# EUR-Lex - 61969J0051 - EN

Avis juridique important

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# 61969J0051

**Judgment of the Court of 14 July 1972. - Farbenfabriken Bayer AG v Commission of the European Communities. - Case 51-69. **

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European Court reports 1972 Page 00745 Danish special edition Page 00221 Greek special edition Page 00185 Portuguese special edition Page 00287 *

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

## Keywords

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

( EEC TREATY, ARTICLE 85 )

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

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

3 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY - ADMINISTRATIVE PROCEDURE - FRESH INQUIRIES - ADDITIONAL OBJECTIONS - COMMUNICATION TO THE INTERESTED PARTIES - POWERS AND OBLIGATIONS OF THE COMMISSION

( REGULATION NO 17 OF THE COUNCIL, ARTICLE 19; REGULATION NO 99/63 OF THE COMMISSION, ARTICLE 2 ( 1 ))

4 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY ADMINISTRATIVE PROCEDURE - HEARING OF THE INTERESTED PARTIES - MINUTES - COMMUNICATION THEREOF - PURPOSE - BELATED COMMUNICATION - EFFECTS

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

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

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

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

( EEC TREATY, ARTICLE 85 )

8 . COMPETITION - EFFECT - FUNCTION AS REGARDS PRICES

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

( EEC TREATY, ARTICLE 85 )

Summary

1 . THE NOTICE OF OBJECTIONS IS THE MEASURE STATING THE ATTITUDE OF THE COMMISSION CONCERNING UNDERTAKINGS AGAINST WHICH PROCEEDINGS FOR INFRINGEMENT OF THE RULES ON COMPETITION HAVE BEEN COMMENCED .

## Summary

2 . IN ORDER TO PROTECT THE RIGHTS OF THE DEFENCE DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE, IT IS SUFFICIENT THAT UNDERTAKINGS SHOULD BE INFORMED OF THE ESSENTIAL ELEMENTS OF FACT ON WHICH THE OBJECTIONS ARE BASED, WITHOUT ITS BEING NECESSARY FOR THE CONTENTS OF THE FILE TO BE MADE AVAILABLE IN THEIR ENTIRETY . THIS REQUIREMENT IS MET EVEN IF THE CONTESTED DECISION CONTAINS ADDITIONAL EVIDENCE FOR THE FACTS TAKEN INTO CONSIDERATION, TOGETHER WITH AMENDMENTS MADE IN THE LIGHT OF INFORMATION FURNISHED BY THE UNDERTAKINGS CONCERNED DURING THE COURSE OF THE PROCEDURE .

3 . THE COMMISSION HAS THE RIGHT AND WHERE APPROPRIATE THE DUTY TO INSTITUTE FRESH INQUIRIES DURING THE ADMINISTRATIVE PROCEDURE IF IT APPEARS FROM THE COURSE OF THAT PROCEDURE THAT ADDITIONAL INVESTIGATIONS ARE NECESSARY . SUCH INQUIRIES WOULD RENDER IT NECESSARY TO SEND AN ADDITIONAL STATEMENT OF OBJECTIONS TO THE UNDERTAKINGS CONCERNED ONLY IF THE RESULT OF THE INVESTIGATIONS LED THE COMMISSION TO TAKE NEW FACTS INTO ACCOUNT AGAINST THE UNDERTAKINGS OR TO ALTER MATERIALLY THE EVIDENCE FOR THE CONTESTED INFRINGEMENTS .

4 . THE PURPOSE OF ARTICLE 9 ( 4 ) OF REGULATION NO 99/63 IS TO ASSURE THE PERSONS HEARD THAT THE MINUTES CONTAIN A TRUE RECORD OF WHAT THEY HAVE SAID . DELAY IN SENDING THE MINUTES OF A HEARING TO THE UNDERTAKINGS WHOSE CONDUCT HAS BEEN CALLED IN QUESTION CAN AFFECT THE LEGALITY OF THE DECISION TAKEN ONLY IF THE STATEMENTS MADE ARE INACCURATELY RECORDED .

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

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

7 . BY ITS VERY NATURE, A CONCERTED PRACTICE DOES NOT HAVE ALL THE ELEMENTS OF A CONTRACT BUT MAY INTER ALIA ARISE OUT OF COORDINATION WHICH BECOMES APPARENT FROM THE BEHAVIOUR OF THE PARTICIPANTS . ALTHOUGH PARALLEL BEHAVIOUR MAY NOT BY ITSELF BE IDENTIFIED WITH A CONCERTED PRACTICE, IT MAY HOWEVER AMOUNT TO STRONG EVIDENCE OF SUCH A PRACTICE IF IT LEADS TO CONDITIONS OF COMPETITION WHICH DO NOT CORRESPOND TO THE NORMAL CONDITIONS OF THE MARKET, HAVING REGARD TO THE NATURE OF THE PRODUCTS, THE SIZE AND NUMBER OF THE UNDERTAKINGS, AND THE VOLUME OF THE SAID MARKET .

THIS IS ESPECIALLY THE CASE IF THE PARALLEL CONDUCT IS SUCH AS TO ENABLE THE PERSONS CONCERNED TO ATTEMPT TO STABILIZE PRICES AT A LEVEL DIFFERENT FROM THAT TO WHICH COMPETITION WOULD HAVE LED, AND TO CONSOLIDATE ESTABLISHED POSITIONS TO THE DETRIMENT OF EFFECTIVE FREEDOM OF MOVEMENT OF THE PRODUCTS IN THE COMMON MARKET AND OF THE FREEDOM OF CONSUMERS TO CHOOSE THEIR SUPPLIERS .

8 . THE FUNCTION OF PRICE COMPETITION IS TO KEEP PRICES DOWN TO THE LOWEST POSSIBLE LEVEL, AND TO ENCOURAGE THE MOVEMENT OF GOODS BETWEEN THE MEMBER STATES, THEREBY PERMITTING THE MOST EFFICIENT POSSIBLE DISTRIBUTION OF ACTIVITIES IN THE MATTER OF PRODUCTIVITY AND THE CAPACITY OF UNDERTAKINGS TO ADAPT THEMSELVES TO CHANGE .

