to enter the market, please come and talk to me and we will do everything we
can to help you succeed with that goal.

1297 It is apparent from the Court's file that a meeting thus took place between Hanjin and the TACA on 13 February 1996.

1298 The TACA briefing paper of 15 February 1996 stated that its purpose was also to prepare for another meeting with Hanjin on
29 February 1996. In that paper the British secretariat of the TACA states that Hanjin, whose market share on the transatlantic
trade was restricted in 1995, engaged in a significant amount of independent action which had to be restrained in order to
maintain price stability on the relevant trade. In order to achieve that objective, the British secretariat of the TACA puts
forward inter alia the following recommendations to the conference:

1 Encourage Hanjin, giving the assurance that other Carriers are similarly being encouraged, to bring commercial problems
to the table for joint discussion and collective resolution. In this way, [independent action] becomes a tool of last resort
rather than one of first action.

2 Encourage and persuade all Carriers to collectively find a way to enable Hanjin to build up a market share consistent with
its slot capacity in the trade, which does not have a negative knock-on effect.

3 If [independent actions] continue to be required, Hanjin should be encouraged to find ways and means [of] structuring them
on a narrower basis, thus minimising the fall-out effect, and to separately indicate Inlands and Accessorial Charges.

4 Indicate to Hanjin that if it persists with [independent actions], it will only add pressure on other Carriers who are competing
at the same service level, and are concentrating on the same market segments, to do the same by stepping up their activity.
This will lead to a complete collapse of TACA's Tariff.

1299 It is clear from the foregoing that the collective willingness of the TACA parties to allow Hanjin to build up a market share
consistent with its slot capacity on the trade had no bearing at all on its admission to the conference. Questioned on this
point at the hearing, the Commission admitted moreover that the TACA briefing paper of 15 February 1996 was unrelated to Hanjin's
admission.

1300 Furthermore, the TACA briefing paper of 15 February 1996 cannot be interpreted as demonstrating a permanent collective willingness
on the part of the TACA parties to allocate a certain market share to Hanjin after its admission to the conference. The fact
that the willingness to enable Hanjin to build up a market share was asserted more than 17 months after it joined in order
to resolve an internal conflict within the TACA suffices to show that no such measure existed prior to that dispute and, in
any event, that it did not exist when Hanjin joined the conference. The Commission cannot therefore submit, as it did at the
hearing, that the TACA briefing paper of 15 February 1996 illustrates the general context in which Hanjin's letter of 19 August
1994 applying for membership of the conference was sent.

1301 The same considerations apply in respect of the TACA letter of 30 January 1996. As stated above, that letter was sent in the
same context as that in which the briefing paper of 15 February 1996 was drafted. Accordingly, even if the general terms of
an isolated passage of that letter might perhaps lead one to suppose that the TACA Chairman was inclined to help third parties
to join the conference, it cannot reasonably be inferred therefrom, in the absence of any other specific evidence to that
effect, that the TACA parties systematically induced potential competitors, including Hanjin, to join the TACA by measures
allowing them to become conference members on terms other than those proposed to existing members. The mere fact that the
TACA Chairman declared a desire to help third parties to become conference members in no way demonstrates that the TACA parties
in fact collectively adopted inducements within the meaning of the contested decision to make potential competitors join the
TACA.

1302 Finally, and in any event, in the context of the system of competition instituted by Regulation No 4056/86, market sharing
agreements entered into between the members of a liner conference are not necessarily prohibited. Article 3 of Regulation
No 4056/86 expressly provides that the block exemption also applies to agreements which have as their objective the regulation
of carrying capacity offered by each member and the allocation of cargo or revenue among members.

1303 The contested decision fails to explain why the TACA'S collective willingness to allow Hanjin to build up a particular market
share on the relevant trade does not constitute such an agreement to enable that line to join the conference on the same basis
as existing members. In paragraph 576 of the contested decision the Commission itself stated that the contested decision did
not prejudice that ability since it did not prohibit, as the Commission confirmed at the hearing, the admission of new members
to the TACA *per se*. As stated above, if participation in agreements falling within the block exemption was considered to constitute the inducement
to join the TACA, the assumption would be that it is the admission to the TACA itself which constituted the abuse since in
that case the measure of inducement imputed to the TACA would reside in the very fact that Hanjin qualifies for the block
exemption laid down by Regulation No 4056/86, which authorises restrictions on competition the exceptional nature of which
has already been emphasised by the Court.

1304 In the light of the foregoing it must be held that the Commission has not established to the requisite legal standard that
the collective willingness of the TACA parties to allow Hanjin to build up a particular market share on the trade in question
constituted a measure to induce that line to become a member of the conference.

1305 Consequently, the applicants' complaints on that point must be upheld.

Hyundai's accession to the TACA

1306 In paragraph 564 of the contested decision the Commission found that Hyundai was induced by the TACA parties to become a member
of the conference by the fact that it was included as a party in the [conference] service contracts in which it wished to
be included with effect from its first sailing on the trade. It is apparent from that paragraph that, according to the Commission,
that measure of inducement is demonstrated by the PWSC 95/8 minutes.

1307 It has already been held, at the end of the discussion of the pleas alleging infringement of the rights of the defence at
paragraph 187 above, that those minutes were used by the Commission in breach of the applicants' rights of defence and that
consequently that inculpatory document must be excluded as evidence.

1308 In so far as the allegation that the TACA induced Hyundai to join the conference by the immediate availability of conference
service contracts is based entirely on that document alone, which the Commission confirmed to be the case at the hearing in
reply to a question from the Court in that regard, that allegation in the contested decision must be regarded as unsubstantiated
by any evidence.

1309 Furthermore, in so far as the Commission seeks to use the letter of 30 January 1996 from the TACA, to which the contested
decision refers in general terms at paragraph 561, to prove that measure of inducement it must also be found that for the
reasons set out in relation to the pleas alleging infringement of the rights of the defence, since that letter was used in
breach of the rights of the defence it must likewise be excluded as evidence.

1310 It follows that in so far as the second abuse consists in the fact that the TACA parties adopted specific measures to induce
Hyundai to join the conference it has not been proved to the requisite legal standard.

1311 In any event, it must be held that, contrary to the Commission's submission, the PWSC 95/8 minutes do not demonstrate that
Hyundai's admission to the TACA was not the result of an autonomous decision but was induced by the abovementioned measure
adopted by the TACA parties.

1312 The minutes as set out at paragraph 230 of the contested decision state that Hyundai had sought inclusion in 1995 service
contracts, in which three or more members currently participate eastbound, three or more members currently participate westbound,
and three or more members currently participate in joint eastbound/westbound service contracts, at the rate levels applicable
to the majority of members in such contracts. In this regard, [it is] confirmed that steps were in hand to so notify service
contract shipper parties of such inclusion effective coincidentally with Hyundai's first transatlantic sailings. The Commission
states in paragraph 564 of the contested decision that in the light of the fact that the widespread existence of service contracts
can act as a barrier to entry, the immediate access to such [service] contracts would have acted as a powerful inducement
to Hyundai to enter the transatlantic trade as a party to the TACA.

1313 It is apparent from the Court's file, in particular from the correspondence concerning Hyundai's admission to the TACA, that
first of all, during February 1995, Hyundai planned to enter the transatlantic trade not by joining the TACA, but by entering
into a slot-chartering agreement with an independent line competing with the TACA. Those negotiations having failed in the
course of May 1995, Hyundai then entered into negotiations with MSC, a member of the TACA, with a view to entering into a
slot-chartering agreement.

1314 It is therefore necessary to ascertain whether, as the Commission submits, the failure of the negotiations with that independent
line was due to the fact that the TACA offered Hyundai immediate availability of conference service contracts should it join
the conference.

1315 It is not in dispute that Hyundai asked the TACA about the possibility of immediate access to conference service contracts
for the first time on 30 August 1995. It is apparent from the minutes of the TACA meeting of 31 August 1995 (PWSC 95/7) that
that proposal, which was said to be discussed at Hyundai's request, was accepted on that date by the TACA. Hyundai took note
of that acceptance by fax of 5 September 1995 addressed to the TACA.

1316 It is therefore established that, following discussions with the TACA prior to joining, Hyundai was informed by the TACA that
if it joined it would be included in the conference service contracts for 1995.

1317 However, that fact alone is not sufficient to show that it was that which induced Hyundai to join the TACA.

1318 It is not in dispute that Hyundai had signed a slot-chartering agreement with MSC with effect from 17 August 1995 following
negotiations with that TACA party in May 1995. It is apparent from the file that on the same date a final draft of the notification
of that agreement to the FMC had already been drawn up. In their response to the request for information of 8 March 1996,
the TACA parties explained, without being challenged by the Commission, that Hyundai's decision to enter into a slot-chartering
agreement with MSC was connected to its decision to join the TACA. Contrary to what the Commission argues, far from contradicting
the applicants' argument such a fact, on the contrary, confirms it, since it shows that Hyundai had decided to join the conference
as early as May 1995.

1319 Furthermore, the applicants stated, without being contradicted by the Commission on the point, that they contacted the TACA
with a view to joining in July 1995 when the terms of the slot-chartering agreement with MSC had been clearly defined.

1320 Finally, it is apparent from the subsequent correspondence with MSC that as early as 22 August 1995 Hyundai stated to that
conference member that its application for membership ought to be sent to the TACA around 30 August 1995, MSC for its part
undertaking to notify that decision to the TACA, so that the conference Chairman could instruct its legal adviser in Europe
to effect the requisite notifications to the Commission.

1321 It is apparent from this evidence that Hyundai decided to join the TACA as the result of an autonomous decision well before
the question of the immediate availability of conference contracts was raised. When Hyundai asked to have immediate access
to conference service contracts, it had already signed the slot-chartering agreement with MSC enabling it to enter the trade
in question without adding new capacity and taken all the steps necessary to join the TACA.

1322 In those circumstances it is not apparent that Hyundai's accession to the TACA was determined by immediate access to conference
service contracts.

1323 Furthermore, the Commission itself stated at paragraph 576 that the contested decision did not prejudice the ability of liner
conferences whose activities fell within the scope of the group exemption contained in Article 3 of Regulation No 4056/86
to admit new members on the same terms as existing members. Therefore, as the Commission confirmed at the hearing, since the
contested decision does not prohibit the TACA parties from entering into conference service contracts, the Commission fails
to explain why the admission of new members on the same terms as existing members did not enable Hyundai to require that it
become immediately party to all conference service contracts, and in particular to enjoy the same terms as those offered to
MSC, with which Hyundai had entered into a slot-chartering agreement to enter the trade in question. Moreover, according to
the letter of 19 August 1994 Hanjin made a request similar to that of Hyundai, which the Commission did not consider to be
a measure intended to induce Hanjin to join the TACA.

1324 When questioned at the hearing, the Commission submitted that Hyundai's admission to the TACA should also be interpreted in
the light of the TACA letter of 30 January 1996. However, it has already been found above at paragraph 1301 that, in the absence
of any other specific evidence to that effect, the Commission could not reasonably infer from the general terms of an isolated
passage from that letter, which was sent by the TACA Chairman in the course of a dispute with Hanjin which occurred 17 months
after its admission to the TACA, that the TACA parties systematically induced potential competitors including Hyundai to join
the TACA by measures allowing them to become conference members on terms other than those proposed to existing members.

1325 In the light of the foregoing it must be held therefore that the Commission has not established to the requisite legal standard
that the TACA parties induced Hyundai to join the conference by granting it immediate access to conference service contracts
from the time of its admission.

1326 It follows from all the foregoing that in so far as the second abuse consists in the fact that the TACA parties adopted specific
measures to induce Hanjin and Hyundai to join the conference it has not been proved to the requisite legal standard.

(2) The general measures to induce potential competitors

1327 By the present pleas and arguments, the applicants challenge the findings in the contested decision concerning the general
measures of inducement adopted by the TACA parties, namely the conclusion of a large number of dual-rate service contracts
and the fact that the former structured TAA members did not compete for certain service contracts with NVOCCs.

(i) Dual-rate service contracts

1328 Essentially, the applicants deny that Hanjin and Hyundai were induced to join the TACA by dual-rate service contracts. In
support of their argument, they submit first that that measure was requested by the shippers. Next, they point out that the
decision contains no proof that that measure induced Hanjin and Hyundai to join the TACA. Finally, they stress that Hanjin
and Hyundai were parties to a minority of service contracts of that type.

1329 At paragraph 565 of the contested decision, the Commission stated that as [it] found in the TAA case ..., the purpose and
effect of offering a two-tier rate structure was to limit competition from independent shipowners by bringing them inside
the conference. Following the prohibition of the TAA in 1994, the TACA parties abandoned their two-tier tariff but nevertheless
have continued to offer service contracts with higher prices for the traditional conference members and lower prices for the
traditional independents and for the new entrants. The Commission considers that the effect of this would have been to induce
potential competitors which wished to enter the market to do so as parties to the TACA.

1330 The Commission bases its allegation on the fact referred to in paragraph 152 of the contested decision that:

... it is ... apparent from a review of TACA's 1995 service contracts that a significant number (approximately one third)
contain a dual-rate structure whereby the former unstructured members of the TAA charge lower rates within the same service
contract than the former structured members of the TAA. The reduction varies between USD 50 and USD 100 per TEU although in
at least one case it is as much as USD 150. These dual-rate structures are also found in TACA's 1996 and 1997 service contracts.

1331 Whilst the applicants deny that the dual rate in conference service contracts was adopted on their own initiative or that
it represents a significant proportion of the service contracts entered into by Hanjin and Hyundai, they do not deny that
many conference service contracts entered into by the TACA parties during the period in question in the contested decision
contained a dual rate.

1332 In the *TAA* judgment (paragraph 163), the Court has already held that the purpose of introducing differentiated rates in the TAA tariff
was to bring inside the agreement independent carriers which, if they were not thus allowed to quote prices lower than those
of the old conference members, would continue as outsiders competing against the conference, especially in terms of price.
The Court pointed out that that objective was apparent to the requisite legal standard from the minutes of a meeting between
all the future members of the TAA in Geneva (Switzerland) on 13 January 1992.

1333 In those circumstances, it is therefore necessary to consider whether, as the Commission contends, the dual rate in conference
service contracts also induced potential competitors to join the TACA in the course of the period covered by the contested
decision, by allowing them to offer shippers lower rates than those offered by former structured members of the conference.

1334 In order to constitute a measure inducing potential competitors to join the conference, the effect of dual-rate service contracts
must necessarily have been to lead potential competitors to become TACA members. The fact that a measure described as an inducement
to join the conference did not lead to any new membership would show that that measure was not in fact an inducement to join
the conference.

1335 It is apparent that the alteration of the competitive structure of the market constituting the second abuse recorded in Article
5 of the operative part of the contested decision results from the fact that the measures of inducement adopted by the TACA
parties, including dual-rate service contracts, had the effect of leading potential competitors to become conference members,
eliminating at the same time the source of potential competition which they represented. The Commission does not identify
in the contested decision any other effect flowing from the measures in question.

1336 However, at the hearing the Commission submitted that dual-rate service contracts had other effects upon the competitive structure.
It submitted first of all that that measure contributed, on the same basis as the other measures in question, to establishing
a favourable permanent environment in the conference in order not only to induce third parties to join the conference rather
than to enter the market as independent lines, but also to induce former independent carriers to remain members of the conference.
Furthermore, it stressed that, by the measures of inducement in question, the TACA parties neutralised potential competition.

1337 As regards the creation of a permanent favourable environment, it should be noted again, however, that unless dual-rate service
contracts induce potential competitors to become members of the TACA they cannot be regarded as having induced those competitors
to join the conference. Consequently, if no potential competitor joined the conference, it must follow that that measure did
not establish a favourable environment for them. Furthermore, in so far as the Commission alleges that the measures in question
created a favourable environment to ensure that the TACA parties remain conference members, it suffices to observe that that
is clearly not the abuse recorded in the contested decision, which refers merely, in paragraphs 562 to 566, to measures intended
to induce potential competitors to join the TACA and not measures intended to induce the TACA parties to remain members of
the conference.

1338 As regards the neutralisation of potential competition, the fact that a liner conference adopts measures in order to restrict
the ability of potential competitors to enter the market as independent carriers might constitute an abusive alteration of
the competitive structure of the market. It is true that in that case the mere fact that potential competitors enter the market
in any event does not necessarily mean that the conference's conduct is not abusive. The fact that potential competitors entered
the market would not mean that those measures had no effect, inasmuch as without such measures the entry to the market might
have occurred under different conditions. In such a case, the fact that the result sought is not achieved is not enough to
negate the existence of an abuse of a dominant position (see to that effect *CEWAL I*, cited at paragraph 568 above, paragraph 149).

1339 However, the neutralisation of potential competition found in the contested decision results not from measures intended to
restrict the ability of potential competitors to enter the market but, conversely, from measures described as inducements
to enter the market as TACA parties. In such a case the fact that the result sought is not achieved suffices to show that
the measure in question does not constitute an inducement to join the conference and, therefore, that there is no abuse of
a dominant position as recorded in the contested decision.

1340 It is therefore necessary to consider whether the dual-rate conference service contracts in fact induced potential competitors
to join the TACA.

1341 Notwithstanding the fact that the TACA parties entered into a large number of dual-rate service contracts, only Hanjin and
Hyundai joined the TACA during the period covered by the contested decision.

1342 It follows that most of the conference's potential competitors were not induced to join the TACA by the measure in question.
However, one potential competitor, UASC, decided not to become a member of the conference, even though it took steps to do
so in 1996. Similarly, it has been stated above that lines such as Cosco, Yangming, K Line, Mitsui and APL, which however
subsequently entered the trade in question, did not join the TACA during the period covered by the contested decision.

1343 Furthermore, as regards Hanjin and Hyundai the Commission does not mention in the contested decision any evidence to show
that those lines joined the TACA because of the inducement represented by dual-rate service contracts.

1344 On the contrary, it has already been stated above that the evidence in the Court's file does not support the conclusion that
the admission of Hanjin and Hyundai to the TACA did not arise from an autonomous decision on the part of those lines. In Hanjin's
case, it should be stressed that the correspondence between that line and the TACA concerning its admission does not at any
point address the question of dual-rate service contracts. As for Hyundai, whilst that question was in fact addressed in a
TACA briefing paper of 2 October 1995, it is apparent from that paper that Hyundai asked, in the case of a dual-rate service
contract, to be able to apply the higher rate, which directly contradicts the Commission's argument that the former independent
carriers were induced to join the TACA by the chance to offer the lower rates laid down by the service contracts. At the hearing
the Commission admitted that it had no evidence to challenge the 2 October 1995 briefing paper.

1345 Moreover, it is not in dispute between the parties that Hanjin and Hyundai were party to a small number of dual-rate service
contracts. Whilst the Commission points out that Hanjin and Hyundai carried the bulk of their cargo pursuant to dual-rate
service contracts or service contracts with NVOCCs, it does not deny that the former type of contract represented a marginal
part of the service contracts to which those lines were party.

1346 In those circumstances it is apparent that Hanjin and Hyundai were not induced to become conference members by the fact that
the TACA parties entered into a large number of dual-rate service contracts.

1347 Therefore the Commission has not proved to the requisite legal standard that dual-rate conference service contracts constituted
a measure which induced potential competitors to join the TACA during the relevant period.

