Judgment — ECLI:EU:C:2024:1004
Date: 2024-12-05
Language of the case: Latvian
Court formation: Tenth Chamber
Subject matter: Competition
Procedure: Reference for a preliminary ruling
Origin: Latvia

Summary C-606/23 – 1 
Case C-606/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
4 October 2023 
Referring court: 
Administratīvā apgabaltiesa (Latvia) 
Date of the decision to refer: 
2 October 2023 
Applicants: 
AS Tallinna Kaubamaja Grupp 
AS KIA Auto 
Defendant: 
Konkurences padome 
  
Subject matter of the main proceedings 
Action for annulment of the decision of the Konkurences padome (Competition 
Council, Latvia) finding various infringements of competition law. 
Subject matter and legal basis of the request 
Pursuant to Article 267 TFEU, the referring court requests the interpretation of 
Article 101(1) TFEU. 
Questions referred for a preliminary ruling 
1) In accordance with Article 101(1) TFEU, for the purposes of determining 
the existence of a prohibited agreement establishing restrictions in respect of car 
warranties which, in order for the car’s warranty to remain valid, oblige or induce 
car owners to carry out the repair and maintenance of that car solely at authorised 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-606/23 
 
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representatives of the car’s manufacturer and to use the original spare parts of that 
manufacturer in its servicing, must the competition authority demonstrate the 
existence of actual and real restrictive effects on competition? 
2) In accordance with Article 101(1) TFEU, for the purposes of determining 
the existence of the agreement mentioned in the first question referred, is it 
sufficient for the competition authority to demonstrate solely the existence of 
potential restrictive effects on competition? 
Provisions of European Union law relied on 
Article 101(1) of the Treaty on the Functioning of the European Union (TFEU). 
Commission notice 2010/C 130/01 of 19 May 2010, Guidelines on Vertical 
Restraints (‘the Guidelines on Vertical Restraints’): paragraphs 96, 97, 110 and 
111. 
Commission notice 2010/C 138/05 of 28 May 2010, Supplementary guidelines on 
vertical restraints in agreements for the sale and repair of motor vehicles and for 
the distribution of spare parts for motor vehicles, paragraphs 1, 2, 60 and 69. 
Case-law 
Judgments of the Court of Justice of: 
Judgment of 15 December 1994, DLG, C-250/92, EU:C:1994:413, paragraph 31 
Judgment of 28 May 1998, Deere v Commission, C-7/95 P, EU:C:1998:256, 
paragraphs 76 and 77 
Judgment of 23 November 2006, Asnef-Equifax and Administración del Estado, 
C-238/05, EU:C:2006:734, paragraphs 49 and 50 and the case-law cited 
Judgment of 20 November 2008, Beef Industry Development and Barry Brothers, 
C-209/07, EU:C:2008:643, paragraph 17 
Judgment of 14 March 2013, Allianz Hungária Biztosító and Others, C-32/11, 
EU:C:2013:160, paragraphs 34 and 36 to 38 and the case-law cited 
Judgment of 11 September 2014, MasterCard and Others v Commission, 
C-382/12 P, EU:C:2014:2201, paragraphs 161, 165 and 166 and the case-law cited 
Judgment of 26 November 2015, Maxima Latvija, C-345/14, EU:C:2015:784, 
paragraphs 29 and 30 
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Judgment of the General Court of 10 November 2021, Google and Alphabet v 
Commission (Google Shopping), T-612/17, EU:T:2021:763, paragraphs 378 and 
443 
Opinion of Advocate General Bobek in Budapest Bank and Others, C-228/18, 
EU:C:2019:678, point 28 and the case-law cited 
Opinion of Advocate General Kokott in Generics (UK) and Others, C-307/18, 
EU:C:2020:28, points 184 and 198 
Provisions of national law relied on 
Konkurences likums (Law on competition; ‘the Competition Law’): 
Article 11(1)(7) 
Succinct presentation of the facts and procedure in the main proceedings 
1 The Estonian company AS KIA Auto is the sole authorised importer of cars of the 
KIA brand in Latvia. AS KIA Auto selects and approves the authorised 
representatives who market KIA cars and carry out repairs under the warranty, 
charged to the manufacturer or importer. 