INDEPENDENT AND NON-UNIFORM CONDUCT BY UNDERTAKINGS IN THE COMMON MARKET ENCOURAGES THE PURSUIT OF THE BASIC OBJECTIVES OF THE TREATY, NAMELY THE INTERPENETRATION OF NATIONAL MARKETS AND, AS A RESULT, DIRECT ACCESS BY CONSUMERS TO THE SOURCES OF PRODUCTION OF THE WHOLE COMMUNITY .

9 . ALTHOUGH EVERY PRODUCER IS FREE TO CHANGE HIS PRICES, TAKING INTO ACCOUNT IN SO DOING THE PRESENT OR FORESEEABLE CONDUCT OF HIS COMPETITORS, NEVERTHELESS IT IS CONTRARY TO THE RULES ON COMPETITION CONTAINED IN THE TREATY FOR A PRODUCER TO COOPERATE WITH HIS COMPETITORS, IN ANY WAY WHATSOEVER, IN ORDER TO DETERMINE A COORDINATED COURSE OF ACTION RELATING TO A MOVEMENT OF PRICES AND TO ENSURE ITS SUCCESS BY PRIOR ELIMINATION OF ALL UNCERTAINTY AS TO EACH OTHER' S CONDUCT REGARDING THE ESSENTIAL ELEMENTS OF THAT ACTION SUCH AS THE AMOUNT, SUBJECT-MATTER, DATE AND PLACE OF SUCH MOVEMENTS .

Parties

IN CASE 51/69

## Parties

FARBENFABRIKEN BAYER AG, HAVING ITS REGISTERED OFFICE IN LEVERKUSEN, REPRESENTED BY ITS BOARD OF MANAGEMENT, ASSISTED BY H . AXSTER, W . DECKER, O . AXSTER, ADVOCATES AT DUESSELDORF, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICES OF E . GRAFF VON CARMER, COUNSELLOR ( FIRST CLASS ) AT THE GERMAN EMBASSY, 20-22 RUE DE L' ARSENAL, APPLICANT,

V

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

Subject of the case

APPLICATION FOR THE ANNULMENT OF THE COMMISSION DECISION OF 24 JULY 1969, PUBLISHED IN THE JOURNAL OFFICIAL L 195 OF 7 AUGUST 1969, P . 11 ET SEQ ., RELATING TO PROCEEDINGS UNDER ARTICLE 85 OF THE EEC TREATY ( IV/26.267 - DYESTUFFS ),

## Subject of the case

Grounds

1 IT IS COMMON GROUND THAT FROM JANUARY 1964 TO OCTOBER 1967 THREE GENERAL AND UNIFORM INCREASES IN THE PRICES OF DYESTUFFS TOOK PLACE IN THE COMMUNITY .

## Grounds

BETWEEN 7 AND 20 JANUARY 1964, A UNIFORM INCREASE OF 15 PER CENT IN THE PRICES OF MOST DYES BASED ON ANILINE, WITH THE EXCEPTION OF CERTAIN CATEGORIES, TOOK PLACE IN ITALY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG AND IN CERTAIN THIRD COUNTRIES .

ON 1 JANUARY 1965 AN IDENTICAL INCREASE TOOK PLACE IN GERMANY .

ON THE SAME DAY ALMOST ALL PRODUCERS IN ALL THE COUNTRIES OF THE COMMON MARKET EXCEPT FRANCE INTRODUCED A UNIFORM INCREASE OF 10 PER CENT ON THE PRICES OF DYES AND PIGMENTS EXCLUDED FROM THE INCREASE OF 1964 .

SINCE THE ACNA UNDERTAKING DID NOT TAKE PART IN THE INCREASE OF 1965 ON THE ITALIAN MARKET, THE OTHER UNDERTAKINGS DID NOT MAINTAIN THE ANNOUNCED INCREASE OF THEIR PRICES ON THAT MARKET .

TOWARDS MID-OCTOBER 1967, AN INCREASE FOR ALL DYES WAS INTRODUCED, EXCEPT IN ITALY, BY ALMOST ALL PRODUCERS, AMOUNTING TO 8 PER CENT IN GERMANY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG, AND 12 PER CENT IN FRANCE .

2 BY A DECISION OF 31 MAY 1967 THE COMMISSION COMMENCED PROCEEDINGS UNDER ARTICLE 3 OF REGULATION NO 17/62 ON ITS OWN INITIATIVE CONCERNING THE INCREASES FOR PRESUMED INFRINGEMENT OF ARTICLE 85 ( 1 ) OF THE EEC TREATY AGAINST SEVENTEEN PRODUCERS OF DYESTUFFS ESTABLISHED WITHIN AND OUTSIDE THE COMMON MARKET, AND AGAINST NUMEROUS SUBSIDIARIES AND REPRESENTATIVES OF THOSE UNDERTAKINGS .

BY A DECISION OF 24 JULY 1969, THE COMMISSION FOUND THAT THE INCREASES WERE THE RESULT OF CONCERTED PRACTICES, WHICH INFRINGED ARTICLE 85 ( 1 ) OF THE TREATY, BETWEEN THE UNDERTAKINGS

- BADISCHE ANILIN - UND SODA-FABRIK AG ( BASF ), LUDWIGSHAFEN,

- CASSELLA FARBWERKE MAINKUR AG, FRANKFURT AM MAIN,

- FARBENFABRIKEN BAYER AG, LEVERKUSEN,

- FARBWERKE HOECHST AG, FRANKFURT AM MAIN,

- SOCIETE FRANCAISE DES MATIERES COLORANTES SA, PARIS,

- AZIENDA COLORI NAZIONALI AFFINI S . P . A . ( ACNA ), MILAN,

- CIBA SA, BASEL,

- J . R . GEIGY SA, BASEL,

- SANDOZ SA, BASEL, AND

- IMPERIAL CHEMICAL INDUSTRIES LTD ., ( ICI ), MANCHESTER

IT THEREFORE IMPOSED A FINE OF 50 000 U . A . ON EACH OF THESE UNDERTAKINGS, WITH THE EXCEPTION OF ACNA, FOR WHICH THE FINE WAS FIXED AT 40 000 U . A .