1348 The applicants' pleas and arguments on that point must therefore be upheld.

(ii) Service contracts with NVOCCs

1349 The applicants deny that the TACA parties induced potential competitors to join the TACA by refraining from competing for
certain service contracts with NVOCCs.

1350 At paragraph 565 of the contested decision the Commission stated that the former structured members of the TAA, namely ACL,
Hapag Lloyd, P&O, Nedlloyd, Sea-Land, Mærsk, NYK and OOCL, did not compete for certain service contracts with NVOCCs, thereby
reserving certain cargoes for the traditional independents and for the new entrants. The Commission considers that the effect
of this would have been to induce potential competitors which wished to enter the market to do so as parties to the TACA.

1351 In order to determine the merits of those assessments in the contested decision, it is first necessary to ascertain whether
the Commission established to the requisite legal standard the existence of an agreement or at least of a concerted practice
seeking to reserve service contracts with NVOCCs to traditional independent lines which were not structured members of the
TAA and to new members of the TACA.

1352 According to the letter dated 28 December 1995, cited at paragraph 180 of the contested decision, POL stated to Hanjin that:

... all NVOCC issues are very delicate and sensitive. This can be handled properly only with full harmony within TACA, collectively,
without any individualism, as any independence may totally destroy this part of the market, so carefully built by the group
throughout the years ... We therefore kindly ask you to settle this problem with POL in the spirit of avoiding mutual competition
within TACA ....

1353 The Commission was therefore entitled to infer from the wording of that letter, at paragraph 180 of the contested decision,
that there was a spirit of cooperation within the TACA concerning the carriage of cargo by NVOCCs. Contrary to the applicants'
submission, it is clearly irrelevant in that respect that that letter was sent by a traditional independent carrier and not
by a former structured member of the conference since that letter reflects the existence of an agreement or at least a concerted
practice between the TACA parties seeking to reserve the carriage of NVOCC cargo to certain of those parties.

1354 Furthermore, the Commission stated at paragraph 150 of the contested decision that:

It is apparent from a review of TACA's 1995 service contracts that a very large number of service contracts with NVOCCs have
been entered into only by those TACA parties which were formerly unstructured members of the TAA. These lines were the former
independent, non-conference lines operating on the transatlantic routes.

1355 Far from contradicting that finding in the contested decision, the evidence put forward by the applicants in the present action
tends to confirm it. It is apparent from the data set out in the application that in 1994 and 1995 none of the structured
members of the TAA carried cargo under service contracts with NVOCCs, apart from Hapag-Lloyd which carried a negligible amount
in 1994. Furthermore, whilst Nedlloyd, NYK, OOCL and P&O carried cargo under service contracts with NVOCCs in 1996, it is
apparent from the same data that that cargo represented only 8.3% of the cargo carried by the TACA members under that type
of contract.

1356 In a letter of 3 May 1995 addressed to the Commission, the TACA's legal adviser explained that the lack of interest on the
part of the former structured members of the TAA for NVOCC cargo was the result of an independent commercial policy on the
part of the lines with large sales staffs, substantial customer service and an extensive network of agencies.

1357 Whilst such an explanation may of course justify the fact that most of the service contracts with NVOCCs were entered into
with former unstructured members of the TAA, which are in fact modest-sized competitors on the trade in question, it cannot
justify the total or near total absence over three years of service contracts between the NVOCCs and the former structured
members of the TAA. Given the commercial value of that cargo, such a lack of interest on the part of the former structured
members of the TAA points undeniably to the existence of an agreement or at least of a concerted practice seeking to reserve
service contracts with NVOCCs to certain TACA members.

1358 On that basis the Commission was therefore entitled to consider that there was an agreement or at least a concerted practice
amongst the TACA parties seeking to reserve service contracts with NVOCCs to traditional independent lines which were not
structured members of the TAA and to new members of the TACA.

1359 However, it is still necessary to consider whether that agreement or concerted practice did in fact induce potential competitors
to join the TACA in the course of the period covered by the contested decision. As stated above at paragraphs 1334 to 1339,
the fact that a measure described as an inducement to join the conference did not lead to any new membership of the TACA would
show that that measure was not in fact an inducement to join the conference.

1360 Notwithstanding the fact that the TACA parties reserved service contracts with the NVOCCs to new members of the conference,
only Hanjin and Hyundai joined the TACA during the period covered by the contested decision.

1361 It follows that most of the conference's potential competitors were not induced to join the TACA by the measure in question.
It has already been stated above at paragraph 1342 that one potential competitor, UASC, decided not to become a member of
the conference, even though it took steps to do so in 1996. Similarly, it has been stated above that lines such as Cosco,
Yangming, K Line, Mitsui and APL, which however subsequently entered the trade in question, did not join the TACA during the
period covered by the contested decision.

1362 Furthermore, as regards Hanjin and Hyundai the Commission does not refer in the contested decision to any evidence to show
that those lines joined the TACA as a result of the inducement represented by the fact that the former structured members
of the TAA did not compete to enter into service contracts with NVOCCs.

1363 On the contrary, it has already been stated above that the evidence in the Court's file did not support the conclusion that
the admission of Hanjin and Hyundai to the TACA did not arise from an autonomous decision on the part of those lines. The
question of participation in service contracts with NVOCCs is not addressed in any document concerning the admission of Hanjin
and Hyundai to the conference.

1364 Finally, and in any event, in the context of the system of competition instituted by Regulation No 4056/86, market sharing
agreements entered into between the members of a liner conference are not necessarily prohibited. Article 3 of Regulation
No 4056/86 expressly provides that the block exemption also applies to agreements which have as their objective the regulation
of carrying capacity offered by each member and the allocation of cargo or revenue among members.

1365 The contested decision does not explain why the fact that the former structured members of the TAA did not compete to enter
into service contracts with NVOCCs, thereby reserving that type of cargo for the traditional independent unstructured members
of the TAA and for new members, does not constitute such an agreement, enabling that line to join the conference on the same
basis as existing members. In paragraph 576 of the contested decision the Commission itself stated that the decision did not
prejudice that ability since it did not prohibit, as the Commission confirmed at the hearing, the admission of new members
to the TACA *per se*. As stated above, if participation in agreements falling within the block exemption was considered to constitute the inducement
to join the TACA, the assumption would be that it is the admission to the TACA itself which constituted the abuse since in
that case the measure of inducement imputed to the TACA would reside in the very fact that the new members qualify for the
block exemption laid down by Regulation No 4056/86, which authorises restrictions on competition the exceptional nature of
which has already been emphasised by the Court.

1366 It follows that the Commission has not established to the requisite legal standard that the reservation of service contracts
with NVOCCs to certain TACA parties constitutes a measure which induced potential competitors to join the conference during
the period in question.

1367 The applicants' pleas and arguments on that point must therefore be upheld.

(3) Conclusion on the evidence for the measures constituting the second abuse

1368 It follows from all the foregoing that the Commission has failed to demonstrate to the requisite legal standard that the TACA
parties induced potential competitors to join the TACA by the measures referred to in the contested decision.

1369 On that ground alone, therefore, without its being necessary to examine the applicants' other pleas in respect of the second
abuse, Article 5 of the operative part of the contested decision, and consequently Article 7 of the operative part in so far
as it requires the applicants to put an end forthwith to the second abuse and to refrain in the future from any action having
the same object or effect, must be annulled.

IV.    *IV - The pleas alleging failure to comply with the procedural requirements laid down by Regulation No 4056/86*

*Arguments of the parties*

1370 The applicant in Case T-213/98 alleges, first, that the Commission infringed the procedural requirements in Article 9 of Regulation
No 4056/86. It is clear that the TACA is governed by both US law and Community law. In particular, the admission of Hanjin
and Hyundai resulted directly from the open conference requirements of US law. Accordingly, since the second abuse consists
in the compliance by the TACA with the obligation laid down by US law to admit Hanjin and Hyundai to the TACA, the Commission
was under an obligation to follow the procedure under Article 9 of the regulation before taking any initiative based on that
regulation - in the present case, adopting a decision finding that certain conduct was abusive and imposing fines - which
was likely to conflict with US law.

1371 Second, that applicant submits that the Commission infringed the procedural requirements laid down by Articles 7 and 8 of
Regulation No 4056/86. In so far as the abuse found consists solely in the conduct of conferences benefiting from the block
exemption the Commission should, before finding that Article 86 of the Treaty had been infringed and a fortiori before imposing
a fine, have followed the procedure for withdrawing exemption set out in Article 7 of the regulation. The applicant relies
on the wording of Article 8(2) of the regulation, which provides that where the conduct of conferences benefiting from the
exemption has effects which are incompatible with Article 86 of the Treaty, the Commission may withdraw the benefit of the
exemption and take all appropriate measures to bring an end to the infringement of Article 86 of the Treaty.

1372 The Commission considers that those pleas are unfounded.

*Findings of the Court*

1373 As regards the plea alleging infringement of Article 9 of Regulation No 4056/86, according to the express wording of the application
the applicant merely relies on infringement of that provision with regard to the second abuse recorded in the contested decision,
but not the first.

1374 In those circumstances, to the extent that it was found above that the contested decision must be annulled with regard to
the finding of the second abuse, it is no longer necessary to rule on this plea.

1375 As regards the plea alleging infringement of Articles 7 and 8 of Regulation No 4056/86, the applicant submits essentially
that since the practices regarded as abusive in the contested decision fall within the block exemption laid down by Regulation
No 4056/86 the Commission was required to withdraw that exemption before finding that there were infringements of Article
86 of the Treaty.

1376 In so far as it was found above that the contested decision must be annulled with regard to the finding of the second abuse,
it is necessary to consider the present plea solely with regard to the finding in respect of the first abuse in the contested
decision, with the exception, however, of the mutual disclosure of the availability and content of individual service contracts,
that finding having been annulled for the reasons set out in paragraphs 1151 to 1159.

1377 The Commission is entitled to withdraw the benefit of the block exemption laid down by Article 3 of Regulation No 4056/86
where it finds in a particular case either, under Article 7(2) of that regulation, that agreements qualifying for that exemption
have effects which are incompatible with Article 85(3) of the Treaty or, under Article 8(2) of that regulation, that the conduct
of conferences benefiting from the exemption has effects which are incompatible with Article 86 of the Treaty.

1378 It is true, as the Commission pointed out at the hearing, that in its judgment in *CEWAL II*, cited at paragraph 595 above, paragraph 136, the Court held that Article 8(2) of Regulation No 4056/86 does not and cannot
restrict the Commission's power to impose fines for infringement of Article 86 of the Treaty.

1379 However, the approach adopted in that judgment, in addition to not concerning the withdrawal laid down by Article 7(2) of
Regulation No 4056/86, related to practices clearly not qualifying for the block exemption laid down by Article 3 of Regulation
No 4056/86, so that it is not necessarily relevant where the practices in question fall within the scope of that exemption
(see to that effect the Opinion of Advocate General Fennelly in *CEWAL II*, cited at paragraph 638 above, paragraphs 163 and 165).

1380 It is not necessary to rule on that question, but it should be noted that in the present case none of the practices in relation
to service contracts constituting the first abuse (apart from the mutual disclosure of the availability and content of individual
service contracts) is capable of qualifying for block exemption, contrary to the applicant's contention.

1381 The practices in relation to service contracts in question, be it the prohibition of individual service contracts or other
restrictions on the availability and content of such contracts, are not referred to in Article 3 of Regulation No 4056/86
among the agreements or practices qualifying for block exemption. It is settled case-law that, having regard to the general
principle of the prohibition of agreements restricting competition laid down by Article 85(1) of the Treaty, provisions derogating
therefrom in an exempting regulation must, by their nature, be strictly interpreted (*Peugeot*, cited at paragraph 568 above, paragraph 37, and *CEWAL I*, cited at paragraph 568 above, paragraph 48). That applies a fortiori to the provisions of Regulation No 4056/86 by virtue
of its unlimited duration and the exceptional nature of the restrictions on competition authorised, so that the block exemption
provided for by Article 3 of Regulation No 4056/86 cannot be interpreted broadly and progressively so as to cover all the
agreements which shipping companies deem it useful, or even necessary, to adopt in order to adapt to market conditions (*TAA*, paragraph 146).

1382 Furthermore, although as the Commission confirmed in reply to the Court's written questions the fixing of rates for service
contracts is not mentioned among the restrictions on competition prohibited by the contested decision pursuant to Article
85 of the Treaty, contrary to the applicants' submission service contracts cannot be treated as agreements which have as their
objective the fixing of rates and conditions of carriage as referred to in Article 3 of Regulation No 4056/86. It is apparent
from that provision that in order to qualify for the block exemption the agreements fixing rates and conditions of carriage
between the members of a maritime conference must establish uniform or common freight rates within the meaning of Article
1(3)(b) of the regulation (*TAA*, paragraphs 138 to 143), which requires the application of the same freight rate for all conference members vis-à-vis all
shippers (*TAA*, paragraphs 144, 151 and 155).

1383 The rates fixed by service contracts are not the same for all shippers, but divide them into categories. As the Commission
stresses at paragraph 457 of the contested decision, without being contradicted by the parties on the point:

... under service contracts the rate is not part of the standard published tariff but is determined more or less ad hoc by
the bargaining process between supplier and consumer. The result of that bargaining process is that shippers shipping goods
of the same description do not necessarily pay the same service contract rate as one another. Service contract rates are different
from tariff rates but do not differ uniformly. This means that although each TACA party may be charging the same rate to a
shipper, different shippers (of the same category of goods) are paying different rates ....

1384 Furthermore, in the present case, the rates fixed by conference service contracts entered into by the TACA during the period
covered by the contested decision were not the same for all members of the conference. It is not in dispute between the parties,
as stated above at paragraph 1331, that the service contracts laid down a dual-rate structure whereby the former unstructured
members of the TAA charged lower rates within the same service contract than the former structured members of the TAA. The
Court has already held that the block exemption provided for by Article 3 of Regulation No 4056/86 does not apply to agreements
between carriers providing for a variable scheme of tariffs (*TAA*, paragraph 167).

1385 In those circumstances, since the rates fixed by service contracts are not the same for all shippers, or even, in the present
case, for all conference members, those rates cannot constitute rate-fixing agreements qualifying for block exemption.

1386 Consequently, since the present plea is based on a false premiss it must be rejected in its entirety.

V.      *The plea alleging failure to state reasons in respect of the failure to have regard to US law*

*Arguments of the parties*

1387 The applicants submit that the obligation under Article 190 of the Treaty to state reasons requires the Commission to explain
why its appraisal of certain important issues differs from that of US law as enshrined in the US Shipping Act. In support
of that complaint the applicants refer to the judgment in Case C-360/92 P *Publishers Association* v *Commission* [1995] ECR I-23, paragraph 44). In that judgment, the Court annulled a Commission decision on the ground that it did not
contain any explanation of why the conclusions of [the UK Restrictive Practices Court] and the documents produced by [Publishers
Association] in support of its arguments are of no relevance.

1388 In this case, the applicants observe, the TACA is governed by both Community and US competition law. On several essential
respects of the TACA the contested decision adopts a position at odds with that under US law. Contrary to US law, the contested
decision finds that the following are not eligible for exemption, either individually or collectively, and are therefore prohibited:
(i) collective rate-fixing by conference members for inland services as part of multimodal transport (paragraphs 400 to 441);
(ii) conference service contract powers (paragraphs 442 to 471); (iii) restrictions under the conference rules on the conclusion
of service contracts and their terms, in particular with regard to the duration of contracts, contingency clauses, the prohibition
of multiple contracts, the level of liquidated damages and the prohibition of independent action on service contracts (paragraphs
464, 487 to 502 and 551 to 558); (iv) the prohibition of individual service contracts and their submission, where permitted,
to conference rules (paragraphs 477 to 486 and 551 to 558) and the disclosure of their terms (paragraphs 496 and 551 to 558)
and (v) the collective fixing of freight-forwarder compensation (paragraphs 505 to 518). Furthermore, the contested decision
relies, in finding that there is a collective dominant position, on the fact that the TACA ensures compliance with its rules
by numerous enforcement measures (paragraph 527), lays down a variable tariff structure (paragraphs 534 and 535) and induced
Hanjin and Hyundai to enter the trade in question as members of the conference rather than as independents (paragraphs 563
and 564) whereas US law, by contrast, permits conference authority, has never declared variable tariff structures to be unlawful
and requires entry to conferences to be open to any undertaking without discrimination and subject to reasonable criteria.

1389 Contrary to what the Commission claims, the applicants do not argue that the Commission is bound by US law or prevented from
applying Community law. The applicants' case is that the Commission should have taken account of the position under US law
in assessing the lawfulness of the practices in question and, to the extent that it adopts a different position, explain why
the assessment of those practices under US law is not relevant.

1390 That obligation applies with particular force in the present case for the following four reasons.

1391 First, the contested decision represents the first case of the application of Community law to service contracts, the agreement
of rates of compensation for freight forwarders, and the obligations of liner conferences with respect to the admission of
new members (Case 73/74 *Papiers peints* v *Commission* [1975] ECR 1491, paragraph 31). By analogy with the order of the President of the Court of First Instance in Case T-65/98
R *Van den Bergh Foods* v *Commission* [1998] ECR II-2641, which concerns the application of Articles 85 and 86 of the Treaty to a practice applied by both the
national competition authorities and the Commission, a contradictory application of Community law and US law should be avoided
in the circumstances of the present case.

1392 Second, there is a significant disagreement in this case between the Commission and the undertakings concerned as to material
issues of assessment by the Commission of the agreement in question (Joined Cases T-374/94, T-375/94, T-384/94 and T-388/94
*European Night Services and Others* v *Commission* [1998] ECR II-3141, paragraph 97). Furthermore, the applicants had challenged the Commission's analysis by reference to US
law on numerous occasions.

1393 Third, the applicants observe that the Commission's failure to address the differences between its assessment and that of
US law is at odds with the duties of cooperation and positive comity established by the cooperation agreements between the
United States of America and the Community. Even if those agreements are not intended to harmonise the substantive law of
the parties, their mere existence, as they seek the avoidance of contradictory decisions, makes it all the more incumbent
on the Commission to explain why, in the present case, its assessment of the practices and issues raised is different from
that of the United States. In the present case the applicants' compliance with the contested decision puts them in conflict
with their obligations under US law. The applicants point out that the FMC not only permitted but required them to make individual
service contracts subject to the rules of Article 14.2 of the TACA as a condition of the 1995 order conditionally approving
settlement. Furthermore, they were also requested to publish the various essential terms of the service contracts specified
at section 8(c) of the US Shipping Act, whereas in the contested decision (paragraphs 496 and 551 to 558) the Commission states
that such mutual disclosure is an infringement of Articles 85 and 86 of the Treaty.

1394 Fourth and finally, the applicants submit that Regulation No 4056/86 itself acknowledges, in paragraph 15 of the preamble,
that account should be taken of the fact that its application to certain agreements may give rise to conflicts with the laws
of certain third countries. They point out that Article 9 of that regulation lays down a procedure to prevent such conflicts.

1395 The Commission considers that that plea is unfounded.

*Findings of the Court*

1396 By the present plea, the applicants submit that the obligation to state reasons under Article 190 of the Treaty requires the
Commission to explain why its appraisal of several important issues differs from that of US law as enshrined in the US Shipping
Act.