2 The Competition Council began a procedure to determine the existence of an 
infringement after receiving a complaint from the owner of a vehicle who had 
been denied the possibility of doing a repair covered by the warranty after having 
carried out the maintenance of his car at an independent garage. 
3 In the booklet on maintenance and repairs aimed at customers, the members of the 
distribution network for cars of the KIA brand in Latvia – that is, AS KIA Auto, in 
its capacity as the importer, and the authorised representatives (distributors of cars 
of the KIA brand and authorised repairers) – included the conditions of the 
warranty, which stipulated that the warranty would remain valid as long as the 
maintenance and repair of the vehicle was carried out solely by authorised garages 
and provided that only original KIA spare parts were used, and also that the 
details of each instance of maintenance would have to be certified by means of the 
signature of the representative of an authorised garage. It also stipulated in the 
booklet that spare parts installed by independent repairers would not be changed 
free of charge. 
4 By a decision of 7 August 2014 (‘the contested decision’), the Competition 
Council found that the conduct of AS KIA Auto violated the prohibition 
established in Article 11(1)(7) of the Competition Law and it imposed various 
legal obligations and fines on it. 
5 In the contested decision, the Competition Council found that, at least since 
1 January 2004 – that is, for more than 10 years – AS KIA Auto, in its capacity as 
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the importer, and the authorised representatives (distributors of cars of the KIA 
brand and authorised repairers) had coordinated with each other to impose 
warranty conditions which oblige or induce car owners, during the warranty 
period, to carry out all routine maintenance of the vehicle planned by the 
manufacturer, KIA, and all repairs not covered by the warranty at authorised 
representatives (repairers) of KIA, in order for the warranty to remain valid, and 
to use original KIA spare parts in the routine maintenance carried out during the 
warranty period, to that same end. 
6 The contested decision held that such restrictions create obstacles to independent 
repairers accessing the Latvian market for maintenance and repair services not 
covered by the warranty, during the warranty period, and to independent 
producers of spare parts accessing the Latvian market for the distribution of spare 
parts, thereby restricting competition between the distributors of original KIA 
spare parts and the distributors of similar spare parts. In the opinion [of the 
Competition Council], the elimination or impeding of competition with regard to 
independent repairers is also detrimental to consumers, as it reduces their capacity 
to choose between various providers of repair and maintenance services, which 
reduces or inhibits the pressure on the prices of such services. There are often 
significant differences in price between the original spare parts sold and resold by 
the car manufacturers and similar spare parts. The consumer benefits considerably 
if the use of similar spare parts from competitors, of equivalent quality, is not 
restricted during the warranty period. 
7 In the contested decision, the Competition Council found that, within the KIA 
network, there is a vertical agreement relating to the warranty conditions: 1) for 
the car’s warranty to remain valid, car owners are required to have all routine 
maintenance of the car that is planned by the producer, KIA, during the warranty 
period, carried out solely by authorised KIA representatives, which impedes 
competition in the market for repair and maintenance services; and 2) in the case 
of repairs and maintenance carried out during the warranty period, only original 
spare parts from the producer, KIA, must be used, which impedes competition in 
the market for the distribution of spare parts. 
8 The Competition Council held that the agreement at issue restricts competition 
through its effects and, at the same time, found that the standard of proof for a 
prohibited agreement does not require evidence of the effects actually produced. 
The negative effects on competition are derived from the very nature of the 
restrictive conditions. According to the Competition Council, car owners will 
always wish the warranty to remain valid, especially for a product such as a car, 
the repair of which may involve considerable expense for the owner. The 
Competition Council therefore considered that, faced with restrictive conditions 
such as those identified by that body in this case, the owner will comply with 
those conditions and, consequently, opt not to carry out maintenance or repairs 
that are not covered by the warranty at independent garages and will not allow 
non-original spare parts to be used in any repairs. Consequently, independent 
repairers and distributors of alternative spare parts find themselves excluded from 
TALLINNA KAUBAMAJA GRUPP AND KIA AUTO 
 
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the market. The Competition Council therefore held that, in the present case, it 
was not necessary to prove the actual effects [of that practice]. 