3 BY APPLICATION LODGED AT THE COURT REGISTRY ON 3 OCTOBER 1969 FARBENFABRIKEN BAYER AG HAS BROUGHT AN APPLICATION AGAINST THAT DECISION .

SUBMISSIONS RELATING TO PROCEDURE AND TO FORM

THE SUBMISSIONS CONCERNING THE ADMINISTRATIVE PROCEDURE

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

4 THE APPLICANT COMPLAINS THAT THE DEFENDANT TOOK A DECISION IMPOSING A FINE, ON THE BASIS OF ARTICLE 15 ( 2 ) OF REGULATION NO 17/62, ALTHOUGH IT HAD ONLY COMMENCED A PROCEDURE WITH A VIEW TO A FINDING OF AN INFRINGEMENT ON THE BASIS OF ARTICLE 3 OF THIS REGULATION .

FURTHERMORE, IT IS ARGUED, THE DEFENDANT COULD NOT RELY AS AGAINST THE APPLICANT ON THE TEXT OF THE DECISION TO COMMENCE THE PROCEDURE BECAUSE IT FAILED TO SENT IT A TRUE COPY .

5 IT IS THE NOTICE OF OBJECTIONS ALONE AND NOT THE DECISION TO COMMENCE PROCEEDINGS WHICH IS THE MEASURE STATING THE FINAL ATTITUDE OF THE COMMISSION CONCERNING UNDERTAKINGS AGAINST WHICH PROCEEDINGS FOR INFRINGEMENT OF THE RULES ON COMPETITION HAVE BEEN COMMENCED .

THAT NOTICE, WHICH WAS SENT TO THE APPLICANT, EXPRESSLY STATED THAT FINES MIGHT BE IMPOSED .

6 THIS SUBMISSION IS THEREFORE UNFOUNDED .

( B ) THE COMPLAINT RELATING TO A FAILURE TO INFORM THE APPLICANT OF ESSENTIAL ELEMENTS OF FACT

7 THE APPLICANT COMPLAINS THAT DURING THE ADMINISTRATIVE PROCEDURE THE DEFENDANT DID NOT INFORM IT OF ALL THE ELEMENTS OF FACT RELIED ON IN SUPPORT OF THE CONCLUSIONS CONTAINED IN THE NOTICE OF OBJECTIONS .

IT IS ARGUED THAT THIS FAILURE TO PROVIDE INFORMATION, DESPITE THE REPEATED REQUESTS OF THE APPLICANT, PREVENTED IT FROM DEFENDING ITSELF DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE .

8 DURING THAT PROCEDURE, THE UNDERTAKINGS CONCERNED MUST BE INFORMED OF THE ESSENTIAL ELEMENTS OF FACT ON WHICH THE COMMISSION BASES ITS OBJECTIONS AGAINST THEM .

HOWEVER, IT IS NOT NECESSARY FOR THE CONTENTS OF THE FILE TO BE MADE AVAILABLE IN THEIR ENTIRETY .

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

9 THIS SUBMISSION IS THEREFORE UNFOUNDED .

( C ) THE COMPLAINT RELATING TO A CONTINUATION OF INQUIRIES FOLLOWING NOTIFICATION OF THE OBJECTIONS

10 THE APPLICANT ASSERTS THAT THE COMMISSION, IN CONTINUING ITS INQUIRIES FOLLOWING COMMUNICATION OF THE NOTICE OF OBJECTIONS, CONDUCTED ITSELF IN A MANNER INCOMPATIBLE WITH THE VERY NATURE OF THAT NOTICE, WHICH MUST CONSTITUTE THE FINAL MEASURE OF INQUIRY .

IT IS ASSERTED THAT THESE INQUIRIES LED THE COMMISSION, IN CONNEXION WITH THE CONTESTED DECISION, TO AMPLIFY AND MAKE CONSIDERABLE ALTERATIONS TO THE STATEMENT OF THE FACTS ALREADY SENT TO THE APPLICANT, PARTICULARLY AS REGARDS THE EVIDENCE FOR THE EXISTENCE OF A CONCERTED PRACTICE ON THE OCCASION OF THE 1967 INCREASES .

11 THE COMMISSION HAS THE RIGHT AND WHERE APPROPRIATE THE DUTY TO INSTITUTE FRESH INQUIRIES DURING THE ADMINISTRATIVE PROCEDURE IF IT APPEARS FROM THE COURSE OF THAT PROCEDURE THAT ADDITIONAL INVESTIGATIONS ARE NECESSARY .

SUCH INQUIRIES WOULD RENDER IT NECESSARY TO SEND AN ADDITIONAL STATEMENT OF OBJECTIONS TO THE UNDERTAKINGS CONCERNED ONLY IF THE RESULT OF THE INVESTIGATIONS LED THE COMMISSION TO TAKE NEW FACTS INTO ACCOUNT AGAINST THE UNDERTAKINGS OR TO ALTER MATERIALLY THE EVIDENCE FOR THE CONTESTED INFRINGEMENTS .

THE RIGHTS OF THE DEFENCE OF THE UNDERTAKINGS ARE NOT INFRINGED BY SUCH INQUIRIES IF THE DECISION TERMINATING THE ADMINISTRATIVE PROCEDURE DOES NOT HOLD AGAINST THE UNDERTAKINGS CONCERNED ANY FACTS OTHER THAN THOSE SET OUT IN THE NOTICE OF OBJECTIONS .

ADDITIONAL EVIDENCE FOR THE FACTS TAKEN INTO CONSIDERATION AND AMENDMENTS CONCERNING THE PRECISE COURSE OF THE FACTS INCLUDED IN THE CONTESTED DECISION IN THE LIGHT OF INFORMATION FURNISHED BY THE UNDERTAKINGS CONCERNED TO THE COMMISSION DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE DOES NOT IN ANY WAY CONSTITUTE AN INFRINGEMENT OF THE RIGHTS OF THE DEFENCE .