1397 It should be remembered that the Court has held that although pursuant to Article 190 of the Treaty the Commission is bound
to mention the facts, law and considerations which have led it to adopt them, it is not required to discuss all the issues
of fact and law which have been raised during the administrative procedure (see, in particular, *Remia*, cited at paragraph 575 above, paragraph 26). At most Article 190 requires the Commission to reply specifically only to the
primary allegations made by the applicants in the course of the administrative procedure (*FEFC*, cited at paragraph 196 above, paragraph 426).

1398 In the present case, although the applicants do not state in their application the extent to which they relied on the alleged
differences between Community law and US law in the course of the administrative procedure, it is apparent from the TACA parties'
response to the statement of objections that they relied on US law in respect of only four specific points, namely TVRIAs,
the competition from the Canadian Gateway, conference service contracts and the collective setting of freight-forwarder remuneration.

1399 Therefore, in so far as the applicants complain that the Commission failed in the contested decision to address the possible
differences between US law and Community law on other points, their arguments are manifestly unfounded. Clearly the Commission
cannot be criticised for not having set out the reasons in its decision for its position on allegations which are made for
the first time in these proceedings against that decision. Consequently, the applicants' assertion that in disputing the Commission's
assessments they relied to a considerable extent on US law cannot be upheld.

1400 In so far as the alleged differences concern the four points referred to above it is to be noted, with regard first to TVRIAs,
that the TACA parties merely stated in their response to the statement of objections that according to FMC rules, TVRs cannot
be amended once they have been notified. Such a statement is clearly purely descriptive since the applicants do not base any
specific allegation thereon. Consequently, the Commission was under no obligation to give a reasoned response to that statement
in the contested decision.

1401 Next, as regards the competition from the Canadian Gateway, it is apparent that the TACA parties stressed in their response
to the statement of objections that the antitrust immunity provided by the US Shipping Act did not apply to cargo carried
via the Canadian ports to or from the United States. However, the Commission answers that allegation at paragraphs 265 to
273 of the contested decision, in which it sets out to the requisite legal standard the reasons why the Canadian Gateway,
notwithstanding the lack of antitrust immunity, did not substantially compete with the TACA parties, pointing out in that
regard that there were other factors restricting that competition. There is therefore no failure to state reasons in the contested
decision in that regard.

1402 As regards conference service contracts, it is apparent from the response to the statement of objections that the TACA parties
submitted, in support of their application for individual exemption, that US law regarded conference service contracts as
a traditional practice of liner conferences. However, the Commission answered that allegation at paragraphs 464 to 471 of
the contested decision by setting out to the requisite legal standard the reasons why those service contracts were not a traditional
conference practice. In particular the Commission stated that the TACA parties' argument failed to account for the findings
of fact contained in one of the US law documents to which they referred. Accordingly, the contested decision is not vitiated
by a failure to state reasons in that regard.

1403 Finally, as regards the collective fixing of freight-forwarder remuneration, it is apparent from the TACA parties' response
to the statement of objections that they relied on US case-law and legislation in support of the contention that US law allowed
shipping lines collectively to fix freight-forwarder remuneration. However, at paragraph 512 of the contested decision the
Commission expressly stated that the TACA parties' argument on that point based on US law, namely that the conferences operating
on the trade in question collectively fixed the levels of commission to be paid to European freight forwarders since the early
1970s, did not justify the fixing of maximum rates of freight-forwarder remuneration. The Commission set out in the following
paragraphs the reasons for which that practice did not satisfy the conditions for individual exemption laid down by Article
85(3) of the Treaty.

1404 It is true that in the contested decision the Commission did not address the relevance or merits of the legal position in
US legislation and case-law on that point and, therefore, did not explain why that position was not also justified in Community
law.

1405 However, Article 190 of the Treaty does not and cannot require that the Commission discuss such questions, since the obligation
to state reasons requires it at most to state why it considers it must reject not US law as such, but the arguments or allegations
which the applicants base on US law, at least where they are essential. The Commission cannot be required, as part of its
obligation to state reasons, to set out the grounds legally justifying its position with regard to the law of a non-member
State; it need only set out the reasons which justify its position in Community law.

1406 According to the case-law, the statement of reasons must enable the parties concerned to obtain adequate indications as to
whether the decision is well founded or whether it may be vitiated by some defect enabling its validity to be challenged (*Van Megen Sports*, cited at paragraph 548 above, paragraph 51). The Court has held that national practices, even if common to all the Member
States, cannot be allowed to prevail in the application of the competition rules set out in the Treaty (*VBVB and VBBB*, cited at paragraph 162 above, paragraph 40). That is all the more so in the case of the national practices of non-member
States (*FEFC*, cited at paragraph 196 above, paragraph 341).

1407 Consequently, since an infringement of US law does not constitute as such a defect resulting in the illegality of a decision
adopted under Community law, the Commission cannot be required in its decision to explain why it departs from the legal position
adopted under US law. If the Commission were so required it would need to examine the merits in the light of the relevant
provisions of US law, since in such a case it would have to explain why the legal approach taken in that jurisdiction does
not apply in Community law even though the position adopted by US law cannot take precedence over that adopted by Community
law.

1408 Contrary to the applicants' submission, the judgment of the Court in *Publishers Association*, cited at paragraph 1387 above, does not undermine that analysis. Whilst it is true that in that judgment the Court considered
that the Commission had not provided a sufficient statement of reasons for its decision in respect of certain aspects of national
law relied upon by Publishers Association, it is apparent that the Court found there to be a lack of reasoning solely in so
far as the Commission had not set out in its decision the reasons why the findings of fact in the relevant national decisions
had no evidential value for the purposes of the exemption procedure before the Commission. In support of its application for
individual exemption the applicant in that case had submitted to the Commission decisions of the UK Restrictive Practices
Court as essential evidence of the benefits of their agreement laying down uniform standard conditions for the sale of books
at a fixed price, where the publisher chooses to market a book as a net book. In particular, it submitted that it was apparent
from those national decisions that the abolition of the net book agreement would bring about a decrease in the number and
facilities of stockholding booksellers, a rise in book prices and a fall in the number of titles published. In its view, those
findings also applied to intra-Community trade, given the single language market in books between Ireland and the United Kingdom.

1409 It follows that, far from undermining the preceding analysis, the *Publishers Association* judgment on the contrary confirms that where an applicant refers to the approach adopted in national law, the Commission
is, at most, required under its obligation to state reasons to explain why it rejects the arguments which the applicant bases
on that approach (see, to that effect, *FEFC*, cited at paragraph 196 above, paragraphs 427 and 428).

1410 In the present case, it is apparent for the reasons set out above that in the contested decision the Commission set out to
the requisite legal standard the reasons for which the arguments derived by the applicants from US law had to be rejected.

1411 Therefore, the present plea alleging failure to state reasons must be rejected as unfounded.

VI.    *The pleas concerning the amount of the fines and various failures to state reasons in that regard*

1412 In support of the present pleas, the applicants submit in the first part that the first abuse, consisting in placing restrictions
on the availability and content of service contracts, qualified for immunity from fines in the light of the notification of
the TACA agreement with a view to obtaining individual exemption. In the second part they also challenge the amount of the
fines imposed by the Commission in the contested decision. They also rely on various failures to state reasons on those points.

1413 As a preliminary point it should be noted that in Article 8 of the operative part of the contested decision the Commission
imposed fines on each of the TACA parties solely for the infringements of Article 86 of the Treaty.

1414 In so far as it was found above, in the assessment of the pleas alleging that there was no infringement of Article 86 of the
Treaty, that the second abuse, consisting in the abusive alteration of the competitive structure of the market, has not been
proved to the requisite legal standard, the part of the fines imposed in respect of that abuse must be annulled for that reason
alone.

1415 Furthermore, since it was found above, in assessing the pleas alleging that there was no infringement of Article 86 of the
Treaty, that the first abuse, resulting from the imposition of restrictions on the availability and content of service contracts,
is not founded in so far as it lies in the mutual disclosure of the availability and content of individual service contracts,
the part of the fines imposed in that respect must also be annulled for that reason alone.

1416 Consequently, the applicants' present pleas must be examined solely in so far as they relate to the fine imposed in respect
of the first abuse, apart from the mutual disclosure of the availability and content of individual service contracts.

*Part one: immunity from fines*

A - Arguments of the parties

1417 The applicants allege that the Commission has unlawfully disregarded the applicants' immunity from fines in respect of restrictions
on the availability of service contracts.

1418 Contrary to what is stated in paragraph 584 of the contested decision, the Commission could not impose fines for infringement
of Article 86 of the Treaty as regards the restrictions on the availability of service contracts where such acts fell within
the limits of the activity described in the notification and took place after notification.

1419 The applicants claim that Article 19(2)(a) and Article 19(4) of Regulation No 4056/86 give immunity from fines both for infringements
of Article 85(1) of the Treaty and for infringements of Article 86 of the Treaty in so far as the infringement constitutes
activity notified for exemption under Article 85(3) of the Treaty. Article 19(4) of Regulation No 4056/86, which lays down
the rules on immunity from fines, refers to the fines provided for in paragraph 2(a), which covers those imposed for infringement
of Article 85(1) or Article 86. They stress that this reference is in no sense limited to the fines provided for in Article
19(2)(a) of Regulation No 4056/86 for infringement of Article 85(1). Contrary to the Commission's submission, that interpretation
certainly does not result in absolute immunity from fines under Article 86 for undertakings in a dominant position. When notification
is made and a decision denying exemption under Article 85(3) is taken, immunity is lost both for infringements of Article
85(1) and for infringements of Article 86.

1420 The Court confirmed that interpretation in *United Brands*, cited at paragraph 853 above, in which no fines were imposed under Article 86 in respect of activities which had been notified
to the Commission for exemption on the ground that no intentional or negligent infringement had been committed during the
exemption procedure. They also refer to the Opinion of Judge Kirschner, acting as Advocate General, in Case T-51/89 *Tetra Pak Rausing* v *Commission* (*Tetra Pak I*) [1990] ECR II-309, II-312, point 39, in which he observed that Article 15(5) of Regulation No 17 ... indirectly governs
the application of Article 86 during the exemption procedure and that where an agreement, decision or concerted practice is
notified pursuant to Article 4 of the regulation, a fine may not be imposed on the conduct notified on account of either an
infringement of Article 85(1) or an infringement of Article 86. That approach is also consistent with academic opinion.

1421 The applicants also allege that their argument is justified on general policy grounds in that the immunity from fines for
infringement of both Article 85(1) and Article 86 is likely to encourage undertakings to notify the Commission. They point
to the statement in the sixth recital to Regulation No 17 that it may be in the interest of undertakings to know whether any
agreements, decisions or practices to which they are party, or propose to become party, may lead to action on the part of
the Commission pursuant to Article 85(1) or Article 86. Similarly, Advocate General Jacobs stated that [the purposes of Regulation
No 17] include encouraging the notification of agreements, decisions and practices and generally facilitating approaches by
undertakings to the Commission (Opinion in Case C-67/91 *Asociación Española de Banca Privada and Others* [1992] ECR I-4785, I-4806, paragraph 23).

1422 The applicants claim that if immunity were restricted to fines imposed for breach of Article 85(1), the notification system
would serve no purpose in the case of dominant undertakings. The Court has acknowledged that where an undertaking takes the
risk of reporting the agreement or concerted practice itself, it should enjoy immunity from fines (Joined Cases 100/80 to
103/80 *Musique diffusion française and Others* v *Commission* [1983] ECR 1825, paragraph 93). In addition to the risk of the Commission's finding that the agreement or practice infringes
Article 85(1) and does not qualify for exemption under Article 85(3), and the risk of fines for conduct prior to notification,
the undertakings also run the risk, according to the Commission's argument, of the agreement which has been notified for exemption
being relied upon by the Commission to justify a finding that the undertakings are collectively dominant or the conclusion
that the agreement or practice notified infringes Article 86. The Commission's approach disturbs the balance necessary for
the proper functioning of the notification system by reducing the advantages and increasing the risks of notification.

1423 The applicants do not consider that the Commission's distinction between an individual dominant position and a collective
dominant position is relevant in that respect. In the case of an undertaking in a putative dominant position entering into
a contract with a non-dominant undertaking, the dominant undertaking would have immunity from fines under Article 85 but might
have no immunity if the contract itself were considered by the Commission to give rise to abusive conduct. The applicants
consider that the undertaking in an individual dominant position is entitled to protection against fines under both Article
85 and Article 86.

1424 Furthermore, without immunity from fines in respect of infringements under Article 86, the Commission would be able to circumvent
the immunity from fines under Article 85 and impose fines in respect of notified activities without following the special
procedure for the withdrawal of immunity under Article 19(4) of Regulation No 4056/86. Notwithstanding the fact that the undertakings
concerned would not have been able to exercise their procedural rights to object to the withdrawal of immunity, the Commission
would be entitled to impose fines with retroactive effect in respect of agreements notified and activities undertaken to implement
such agreements in accordance with the terms notified. That result runs contrary to the procedural safeguards described in
the judgment in Joined Cases 8/66 to 11/66 *Cimenteries CBR and Others* v *Commission* [1967] ECR 75, which declares that the effect [of measures withdrawing immunity from fines] was that the undertakings ceased
to be protected by Article 15(5) which exempted them from fines, and came under the contrary rules of Article 15(2) which
thenceforth exposed them to the risk of fines. This measure deprived them of the advantages of a legal situation which Article
15(5) attached to the notification of the agreement, and exposed them to a grave financial risk (p. 91). The applicants claim
that it follows that if the Commission considered that the TACA parties' service contracts constituted an abuse of a collective
dominant position for which no exemption could be granted, it could, even before the initiation of the substantive procedure,
have withdrawn the applicants' immunity from fines. They note that the Commission did not do so in the present case.

1425 Lastly, the applicants maintain that the Commission does not give reasons as to why it considers that notification confers
no immunity from fines for infringements of Article 86, when that is the first time it takes that approach, which runs counter
to its practice in decisions, to the case-law of the Court (*Papiers peints*, cited at paragraph 1391 above), to the terms of Regulation No 4056/86 and to academic opinion.

1426 The Commission points out that the second subparagraph of Article 19(4) of Regulation No 4056/86 confers immunity from fines
for the period between notification and the adoption of the Commission decision in application of Article 85(3). That strongly
suggests that immunity is granted only in respect of the prohibition from which exemption may be granted, that is to say Article
85(1). The Commission is of the opinion that that interpretation is confirmed by the third paragraph of Article 19(4), which
provides that the Commission may withdraw immunity where it considers that the requirements for the application of Article
85(1) are met and the application of Article 85(3) is not justified. If the intention of the legislature had been to include
immunity from fines under Article 86, it would certainly have also provided for withdrawal of such immunity. The applicants'
interpretation would have the result of making immunity from fines under Article 86 absolute.

1427 The Commission also underlines the fact that since the purpose of immunity is to provide an incentive to undertakings to notify
agreements which may infringe Article 85(1), they must be protected solely against the risk of fines which would arise in
the event that the Commission found that their agreements did not fulfil the criteria of Article 85(3). In relation to Article
86, no such balance of interests, no such need for protection and thus no such function for immunity exists.

1428 The Commission draws attention to the fact that if the question of immunity under Article 86 arises in the present case, it
is because of the collective dominance of the applicants. In such a case Article 85 may render unlawful the collective nature
of the activity, whereas Article 86 relates to the abusive character of the conduct in question. Undertakings which have collectively
abused their dominant position should not be in a better position than a single dominant undertaking, which would not have
the possibility of notifying its conduct and obtaining immunity.

1429 Finally, as regards the argument based on withdrawal of immunity, the Commission argues that if Article 19(2) of Regulation
No 4056/86 does not provide immunity in respect of infringements of Article 86, the Commission cannot be accused of having
sought to avoid the procedural safeguards laid down by Article 19(4) for withdrawal of immunity.

1430 As regards compliance with the obligation to state reasons, the Commission asserts that it is unaware of any existence of
30 years or so of practice enshrining such immunity and it stresses that the applicants fail to cite any case in which the
Commission decided that notification of an agreement or practice confers immunity from the imposition of fines under Article
86. On the contrary, in *United Brands*, cited at paragraph 853 above, the Commission merely considered it inappropriate to impose a fine, which implies that there
was no obstacle to imposing fines.

B - Findings of the Court

1431 By the first plea the applicants allege essentially that the fine imposed in respect of the first abuse, consisting in the
abusive imposition of restrictions on the availability and content of service contracts, should be annulled on the ground
that it was covered by the immunity from fines laid down by Regulation No 4056/86. They also claim that there was a failure
to state reasons in that regard.

1432 It should be noted at the outset, however, that according to paragraph 583 of the contested decision the Commission imposed
fines on the TACA parties not only under Article 19(2) of Regulation No 4056/86 but also, in so far as the first abuse also
falls within Regulation No 1017/68, under Article 22(2) of Regulation No 1017/68.

1433 The Court has already held that Article 22 of Regulation No 1017/68 does not provide any immunity from fines in respect of
notified agreements falling within its scope, whether fines imposed under Article 85 or fines imposed under Article 86 (*Atlantic Container Line*, cited at paragraph 44 above, paragraph 48).

1434 It follows that the applicants cannot rely on immunity for the part of the fines imposed in respect of the first abuse under
Article 22 of Regulation No 1017/68.

1435 Therefore, contrary to the applicants' submission, even if the present plea were well founded, it would not result in the
annulment of all of the fines imposed in respect of the first abuse, but only of the part of those fines imposed under Regulation
No 4056/86.

1436 In assessing the present plea, it is therefore necessary to consider whether the part of the fines imposed under Article 86
of the Treaty pursuant to Regulation No 4056/86 was covered by the immunity laid down by that regulation.

1437 Under Article 19(2)(a) of Regulation No 4056/86, the Commission may impose fines on undertakings which infringe Article 85(1)
or Article 86 of the Treaty. However, the second subparagraph of Article 19(4) of the same regulation provides that the fines
provided for in paragraph 2(a) shall not be imposed in respect of acts taking place after notification to the Commission and
before its decision in application of Article 85(3) of the Treaty, provided they fall within the limits of the activity described
in the notification. The third subparagraph of Article 19(4) provides however that that provision shall not have effect where
the Commission has informed the undertakings concerned that after preliminary examination it is of the opinion that Article
85(1) of the Treaty applies and that application of Article 85(3) is not justified.

1438 The Commission considered in paragraph 584 that the above-cited provisions did not provide for immunity for fines with respect
to infringements of Article 86 of the Treaty. Consequently, it imposed fines on the TACA parties on the basis of that provision,
notwithstanding the notification of the TACA.

1439 In order to decide whether the Commission was entitled to exclude immunity for the first abuse, it is necessary first to determine
the scope of the immunity provided for by Regulation No 4056/86 and then the extent, if any, to which the practices constituting
the first abuse are covered by that immunity.

1. The scope of the immunity provided for by Regulation No 4056/86

1440 In order to determine the scope of the immunity laid down by Regulation No 4056/86, it is necessary to have regard to the
wording of the relevant provisions of that regulation as well as to their purpose and general structure.

1441 As regards first the wording of the relevant provisions of Regulation No 4056/86, it should be noted as a preliminary point
that the Court has already held (*Atlantic Container Line*, cited at paragraph 44 above, paragraphs 50 to 52) that the immunity from fines represents a derogation. Consequently, the
relevant terms of the second subparagraph of Article 19(4) of Regulation No 4056/86 providing for immunity from fines in the
case of notification must be strictly interpreted and cannot be interpreted so that its effects extend to cases not expressly
provided for.