9 Given that AS KIA Auto and AS Tallinna Kaubamaja Grupp did not agree with 
the contested decision, they brought a challenge against it; however, the 
Administratīvā apgabaltiesa (Regional Administrative Court, Latvia) rejected that 
challenge in a judgment of 10 March 2017. 
10 The Augstākās tiesas Senāta Administratīvo lietu departaments (Supreme Court 
(Senate), Department of Administrative Cases, Latvia; ‘the Supreme Court’), by a 
judgment of 22 December 2021 (‘the judgment of the Supreme Court’), set aside 
the judgment of the Regional Administrative Court of 10 March 2017 and held 
that, given that it is the Competition Council itself that has to show that an 
infringement of competition law has been committed, which instruments it 
chooses in order to prove that an infringement has occurred is a matter for it alone. 
Therefore, according to the Supreme Court, it is at the discretion of that institution 
to determine how the agreement is to be classified: if it does not find a sufficiently 
sound basis for maintaining that the agreement restricts competition due to its 
object, it is only logical that that institution should focus on the restrictive effects 
of the agreement, without carrying out a preliminary assessment based on the 
object of the agreement. 
11 The Supreme Court concluded that, in the present case, the question of whether 
the reasons set out in the contested decision were sufficient to determine the 
existence of a prohibited agreement on account of its effects had to be settled. The 
Supreme Court examined whether the Regional Administrative Court had been 
guided in that regard by relevant criteria, derived from legal rules and from case-
law. 
12 The Supreme Court held that, when checking whether the contested decision had 
reached a well-founded conclusion that the agreement in question was a 
prohibited agreement due to its effects, the Regional Administrative Court had 
based its examination on assessment criteria which had to be taken into 
consideration in the case of a prohibition due to the effects, but which were not 
correct (or on an erroneous understanding of those criteria). In those 
circumstances, the Supreme Court held that the Regional Administrative Court 
could not properly determine whether the basis for the decision was sufficient. 
The essential arguments of the parties in the main proceedings 
13 After the Supreme Court had given that judgment, the Competition Council told 
the Regional Administrative Court that there was uncertainty in the present case 
regarding the delimitation of the restriction of competition by the effects and the 
interpretation of Article 11(1) of the Competition Law in those cases in which 
prohibited agreements have to be identified by their effects. In its opinion, an 
unambiguous understanding of the concept of restriction of competition by object 
and by effect is of vital importance for the correct application of competition law, 
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regardless of whether Article 11 or Article 13 (prohibition of abuse of a dominant 
position) of the Competition Law is applied. In the opinion of the Competition 
Council, the conclusions contained in the judgment of the Supreme Court differ 
substantially from those contained in the case-law of the Court of Justice of the 
European Union, and, therefore, the content of the restriction of competition by 
the effects [of the agreement] and the standard of proof arising from that concept 
is unclear. Consequently, in order to ensure lawful and uniform practice (in 
accordance with that of the Court of Justice of the European Union) in future, it 
considers it necessary to refer a question to the Court of Justice for a preliminary 
ruling. 
14 The Competition Council also refers to another case, namely the case Maxima, in 
which the Supreme Court gave judgment on 29 December 2015 and in which that 
court not only adopted a restrictive interpretation of the object of the restrictions 
of competition, but it also expressed its opinion on the need to demonstrate actual 
effects. In the case Maxima, the Supreme Court adhered to the assessment of the 
Court of Justice of the European Union, according to which the argument made by 
the claimant that, when assessing the effects of an agreement, only the restriction 
of competition actually occurring must be assessed was unfounded. Nor, in the 
opinion of the Competition Council, did the Supreme Court have reasons to 
disagree as regards the application of Article 11(1) of the Competition Law, since 
the general objective of paragraph 1 of that article is to deal with agreements that 
restrict competition, regardless of their actual effects. The assessment of the 
effects, including the potential effects, is, in such a case, a tool to understand the 
nature of the agreement (regardless of whether it is restrictive of competition by 
its object or by its effects), not to assess the damage to competition that has been 
caused. 