12 THIS SUBMISSION IS THEREFORE UNFOUNDED .

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

13 THE APPLICANT ARGUES THAT THE PERIOD OF TWO WEEKS GIVEN TO IT FOR THE PURPOSE OF APPEARING BEFORE THE COMMISSION WAS NOT LONG ENOUGH TO ENABLE IT TO PREPARE AN ADEQUATE DEFENCE .

14 TAKING INTO ACCOUNT THE TIME WHICH HAD ELAPSED FOLLOWING COMMUNICATION OF THE NOTICE OF OBJECTIONS, IT DOES NOT APPEAR THAT THE ABOVEMENTIONED PERIOD OF NOTICE WAS OF A NATURE SUCH AS TO JEOPARDIZE THE DEFENCE OF THE UNDERTAKINGS CONCERNED .

FURTHERMORE, THERE WAS NOTHING TO PREVENT THE APPLICANT FROM SETTING OUT ITS POINT OF VIEW IN WRITING AT A LATER DATE AND SUBMITTING IT TO THE COMMISSION .

15 THIS SUBMISSION IS THEREFORE UNFOUNDED .

( E ) THE COMPLAINT RELATING TO THE MINUTES OF THE HEARING OF THE UNDERTAKINGS CONCERNED

16 THE APPLICANT ARGUES THAT THE HEARING OF 10 DECEMBER 1968 WAS IRREGULAR BECAUSE THE CONTESTED DECISION WAS TAKEN SIX WEEKS BEFORE THE EXPIRY OF THE PERIOD WHICH THE COMMISSION HAD ALLOWED IT FOR THE SUBMISSION OF OBSERVATIONS ON THE DRAFT MINUTES OF THE HEARING, SUCH THAT ARTICLE 9 ( 4 ) OF REGULATION NO 99/63 WAS INFRINGED .

IT IS ALSO ALLEGED THAT THE MINUTES DO NOT CONTAIN AN ACCURATE RECORD OF THE STATEMENT' S MADE BY THE APPLICANT' S COUNSEL .

17 ARTICLE 9 ( 4 ) OF REGULATION NO 99/63 OF THE COMMISSION PROVIDES THAT THE ESSENTIAL CONTENT OF THE STATEMENTS MADE BY EACH PERSON HEARD SHALL BE RECORDED IN MINUTES WHICH SHALL BE READ AND APPROVED BY HIM .

THE PURPOSE OF THIS PROVISION IS TO ASSURE THE PERSONS HEARD THAT THE MINUTES CONTAIN A TRUE RECORD OF THE SUBSTANCE OF WHAT THEY HAVE SAID .

NOTWITHSTANDING THE FAILURE TO OBSERVE THE TIME-LIMIT OF WHICH THE APPLICANT COMPLAINS, THIS IRREGULARITY COULD ONLY AFFECT THE LEGALITY OF THE DECISION IF THE RECORD OF STATEMENTS MADE AT THE HEARING WERE INACCURATE IN A MANNER SUCH AS TO GIVE RISE TO MISUNDERSTANDINGS ON ESSENTIAL POINTS .

SUCH IS NOT THE CASE AS REGARDS THE STATEMENTS OF THE APPLICANT' S COUNSEL, THE RECORD OF WHICH IN THE MINUTES IS ALLEGED TO BE INACCURATE .

18 THIS SUBMISSION IS THEREFORE UNFOUNDED .

THE SUBMISSION AS TO THE LIMITATION PERIOD

19 THE APPLICANT ARGUES THAT THE CONTESTED DECISION IS CONTRARY TO THE TREATY AND TO THE RULES RELATING TO ITS APPLICATION BECAUSE THE COMMISSION, IN COMMENCING ON 31 MAY 1967 PROCEEDINGS CONCERNING THE PRICE INCREASES OF 1964 AND OF 1965, EXCEEDING ANY REASONABLE LIMITATION PERIOD .

20 THE PROVISIONS GOVERNING THE COMMISSION' S POWER TO IMPOSE FINES FOR INFRINGEMENT OF THE RULES ON COMPETITION DO NOT LAY DOWN ANY PERIOD OF LIMITATION .

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

THE FIXING OF THEIR DURATION AND THE DETAILED RULES FOR THEIR APPLICATION COME WITHIN THE POWERS OF THE COMMUNITY LEGISLATURE .

ALTHOUGH, IN THE ABSENCE OF ANY PROVISIONS ON THIS MATTER, THE FUNDAMENTAL REQUIREMENT OF LEGAL CERTAINTY HAS THE EFFECT OF PREVENTING THE COMMISSION FROM INDEFINITELY DELAYING THE EXERCISE OF ITS POWER TO IMPOSE FINES, ITS CONDUCT IN THE PRESENT CASE CANNOT BE REGARDED AS CONSTITUTING A BAR TO THE EXERCISE OF THAT POWER AS REGARDS PARTICIPATION IN THE CONCERTED PRACTICES OF 1964 AND 1965 .

21 THEREFORE THE SUBMISSION IS UNFOUNDED .

SUBSTANTIVE SUBMISSIONS AS TO THE EXISTENCE OF CONCERTED PRACTICES

ARGUMENTS OF THE PARTIES

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

23 THAT DECISION STATES THAT PRIMA FACIE EVIDENCE THAT THE INCREASES OF 1964, 1965 AND 1967 TOOK PLACE AS THE RESULT OF CONCERTED ACTION IS TO BE FOUND IN THE FACTS THAT THE RATES INTRODUCED FOR EACH INCREASE BY THE DIFFERENT PRODUCERS IN EACH COUNTRY WERE THE SAME, THAT WITH VERY RARE EXCEPTIONS THE SAME DYESTUFFS WERE INVOLVED, AND THAT THE INCREASES WERE PUT INTO EFFECT OVER ONLY A VERY SHORT PERIOD, IF NOT ACTUALLY ON THE SAME DATE .

IT IS CONTENDED THAT THESE INCREASES CANNOT BE EXPLAINED SIMPLY BY THE OLIGOPOLISTIC CHARACTER OF THE STRUCTURE OF THE MARKET .