1442 However, the immunity provided for by the second paragraph of Article 19(4) refers expressly to the fines provided for in
paragraph 2(a). The fines laid down by that provision are those which are imposed not only for taking part in an agreement
restricting competition, but also for abuses. Article 19(2)(a) expressly refers to fines for infringement of Article 85(1)
or Article 86 of the Treaty.

1443 It thus follows that that reference to the express wording of Article 19(4) of Regulation No 4056/86, far from restricting
immunity from fines to infringements of Article 85 of the Treaty, expressly provides on the contrary that abuses under Article
86 of the Treaty may also qualify for that immunity.

1444 It is true, as the Commission points out, that the second subparagraph of Article 19(4) of Regulation No 4056/86 envisages
acts after notification to the Commission and before its decision in application of Article 85(3) of the Treaty and which
fall within the limits of the activity described in the notification. Only agreements falling within Article 85(1) of the
Treaty may be notified with a view to obtaining exemption under Article 85(3), since abuse of a dominant position is prohibited
without exception (*Ahmed Saeed Flugreisen*, cited at paragraph 1109 above, paragraph 32).

1445 However, contrary to the Commission's submission, it does not follow from this that the immunity only applies to fines imposed
for infringement of Article 85(1) of the Treaty.

1446 In the first place, according to the express wording of the passages from the second subparagraph of Article 19(4) cited above,
the immunity from fines does not cover agreements between undertakings, decisions by associations of undertakings and concerted
practices contrary to Article 85(1) of the Treaty, but acts, a generic term which may include, without distorting its meaning,
unilateral practices falling within Article 86 of the Treaty. As for the requirement that those acts must occur after notification,
it clearly does not concern the material scope of the immunity, which concerns acts, but its temporal scope. As the Court
has already held, that provision is a temporary derogation benefiting undertakings that notify an agreement in respect of
acts taking place after notification and before the final decision on that notification (*Atlantic Container Line*, cited at paragraph 44 above, paragraph 46).

1447 In the second place, whilst the requirement that the acts must remain within the limits of the activity described in the notification
necessarily means that only activities in fact notified qualify for exemption (Joined Cases 240/82 to 242/82, 261/82, 262/82,
268/82 and 269/82 *Stichting Sigarettenindustrie and Others* v *Commission* [1985] ECR 3831, paragraph 74), it in no way has the effect of restricting immunity to infringements of Article 85(1) of
the Treaty to the exclusion of those of Article 86 of the Treaty. Even though the abuses cannot be notified with a view to
obtaining an exemption, certain activities or agreements notified may be regarded as constituting abuses since, according
to the case-law, the Commission is entitled to consider that an agreement restricting competition within the meaning of Article
85(1) of the Treaty also constitutes an abuse under Article 86 of the Treaty if it is the act of an undertaking in a dominant
position (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 116, and *Ahmed Saeed Flugreisen*, cited at paragraph 1109 above, paragraph 34 et seq.). Thus an agreement notified by an undertaking in a dominant position,
such as an exclusive supply agreement, may constitute not only an agreement prohibited by Article 85(1) of the Treaty but
also an abuse prohibited by Article 86 of the Treaty. Such an abuse clearly amounts to acts which remain within the limits
of the activity described in the notification within the meaning of the second subparagraph of Article 19(4) since it consists
in the notified agreements themselves.

1448 The Commission is wrong to argue that the third subparagraph of Article 19(4) of Regulation No 4056/96, which enables the
Commission to withdraw immunity where it considers after a preliminary examination that Article 85(1) of the Treaty applies
and that application of Article 85(3) is not justified, necessarily prevents infringements of Article 86 of the Treaty from
qualifying for immunity since otherwise such infringements would qualify for absolute immunity.

1449 That argument is based on the false premiss that the third subparagraph of Article 19(4) of Regulation No 4056/86 does not
permit the withdrawal of immunity from fines imposed in respect of Article 86 of the Treaty. Whilst it is true that the third
subparagraph of Article 19(4) of Regulation No 4056/86 provides that the withdrawal of immunity can only occur where after
a preliminary examination the Commission considers that the notified agreements cannot be exempted under Article 85(3) of
the Treaty, it does not in any case provide that immunity may only be withdrawn for infringements of Article 85 of the Treaty.
It is perfectly apparent from the wording of that provision that the requirement that there be an agreement prohibited by
Article 85 of the Treaty refers not to the purpose of the withdrawal of immunity, but to the circumstances in which that may
be decided. Thus, where an abuse consists in an agreement notified with a view to obtaining an exemption, if the Commission
considers at the end of a preliminary examination that that agreement is prohibited by Article 85(1) and cannot qualify for
such an exemption and decides to withdraw immunity, that withdrawal will concern not only the infringement of Article 85(1)
of the Treaty but also the infringement, if any, of Article 86 of the Treaty.

1450 It thus follows that not only does the second subparagraph of Article 19(4) of Regulation No 4056/86 expressly provide that
abuses contrary to Article 86 of the Treaty may qualify for immunity from fines, but also that there is nothing in the wording
of the second and third subparagraphs of that provision which prevents that immunity from applying to infringements of Article
86 of the Treaty.

1451 In those circumstances, the Commission cannot argue in the context of these proceedings that the applicants' argument misconstrues
the wording of Article 19(4) of Regulation No 4056/86 and that the wording strongly suggests that the immunity only applies
to infringements of Article 85(1) of the Treaty.

1452 That conclusion in no way results in a broad interpretation of Article 19(4) of Regulation No 4056/86 incompatible with the
principle of interpretation applicable in the present case, since it flows directly from the express wording of that provision
without distorting its meaning or even simply supplementing it. Moreover, the immunity from fines does not apply to all abuses
contrary to Article 86 of the Treaty but merely, according to the express wording of the second subparagraph of Article 19(4)
of Regulation No 4056/86, to those which remain within the limits of the activity described in the notification.

1453 Furthermore, the scope of the second subparagraph of Article 19(4) of Regulation No 4056/86, as is apparent from its terms,
is compatible with the objective pursued by that provision and its general structure.

1454 The Court has already held with regard to the similar provisions of Regulation No 17 that the benefit of immunity for undertakings
which have notified an agreement or a concerted practice constitutes the quid pro quo for the risk run by the undertaking
in taking the initiative to give notice of the agreement or concerted practice. The undertaking risks not only a finding that
the agreement or practice is in breach of Article 85(1) of the Treaty and refusal of the application of Article 85(3) but
also the imposition of a fine for its actions prior to the notification (*Musique diffusion française*, cited at paragraph 1422 above, paragraph 93, and *Asociación Española de Banca Privada*, cited at paragraph 1421 above, paragraph 52). The Court also emphasised that if the Community legislature wished to reserve
the benefit of the immunity to undertakings which notify their agreements, it is because by divulging them they run the risk
of being obliged to terminate them and at the same time correspondingly reduce the Commission's investigation workload (*Stichting Sigarettenindustrie*, cited at paragraph 1447 above, paragraph 76).

1455 Whilst it is true that unlike agreements falling within Article 85 of the Treaty abuses contrary to Article 86 of the Treaty
are prohibited without exception, where an undertaking holding a dominant position notifies agreements to the Commission with
a view to obtaining an exemption under Article 85(3) of the Treaty, it runs the risk not only that the Commission considers
that that agreement does not qualify for that exemption and is prohibited, but also, if the Commission takes the view that
the agreement constitutes an abuse, of its being prohibited under Article 86 of the Treaty and of incurring fines on that
basis. As noted above, according to the case-law the Commission is entitled to consider that an agreement restricting competition
also constitutes an abuse if it is the act of an undertaking in a dominant position (*Hoffmann-La Roche*, cited at paragraph 765 above, paragraph 116, and *Ahmed Saeed Flugreisen*, cited at paragraph 1109 above, paragraph 44).

1456 Furthermore, where the Commission grants an individual exemption pursuant to Article 85(3) of the Treaty in respect of agreements
notified by undertakings holding a dominant position it indirectly bars itself, in the absence of a change in the facts or
the law, from considering that the same agreements constitute abuses contrary to Article 86 of the Treaty (see to that effect
*Tetra Pak I*, cited at paragraph 1420 above, paragraph 28). Before granting exemption to an undertaking in a dominant position the Commission
must check that all the conditions laid down in Article 85(3) of the Treaty, that is to say in particular the consumers' share
of the benefit of the cartel, the proportionality of the restrictions imposed and the maintenance of competition in respect
of a substantial part of the products or services in question, are met. Therefore, if the Commission makes a positive finding
- granting exemption - in respect of a given agreement, the same agreement cannot be held in a second set of proceedings brought
for infringement of Article 86 of the Treaty to be an abuse of a dominant position. That provision thus has effects within
the ambit of Article 85(3) in so far as the latter precludes exemption in respect of conduct which constitutes an abuse of
a dominant position (Opinion of Judge Kirschner acting as Advocate General in *Tetra Pak I*, cited at paragraph 1420 above, paragraphs 40 and 45).

1457 It follows that in terms of the risk involved, an undertaking in a dominant position is in a position similar to that of a
non-dominant undertaking which has notified an agreement with a view to obtaining exemption. If the Commission refuses to
grant an exemption under Article 85(3) of the Treaty that undertaking loses the certainty that, if there is no change in the
circumstances of fact or law, the Commission will not intervene under Article 86 of the Treaty in respect of the agreement
notified and moreover risks being fined for an agreement which it has itself disclosed, thereby facilitating the Commission's
investigative workload. It is also clear that the immunity from fines in respect of the risk of infringement of Article 85(1)
of the Treaty for which an undertaking in a dominant position qualifies in respect of notified agreements would be largely
meaningless if that undertaking could be fined for infringing Article 86 of the Treaty on the basis of having entered into
those same agreements.

1458 That is all the more so where, under the competition rules established by Regulation No 4056/86, the grant of an individual
exemption under that regulation does not require that an agreement be notified first. Under Article 11(4) of that regulation,
the Commission is required to grant an exemption even on its own initiative or following a complaint. In those circumstances,
where a shipping line nevertheless chooses voluntarily to notify an agreement with a view to obtaining individual exemption,
it must be conceded that it is entitled a fortiori to protection against the risk of fines which might be imposed under Article
86 of the Treaty in respect of the agreement.

1459 It is thus in keeping with the purpose and general structure of the scheme for the immunity laid down by Regulation No 4056/86
to apply also to infringements of Article 86 of the Treaty which consist in notified agreements.

1460 That conclusion cannot be undermined by the fact that dominant undertakings have a special responsibility not to allow their
conduct to impair genuine undistorted competition on a market where competition is already restricted by the fact of their
dominant position (*Michelin*, cited at paragraph 337 above, paragraph 57). That special responsibility means only that a dominant undertaking may be prohibited
from conduct which is legitimate where it is carried out by non-dominant undertakings. It cannot on the other hand deprive
dominant undertakings of immunity from fines where they have taken the risk of disclosing to the Commission agreements restricting
competition which could be qualified as an abuse should exemption be refused. Such conduct shows precisely that a dominant
undertaking is assuming the special responsibility placed upon it. If the Commission is possibly entitled to qualify such
conduct as a restriction of competition and abuse of a dominant position and, if so, to impose fines in respect of each of
those infringements, it is for it to assume all the legal consequences of that as regards observance of the immunity from
fines.

1461 Furthermore, contrary to what the Commission maintains, applying immunity from fines for infringements of Article 86 of the
Treaty in no way confers an advantage on undertakings in a collective dominant position when compared with undertakings holding
an individual dominant position. An undertaking holding an individual dominant position is equally capable of qualifying for
immunity from fines in respect of infringements of Article 86 of the Treaty where the latter consist in notified agreements.

1462 On those grounds it must be concluded that both the wording of the second subparagraph of Article 19(4) of Regulation No 4056/86
and its aim and general structure justify application of the immunity laid down by that provision not only for infringements
of Article 85(1) of the Treaty but also for those of Article 86 of the Treaty where the abuse results from notified agreements.

1463 In those circumstances, it remains in the present case to assess the extent to which the applicants' first abuse consists
in notified agreements which may qualify for immunity from fines under Regulation No 4056/86.

2. The application of the immunity from fines to the first abuse

1464 It is apparent from paragraphs 551 to 558 of the contested decision that the first abuse lies in the outright ban on individual
service contracts in 1994 and 1995 and, where they were authorised with effect from 1996, in the application thereto of certain
conditions collectively agreed by the TACA and the mutual disclosure of their terms, and in the application of certain terms
collectively agreed by the TACA to conference service contracts.

1465 It is apparent from paragraph 556 of the contested decision that the terms in question collectively agreed by the TACA are
those concerning the prohibition of contingency clauses, the duration of service contracts, the ban on multiple contracts
and the amount of liquidated damages.

1466 It has already been found above that the first abuse was not founded in so far as it concerns the mutual disclosure of the
availability and contents of individual service contracts.

1467 In those circumstances it is therefore only necessary to consider whether the other abusive practices constituting the first
abuse consist in agreements notified to the Commission.

1468 The TACA rules on service contracts are laid down by Article 14 of the TACA which was notified to the Commission with a view
to obtaining individual exemption under Article 12 of Regulation No 4056/86.

1469 All the abusive practices which are the subject of the present plea are set out in Article 14 of the TACA. Article 14(3)(a)
of the TACA expressly prohibits individual service contracts, whilst Article 14(2)(a), (c), (d) and (e) lay down the maximum
duration of service contracts, the prohibition of contingency clauses, the amount of liquidated damages and the prohibition
of multiple contracts respectively. Furthermore, as is apparent from paragraph 32 of the contested decision, the TACA parties
expressly informed the Commission on 9 March 1995 that the FMC had required them to amend their agreement so as to allow the
conclusion of individual service contracts in 1996 provided that those contracts complied with the provisions of Article 14
of the TACA. On 21 March 1995, the TACA parties thus sent the Commission an amended version of Article 14 of the TACA notified
in 1994.

1470 Consequently, the abusive rules on service contracts at issue in this plea fell within the scope of the immunity from fines
laid down by the second subparagraph of Article 19(4) since they were in fact notified to the Commission with a view to obtaining
exemption.

1471 Since the initial notification of the TACA took place on 5 July 1994 and the period of the infringement recorded in the contested
decision covered, according to paragraph 592 thereof, part of 1994 and the whole of 1995 and 1996, all the fines imposed on
the TACA parties in the contested decision in respect of the abusive rules in question concern acts which occurred after the
notification of the TACA and before the adoption of the contested decision.

1472 The part of the fines imposed under Regulation No 4056/86 in respect of the abusive rules on service contracts laid down by
Article 14 of the TACA was therefore covered by the immunity from fines laid down by that regulation.

1473 Consequently, without its being necessary to ascertain whether there is an adequate statement of reasons in the contested
decision on that point, this plea of the applicants must be upheld, inasmuch as by imposing fines in respect of the rules
on service contracts laid down by Article 14 of the TACA the Commission breached the immunity from fines laid down by Regulation
No 4056/86 which the applicants qualified for by reason of the notification of the TACA. That part of the fines must therefore
be annulled.

1474 For the remainder, that is, the part of the fines imposed under Regulation No 1017/68, the applicants' plea must be rejected
for the reasons given at paragraphs 1432 to 1434 above.

*Part two: calculation of the fines*

1475 Under the third part of the present pleas relating to the amount of the fines and the various failures to state reasons in
that regard, the applicants challenge, first, the method adopted by the Commission to determine the amount of the fines. Second,
they submit that the infringements punished by the fines were not committed deliberately or negligently. Third, they submit
that the Commission erred in its assessment of the effect, gravity and duration of the infringements as well as the mitigating
circumstances. Fourth, they refer to certain specific individual factors which the Commission failed to take into account.
Fifth and finally, they challenge the interest rate adopted in the contested decision for late payment of the fines.

A - The method adopted by the Commission to determine the amount of the fines

1. Arguments of the parties

1476 The applicants claim that the Commission adopted an irrational and incoherent approach in calculating the fines, in breach
of the fundamental principles of Community law.

1477 Any fine imposed by the Commission in application of its Guidelines on the method of setting fines imposed pursuant to Article
15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty (the Guidelines) (OJ 1998 C 9, p. 3) must observe the principles
laid down by the Court. It follows that, even if the Commission's new approach is that a fine should reflect principally the
seriousness of the infringement as such, independently of the size and turnover of the undertaking which has committed it,
the principles developed by the Court require that other factors also be taken into account. In particular, the applicants
consider that the overriding principle derived from the case-law of the Court is that in assessing the seriousness of an infringement
the Commission must have regard to all the relevant factors: the total turnover of the undertaking concerned, the proportion
of that total turnover accounted for by its turnover on the market where the infringement was committed, the profit derived
by it from the unlawful practices, the size of the undertaking and the value of the goods or services concerned (see, for
example, *Musique diffusion française*, cited at paragraph 1422 above, paragraphs 120 and 121).

1478 That case-law shows, first, that all the relevant factors must be taken into account by the Commission when it determines
the seriousness of the infringement and the amount of the fines and, second, that failure to take one or more factors into
account means that disproportionate importance is attached to those factors which are taken into account.

1479 In the present case, the applicants allege, the contested decision does not comply with the requirements laid down by the
case-law for several reasons.

1480 First, the Commission lacked impartiality and infringed the principle of non-discrimination and equal treatment enshrined
in the case-law (Case T-143/89 *Ferriere Nord* v *Commission* [1995] ECR II-917, paragraph 55) by fining the applicants on the basis of artificial categories and not on the basis of the
individual applicant's size.

1481 The Commission fails to provide any explanation or justification for the division of the undertakings into four groups, or
for the criteria identifying those groups. Moreover, the categories of fines in Table 13 do not reflect the differences in
size in the four groups of carriers identified in Table 12. Thus, small carriers, whose worldwide containerised shipping turnover
is only 6% to 12% of the highest turnover, each receive a fine which is 25% of that of the applicant receiving the highest
fine. The level of individual fines was differentiated only on the basis of worldwide turnover and only to the extent that
the Commission placed the applicants into four groups on the basis of their worldwide turnover. Consequently, the applicants'
size played little part in the calculation of fines. If the applicants' size had been taken into account in determining the
fines they would have been lower.

1482 DSR-Senator points out on its own behalf in this context that the fine imposed on it is half of that imposed on the large
carriers falling within the first group whereas its worldwide turnover from the carriage of containerised cargo is about a
quarter of that of the large carriers.

1483 Similarly, the applicant in Case T-212/98 notes that whilst the average size of the undertakings in the third category of
small to medium carriers in which it was placed is less than a quarter of that of the largest TACA members, the applicant
received a fine which is half the amount imposed on the large TACA members. Furthermore, although in 1996 it held the lowest
turnover of the TACA parties on the transatlantic trade, the fine imposed on it was double that imposed on three other applicants
whose transatlantic turnover was 400% higher than the applicant's, and the same as that imposed on three applicants whose
transatlantic turnover was 800% or more of that of the applicant.

1484 The applicant in Case T-213/98 alleges that the fine infringes the principle of equal treatment in that it has received the
second highest fine and yet its turnover on the relevant market is the second lowest. Consequently, notwithstanding an average
share of the relevant market in the period from 1994 to 1996 of 0.7%, the amount of the fine imposed on it represents 7.76%
of the total amount of the fine imposed on the conference as a whole.