15 The Competition Council refers to the conclusions reached with regard to the 
assessment of the effects, in particular to the judgment of the General Court in 
Case T-612/17, Google Shopping, although it should be borne in mind that that 
case related to an infringement of Article 102 TFEU. In that judgment, the 
General Court held that the European Commission is not immediately obliged, 
even in response to a counterfactual analysis put forward by the undertaking being 
challenged, systematically to establish a counterfactual scenario in the sense 
referred to in that judgment. That would, moreover, oblige it to demonstrate that 
the conduct at issue had actual effects, which is not required in the case of an 
abuse of a dominant position, where it is sufficient to establish that there are 
potential effects. That judgment also states that the Commission was not required 
to demonstrate that possible consequences of the elimination or restriction of 
competition actually manifested themselves, for example in the form of less 
innovation or price increases that could only be explained by the lack of 
competition. 
16 The Competition Council considers that a similar approach should be followed 
when applying and interpreting Article 101 TFEU and, therefore, Article 11 of the 
Competition Law, since, in its opinion, the conclusions mentioned indicate, in 
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general, that, when assessing the impact of an agreement on competition on 
account of its effects, it is not possible, nor is it appropriate, to reduce the 
assessment of an agreement and of all the circumstances relevant to a particular 
case to the determination of the actual and measurable negative effects on 
competition, and that such an approach de facto does away with the possibility of 
the competition authority preventing the existence of restrictions of competition 
which have not yet produced negative effects that can be determined materially. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
17 In its judgment of 22 December 2021, referred to above, the Supreme Court 
referred to the case-law mentioned below. 
18 When interpreting Article 81(1) of the Treaty establishing the European 
Community and Article 101(1) TFEU, and clarifying the nature of the concepts of 
object and effect, the Court of Justice has also delineated a distinction between 
those concepts and the circumstances which must be established in each case. 
19 Thus, the Court of Justice has held that the distinction between ‘infringements by 
object’ and ‘infringements by effect’ arises from the fact that certain forms of 
collusion between undertakings can be regarded, by their very nature, as being 
injurious to the proper functioning of normal competition (judgment in Case 
C-209/07, paragraph 17). Accordingly, where the anti-competitive object of the 
agreement is established it is not necessary to examine its effects on competition. 
Where, however, the analysis of the content of the agreement does not reveal a 
sufficient degree of harm to competition, the effects of the agreement should then 
be considered and, for it to be caught by the prohibition, it is necessary to find that 
factors are present which show that competition has in fact been prevented, 
restricted or distorted to an appreciable extent (judgment in Case C-32/11, 
paragraph 34 and the case-law cited). 
20 As regards the determination of the existence of a restriction by object, the Court 
of Justice has held the following: in order to determine whether an agreement 
involves a restriction of competition ‘by object’, regard must be had to the content 
of its provisions, its objectives and the economic and legal context of which it 
forms a part. When determining that context, it is also appropriate to take into 
consideration the nature of the goods or services affected, as well as the real 
conditions of the functioning and structure of the market or markets in question. 
Although it is not necessary to establish the existence of an intention, there is 
nothing to prevent it being done. Moreover, in order for the agreement to be 
regarded as having an anti-competitive object, it is sufficient that it has the 
potential to have a negative impact on competition, that is to say, that it be capable 
in an individual case of resulting in the prevention, restriction or distortion of 
competition within the internal market. Whether and to what extent, in fact, such 
an effect results can only be of relevance for determining the amount of any fine 
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and assessing any claim for damages (judgment given in Case C-32/11, 
paragraphs 36 to 38 and the case-law cited). 