IT IS SAID TO BE UNREALISTIC TO SUPPOSE THAT WITHOUT PREVIOUS CONCERTATION THE PRINCIPAL PRODUCERS SUPPLYING THE COMMON MARKET COULD HAVE INCREASED THEIR PRICES ON SEVERAL OCCASIONS BY IDENTICAL PERCENTAGES AT PRACTICALLY THE SAME MOMENT FOR ONE AND THE SAME IMPORTANT RANGE OF PRODUCTS INCLUDING SPECIALITY PRODUCTS FOR WHICH THERE ARE FEW, IF ANY, SUBSTITUTES, AND THAT THEY SHOULD HAVE DONE SO IN A NUMBER OF COUNTRIES WHERE CONDITIONS ON THE DYESTUFFS MARKET ARE DIFFERENT .

THE COMMISSION HAS ARGUED BEFORE THE COURT THAT THE INTERESTED PARTIES NEED NOT NECESSARILY HAVE DRAWN UP A COMMON PLAN WITH A VIEW TO ADOPTING A CERTAIN COURSE OF BEHAVIOUR FOR IT TO BE SAID THAT THERE HAS BEEN CONCERTATION . IT IS ARGUED THAT IT IS ENOUGH THAT THEY SHOULD PREVIOUSLY HAVE INFORMED EACH OTHER OF THE ATTITUDE WHICH THEY INTENDED TO ADOPT SO THAT EACH COULD REGULATE HIS CONDUCT SAFE IN THE KNOWLEDGE THAT HIS COMPETITORS WOULD ACT IN THE SAME WAY .

24 THE APPLICANT ARGUES THAT THE CONTESTED DECISION IS BASED ON AN INADEQUATE ANALYSIS OF THE MARKET IN THE PRODUCTS IN QUESTION AND ON AN ERRONEOUS UNDERSTANDING OF THE CONCEPT OF A CONCERTED PRACTICE, WHICH IS WRONGLY IDENTIFIED BY THE DECISION WITH THE CONSCIOUS PARALLELISM OF MEMBERS OF AN OLIGOPOLY, WHEREAS SUCH CONDUCT IS DUE TO INDEPENDENT DECISIONS ADOPTED BY EACH UNDERTAKING, DETERMINED BY OBJECTIVE BUSINESS NEEDS, AND IN PARTICULAR BY THE NEED TO INCREASE THE UNSATISFACTORILY LOW RATE OF PROFIT ON THE PRODUCTION OF DYESTUFFS .

IT IS ARGUED THAT IN FACT THE PRICES OF THE PRODUCTS IN QUESTION DISPLAYED A CONSTANT TENDENCY TO FALL BECAUSE OF LIVELY COMPETITION BETWEEN PRODUCERS WHICH IS TYPICAL OF THE MARKET IN THOSE PRODUCTS, NOT ONLY AS REGARDS THE QUALITY OF THE PRODUCTS AND TECHNICAL ASSISTANCE TO CUSTOMERS, BUT ALSO AS REGARDS PRICES, PARTICULARLY THE LARGE REDUCTIONS GRANTED INDIVIDUALLY TO THE PRINCIPAL PURCHASERS .

IT IS ALSO ARGUED THAT THE LARGE NUMBER OF DYESTUFFS PRODUCED BY EACH UNDERTAKING MAKES IT IMPOSSIBLE IN PRACTICE TO RAISE PRICES PRODUCT BY PRODUCT .

A FURTHER ARGUMENT IS THAT DIFFERENT PRICE INCREASES FOR INTERCHANGEABLE PRODUCTS EITHER COULD NOT PRODUCE ECONOMICALLY SIGNIFICANT RESULTS BECAUSE OF THE LIMITED LEVEL OF STOCKS AND OF THE TIME NECESSARY FOR ADAPTING PLANT TO APPRECIABLY INCREASED DEMAND, OR WOULD LEAD TO A RUINOUS PRICE WAR .

FURTHERMORE, IT IS SAID THAT DYESTUFFS FOR WHICH THERE ARE NO SUBSTITUTES FORM ONLY A SMALL PART OF THE PRODUCERS' TURNOVER .

TAKING THESE MARKET CHARACTERISTICS INTO ACCOUNT AND IN VIEW OF THE WIDESPREAD AND CONTINUOUS EROSION OF PRICES, EACH MEMBER OF THE OLIGOPOLY WHO DECIDED TO INCREASE HIS PRICES COULD, IT IS ARGUED, REASONABLY EXPECT TO BE FOLLOWED BY HIS COMPETITORS, WHO HAD THE SAME PROBLEMS REGARDING PROFITS .

FINALLY, IT IS ARGUED, IF IT WERE POSSIBLE TO APPLY DIFFERENT RATES OF INCREASE ON DIFFERENT MARKETS, IT IS NEVERTHELESS PROBABLE THAT A UNIFORM PRICE INCREASE INTRODUCED ON A GIVEN MARKET WOULD HAVE REPERCUSSIONS OUTSIDE IT BECAUSE OF THE INTERNATIONAL CHARACTER OF THE DYESTUFFSMARKET .

THE CONCEPT OF A CONCERTED PRACTICE

25 ARTICLE 85 DRAWS A DISTINCTION BETWEEN THE CONCEPT OF " CONCERTED PRACTICES " AND THAT OF " AGREEMENTS BETWEEN UNDERTAKINGS " OR OF " DECISIONS BY ASSOCIATIONS OF UNDERTAKINGS "; THE OBJECT IS TO BRING WITHIN THE PROHIBITION OF THAT ARTICLE A FORM OF COORDINATION BETWEEN UNDERTAKINGS WHICH, WITHOUT HAVING REACHED THE STAGE WHERE AN AGREEMENT PROPERLY SO-CALLED HAS BEEN CONCLUDED, KNOWINGLY SUBSTITUTES PRACTICAL COOPERATION BETWEEN THEM FOR THE RISKS OF COMPETITION .

BY ITS VERY NATURE, THEN, A CONCERTED PRACTICE DOES NOT HAVE ALL THE ELEMENTS OF A CONTRACT BUT MAY INTER ALIA ARISE OUT OF COORDINATION WHICH BECOMES APPARENT FROM THE BEHAVIOUR OF THE PARTICIPANTS .