1485 Finally, the applicants in Case T-214/98 submit that the Commission has infringed the principle of equal treatment by failing
to carry out an individual assessment of each of the applicants on the relevant market.

1486 Second, the Commission failed to carry out an individual assessment of each applicant in setting the fines (*Musique diffusion française*, cited at paragraph 1422 above, paragraphs 129 to 134).

1487 That is demonstrated by the fact that it placed the applicants, arbitrarily and without any explanation, into four groups
and fined the groups rather than the individual applicants which comprise them. Furthermore, the Commission has not taken
account of any other factors, such as turnover on the relevant trade or profit derived from the infringement.

1488 The applicant in Case T-213/98 submits that the Commission did not carry out an individual assessment of its position as the
smallest line (bar one) on the transatlantic trade. It points out that it received a fine equivalent to 98% of its turnover
in 1996 on the transatlantic trade.

1489 Third, the Commission calculated the fines on the basis of total worldwide turnover in respect of transport services relating
to the carriage of containerised cargo with no reference to turnover on the relevant market.

1490 The applicants consider that, in accordance with the case-law (*Musique diffusion française*, cited at paragraph 1422 above, paragraphs 120 and 121; Case 183/83 *Krupp* v *Commission* [1985] ECR 3609, paragraph 37; Case T-77/92 *Parker Pen* v *Commission* [1994] ECR II-549, paragraph 94; *CEWAL I*, cited at paragraph 568 above, paragraph 233; Opinion of Advocate General Slynn in *Musique diffusion française*, cited above, p. 1914, at p. 1950), the Commission should have taken account of the turnover of the parties from the provision
of services on the market to which the infringement relates, that is, from the provision of transatlantic transport services,
and the proportion of that turnover in worldwide containerised shipping turnover. Furthermore, at paragraph 588 of the contested
decision the Commission states that transatlantic turnover is relevant in assessing the impact of the infringements.

1491 The applicants stress that for many of them the turnover accounted for by their transatlantic services represents a small
proportion of their worldwide turnover. The amount of the fines is thus manifestly disproportionate to the turnover on the
transatlantic trade. They note that Advocate General Fennelly stated (Opinion in *CEWAL II*, cited at paragraph 638 above) that an infringement by an undertaking in relation to only a small sector of its business
will usually be less serious than an infringement in relation to the whole of its business. The disproportion is emphasised
in the present case by the fact that only 60% (or less) of their turnover on the transatlantic trade is derived from the service
contracts which are the subject of the first abuse and partly that of the second abuse.

1492 As a result, the applicants claim, the Commission has failed to assess the scale of the infringements (*Musique diffusion française*, cited at paragraph 1422 above, paragraph 120) correctly and the fine is the result of a simple calculation based on the
total turnover (*Musique diffusion française*, cited at paragraph 1422 above, paragraph 121).

1493 Fourth, the applicants submit that the Commission failed to have regard to all the factors relevant to an assessment of gravity
in setting the fines (*Musique diffusion française*, cited at paragraph 1422 above, paragraph 129, and Case T-229/94 *Deutsche Bahn* v *Commission* [1997] ECR II-1689, paragraph 127).

1494 Since the only factor taken into account by the Commission was the worldwide turnover from containerised shipping services,
disproportionate importance is inevitably attached to that factor. The applicants submit that the relevant factors to be taken
into account should have included the position of the parties on the relevant market, any profits from the supply of transatlantic
services under service contracts and the turnover from service contracts compared with total turnover.

1495 Fifth, the applicants claim that the Commission failed to consider any profits from the relevant market, with the consequence
that the fines are disproportionate.

1496 The applicants observe that in the Guidelines (p. 5) the Commission points to the need to relate fines in particular to any
economic or financial benefit derived by the offenders (see also the *XXI st Report on Competition Policy*, 1992, paragraph 139). Accordingly, the applicants claim, the amount of the fines should not be greater than any profits
made from the infringement on the relevant market because it is on that market that the infringement was committed. In the
present case, the Commission did not take account of the applicant's net results on the transatlantic trade in 1996 in determining
the amount of the fines.

1497 Sixth, the applicants consider that the Commission failed to observe the principle of proportionality. They refer to the foregoing
arguments in that regard.

1498 Seventh, the applicants in Cases T-213/98 and T-214/98 consider that the Commission infringed the principle of legitimate
expectations.

1499 The applicant in Case T-213/98 alleges that the Commission did not apply in the present case the principles governing the
calculation of fines derived from earlier case-law.

1500 The applicants in Case T-214/98 also criticise the Commission for failing to follow its Guidelines in setting the fines. Since
the basic amount of the fine was fixed for groups of undertakings and not for each undertaking separately there was no connection
between the basic amount of the fine and the turnover (total or relative to the relevant market) of the undertakings in question.
Moreover, the Commission made findings as to the seriousness of the abuses without demonstrating their actual impact on the
relevant market. It also failed to take account of the size of the geographic market affected by the alleged infringements.

1501 The applicants in Case T-214/98 consider that by not applying the criteria set out in the Guidelines for setting fines the
Commission infringed the principle of legitimate expectations. The Guidelines give rise to a legitimate expectation on the
part of the undertakings that the Commission will exercise its discretion to set fines in each particular case in accordance
with the approach set out in the Guidelines and having regard to all the criteria mentioned therein. The Guidelines themselves
state that the principles outlined therein should ensure the transparency and impartiality of the Commission's decisions,
in the eyes of the undertakings and of the Court of Justice alike, and that the new method of determining the amount of a
fine will adhere to the rules [they set out]. In any event the Commission cannot amend a measure of general application such
as the Guidelines by an individual decision (Case C-313/90 *CIRFS and Others* v *Commission* [1993] ECR I-1125, paragraphs 44 and 45).

1502 Eighth, the contested decision contains no explanation of the calculation of the fines. The approach adopted by the Commission
infringes the principle of transparency, contrary to Article 190 of the Treaty and the case-law (*Tréfilunion*, cited at paragraph 498 above, paragraph 142; Case T-147/89 *Société métallurgique de Normandie* v *Commission* [1995] ECR II-1057; Case T-151/89 *Société des treillis et panneaux soudés* v *Commission* [1995] ECR II-1191; Case T-327/94 *SCA Holding* v *Commission* [1998] ECR II-1373, paragraph 206).

1503 In this regard the applicants point out that the contested decision explains neither the reasons for which the Commission
divided the applicants into four categories (Table 12 of the contested decision) nor the criteria adopted by the Commission
for making that division. The decision thus explains neither the relationship between Table 12 and Table 13 (which sets out
the amount of the fines imposed), nor the way in which the figures in Table 13 have been calculated. Furthermore, the applicants
consider that in setting the fines at a level which represents such a significant proportion of their turnover on the relevant
trade, the Commission has departed from its own practice in the past (Commission Decision 94/815/EC of 30 November 1994 relating
to a proceeding under Article 85 of the EC Treaty, Cases IV/33.126 and 33.322 - Cement, OJ 1994 L 343, p. 1; and Commission
Decision 98/273/EC of 28 January 1998 relating to a proceeding under Article 85 of the EC Treaty, Case IV/35.733 - VW, OJ
1998 L 124, p. 60), without giving reasons to the requisite legal standard for that change, contrary to the requirements set
out in *Papiers peints*, cited at paragraph 1391 above.

1504 Furthermore, the applicant in Case T-212/98 submits in addition that the Commission does not explain in the contested decision
why it imposes a fine on it equivalent to double its relative size but refers solely to its worldwide turnover, contrary to
its previous practice in such matters (*Musique diffusion française*, cited at paragraph 1422 above, paragraph 129; *Deutsche Bahn*, cited at paragraph 1493 above, paragraph 127). Nowhere does the Commission explain why it chose not to take into account
other factors, such as its position on the market, its profits and its position as a new entrant to the trade and new member
of the TACA. Moreover, as regards the role played by the applicants in the alleged infringements, the Commission does not
show that the TACA members acted together to induce third parties to join the TACA, nor does it show that the applicant itself
participated in those inducements. In *Musique diffusion française*, cited at paragraph 1422 above, the Advocate General observed that an infringement committed by an undertaking in only a
small sector of its activities is, in ordinary circumstances, less grave than one committed in the whole of its activities.

1505 It is only in the defence that the Commission explains in general terms why it chose to calculate the level of fines by reference
to worldwide turnover. It fails to explain, however, why that method is justified with respect to the applicant despite the
fact that it results in a disproportionately high fine in its case, even when compared with the other applicants by reference
to worldwide turnover alone. In *PVC II*, cited at paragraph 191 above, the Court of First Instance reduced the fines on the ground that the Commission overestimated
the market share of the undertakings concerned on the relevant market when apportioning the total fine between them.

1506 Finally, the applicants in Case T-214/98 claim for their part that, contrary to the requirements of the case-law, the contested
decision does not explain the method used for calculating the amount of the fines, so that the applicants are unable to ascertain
whether the Commission applied that method correctly (*Tréfilunion*, cited at paragraph 498 above, paragraph 142, and *Mo och Domsjö*, cited at paragraph 138 above, paragraph 278). In particular, the Commission failed to explain in the contested decision
the criterion used to divide the TACA parties into four groups.

1507 The Commission considers that none of these pleas is well founded.

2. Findings of the Court

1508 By the present pleas and complaints, the applicants essentially criticise the Commission for having divided the TACA parties
into four groups in order to determine the amount of the fines. They rely on three kinds of argument in that regard. The first
kind concerns the lack of individual assessment and breach of the principle of proportionality, as well as failure to state
reasons in that regard. The second concerns infringement of the principle of equal treatment and failure to state reasons
in that regard. The third group concerns infringement of the principle of the protection of legitimate expectations and failure
to state reasons in that regard.

1509 It is not in dispute that the fines imposed in the present case were determined by the Commission on the basis of the method
set out in its Guidelines.

1510 In paragraph 595 of the contested decision the Commission stated, after determining, at paragraphs 591 to 594 of the contested
decision, the inherent seriousness of the infringements, that in order to take account of the effective capacity of the undertakings
concerned to cause significant damage and the need to ensure that the amount of the fine had a sufficiently deterrent effect
larger fines should be imposed on the larger TACA parties than on the smaller ones because of the considerable disparity between
their sizes.

1511 The Commission therefore divided the TACA parties into four groups according to their size relative to that of Mærsk, the
largest of the TACA parties. It is apparent from paragraph 596 of the contested decision that the relative size of each of
the TACA parties was calculated on the basis of their turnover in respect of worldwide maritime transport of containerised
cargo in 1996. The Commission considered that that turnover provided an indication of the resources and actual size of the
undertakings concerned.

1512 Table 12 at paragraph 596 of the contested decision sets out the four groups thus determined and the size of each of the TACA
parties in 1996 relative to that of Mærsk. It is apparent from that table that the four groups and the relative size of the
TACA parties which make up those groups are calculated as follows: the large carriers (Mærsk (1.00) and Sea-Land (0.89)),
the medium to large carriers (P&O (0.50), OOCL (0.44), NYK (0.41), Nedlloyd (0.39), Hanjin (0.33), Hapag Lloyd (0.32) and
Hyundai (0.31)), the small to medium carriers (DSR-Senator (0.24), NOL (0.22), MSC (0.21), Cho-Yang (0.18)) and the small
carriers (TMM-Tecomar (0.12), ACL (0.06) and POL (0.06)).

1513 Table 13 in paragraph 598 of the contested decision sets out the calculation of the amount of fines for each of those groups,
taking into account the nature of the infringements and their duration. Those amounts are ECU 27.5 million for the large carriers,
ECU 20.63 million for the medium to large carriers (apart from Hyundai, for which the amount of the fine is reduced on account
of the duration of its participation to ECU 18.56 million), ECU 13.75 million for the small to medium carriers and ECU 6.88
million for the small carriers.

1514 It is necessary to consider whether, as the applicants allege, that method of determining the amount of the fines infringes
the principles of individual assessment, equal treatment and proportionality, and the protection of legitimate expectations.

(a) The principle of individual assessment

1515 The applicants allege first that the Commission failed to examine individually the situation of each of them in determining
the amount of the fines. Next, they allege that dividing the TACA parties into four groups meant that in this case the Commission
only took into account in calculating the fines the worldwide turnover in respect of maritime transport of containerised cargo,
to the exclusion of other criteria relevant to the assessment of the seriousness of the infringement, in particular turnover
on the relevant market, the ratio of that turnover to worldwide turnover, profits made on the relevant market and the actual
effect of the infringements on the relevant market. They also refer to various failures to state reasons with regard to those
points.

1516 By their first complaint, the applicants thus challenge the adoption of a fixed rate for the basic amount of the fines for
each group of undertakings, as shown in Table 13 at paragraph 598 of the contested decision. It is that fixed rate which led
the Commission to ignore the differences which might exist between individual undertakings belonging to the same group.

1517 As regards the merits of the contested decision on that point, it is apparent from paragraph 595 of the contested decision
that in order to determine the seriousness of the infringements and in view of the considerable disparity between the sizes
of the TACA parties, the Commission divided them into four groups so as to impose larger fines on the larger TACA parties.

1518 The Court has already held in *CMA CGM*, cited at paragraph 427 above, paragraph 384, that the Commission did not exceed its powers regarding the imposition of fines
by dividing the undertakings concerned into groups according to their size, since by ensuring that undertakings in the groups
of larger undertakings incur higher fines than those imposed on undertakings in the groups of the smaller undertakings, that
division contributes to the aim of penalising the large undertakings more severely.

1519 The Court emphasised in particular in this regard that the Commission was not required, when determining fines on the basis
of the gravity of the infringement in question, to ensure, where fines are imposed on a number of undertakings involved in
the same infringement, that the final amounts of the fines resulting from its calculations for the undertakings concerned
reflect any distinction between them in terms of their overall turnover (*CMA CGM*, cited at paragraph 427 above, paragraph 385).

1520 Consequently, the Court finds that the Commission did not err in fact or in law in dividing the applicants into groups when
determining the gravity of the infringement (*CMA CGM,* cited at paragraph 427 above, paragraph 386).

1521 As regards the obligation to state reasons in that regard, the Court has held that the essential procedural requirement to
state reasons is satisfied where the Commission indicates in its decision the factors which enabled it to determine the gravity
of the infringement and its duration (Case C-291/98 P *Sarrió* v *Commission* [2000] ECR I-9991, paragraph 73).

1522 In the present case it is apparent to the requisite legal standard from paragraph 595 of the contested decision that, first,
in order to take account of the effective capacity of the undertakings concerned to cause significant damage and the need
to ensure that the amount of the fine has a sufficiently deterrent effect, the inherent seriousness of the infringement was
adjusted according to the size of the undertaking in question and, second, in order to impose higher fines on the larger undertakings
the Commission divided the TACA parties into four groups. Since the rate of the fines was the result of that division, it
must be found that the contested decision does contain a sufficient statement of reasons in that regard.

1523 The applicants' complaints on that point must therefore be rejected.

1524 By the second set of complaints, the applicants criticise the Commission for not having made separate calculations of the
fine for each party taking account of criteria other than turnover. They criticise the Commission in particular in this regard
for not taking account of their turnover on the relevant market or their share of that market.

1525 As regards the merits of the decision on that point, according to the case-law the gravity of infringements is to be determined
by reference to numerous factors, such as the particular circumstances of the case, its context and the dissuasive effect
of fines; moreover, no binding or exhaustive list of the criteria which must be applied has been drawn up (order in Case C-137/95
P *SPO and Others* v *Commission* [1996] ECR I-1611, paragraph 54). It has been consistently held that the factors on the basis of which the gravity of an
infringement may be assessed may, depending on the circumstances, include the volume and value of the goods in respect of
which the infringement was committed and the size and economic power of the undertaking (*Musique diffusion française*, cited at paragraph 1422 above, paragraph 120, and Joined Cases 96/82 to 102/82, 104/82, 105/82, 108/82 and 110/82 *IAZ and Others* v *Commission* [1983] ECR 3369, paragraph 52).

1526 In the present case, it is apparent from paragraph 598 of the contested decision that the basic amounts of the fines set out
at Table 13 were fixed on the basis of the nature of the infringements and their duration for each of the four groups identified
at Table 12 in paragraph 596. It is apparent from the latter paragraph that that division into four groups was carried out
by the Commission on the basis of the size of each of the TACA parties relative to that of Mærsk, according to their worldwide
turnover in respect of the maritime transport of containerised cargo. Therefore, the basic amounts set out in Table 13 result
indirectly from the reference to the applicants' turnover.

1527 The Court has already held that such a method, in which the turnover of the undertakings in question is used not to calculate
directly the level of fine as a proportion of that turnover but to adjust, when determining the gravity of the infringement,
the basic amount calculated on the basis of the nature of the infringement and its duration in order to take account of the
difference in size between the undertakings concerned, is in accordance with the legal framework of the sanctions as defined
by Article 15(2) of Regulation No 17 and the equivalent provisions of Regulations No 1017/68 and No 4056/86 (*CMA CGM*, cited at paragraph 427 above, paragraphs 395 and 397).

1528 In that regard, contrary to what the applicants maintain, the Commission is entitled when determining the size of the undertakings
concerned to refer to the total turnover rather than to their turnover on the relevant market(s). Indeed it has already been
held that the total turnover of the undertaking concerned constitutes an indication, albeit approximate and imperfect, of
its size and economic power (*Musique diffusion française*, cited at paragraph 1422 above, paragraph 121). Thus, in the maritime transport sector, the Court of First Instance has already
held that in taking the total turnover of the undertaking concerned for maritime transport of containerised cargo as the basis
for calculating the fines, the Commission did not infringe Article 19 of Regulation No 4056/86 (*CEWAL I*, cited at paragraph 568 above, paragraph 233, and *CMA CGM*, cited at paragraph 427 above, paragraph 399).

1529 Furthermore, the applicants err in maintaining that the Commission should have taken account of the fact that only 60% of
the turnover of the TACA parties on the trade in question is derived from the service contracts which are the subject of the
first abuse. The turnover in respect of service contracts alone does not reflect the effective capacity of the TACA parties
to cause damage, since such turnover does not take account of their resources and actual size. In so far as, in fixing the
amount of the fines in the present case, the Commission sought precisely to take account of the real capacity of the undertakings
concerned to cause damage, it was therefore entitled not to determine the size of the TACA parties on the basis of their turnover
in respect of service contracts alone.

1530 Finally, contrary to what the applicants maintain, that method does not lead to the Commission setting the level of the fine
by means of a calculation based only on total turnover, without taking account of factors peculiar to each applicant. It is
apparent from the contested decision as well as from the Guidelines, the principles of which were applied in that decision,
that whilst the gravity of the infringement is initially assessed on the basis of the particular characteristics of the infringement,
such as its nature and impact on the market, that assessment is subsequently adjusted according to the individual circumstances
of the undertaking, so that the Commission takes into consideration, besides the size and capacities of the undertakings,
both aggravating and mitigating circumstances, as the case may be (Joined Cases T-202/98, T-204/98 and T-207/98 *Tate & Lyle and Others* v *Commission* [2001] ECR II-2035, paragraph 109, and *CMA CGM*, cited at paragraph 427 above, paragraph 401).

1531 In those circumstances, the Commission was entitled when setting the fines on the basis of the gravity of the infringement
to disregard the factors peculiar to each applicant other than their total turnover from maritime transport of containerised
cargo.