21 As regards the determination of the existence of a restriction by the effects [of the 
agreement], the Court of Justice has held the following: to determine whether an 
agreement is to be considered to be prohibited by reason of the distortion of 
competition which is its effect, the competition in question should be assessed 
within the actual context in which it would occur in the absence of the agreement 
in dispute. An agreement’s conformity with the competition rules cannot be 
assessed in the abstract. Indeed, when appraising the effects of coordination 
between undertakings, it is necessary to take into consideration the actual context 
in which the relevant coordination arrangements are situated, in particular the 
economic and legal context in which the undertakings concerned operate, the 
nature of the goods or services affected, as well as the real conditions of the 
functioning and the structure of the market or markets in question. It follows from 
this that the scenario envisaged on the basis of the hypothesis that the coordination 
arrangements in question are absent must be realistic. From that perspective, it is 
permissible, where appropriate, to take account of the likely developments that 
would occur on the market in the absence of those arrangements (judgment given 
in Case C-250/92, paragraph 31, and judgment given in Case C-382/12 P, 
paragraphs 161, 165 and 166 and the case-law cited). The Court has likewise held 
that, while Article 81(1) EC does not restrict such an assessment to actual effects 
alone, as that assessment must also take account of the potential effects of the 
agreement or practice in question on competition within the common market, an 
agreement will, however, fall outside the prohibition in Article 81 EC if it has 
only an insignificant effect on the market (judgment given in Case C-238/05, 
paragraph 50 and the case-law cited). 
22 From that case-law, the Supreme Court deduced that, in the event that the 
competition protection authority reaches the conclusion that it cannot find a 
restriction of competition by object, it must establish whether the agreement has 
had restrictive effects on competition. That, in turn, implies that the authority in 
question must obtain a body of evidence that shows that competition has actually 
been restricted. Indeed, it is incumbent on that authority to establish whether the 
agreement actually had restrictive effects on competition, which it should not do 
in the event that a restriction of competition by object is found to exist. To 
establish that, the authority must examine the competition conditions in the real 
context in which they occur, without the influence of the agreement at issue, 
essentially carrying out a market analysis. That assessment must not be theoretical 
and abstract, but rather it must be based on the actual circumstances of the 
particular market and the competition, since, otherwise, the assessment could be 
considered to be based on suppositions. 
23 The Supreme Court observed that the Competition Council had not explained 
what it understood by the concept of ‘potential effects’, which it used, nor how the 
assessment of such effects had been expressed in the decision. In any event, 
according to the Supreme Court, that concept must not be identified with the 
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assessment carried out when examining whether the object of an agreement is to 
restrict competition, since, otherwise, the boundary between the standard of proof 
in respect of the object and that in respect of the effects would become blurred, 
which must not happen. 
24 It also drew attention to the fact that the concept of potential or possible effects is 
linked, in the case-law of the Court of Justice, to potential competition and that it 
is subject to the same standard of proof as that applicable to actual effects. 
25 The Supreme Court pointed out that, from the Guidelines on Vertical Restraints, it 
may also be inferred that the European Commission establishes the actual and 
possible effects of an agreement according to the same standard of proof. 
26 The Regional Administrative Court agrees with the Competition Council that, 
given the existence of an essentially similar legal context and in view of the 
objective, acknowledged by the legislature, of harmonising the rules of Latvian 
competition law with those of the European Union, the application of 
Article 11(1) of the Competition Law must not differ from that of Article 101(1) 
TFEU. In applying Article 11(1) of the Competition Law, the considerations of 
the Court of Justice in relation to the application of Article 101(1) TFEU should 
be taken into account. 
27 The applicants indicated to the Regional Administrative Court that they believed it 
was appropriate to refer a question to the Court of Justice for a preliminary ruling. 
28 In view of the fact that, in the present case, the parties have made reasoned 
observations regarding the interpretation of a provision of EU law which is not so 
clear that it could not give rise to a degree of reasonable uncertainty, the Regional 
Administrative Court considers it appropriate to refer questions regarding the 
interpretation of Article 101(1) TFEU to the Court of Justice.