ALTHOUGH PARALLEL BEHAVIOUR MAY NOT BY ITSELF BE IDENTIFIED WITH A CONCERTED PRACTICE, IT MAY HOWEVER AMOUNT TO STRONG EVIDENCE OF SUCH A PRACTICE IF IT LEADS TO CONDITIONS OF COMPETITION WHICH DO NOT CORRESPOND TO THE NORMAL CONDITIONS OF THE MARKET, HAVING REGARD TO THE NATURE OF THE PRODUCTS, THE SIZE AND NUMBER OF THE UNDERTAKINGS AND THE VOLUME OF THE SAID MARKET .

THIS IS ESPECIALLY THE CASE IF THE PARALLEL CONDUCT IS SUCH AS TO ENABLE THE PERSONS CONCERNED TO ATTEMPT TO STABILIZE PRICES AT A LEVEL DIFFERENT FROM THAT TO WHICH COMPETITION WOULD HAVE LED, AND TO CONSOLIDATE ESTABLISHED POSITIONS TO THE DETRIMENT OF EFFECTIVE FREEDOM OF MOVEMENT OF THE PRODUCTS IN THE COMMON MARKET AND OF THE FREEDOM OF CONSUMERS TO CHOOSE THEIR SUPPLIERS .

26 THEREFORE THE QUESTION WHETHER THERE WAS A CONCERTED ACTION IN THIS CASE CAN ONLY BE CORRECTLY DETERMINED IF THE EVIDENCE UPON WHICH THE CONTESTED DECISION IS BASED IS CONSIDERED, NOT IN ISOLATION, BUT AS A WHOLE, ACCOUNT BEING TAKEN OF THE SPECIFIC FEATURES OF THE MARKET IN THE PRODUCTS IN QUESTION .

THE CHARACTERISTIC FEATURES OF THE MARKET IN DYESTUFFS

27 THE MARKET IN DYESTUFFS IS CHARACTERIZED BY THE FACT THAT 80 PER CENT OF THE MARKET IS SUPPLIED BY ABOUT TEN PRODUCERS, VERY LARGE ONES IN THE MAIN, WHICH OFTEN MANUFACTURE THESE PRODUCTS TOGETHER WITH OTHER CHEMICAL PRODUCTS OR PHARMACEUTICAL SPECIALITIES .

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

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

THE AVERAGE EXTENT TO WHICH THESE PRODUCTS CAN BE REPLACED BY OTHERS IS CONSIDERED RELATIVELY GOOD FOR STANDARD DYES, BUT IT CAN BE VERY LOW OR EVEN NON-EXISTENT FOR SPECIALITY DYES .

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

SINCE THE PRICE OF DYESTUFFS FORMS A RELATIVELY SMALL PART OF THE PRICE OF THE FINAL PRODUCT OF THE USER UNDERTAKING, THERE IS LITTLE ELASTICITY OF DEMAND FOR DYESTUFFS ON THE MARKET AS A WHOLE AND THIS ENCOURAGES PRICE INCREASES IN THE SHORT TERM .

ANOTHER FACTOR IS THAT THE TOTAL DEMAND FOR DYESTUFFS IS CONSTANTLY INCREASING, AND THIS TENDS TO INDUCE PRODUCERS TO ADOPT A POLICY ENABLING THEM TO TAKE ADVANTAGE OF THIS INCREASE .

28 IN THE TERRITORY OF THE COMMUNITY, THE MARKET IN DYESTUFFS IN FACT CONSISTS OF FIVE SEPARATE NATIONAL MARKETS WITH DIFFERENT PRICE LEVELS WHICH CANNOT BE EXPLAINED BY DIFFERENCES IN COSTS AND CHARGES AFFECTING PRODUCERS IN THOSE COUNTRIES .

THUS THE ESTABLISHMENT OF THE COMMON MARKET WOULD NOT APPEAR TO HAVE HAD ANY EFFECT ON THIS SITUATION, SINCE THE DIFFERENCES BETWEEN NATIONAL PRICE LEVELS HAVE SCARCELY DECREASED .

ON THE CONTRARY, IT IS CLEAR THAT EACH OF THE NATIONAL MARKETS HAS THE CHARACTERISTICS OF AN OLIGOPOLY AND THAT IN MOST OF THEM PRICE LEVELS ARE ESTABLISHED UNDER THE INFLUENCE OF A " PRICE-LEADER ", WHO IN SOME CASES IS THE LARGEST PRODUCER IN THE COUNTRY CONCERNED, AND IN OTHER CASES IS A PRODUCER IN ANOTHER MEMBER STATE OR A THIRD STATE, ACTING THROUGH A SUBSIDIARY .

ACCORDING TO THE EXPERTS THIS DIVIDING-UP OF THE MARKET IS DUE TO THE NEED TO SUPPLY LOCAL TECHNICAL ASSISTANCE TO USERS AND TO ENSURE IMMEDIATE DELIVERY, GENERALLY IN SMALL QUANTITIES, SINCE, APART FROM EXCEPTIONAL CASES, PRODUCERS SUPPLY THEIR SUBSIDIARIES ESTABLISHED IN THE DIFFERENT MEMBER STATES AND MAINTAIN A NETWORK OF AGENTS AND DEPOTS TO ENSURE THAT USER UNDERTAKINGS RECEIVE SPECIFIC ASSISTANCE AND SUPPLIES .

IT APPEARS FROM THE DATA PRODUCED DURING THE COURSE OF THE PROCEEDINGS THAT EVEN IN CASES WHERE A PRODUCER ESTABLISHES DIRECT CONTACT WITH AN IMPORTANT USER IN ANOTHER MEMBER STATE, PRICES ARE USUALLY FIXED IN RELATION TO THE PLACE WHERE THE USER IS ESTABLISHED AND TEND TO FOLLOW THE LEVEL OF PRICES ON THE NATIONAL MARKET .