1532 As regards compliance with the obligation to state reasons in that regard, it has been held that the essential procedural
requirement to state reasons is satisfied where the Commission indicates in its decision the factors which enabled it to determine
the gravity of the infringement and its duration (*Sarrió*, cited at paragraph 1521 above, paragraph 73). Furthermore, the scope of the obligation to state reasons must be determined
in the light of the fact that the gravity of infringements must be determined by reference to numerous factors; moreover,
no binding or exhaustive list of the criteria which must be applied has been drawn up (order in *SPO*, cited at paragraph 1525 above, paragraph 54, and *LR AF 1998*, cited at paragraph 334 above, paragraph 378).

1533 In the present case, it is apparent to the requisite legal standard from the contested decision, in particular paragraphs
591 to 596 thereof, that the gravity of the infringements was determined on the basis of their nature and adjusted according
to the relative size of the TACA parties expressed in terms of their worldwide turnover in respect of maritime transport of
containerised cargo in order to take account of the considerable differences in size between those parties, so that higher
fines could be imposed on the larger parties.

1534 Since the decision contains a statement of reasons to the requisite legal standard of the factors used by it to determine
the gravity of the infringements and the list of relevant criteria for determining the gravity of the infringements is not
binding on the Commission, it cannot be criticised for not stating why it does not rely on other grounds.

1535 As for the alleged fact that in setting fines at a level which represents a significant proportion of turnover on the relevant
market the Commission altered its practice in fixing fines, it suffices to state that that complaint amounts to a denial that
the Commission can use the turnover of the undertakings in question not to calculate directly the level of fines, but indirectly,
to adjust the inherent gravity of the infringement in order to take account of the difference in size between the undertakings
concerned. The statement of reasons on this point appears at paragraph 595 of the contested decision and at paragraph 1.A
of the Guidelines which the Commission is, in principle required to apply since their publication (*LR AF 1998*, cited at paragraph 334 above, paragraph 390).

1536 Similarly, as regards the fact that the Commission altered its practice by referring to worldwide turnover, it suffices to
state that at paragraph 598 it set out the reasons for that choice, namely to take account of the resources and actual size
of the undertakings concerned. It is true, as noted by the applicant in Case T-212/98 in particular, that that method can
result in a proportionately higher fine for certain applicants. However, the Commission is not required to explain why it
applies that method to each of the applicants. Since the Commission explained in its decision why it took account of worldwide
turnover, it provided each of the applicants with all the data necessary to enable it to know whether the decision is well
founded in its particular case or whether it may be vitiated by some defect enabling its validity to be challenged.

1537 The analogy drawn by the applicant in Case T-212/98 with the *PVC II* judgment (cited at paragraph 191 above) is false. It is true that in that judgment the Court of First Instance reduced the
fine imposed on certain PVC producers on the ground that the Commission wrongly calculated their market share in the PVC sector.
However, in its decision, the Commission had apportioned the total fine between the undertakings on the basis of the criterion
of the importance of each of them on the PVC market, calculated by reference to their average market share between 1980 and
1984 on that market (paragraph 1191). By contrast, the Commission did not fix the amount of the fines in the present case
by taking account of the market share of the undertakings in question. The analogy with the Court's judgment in *PVC II* is therefore groundless.

1538 Consequently, the contested decision contains a sufficient statement of reasons for the criteria adopted to determine the
gravity of the infringements. The complaint alleging failure to state reasons on that point must therefore be rejected.

1539 It follows from the foregoing that the complaints alleging infringement of the principle of individual assessment and failures
to state reasons in that regard must be rejected in their entirety.

(b) The principles of equal treatment and proportionality

1540 The applicants criticise the Commission for having divided the TACA parties into four groups artificially, without any explanation
of the criterion used for that purpose. They challenge both the definition of the four groups and the basic amounts applied
to each of those groups.

1541 First, as regards the definition of the four groups, it should be noted that, in terms of the merits of the contested decision
on that point, the Court held in *CMA CGM*, cited at paragraph 427 above, paragraphs 416 to 418, that the Commission is entitled to divide the undertakings concerned
into groups for the purpose of setting the amount of the fines, provided however that that division is coherent and objectively
justified.

1542 Thus, if the Court considered in that judgment that the division into four groups was defective in substance, it was only
to the extent that the coherency of that division was not apparent either from the decision, since the logic underpinning
the division was not apparent from a review of it and the decision did not explain the criteria used for that purpose, or
from the explanations subsequently given by the Commission, which did not justify the division carried out in the decision.

1543 In the present case by contrast, the coherency of the division into four groups in Table 12 in paragraph 596 of the contested
decision is clearly apparent from that table. It reveals that the thresholds dividing each group were fixed starting with
the size of the largest of the TACA parties, with successive reductions by half of that size, that is, 50%, 25% and 12.5%
of the size of Mærsk.

1544 Such a division is clearly one of the methods enabling the undertakings concerned to be divided into groups in a coherent
and objectively justified way. Further, the applicants have put forward no evidence to cast doubt on the coherency of a division
using that method.

1545 Contrary to what the applicants argued at the hearing, the Court in its judgment in *CMA CGM*, cited at paragraph 427 above, paragraphs 420 to 422, did not lay down the principle that the Commission was required in
dividing the undertakings concerned into groups for the purposes of fixing the amount of the fines to set the thresholds for
each of the groups where the relative differences in size were most pronounced, but merely held that in that case the Commission
could not maintain, as it had done in reply to written questions from the Court, that the division into groups had been carried
out according to that method, since the relative differences in size between the groups adopted in the contested decision
were not the most pronounced of those between the undertakings in question. Since the Commission was unable to justify the
choice of thresholds between the four groups adopted in the decision, the Court considered that that division infringed the
principle of equal treatment.

1546 In *IAZ*, cited at paragraph 1525 above, paragraph 53, the Court held to be lawful a calculation whereby the Commission first determined
the amount of the fines to be imposed and then spread that total among the undertakings concerned by dividing them into three
groups according to the size of their activities (determined on the basis of the number of conformity labels ordered from
the association in question, namely less than 10 000 labels, 10 000 to 50 000 labels and more than 50 000 labels).

1547 Consequently, the applicants erred in their argument at the hearing that the approach adopted by the Court in *CMA CGM*, cited at paragraph 427 above, must also result in a finding that the division into groups in the present case was similarly
flawed.

1548 As for compliance with the obligation to state reasons, it suffices to state that since the logic underlying the division
in the present case is apparent from Table 12 in paragraph 596 of the contested decision, the applicants were in a position
on that basis alone to know whether the decision was well founded or whether it might be vitiated by some defect enabling
its validity to be challenged, whilst on the same basis the Court is able to review its legality (*Van Megen Sports*, cited at paragraph 548 above, paragraph 51).

1549 Consequently, the division into four groups in the present case does not infringe the principles of equal treatment and proportionality
and is supported by a sufficient statement of reasons.

1550 Second, as regards the basic amounts of the fines imposed on each of the groups, it is apparent from Table 13 in paragraph
598 of the contested decision that the basic amounts imposed on each group according to the gravity and duration of the infringements
were fixed by successive reductions of 25% of the basic amount imposed on the largest undertaking.

1551 As regards the merits of the contested decision on that point, the Court has already held in *CMA CGM*, cited at paragraph 427 above, paragraph 431, that the method of fixing the basic amounts of the fines by making successive
reductions of 25% of the basic amount imposed on the largest carrier did not exceed the Commission's margin of discretion
in fixing fines. Since the Commission defined four groups on the basis of the applicants' relative size, the successive reduction
in steps of 25% of the basic amount used for the group containing the largest applicant may be regarded as a coherent method
which may be objectively justified.

1552 As for the alleged fact that in such a system the same basic amount is imposed within each group on undertakings of different
sizes, that is an integral feature of any system of division into groups. It has already been held at paragraph 1520 above
that that division represents an accurate assessment of the gravity of the infringement.

1553 Therefore, even if the effect of the division into groups is that certain applicants are allocated the same basic amount even
though they differ in size, that difference in treatment is objectively justified by the importance attached to the nature
of the infringement in comparison with the size of the undertakings in the assessment of the gravity of the infringement (*CMA CGM*, cited at paragraph 427 above, paragraph 411).

1554 Consequently, the Commission was entitled in this case to set the same basic amount for undertakings in the same group and
did not thereby infringe the principle of equal treatment.

1555 As regards compliance with the obligation to state reasons on that point, it suffices to state that the logic underlying the
determination of the basic amounts of the fines set out in Table 13 in paragraph 598 of the contested decision is apparent
from that table, and all the more so since those basic amounts of the fines translate precisely into figures the division
into four groups carried out in the contested decision.

1556 In those circumstances the applicants were manifestly in a position on that basis alone to know whether the decision was well
founded or whether it might be vitiated by some defect enabling its validity to be challenged, whilst on the same basis the
Court is able to review its legality (*Van Megen Sports*, cited at paragraph 548 above, paragraph 51).

1557 It is true that the contested decision does not set out the method or the calculation whereby the Commission determined, in
assessing the gravity of the infringement, the amount of EUR 2 million chosen for the large carrier group, on the basis of
which the other amounts were determined, any more than its relationship with the other groups identified in Table 12.

1558 However, according to the case-law, the essential procedural requirement to state reasons does not require the Commission
to set out in its decision the figures showing the method of calculating the fines, but only requires it to indicate the factors
which enabled it to determine the gravity of the infringement and its duration (*Sarrió*, cited at paragraph 1521 above, paragraphs 73 and 76).

1559 Those factors are apparent to the requisite legal standard from paragraphs 591 to 596 of the contested decision.

1560 Thus, in terms of the gravity of the infringement, the Commission states at paragraph 591 that in so far as the first abuse
sought to restrict price competition that abuse must, given its nature, be regarded as a serious infringement within the meaning
of the Guidelines, which provide in such a case that the amount which may be imposed in respect of the gravity of the infringement
may vary from EUR 1 million to 20 million. Furthermore, it is apparent from paragraphs 595 and 596 of the contested decision
that the Commission's intention was to adjust the amount calculated on the basis of the nature of the infringement according
to the size of the undertakings in question in order to take account, in the light of the considerable disparity between their
sizes, of the TACA parties' effective capacity to cause damage and the need to ensure that the amount of the fine has a sufficiently
deterrent effect.

1561 In those circumstances, the applicants cannot rely, as they sought to at the hearing, on the judgment in *CMA CGM*, cited at paragraph 427 above, in support of the complaint that the Commission did not explain why it imposed on the large
carriers an amount higher than the minimum laid down by the Guidelines for serious infringements. Whilst the Court found in
that judgment that the statement of reasons was defective in that regard, it was not because the Commission used a basic amount
higher than the minimum amount laid down by the Guidelines for serious infringements but because, after expressly stating
in its decision that the basic level of fine [should] be set at the very lowest end of the scale of fines appropriate for
a serious infringement, the Commission, without giving any explanation, ultimately adopted another amount. In the present
case, by contrast, the Commission at no point in the contested decision stated that it intended to impose the lowest amount
laid down by the Guidelines for serious infringements.

1562 Next, as regards the duration of the infringement, the Commission states at paragraph 597 of the contested decision that since
the duration of the infringement was two to three years, the level of the fines imposed on the basis of gravity should be
increased by 25%.

1563 Consequently, the contested decision contains a sufficient statement of reasons for the determination of the basic amounts
appearing in Table 13. Therefore, the applicants' complaints in that regard must be rejected.

1564 It follows from the foregoing that the applicants' complaints relating to the determination of the basic amount of the fines
must be rejected in their entirety.

(c) The principle of the protection of legitimate expectations

1565 The applicant in Case T-213/98 considers that the Commission has infringed the principle of the protection of legitimate expectations
by not applying the principles established in previous practice for calculating the fines. Furthermore, the applicant in Case
T-214/98 criticises the Commission for not having applied the criteria set out in the Guidelines.

1566 As regards, first, the complaint alleging failure to apply previous practice, the applicant in Case T-213/98 essentially criticises
the Commission for having altered its practice in applying the Guidelines.

1567 As regards the setting of fines for infringements of the competition rules, the Commission exercises its powers within the
limits of the discretion conferred on it by Regulation No 17, Regulation No 1017/68 and Regulation No 4056/86. It is settled
case-law that traders cannot have a legitimate expectation that an existing situation which is capable of being altered by
the Community institutions in the exercise of their discretion will be maintained (Case 245/81 *Edeka* [1982] ECR 2745, paragraph 27, Case C-350/88 *Delacre and Others* v *Commission* [1990] ECR I-395, paragraph 33, and *LR AF 1998*, cited at paragraph 334 above, paragraph 241).

1568 Thus, it has already been held that the Commission was entitled to raise the general level of fines, within the limits laid
down in Regulation No 17, if that was necessary to ensure the implementation of the Community competition policy (*Musique diffusion française*, cited at paragraph 1422 above, paragraph 109).

1569 In the present case, whilst it is true that the Commission applied the Guidelines to facts which occurred prior to their publication,
it has already been held above that the method for fixing the amount of the fines laid down by the Guidelines respects the
legal framework defined by Regulation No 17, Regulation No 1017/68 and Regulation No 4056/86.

1570 It follows that the Commission has not infringed the applicant's legitimate expectations in following the method defined in
the Guidelines for fixing the fines imposed in the contested decision.

1571 In any event, in so far as the applicant criticises the Commission for not calculating the amount of the fines on the basis
of an individual assessment of the undertakings concerned and for not taking account of all the relevant factors, it is apparent
from the case-law prior to the adoption of the Guidelines that the criteria for determining the gravity of the infringement
are neither exhaustive nor binding (order in *SPO*, cited at paragraph 1525 above, paragraph 54).

1572 Thus, well before the adoption of the Guidelines, the Community judicature had already upheld the lawfulness of a calculation
method whereby the Commission first determines the overall amount of the fines to be imposed and then divides that total among
the undertakings concerned according to their activities in the relevant sector (*IAZ*, cited at paragraph 1525 above, paragraph 53).

1573 Since the Commission's previous practice did not consist solely in using a method based on an individual assessment of the
undertakings concerned on the basis of all the relevant criteria, the applicant could not legitimately expect that such a
method would be applied to it in the contested decision.

1574 Therefore the applicant's complaints on that point must be rejected.

1575 Second, as regards the complaint made by the applicant in Case T-214/98 alleging failure to apply the criteria set out in
the Guidelines, it is apparent from the foregoing that in determining the amount of the fines on the basis, first, of the
inherent gravity of the infringements, adjusted according to the size of the undertaking, and, second, of the duration of
the infringements, the Commission in the present case accurately applied the criteria set out in the Guidelines, which is
incidentally alleged against it by the other applicants in the complaints examined above.

1576 Further, the Guidelines expressly include the possibility of adjusting the inherent gravity of the infringement on the basis
of the size of the undertakings concerned. In the sixth paragraph of section 1.A of those guidelines, the Commission states
that for infringements involving more than one undertaking it may be necessary in some cases to apply weightings to the amounts
of the fines determined in order to take account of the specific weight and, therefore, the real impact of the offending conduct
of each undertaking on competition, particularly where there is considerable disparity between the sizes of the undertakings
committing infringements of the same type. The Commission states in the seventh paragraph of section 1.A that the principle
of equal punishment for the same conduct may, if the circumstances so warrant, lead to different fines being imposed on the
undertakings concerned without this differentiation being governed by arithmetical calculation.

1577 Therefore the complaints of the applicants in Cases T-213/98 and T-214/98 alleging infringement of the principle of the protection
of legitimate expectations must be rejected.

(d) Conclusion on the method adopted by the Commission to determine the amount of the fines

1578 It follows from all the foregoing that the applicants' pleas and complaints in respect of the Commission's method in the present
case for fixing the amount of the fines must be rejected in their entirety.

B - The assessment of the mitigating circumstances

1. Arguments of the parties

1579 The applicants allege that the Commission failed to adjust the level of the fines to reflect mitigating factors.

1580 The first mitigating factor put forward by the applicants is that, in accordance with its practice in other cases (Commission
Decision 88/518/EEC of 18 July 1988 relating to a proceeding under Article 86 of the EEC Treaty, Case No IV/30.178 Napier
Brown - British Sugar, OJ 1988 L 284, p. 41, paragraph 87; Commission Decision 94/985, paragraph 159), the Commission should
have taken account of the fact that Community law has not been sufficiently developed in certain respects.

1581 First, they refer to the fact that, as the Commission admits in other contexts (see, for example, the Commission Notice on
the application of the competition rules to access agreements in the telecommunications sector, OJ 1998 C 265, p. 2, paragraph
76), the conditions for the existence of a collective dominant position in the case of liner conferences were not clearly
defined. Contrary to its statement at paragraph 522 of the contested decision, the Commission earlier expressed the view that
a collective dominant position requires there to be no competition at all between the companies on the relevant market (Notice,
cited above, paragraphs 78 and 79). The applicants also deny that they have known since at least 10 December 1993 that the
Commission has considered that the TAA parties were in a dominant position (paragraph 603 of the contested decision). The
applicants stress that that assertion, formulated in the statement of objections in the TAA case, was not repeated in the
TAA decision. They add that market conditions have changed since then.

1582 Second, the contested decision is the first case in which the Commission has addressed the obligations of members of a conference
with respect to new members in a case in which the conference is also governed by US law.

1583 Third, the contested decision is the first application of competition law to agreements between the members of a liner conference
on service contracts. Accordingly, even if the parties were aware from October 1994 that the Commission considered the ban
on individual service contracts to be a serious restriction of competition (paragraph 603), it should have imposed no fine,
or only a low one (see Commission Decision 87/1/EEC of 2 December 1986 relating to a proceeding under Article 85 of the EEC
Treaty, IV/31.128 - Fatty Acids, OJ 1987 L 3, p. 17, paragraphs 34, 35, 58 and 59). The TAA decision makes no finding as to
the lawfulness of prohibiting individual service contracts in the light of Articles 85 and 86. As for the Commission's letter
of 15 December 1994, referred to at paragraph 604 of the contested decision, it could not in any case have put the parties
on notice that the Commission intended to impose fines under Article 86. Lastly, contrary to the assertion at paragraph 601,
it is apparent from the letter from the applicants' lawyers set out at paragraph 153 that they did not receive legal advice
to the effect that dual rates were contrary to the TAA decision where they are requested by the shipper.

1584 Fourth, the contested decision is the first case in which a fine has been imposed under Article 86 in respect of an agreement
notified to the Commission. Judge Kirschner, acting as Advocate General, has concluded (in his Opinion in *Tetra Pak I*, cited at paragraph 1420 above) that a fine could not be imposed in such a case. The applicants also note that in other cases
of that type the Commission has not imposed fines (Commission Decision 76/353/EEC of 17 December 1975 relating to a procedure
under Article 86 of the EEC Treaty, IV/26.699 - Chiquita, OJ 1976 L 95, p. 1, paragraph 119; Commission Decision 89/113/EEC
of 21 December 1988 relating to a proceeding under Articles 85 and 86 of the EEC Treaty, IV/30.979 and 31.394, Decca Navigator
System, OJ 1989 L 43, p. 27).

1585 Fifth, the applicants repeat that the activities to which the Commission objects in the contested decision are permitted or
required by US law.

1586 The applicant in Case T-212/98 considers that uncertainty as to the state of Community law and, in particular, the lack of
clarity concerning the concept of collective dominant position apply a fortiori in its case, as a non-Community carrier with
a weak position on the Community market. Furthermore, the Commission failed, contrary to its previous practice (Commission
Decision of 15 March 1994 declaring a concentration to be compatible with the common market (Case No IV/M.422 - Unilever France
/ Ortiz Miko (II) according to Council Regulation (EEC) No 4064/89, paragraph 19), to take account of the imbalance between
the market shares of the undertakings concerned. It also points out that when it became a member of the conference the TAA
agreement had just been amended to take account of the Commission's requirements. Since the modified agreement, that is, the
TACA, had been notified, it was legitimate for the applicant to assume that its admission to the TACA was compatible with
Article 86. Lastly, in the light of the foregoing factors the applicant considers that it had a legitimate expectation that
the Commission would not impose a fine in its case.

1587 The applicant in Case T-213/98 does not understand the significance that the Commission seems to attach to the opinions it
expressed during the administrative procedure in the TAA and TACA cases, and to which it refers at paragraphs 603 and 604
of the contested decision. If the Commission intended to take these into account in calculating the fine, the applicant considers
that, given the uncertain state of Community law during the period in question, the Commission's opinions should not affect
the position of the parties adversely, in particular as regards the amount of the fines. The applicant submits that any undertaking
to which a statement of objections is addressed is entitled to continue to believe in good faith in the lawfulness of the
conduct under review and in the possibility of having the Commission's final decision annulled.

1588 In any event the Commission should have taken account of the novelty of the legal situation addressed by the contested decision
as a mitigating factor. The applicant stresses the particularity of the competition rules established by Regulation No 4056/86.
It submits that it is because of that particularity that well-established notions of competition law such as the prohibition
of horizontal price agreements, market sharing arrangements and capacity control agreements do not apply in the maritime transport
sector. In those circumstances, and in the absence of authority from the Court on the scope of the block exemption, the applicant
considers that the amount of the fine should have taken account of the fact that it was reasonable for the applicants to believe
that their practices complied with competition law.

1589 The second mitigating factor advanced by the applicants is the degree of cooperation with the Commission. The applicants stress
first that they notified the TACA in July 1994, and other agreements on inland cooperation, namely the EIEIA and the hub and
spoke system, after that date. They consider that such notification informs the Commission of all material facts and potential
infringements of which it was previously unaware, so that, by analogy with the Commission Notice on the non-imposition or
reduction of fines in cartel cases (OJ 1996 C 207, p. 4) and in accordance with its previous practice (Decision 89/113; Commission
Decision 79/68/EEC of 12 December 1978 relating to a proceeding under Article 85 of the EEC Treaty, IV/29.430 - Kawasaki,
OJ 1979 L 16, p. 9; Commission Decision 96/438/EC of 5 June 1996 relating to a proceeding pursuant to Article 85 of the EC
Treaty, IV/34.983 - Fenex, OJ 1996 L 181, p. 28, paragraph 89), the Commission should not have imposed a fine or should have
reduced the amount of it. The applicants point next to the lengthy correspondence and the meetings which took place on the
subject of service contracts and the fixing of tariffs for inland transport. Lastly, they observe that the TACA is a modification
of the TAA agreement following the TAA decision and that the TACA was modified on numerous occasions in the course of the
procedure to take account of the Commission's objections.

1590 The applicant in Case T-213/98 stresses that, far from being a hidden cartel, the TACA conference has at all times acted openly
and transparently, filing its tariffs with the US authorities and making them publicly available as required by Article 5
of Regulation No 4056/86. The applicant also refers to the fact that the Commission was kept continually informed of the TACA
practices, which were notified in detailed applications for individual exemption. The applicant points out that under Regulation
No 1017/68 and Regulation No 4056/86, notification was not obligatory. Finally, the applicant has always entered into open
discussion with the Commission with a desire to arrive at a solution which complied with Community law and was at the same
time commercially satisfactory.

1591 The third mitigating factor put forward by the applicants concerns the difficult market conditions and the financial losses
made by the TACA parties. The applicants allege that they incurred losses of about USD 600 million in 1991 and 1992, and following
the entry into force of the TACA many of them continued to make losses or only small profits. In its earlier decisions (Commission
Decision 83/546/EEC of 17 October 1983 relating to a proceeding under Article 85 of the EEC Treaty, IV/30.064 - Cast iron
and steel rolls, OJ 1983 L 317, p. 1, paragraphs 72 and 74) the Commission took that type of factor into account in order
to reduce the amount of the fine. Moreover, the Community legislature has recognised the importance of liner conferences for
Community industry (see the third and fifth recitals of the preamble to Regulation No 479/92).

1592 The applicant in Case T-212/98 further submits that because of its weak position on the relevant market and its status as
a new entrant it could not have played a significant role in the alleged infringements, nor could it have committed the infringement
deliberately or negligently.

1593 The Commission observes first as regards the state of Community law that in the present case there is no new factor justifying
the reduction of the fines. There is nothing new in the idea that the members of a conference may occupy a dominant position
or in the idea that the measures taken in a concerted effort to subvert or eliminate potential competition can constitute
an abuse of a dominant position. The fact that the TACA is also subject to the requirements of US law adds nothing to the
debate. As regards the application of the competition rules to service contracts, the Commission stresses that the abuse in
question is a classic one consisting in the imposition of unfair trading conditions on customers and the refusal to supply
users except on the conference's own terms. As for the lack of immunity from fines for an infringement of Article 86, the
Commission observes that this is not a case of a new development in the substantive law relating to abuse of a dominant position.
Lastly, since there is no obligation under US law to carry out the activities giving rise to the infringements, that is not
a factor justifying a reduction of the fines.

1594 Second, as regards cooperation with the Commission, the applicants cannot rely on the Notice on the non-imposition or reduction
of fines in cartel cases, cited above, since the present case is not one in which a cartel was denounced. On the contrary,
in the course of the procedure the applicants contested the Commission's view of the law and the facts.

1595 Third, as regards the difficult market conditions, the Commission points out that the applicants' claim of unfavourable conditions
relates to a period well before both the abuses in question and the contested decision.

1596 In Case T-213/98 the Commission repeats that the issues raised in the present case are not new. The Commission cannot accept
that since Regulation No 4056/86 creates in certain respects a favourable competition regime for shipping lines, they were
entitled to believe that none of the established rules of Community competition law applied to them.

2. Findings of the Court

1597 As a preliminary point, it must be remembered that the result of the consideration of the pleas prior to this one was that
the fines imposed by Article 8 of the operative part of the contested decision must be annulled inasmuch as they relate to
the second abuse and, where they relate to the first abuse, in so far as they concern the mutual disclosure of the availability
and content of individual service contracts and, for the other practices constituting the first abuse, namely the practices
in issue relating to service contracts laid down by Article 14 of the TACA, in so far as they were imposed pursuant to Regulation
No 4056/86.

1598 Consequently, the present plea must be considered solely in respect of that part of the fines which was imposed in respect
of those practices pursuant to Regulation No 1017/68.

1599 It is apparent from paragraph 92 of the contested decision that the carrier haulage services within the territory of the Community
which fall within Regulation No 1017/68 represented some 48% of the cargo that the TACA parties carried on the transatlantic
trade in 1995.

1600 Since it is apparent from Table 13 in paragraph 598 of the contested decision that the amount of the fines imposed for the
first abuse is about 9% of the total fines imposed by the contested decision, the part of the fines imposed pursuant to Regulation
No 1017/68 represents about 5% of that amount.

1601 It is therefore necessary to determine whether that part of the fine remains justified notwithstanding the mitigating circumstances
put forward by the applicants.

1602 In paragraphs 601 to 606 of the contested decision, the Commission excluded the existence of mitigating circumstances essentially
on the grounds that no reason was put forward to explain why the TACA parties should be considered to have acted as a follower
as opposed to a leader and that the TACA parties could not have been unaware that their activities had as their object the
restriction of competition and did not fall within the block exemption laid down by Regulation No 4056/86, and could have
had no doubt as to the possibility that fines would be imposed on them under Article 86 of the Treaty notwithstanding the
notification of the rules in respect of service contracts.

1603 First, as already held above at paragraphs 1468 and 1469, the abusive practices laid down by Article 14 of the TACA were all
notified to the Commission with a view to obtaining individual exemption. Although the TACA parties made that notification
under Regulation No 4056/86, the Commission itself informed them by letter dated 15 July 1994 that their application for individual
exemption would also be examined in the light of Regulation No 1017/68 as some of the notified activities did not fall within
the ambit of Regulation No 4056/86.

1604 Furthermore, the TACA parties expressly informed the Commission on 9 March 1995 that the FMC had required them to amend their
agreement so as to allow the conclusion of individual service contracts in 1996 provided that those contracts complied with
the provisions of Article 14 of the TACA. On 21 March 1995, the TACA parties thus sent the Commission an amended version of
Article 14 of the TACA notified in 1994.

1605 It is clear that in so doing the applicants on their own initiative revealed the practices regarded by the Commission as constituting
an abuse contrary to Article 86 of the Treaty.

1606 That is all the more so since neither Regulation No 4056/86 nor Regulation No 1017/68 establishes a system of compulsory notification
for the grant of individual exemption, so that the applicants notified the TACA voluntarily.

1607 In those circumstances, the notification of the TACA enabled the Commission to establish more easily that the practices provided
for in that agreement relating to service contracts were an abuse, and thus facilitated the Commission's task of establishing
infringements of the Community competition rules and bringing them to an end which, according to the case-law, is a factor
justifying a reduction in the fine (Case C-297/98 P *SCA Holding* v *Commission* [2000] ECR I-10101, paragraph 36; see also, to that effect, Case C-338/00 P *Volkswagen* v *Commission* [2003] ECR I-9189, paragraph 179).

1608 It is apparent that in the contested decision the Commission did not consider in assessing whether there were any mitigating
circumstances in the TACA parties' case the extent to which they cooperated during the administrative procedure. Neither in
its written pleadings nor at the hearing did the Commission deny that the notification of the TACA amounted to cooperation,
however. It merely submitted in the defence that during the administrative procedure the applicants persistently contested
the facts and the legal assessment thereof, so that it could not be said that there was any cooperation within the meaning
of the Notice on the non-imposition or reduction of fines in cartel cases.

1609 However, the applicants do not claim that they did not dispute the facts or the infringements recorded in the contested decision,
but merely that they enabled the Commission to establish the existence of those facts and infringements more easily. That
being the case, the applicants do not rely on that notice at all, which concerns cooperation with the Commission in relation
to the exposure of secret cartels, which is not the situation in the present case. They rely rather on the cooperation to
which the Commission must have regard in any proceedings applying the Community competition rules where the conduct of the
undertakings in question during the administrative procedure facilitates the Commission's task within the meaning of the case-law
cited above. In any event, under the sixth indent of section 3 of the Guidelines, the Commission itself provides for the possibility
of reducing fines in order to take account of effective cooperation by the undertaking in the proceedings, outside the scope
of the Notice ... on the non-imposition or reduction of fines.

1610 Finally, it is irrelevant that the abusive practices in question were disclosed for the purpose of obtaining individual exemption
under Article 85(3) of the Treaty. Since, by their notification, the TACA parties enabled the Commission to detect and more
easily prove the existence of the relevant practices constituting the first abuse, they necessarily facilitated the Commission's
task within the meaning of the case-law cited above.

1611 Second, the contested decision is the first decision in which the Commission directly assessed the lawfulness, in the light
of the Community competition rules, of the practices on service contracts adopted by shipping conferences.

1612 As regards in the first place the application of Article 85 of the Treaty, the Commission errs in relying on paragraph 410
of the TAA decision in order to claim at paragraph 603 of the contested decision that the applicants have known since October
1994 that the Commission considered the banning of individual service contracts to be a serious restriction of competition.
Under that paragraph of the TAA decision, the Commission does not in the least find that the prohibition of individual service
contracts constitutes a restriction of competition within the meaning of Article 85(1) of the Treaty; it merely finds that
the agreement fixing maritime transport rates entered into by the TAA members does not satisfy the first condition for the
grant of individual exemption laid down by Article 85(3) of the Treaty, in particular on the ground that by prohibiting direct
and individual business negotiations between structured members of the TAA and shippers ... the TAA limits the opportunities
for direct cooperation and partnership in the medium or long term between suppliers and clients.

1613 Furthermore, in so far as, given the reference in paragraph 286 of the TAA decision to paragraphs 13 to 15 thereof, that decision
may be interpreted as prohibiting the rules and conditions laid down by the TAA on service contracts described in those paragraphs,
namely those concerning their duration, the minimum quantities to which they must apply and the procedures for entering into
individual service contracts (an interpretation not advocated by the Commission either in the present proceedings or in the
TAA case), it is clear that since, according to the TAA decision, the TAA was not a shipping conference, that decision cannot
be regarded as having already assessed the lawfulness of the rules adopted by shipping conferences on service contracts. In
any event, the TAA decision merely assesses the lawfulness of two of the five practices considered to be abusive in the contested
decision. By contrast, the TAA notified in 1992 also contained rules for the prohibition of contingency clauses, the prohibition
of multiple contracts and the amount of liquidated damages, which were considered to be abusive in the contested decision.

1614 Next, as regards the application of Article 86 of the Treaty, whilst it is true, as the Commission states at paragraph 602
of the contested decision, that in the statement of objections in the TAA case it informed the TAA parties that it intended
to impose fines for abuse of a dominant position in relation to service contracts, in the final decision the Commission did
not find that there had been an infringement of Article 86 of the Treaty on that point. In those circumstances, given the
provisional nature of the statement of objections, the applicants were entitled to believe that the Commission had withdrawn
its complaints concerning the application of Article 86 of the Treaty to the rules on service contracts.

1615 Third, it cannot seriously be denied that the legal treatment that should be reserved for the practices of shipping conferences
on service contracts, particularly because of their close links with agreements which are the subject of block exemption pursuant
to a wholly specific and exceptional set of rules under competition law, was not at all straightforward and, in particular,
raised complex legal issues (see by analogy *FEFC*, cited at paragraph 196 above, paragraph 484).

1616 In the present case, as is apparent from paragraphs 496 to 507 and 520 to 528 above, although the grounds of the contested
decision are set out in 611 paragraphs, it was only at the hearing that the Commission explained the extent to which the TACA
practices on service contracts were, according to that decision, contrary to Articles 85 and 86 of the Treaty, and the Commission
itself admitted at the hearing and in reply to the Court's written questions on that point that both the operative part and
certain paragraphs of the contested decision could, taken separately, be interpreted otherwise. In particular, the contested
decision contains several contradictory passages concerning the question whether the TACA parties were entitled to enter into
conference service contracts and whether those parties were free to determine the content of such contracts even though, as
is apparent from paragraphs 421 to 423 of the *TAA* judgment, the TAA decision already gave rise to difficulties of interpretation on that point.

1617 Fourth, the abuse resulting from the practices on service contracts do not constitute a classic abuse within the meaning of
Article 86 of the Treaty.

1618 Contrary to the Commission's submission, the practices in question can certainly not be likened to cases of an outright refusal
to supply, which have already been held to be abusive by the case-law relating to, inter alia, ceasing to deliver to an existing
customer where there is nothing unusual about that customer's orders (*United Brands*, cited at paragraph 853 above, paragraph 186), refusing to supply a customer so as to reserve for oneself a derivative market
(Joined Cases 6/73 and 7/73 *Istituto Chemioterapico Italiano and Commercial Solvents* v *Commission* [1974] ECR 223, paragraph 24) or the refusal to supply a customer so as to protect exclusive rights (Case C-238/87 *Volvo* [1988] ECR 6211, paragraph 9, and Joined Cases C-241/91 P and C-242/91 P *RTE and ITP* v *Commission* [1995] ECR I-743, paragraph 54). In the present case, whilst it is true that by the practices in question the TACA parties
restricted the availability and content of service contracts, they in no way deprived shippers of the possibility to have
their cargo carried by conference members on the trade in question, whether under service contracts or at tariff rates. The
Commission itself stated at paragraph 553 of the contested decision that the practices in question did not constitute an outright
refusal to supply but, in its own words, a refusal to supply other than on the basis of unfair conditions.

1619 Furthermore, whilst the relevant restrictions in relation to service contracts may be qualified, at paragraph 592 of the contested
decision, as a serious infringement within the meaning of the Guidelines, given their objective of seeking to restrict price
competition, which the applicants cannot seriously deny since they justify those rules by the need to preserve the stability
of tariff rates, it is not manifestly clear that such rules constitute an abuse within the meaning of Article 86 of the Treaty.

1620 In addition to the fact that in the TAA decision the Commission abandoned the complaints of abuse initially formulated on
that point, in the present case it was only in the statement of objections, after three years of examining the rules in question,
that the Commission informed the TACA parties for the first time that it intended to apply Article 86 of the Treaty to the
practices even though it is apparent from the exchange of correspondence during the administrative procedure that it had already
examined them in detail at the end of 1994 and at the beginning of 1995. At that stage, however, the Commission at no time
alluded to a possible application of Article 86 of the Treaty. Thus, in its letter of 15 December 1994 the Commission merely
emphasised that the practices on service contracts did not fall within the block exemption laid down by Regulation No 4056/86
and that they should be amended in order to qualify for individual exemption. Similarly, when the Commission was informed
by the TACA parties, following the intervention of the FMC, of the application of the rules laid down by Article 14 of the
TACA to individual service contracts, it merely informed them, in its letter of 16 May 1995, that that application appeared
to restrict competition and was unlikely to qualify for individual exemption.

1621 In those circumstances, the TACA parties could, notwithstanding the case-law to the effect that agreements entered into by
a dominant undertaking are liable to constitute an abuse, legitimately have been unaware that their practices on service contracts
were likely to be regarded as such. It was only at the hearing that the Commission explained for the first time that, whilst
the contested decision found that the rules laid down by Article 14 of the TACA were contrary to Article 85 of the Treaty
only in so far as they applied to individual service contracts, but not in so far as they applied to conference service contracts,
the decision established that those rules were in any event contrary to Article 86 of the Treaty, including in their application
to conference service contracts.

1622 Fifth, the applicants had every reason to believe during the administrative procedure in question that the Commission would
not fine them in respect of their practices on service contracts.

1623 First, in so far as those practices fall within the ambit of Regulation No 4056/86, it has already been held above that the
TACA parties enjoyed immunity from fines under that regulation for the infringements of Article 86 of the Treaty. Although
the part of the fines imposed pursuant to Regulation No 4056/86 need no longer be considered in the context of the present
pleas, the Commission was thus wrong to find against the applicants at paragraph 604 of the contested decision that all of
the TACA parties had access to sufficient legal advice to know of the possibility of fines for breaches of Article 86 notwithstanding
the notification of the TACA.

1624 Furthermore, in so far as the practices in question fall within Regulation No 1017/68, there existed at that time genuine
uncertainty as to whether there was any immunity from fines under that regulation. Although the Court held in *Atlantic Container Line*, cited at paragraph 44 above, that there was no immunity from fines under Regulation No 1017/68 and that such immunity could
not be inferred from general principles, it cannot be denied that there was a serious doubt in that regard, since, according
to the decision at issue in that judgment, the Commission itself had considered it necessary by way of a precaution to withdraw
from the TACA parties the immunity from fines in respect of the TACA provisions fixing inland rates, should those parties
have qualified for immunity under Regulation No 1017/68. It follows that the complaint set out at paragraph 604 of the contested
decision, to the effect that the TACA parties could not have been unaware of the risk that they would be fined under Article
86 of the Treaty in respect of the notified agreements, likewise cannot be upheld in respect of the part of the fines imposed
pursuant to Regulation No 1017/68, which is the only one still to be examined for the purposes of the present pleas.