ALTHOUGH THE FOREMOST REASON WHY PRODUCERS HAVE ACTED IN THIS WAY IS IN ORDER TO ADAPT THEMSELVES TO THE SPECIAL FEATURES OF THE MARKET IN DYESTUFFS AND TO THE NEEDS OF THEIR CUSTOMERS, THE FACT REMAINS THAT THE DIVIDING-UP OF THE MARKET WHICH RESULTS TENDS, BY FRAGMENTING THE EFFECTS OF COMPETITION, TO ISOLATE USERS IN THEIR NATIONAL MARKET, AND TO PREVENT A GENERAL CONFRONTATION BETWEEN PRODUCERS THROUGHOUT THE COMMON MARKET .

IT IS IN THIS CONTEXT, WHICH IS PECULIAR TO THE WAY IN WHICH THE DYESTUFFS MARKET WORKS, THAT THE FACTS OF THE CASE SHOULD BE CONSIDERED .

THE INCREASES OF 1964, 1965 AND 1967

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

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

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

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

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

30 IN 1964 ALL THE UNDERTAKINGS IN QUESTION ANNOUNCED THEIR INCREASES AND IMMEDIATELY PUT THEM INTO EFFECT, THE INITIATIVE COMING FROM CIBA-ITALY WHICH, ON 7 JANUARY 1964, FOLLOWING INSTRUCTIONS FROM CIBA-SWITZERLAND, ANNOUNCED AND IMMEDIATELY INTRODUCED AN INCREASE OF 15 PER CENT . THIS INITIATIVE WAS FOLLOWED BY THE OTHER PRODUCERS ON THE ITALIAN MARKET WITHIN TWO OR THREE DAYS .

ON 9 JANUARY ICI-HOLLAND TOOK THE INITIATIVE IN INTRODUCING THE SAME INCREASE IN THE NETHERLANDS, WHILST ON THE SAME DAY BAYER TOOK THE SAME INITIATIVE ON THE BELGO-LUXEMBOURG MARKET .

WITH MINOR DIFFERENCES, PARTICULARLY BETWEEN THE PRICE INCREASES BY THE GERMAN UNDERTAKINGS ON THE ONE HAND AND THE SWISS AND UNITED KINGDOM UNDERTAKINGS ON THE OTHER, THESE INCREASES CONCERNED THE SAME RANGE OF PRODUCTS FOR THE VARIOUS PRODUCERS AND MARKETS, NAMELY, MOST ANILINE DYES OTHER THAN PIGMENTS, FOOD COLOURINGS AND COSMETICS .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

THESE PRODUCERS ARE SUFFICIENTLY POWERFUL AND NUMEROUS TO CREATE A CONSIDERABLE RISK THAT IN TIMES OF RISING PRICES SOME OF THEM MIGHT NOT FOLLOW THE GENERAL MOVEMENT BUT MIGHT INSTEAD TRY TO INCREASE THEIR SHARE OF THE MARKET BY BEHAVING IN AN INDIVIDUAL WAY .

FURTHERMORE, THE DIVIDING-UP OF THE COMMON MARKET INTO FIVE NATIONAL MARKETS WITH DIFFERENT PRICE LEVELS AND STRUCTURES MAKES IT IMPROBABLE THAT A SPONTANEOUS AND EQUAL PRICE INCREASE WOULD OCCUR ON ALL THE NATIONAL MARKETS .

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

THEREFORE, ALTHOUGH PARALLEL CONDUCT IN RESPECT OF PRICES MAY WELL HAVE BEEN AN ATTRACTIVE AND RISK-FREE OBJECTIVE FOR THE UNDERTAKINGS CONCERNED, IT IS HARDLY CONCEIVABLE THAT THE SAME ACTION COULD BE TAKEN SPONTANEOUSLY AT THE SAME TIME, ON THE SAME NATIONAL MARKETS AND FOR THE SAME RANGE OF PRODUCTS .

35 NOR IS IT ANY MORE PLAUSIBLE THAT THE INCREASES OF JANUARY 1964, INTRODUCED ON THE ITALIAN MARKET AND COPIED ON THE NETHERLANDS AND BELGO-LUXEMBOURG MARKETS, WHICH HAVE LITTLE IN COMMON WITH EACH OTHER EITHER AS REGARDS THE LEVEL OF PRICES OR THE PATTERN OF COMPETITION, COULD HAVE BEEN BROUGHT INTO EFFECT WITHIN A PERIOD OF TWO TO THREE DAYS WITHOUT PRIOR CONCERTATION .

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

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

THE GENERAL AND UNIFORM INCREASE ON THOSE DIFFERENT MARKETS CAN ONLY BE EXPLAINED BY A COMMON INTENTION OF THE PART OF THOSE UNDERTAKINGS, FIRST, TO ADJUST THE LEVEL OF PRICES AND THE SITUATION RESULTING FROM COMPETITION IN THE FORM OF DISCOUNTS, AND SECONDLY, TO AVOID THE RISK, WHICH IS INHERENT IN ANY PRICE INCREASE, OF CHANGING THE CONDITIONS OF COMPETITION .

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

36 THE FUNCTION OF PRICE COMPETITION IS TO KEEP PRICES DOWN TO THE LOWEST POSSIBLE LEVEL AND TO ENCOURAGE THE MOVEMENT OF GOODS BETWEEN THE MEMBER STATES, THEREBY PERMITTING THE MOST EFFICIENT POSSIBLE DISTRIBUTION OF ACTIVITIES IN THE MATTER OF PRODUCTIVITY AND THE CAPACITY OF UNDERTAKINGS TO ADAPT THEMSELVES TO CHANGE .

DIFFERENCES IN RATES ENCOURAGE THE PURSUIT OF ONE OF THE BASIC OBJECTIVES OF THE TREATY, NAMELY THE INTERPENETRATION OF NATIONAL MARKETS AND, AS A RESULT, DIRECT ACCESS BY CONSUMERS TO THE SOURCES OF PRODUCTION OF THE WHOLE COMMUNITY .