1625 Therefore, even if the Commission informed the TACA parties by letter of 15 December 1994 that in its view the TACA practices
on service contracts did not fall within the block exemption laid down by Regulation No 4056/86, which admittedly suggested
that it had reservations in that regard, it was nevertheless legitimate for the TACA parties to believe that they were protected
from the risk of fines under Articles 85 and 86 of the Treaty by the fact of notifying those rules. The Commission could not
therefore, at paragraph 604 of the contested decision, hold that letter against the applicants so as to exclude the existence
of mitigating circumstances.

1626 Second, notwithstanding the continuous exchange of correspondence with the TACA parties during the administrative procedure
in the present case, the Commission did not inform them prior to issuing the statement of objections that it intended to treat
the practices in question not only as restrictions of competition within the meaning of Article 85 of the Treaty, but also
as an abuse of a dominant position under Article 86 of the Treaty.

1627 It must be remembered, however, that all the fines imposed by the contested decision were in respect of the period between
the notification of the TACA and the issue of the statement of objections.

1628 It follows that even if the TACA parties considered that the notification of the practices on service contracts did not give
them immunity from fines for infringements of Article 86 of the Treaty, they had no reason to amend them in order to escape
fines under that provision since, at that time, they were unaware that the Commission considered them to be an abuse.

1629 For that reason too, the complaint in paragraph 604 of the contested decision that all of the TACA parties had access to sufficient
legal advice to know of the possibility of fines for breaches of Article 86 notwithstanding the notification of the TACA cannot
be upheld.

1630 Third and finally, as the applicants submitted in their written pleadings, the Commission has already conceded in earlier
decisions that where the same conduct was contrary to Articles 85 and 86 of the Treaty, no fines should be imposed where that
conduct had been notified with a view to obtaining individual exemption under Article 85(3) of the Treaty. Thus it is apparent
from Decision 89/113, in which the Commission found that Racal Decca had infringed Articles 85 and 86 of the Treaty in respect
of certain agreements notified for the purposes of an exemption, that no fine was imposed on that undertaking, either under
Article 85 or under Article 86, inter alia on the ground that from the beginning Racal Decca had brought the abusive practices
to the Commission's attention. Similarly, the Court has already held that in Decision 76/353 the Commission did not impose
a fine on United Brands under Article 86 of the Treaty for having prohibited its ripener/distributors from reselling its bananas
while still green, as that prohibition appeared in the general conditions of sale notified by United Brands with a view to
obtaining an exemption (*United Brands*, cited at paragraph 853 above, paragraphs 291 and 292).

1631 At the hearing the applicants also pointed out rightly that in the Van den Bergh Foods case (Commission Decision 98/531/EC
of 11 March 1998 relating to a proceeding under Articles 85 and 86 of the EC Treaty, Case Nos IV/34.073, IV/34.395 and IV/35.436
- Van den Bergh Foods Limited, OJ 1998 L 246, p. 1) the agreements notified by the dominant undertaking in question with a
view to obtaining individual exemption, which made provision for the supply of freezers to sales points distributing that
undertaking's ice cream, on condition that they be used exclusively for those products, were regarded as being both a restriction
of competition and an abuse, but were not penalised with fines.

1632 The Commission has not put forward any other decisions in which a fine was imposed for infringement of Article 86 of the Treaty
in respect of conduct notified under Article 85(3) of the Treaty.

1633 In the light of all of those factors, without there being any need to make a finding in respect of the other pleas and complaints
raised by the applicants, the Court in the exercise of its unlimited jurisdiction considers that there is justification for
not imposing a fine in the present case in respect of the abusive practices provided for in Article 14 of the TACA in so far
as they fall within the ambit of Regulation No 1017/68.

1634 Consequently, Article 8 of the operative part of the contested decision must be annulled.

VII. *The plea alleging infringement of the second paragraph of Article 215 of the Treaty*

*Arguments of the parties*

1635 The applicant in Case T-213/98 submits that the Commission caused it unlawful injury in requiring it to provide a bank guarantee
for the fine imposed on it.

1636 The Commission considers that that plea is inadmissible and unfounded.

*Findings of the Court*

1637 Under the first paragraph of Article 21 of the Statute of the Court of Justice, applicable to proceedings before the Court
of First Instance by virtue of the first paragraph of Article 53 thereof, and under Article 44(1)(c) and (d) of the Rules
of Procedure, the application must include the subject-matter of the dispute, the forms of order sought and a brief statement
of the pleas in law. Those particulars must be sufficiently clear and precise to enable the defendant to prepare the defence
and the Court of First Instance to rule on the application without further information, as the case may be. In order to guarantee
respect for the adversarial system, legal certainty and sound administration of justice it is necessary, for an action to
be admissible, that the basic matters of law and fact relied on be indicated, at least in summary form, coherently and intelligibly
in the application itself (order in *de Hoe*, cited at paragraph 281 above, paragraph 20; *Ismeri Europa*, cited at paragraph 281 above, paragraph 29; and order in *Partido Latinoamericano*, cited at paragraph 281 above, paragraph 6).

1638 It is apparent from the case-law that in the light of those requirements it is first and foremost for the party seeking to
establish the Community's liability to adduce proof as to the existence or extent of the damage it alleges and to establish
the causal link between that damage and the conduct complained of on the part of the Community institutions (Case 26/74 *Roquette Frères* v *Commission* [1976] ECR 677, paragraphs 22 and 23, and Case C-401/96 P *Somaco* v *Commission* [1998] ECR I-2587, paragraph 71).

1639 In the present case, as the Commission rightly pointed out at the hearing, the application does not adequately identify the
conduct on the part of the Commission alleged to be defective.

1640 In its written pleadings the applicant merely points out that the Commission's insistence on a bank guarantee placed NYK in
the undesirable position of having to arrange such an instrument at considerable cost and that given the wholly exceptional
nature of the case, characterised as it is by almost unprecedented examples of maladministration on the part of the Commission,
NYK respectfully submits that the Commission has caused it unlawful injury. Similarly, at the hearing, the applicant merely
submitted that the illegalities alleged in the context of the pleas seeking annulment are so serious that they justify compensation
under Article 215 of the Treaty.

1641 The passages from the application cited above and the evidence submitted at the hearing do not enable the Court to identify
the alleged fault of the Commission, or even whether that conduct is distinct from the illegality of the contested decision
(Joined Cases T-185/96, T-189/96 and T-190/96 *Riviera Auto Service and Others* v *Commission* [1999] ECR II-93, paragraph 90; in the sector of the ECSC Treaty: Case T-171/99 *Corus UK* v *Commission* [2001] ECR II-2967, paragraph 45). In particular, the application does not clearly indicate whether the alleged fault is
the adoption of the contested decision, the fact that the Commission required a bank guarantee, or both.

1642 It follows that the forms of order seeking compensation set out in the application must, for that reason alone, be rejected
as inadmissible.

1643 Furthermore, in so far as at the hearing the applicant submitted in the context of its claim for compensation under Article
215 of the Treaty that the enforcement of the Court's judgment setting aside that aspect of the decision would require the
Commission to reimburse the costs in connection with providing the bank guarantee pursuant to Article 176 of the EC Treaty
(now Article 233 EC), it suffices to recall that, according to the case-law, a request such as that, made independently of
the application for costs, must be rejected as inadmissible because it in fact concerns enforcement of the judgment. Under
Article 176 of the Treaty it is for the Commission to take the measures necessary to comply with the judgment (*Cimenteries CBR*, cited at paragraph 172 above, paragraph 5118, and Case T-224/00 *Archer Daniels Midland and Others* v *Commission* [2003] ECR II-2597, paragraph 356). In any event, in the present case it should be noted that such a plea alleging infringement
of Article 176 of the Treaty, since it does not appear in the application and is not based on any evidence adduced during
the proceedings, constitutes a new plea within the meaning of Article 48(2) of the Rules of Procedure.

1644 For all those reasons, the forms of order seeking compensation must be rejected as being inadmissible in any event.

**Costs**

1645 Under Article 87(3) of the Rules of Procedure the Court may order that the costs be shared or that the parties bear their
own costs where each party succeeds on some and fails on other heads, or where the circumstances are exceptional.

1646 In the present case, it is true that the contested decision is one of the longest ever adopted by the Commission in application
of Articles 85 and 86 of the Treaty, that that decision raises relatively complex issues of fact and law in respect of which,
when the actions were brought, there was no relevant case-law and that as Community law stands at present there is no provision
limiting the length of the written pleadings or the number of documents lodged in support of an action for annulment under
Article 173 of the Treaty. However, the four applications lodged by the applicants and the annexes thereto are unusually long
- each application is some 500 pages long whilst the annexes make up approximately 100 files - and even if some of the pleas
they contain have been upheld they are for the most part unfounded, and their number is so great as to amount to an abuse.

1647 In those circumstances, and notwithstanding the fact that some heads of the application have been upheld, since by their conduct
the applicants have substantially added to the burden of dealing with this case, thus needlessly adding in particular to the
costs of the Commission, the Court considers it fair, having regard to the circumstances of the case, to order each party
to bear its own costs.

1648 As regards the ECTU, the intervener, the Court considers it fair, having regard to Article 87(4) of the Rules of Procedure
of the Court of First Instance, to order it to bear its own costs.

On those grounds,

THE COURT OF FIRST INSTANCE (Third Chamber),

hereby:

1)      **Annuls Article 5 of Commission Decision 1999/243/EC of 16 September 1998 relating to a proceeding pursuant to Articles 85
and 86 of the EC Treaty (Case No IV/35.134 - Trans-Atlantic Conference Agreement);**

2)      **Annuls Article 6 of Decision 1999/243 in so far as it applies to mutual disclosure by the applicants of the availability and
content of their individual service contracts;**

3)      **Annuls Article 7 of Decision 1999/243 to the extent required by the annulment of Articles 5 and 6;**

4)      **Annuls Article 8 of Decision 1999/243;**

5)      **Dismisses the remainder of the applications;**

6)      **Orders the applicants and the Commission each to bear their own costs;**

7)      **Orders the European Council of Transport Users ASBL to bear its own costs.**

| Lenaerts | Azizi | Jaeger |
| -------- | ----- | ------ |

Delivered in open court in Luxembourg on 30 September 2003.

| H. Jung | | K. Lenaerts |
| ------- | | ----------- |

| Registrar | | President |
| --------- | | --------- |

Table des matières

Legal background

Facts

I.     The Transatlantic Agreement (TAA)

II.   The Trans-Atlantic Conference Agreement (TACA)

TACA notifications

Administrative procedure withdrawing immunity from fines

Administrative procedure for infringement of Articles 85 and 86 of the Treaty

The contested decision

III. The relevant provisions of the TACA

The collective fixing of transport rates

Service contracts

Remuneration of freight forwarders

IV.   The definition of the relevant market

V.     Legal assessment

Application of Article 85 of the Treaty

Application of Article 86 of the Treaty

Fines

The operative part

Procedure

Forms of order sought

Law

I.     The pleas alleging infringement of the rights of the defence

Part one: infringement of the right to be heard

A –  The plea alleging that the statement of objections is unlawful because it is premature

Arguments of the parties

Findings of the Court

B –  The pleas alleging the presence of new allegations of fact or law in the contested decision

1. The purportedly new allegations of fact or law concerning the second abuse

a) Arguments of the parties

b) Findings of the Court

1.  The change of case in relation to the second abuse in the contested decision

2.  The documentary evidence relied upon in support of the second abuse recorded in the contested decision

2. The purportedly new allegations of fact or law other than those relating to the second abuse

a) Preliminary observations

b) The new allegations of fact or law concerning the lawfulness of joint service contracts, the fact that the TACA parties
held a collective position and the fact that that position was a dominant one

1.  Arguments of the parties

2.  Findings of the Court

(i) The allegations concerning the lawfulness of joint service contracts

(ii) The allegations that the TACA parties held a collective position

(iii) The allegations concerning the dominant nature of the TACA parties' position

c) The new allegations of fact and law arising from the applicants' responses to certain requests for information after the
statement of objections was issued

1.  Arguments of the parties

2.  Findings of the Court

(i) The admissibility of the plea

(ii) The substance of the plea

d) Conclusion

A –  Preliminary observations

B –  The plea alleging failure to disclose the minutes of the meetings between the Commission and the complainants

1.  Arguments of the parties

2.  Findings of the Court

C –  The plea alleging failure to disclose the minutes or any other record of a meeting between the member of the Commission
responsible for competition matters and the ESC

1.  Arguments of the parties

2.  Findings of the Court

D –  The plea alleging that the file is incomplete

1.  Arguments of the parties

2.  Findings of the Court

E –  The conduct of the administrative procedure

1.  Arguments of the parties

2.  Findings of the Court

a) The prematurity of the statement of objections

b) The drafting of the contested decision

c) The threats of fines

F –  The assessment of the facts, evidence and relevant questions

1.  Arguments of the parties

2.  Findings of the Court

G –  The assessment of the fines

1.  Arguments of the parties

2.  Findings of the Court

H –  Conclusion on the third part

II.   The pleas alleging that there is no infringement of Article 85 of the Treaty and of Article 2 of Regulation No 1017/68 and
various failures to state reasons in that regard

A –  The TACA parties' conference service contract authority

1.  The block exemption under Article 3 of Regulation No 4056/86

a) Arguments of the parties

b) Findings of the Court

2.  Individual exemption under Article 85(3) of the Treaty

a) Arguments of the parties

b) Findings of the Court

B –  The TACA rules on service contracts

1.  The rules as to the content of conference service contracts

a) Arguments of the parties

b) Findings of the Court

2.  The rules on the availability and content of individual service contracts

a) Arguments of the parties

b) Findings of the Court

3.  The prohibition of independent action on service contracts

a) Arguments of the parties

b) Findings of the Court

A –  Arguments of the parties

B –  Findings of the Court

III. Pleas alleging absence of infringement of Article 86 of the Treaty and various failures to state reasons in that regard

A –  Pleas alleging incorrect assessment of the economic links between the TACA parties

1.  Arguments of the parties

2.  Findings of the Court

B –  Pleas alleging errors of assessment concerning internal competition between the parties to the TACA

1.  Application in the contested decision of the wrong legal test

a)  Arguments of the parties

b)  Findings of the Court

2.  Pleas alleging incorrect assessment of internal price and non-price competition

a)  Arguments of the parties

b)  Findings of the Court

1. Internal price competition

2. Internal non-price competition

3.The specific arguments put forward by the applicant in Case T-213/98

4.Conclusion on the extent of internal competition

3.  Pleas alleging failure to state reasons

a)  Arguments of the parties

b)  Findings of the Court

C –  Conclusion on the first part

D –  Definition of the relevant market

1.  The relevant market for services

a) The relevant transport services

(1) Arguments of the parties

(2) Findings of the Court

(i) Demand-side substitution

Break bulk shipping

NVOCCs

Consideration of the cumulative effect of sources of competition

(ii) Supply-side substitution

b) Geographical scope of the services in question

(1) Arguments of the parties

(2) Findings of the Court

c) Conclusion on the relevant market for services

2. The relevant geographic market

a) Arguments of the parties

b)Findings of the Court

3. Conclusion on the definition of the relevant market

E –  The existence of a dominant position on the relevant market

1. The market share held by the TACA parties

(a) Arguments of the parties

(b) Findings of the Court

2. Effective external competition

(a) Arguments of the parties

(b) Findings of the Court

(1) The number of competitors of the TACA parties and the increase in their market share

(2) The rate of increase in the volume of freight carried by the TACA's competitors

(3) The effective competition from Evergreen and Lykes

(4) The TACA's leadership in pricing matters and the role of follower played by the independent competitors

(5) Competition from the Canadian Gateway

(6) Conclusion on effective external competition

3. Potential competition

(a) Arguments of the parties

(b) Findings of the Court

(1) The costs of market entry

(2) Recent non-TACA entries to the relevant market

(3) Service contracts

(4) Conclusion on potential competition

4. Internal competition within the TACA

(a) Arguments of the parties

(b) Findings of the Court

5. The development of rates on the trade in question

(a) Arguments of the parties

(b) Findings of the Court

(1) The proportion represented by freight carried at the ordinary rates compared with freight carried under TVRs and service
contracts

(2) The increase in the rates charged by the TACA parties

6. Conclusion on the pleas relating to the existence of a dominant position on the relevant market

C - Conclusion on the second part

Part three: no abuse

A - The first abuse: placing restrictions on the availability and content of service contracts

1. Objective justification of the practices constituting the first abuse

(a) Arguments of the parties

(b) Findings of the Court

(1) Justifications on the basis of the necessity of certain of the practices in question

(2) Justifications based on the conformity of certain practices in question with standard practice in the maritime transport
sector

(3) Justifications based on the conformity of some of the practices in question with US law

(i) commence no sooner than January 1, 1996, and terminate on or before December 31, 1996 ...

(ii) comply with the Contract Guidelines contained in Article 14.2(a) - (h).

2. The statement of reasons in the contested decision with regard to the first abuse

(a) Arguments of the parties

(b) Findings of the Court

3. Conclusion on the first abuse

B - The second abuse: the abusive alteration of the competitive structure of the market

1. The evidence for the practices constituting the second abuse

(a) Arguments of the parties

(1) Preliminary observations

(2) The measures specifically addressed to Hanjin and Hyundai

(3) The general measures addressed to all potential competitors

(i) Dual-rate service contracts

(ii) Service contracts with NVOCCs

(b) Findings of the Court

(1) The specific measures to induce Hanjin and Hyundai

(i) The obligations under US law

(ii) Evidence of the measures addressed to Hanjin and Hyundai

Hanjin's accession to the TACA

Hyundai's accession to the TACA

(2) The general measures to induce potential competitors

(i) Dual-rate service contracts

(ii) Service contracts with NVOCCs

(3) Conclusion on the evidence for the measures constituting the second abuse

IV.   IV - The pleas alleging failure to comply with the procedural requirements laid down by Regulation No 4056/86

Arguments of the parties

Findings of the Court

V.     The plea alleging failure to state reasons in respect of the failure to have regard to US law

Arguments of the parties

Findings of the Court

VI.   The pleas concerning the amount of the fines and various failures to state reasons in that regard

Part one: immunity from fines

A - Arguments of the parties

B - Findings of the Court

1. The scope of the immunity provided for by Regulation No 4056/86

2. The application of the immunity from fines to the first abuse

Part two: calculation of the fines

A - The method adopted by the Commission to determine the amount of the fines

1. Arguments of the parties

2. Findings of the Court

(a) The principle of individual assessment

(b) The principles of equal treatment and proportionality

(c) The principle of the protection of legitimate expectations

(d) Conclusion on the method adopted by the Commission to determine the amount of the fines

B - The assessment of the mitigating circumstances

1. Arguments of the parties

2. Findings of the Court

VII. The plea alleging infringement of the second paragraph of Article 215 of the Treaty

Arguments of the parties

Findings of the Court

Costs

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- Langue de procédure : l'anglais.