BY REASON OF THE LIMITED ELASTICITY OF THE MARKET IN DYESTUFFS, RESULTING FROM FACTORS SUCH AS THE LACK OF TRANSPARENCY WITH REGARD TO PRICES, THE INTERDEPENDENCE OF THE DIFFERENT DYESTUFFS OF EACH PRODUCER FOR THE PURPOSE OF BUILDING UP THE RANGE OF PRODUCTS USED BY EACH CONSUMER, THE RELATIVELY LOW PROPORTION OF THE COST OF THE FINAL PRODUCT OF THE USER UNDERTAKING REPRESENTED BY THE PRICES OF THESE PRODUCTS, THE FACT THAT IT IS USEFUL FOR USERS TO HAVE A LOCAL SUPPLIER AND THE INFLUENCE OF TRANSPORT COSTS, THE NEED TO AVOID ANY ACTION WHICH MIGHT ARTIFICIALLY REDUCE THE OPPORTUNITIES FOR INTERPENETRATION OF THE VARIOUS NATIONAL MARKETS AT THE CONSUMER LEVEL BECOMES PARTICULARLY IMPORTANT ON THE MARKET IN THE PRODUCTS IN QUESTION .

ALTHOUGH EVERY PRODUCER IS FREE TO CHANGE HIS PRICES, TAKING INTO ACCOUNT IN SO DOING THE PRESENT OR FORESEEABLE CONDUCT OF HIS COMPETITORS, NEVERTHELESS IT IS CONTRARY TO THE RULES ON COMPETITION CONTAINED IN THE TREATY FOR A PRODUCER TO COOPERATE WITH HIS COMPETITORS, IN ANY WAY WHATSOEVER, IN ORDER TO DETERMINE A COORDINATED COURSE OF ACTION RELATING TO A PRICE INCREASE AND TO ENSURE ITS SUCCESS BY PRIOR ELIMINATION OF ALL UNCERTAINTY AS TO EACH OTHER' S CONDUCT REGARDING THE ESSENTIAL ELEMENTS OF THAT ACTION, SUCH AS THE AMOUNT, SUBJECT-MATTER, DATE AND PLACE OF THE INCREASES .

IN THESE CIRCUMSTANCES AND TAKING INTO ACCOUNT THE NATURE OF THE MARKET IN THE PRODUCTS IN QUESTION, THE CONDUCT OF THE APPLICANT, IN CONJUNCTION WITH OTHER UNDERTAKINGS AGAINST WHICH PROCEEDINGS HAVE BEEN TAKEN, WAS DESIGNED TO REPLACE THE RISKS OF COMPETITION AND THE HAZARDS OF COMPETITORS' SPONTANEOUS REACTIONS BY COOPERATION CONSTITUTING A CONCERTED PRACTICE PROHIBITED BY ARTICLE 85 ( 1 ) OF THE TREATY .

THE EFFECT OF THE CONCERTED PRACTICE ON TRADE BETWEEN MEMBER STATES

37 THE APPLICANT ARGUES THAT THE UNIFORM PRICE INCREASES WERE NOT CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES BECAUSE NOTWITHSTANDING THE NOTICEABLE DIFFERENCES EXISTING BETWEEN PRICES CHARGED IN THE DIFFERENT STATES CONSUMERS HAVE ALWAYS PREFERRED TO MAKE THEIR PURCHASES OF DYESTUFFS IN THEIR OWN COUNTRY .

38 HOWEVER, IT APPEARS FROM WHAT HAS ALREADY BEEN SAID THAT THE CONCERTED PRACTICES, BY SEEKING TO KEEP THE MARKET IN A FRAGMENTED STATE, WERE LIABLE TO AFFECT THE CIRCUMSTANCES IN WHICH TRADE IN THE PRODUCTS IN QUESTION TAKES PLACE BETWEEN THE MEMBER STATES .

THE PARTIES WHO PUT THESE PRACTICES INTO EFFECT SOUGHT, ON THE OCCASION OF EACH PRICE INCREASE, TO REDUCE TO A MINIMUM THE RISKS OF CHANGING THE CONDITIONS OF COMPETITION .

THE FACT THAT THE INCREASES WERE UNIFORM AND SIMULTANEOUS HAS IN PARTICULAR SERVED TO MAINTAIN THE STATUS QUO, ENSURING THAT THE UNDERTAKINGS WOULD NOT LOSE CUSTOM, AND HAS THUS HELPED TO KEEP THE TRADITIONAL NATIONAL MARKETS IN THOSE GOODS " CEMENTED " TO THE DETRIMENT OF ANY REAL FREEDOM OF MOVEMENT OF THE PRODUCTS IN QUESTION IN THE COMMON MARKET .

39 THEREFORE THIS SUBMISSION IS UNFOUNDED .

THE FINE

40 THE APPLICANT CLAIMS THAT THE CONTESTED DECISION DID NOT TAKE INTO ACCOUNT THE FINES WHICH HAD BEEN IMPOSED UPON IT BY THE BUNDESKARTELLAMT BY ITS DECISION OF 28 NOVEMBER 1967 .

41 SINCE THE DECISION OF THE BUNDESKARTELLAMT HAS BEEN ANNULLED, THIS SUBMISSION HAS BECOME DEVOID OF OBJECT .

THEREFORE IT IS NOT NECESSARY TO EXAMINE THE SUBSTANCE OF IT .

42 IN VIEW OF THE FREQUENCY AND EXTENT OF THE APPLICANT' S PARTICIPATION IN THE PROHIBITED PRACTICES, AND TAKING INTO ACCOUNT THE CONSEQUENCES THEREOF IN RELATION TO THE CREATION OF A COMMON MARKET IN THE PRODUCTS IN QUESTION, THE AMOUNT OF THE FINE IS APPROPRIATE TO THE GRAVITY OF THE INFRINGEMENT OF THE COMMUNITY RULES ON COMPETITION .

Decision on costs

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

## Decision on costs

THE APPLICANT HAS FAILED IN ITS SUBMISSIONS .

THEREFORE IT MUST BE ORDERED TO BEAR THE COSTS .

Operative part

THE COURT

## Operative part

HEREBY :

1 . DISMISSES THE APPLICATION;

2 . ORDERS THE APPLICANT TO BEAR THE COSTS .