Judgment — ECLI:EU:T:2003:250
Date: 2003-09-30
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Agreements, decisions and concerted practices;Dominant position
Concepts: Definition of abuse;Examples of abuse;Determining the amount of the fine;General;Hearing of persons concerned and of third parties / Access to the file
Procedure: Action for annulment - unfounded
Origin: France

Summary of the Judgment 
1. Competition — Dominant position — Abuse — Meaning — Objective concept 
referring to conduct likely to influence the structure of the market and with the effect 
of hindering the maintenance or development of competition — Obligations on 
dominant undertakings — Exercise of competition only on the merits 
(Art. 82 EC) 
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SUMMARY — CASE T-203/01 
2. Competition — Dominant position — Abuse — Discounts with a foreclosure effect 
on the market •—• Loyalty rebate — Abusive practice 
(Art. 82 EC) 
3. Competition — Dominant position — Abuse — Quantity rebates — Whether per­
missible — Conditions — Abusive nature of the rebate system •—• Criteria for assess­
ment 
(Art. 82 EC) 
4. Competition — Administrative procedure — Statement of objections — Matters to 
be stated 
5. Competition — Dominant position — Abuse — Quantity rebates with a loyalty-
inducing effect — Rebate, granted annually, representing a percentage of the overall 
turnover achieved with the customer over the preceding year and rising progressively 
and significantly with that figure 
(Art. 82 EC) 
6. Competition — Administrative procedure — Observance of the rights of the 
defence — Access to the file — Limits — Obligation to communicate to the 
dominant undertaking the identity of its customers which collaborated in the 
investigation — None 
7. 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 
8. Competition — Dominant position — Abuse — System of rebates leaving the domi­
nant undertaking with a broad scope for subjective assessment — Rebates devoid of 
objective economic justification 
(Art. 82 EC) 
9. Competition — Dominant position — Abuse — Tyre manufacturer — Contracts 
granting a rebate to retailers undertaking systematically to have carcasses retreaded 
by that manufacturer — Condition with a tied sales effect — Permissible under 
national law — Irrelevant — Primacy of Community law 
(Art. 82 EC) 
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MICHELIN v COMMISSION 
10.Competition — Dominant position — Abuse — Obligations imposed on retailers of 
the dominant undertaking's products in return for financial advantages — Obligations 
aimed at eliminating competition from other manufacturers 
(Art. 82 EC) 
11. Competition — Dominant position — Abuse — Obligations to provide information 
and submit to supervision without objective justification imposed on retailers of the 
dominant undertaking's products in return for financial advantages — Application of 
Regulation No 4087/88 allowing obligations to provide information in the context of 
franchise agreements — Excluded 
(Art. 82 EC; Commission Regulation No 4087/88, Art. 3(2)) 
12.Competition — Dominant position — Abuse — Meaning — Conduct having either 
the effect or the object of hindering the maintenance or development of competition 
(Art. 82 EC) 
13.Competition — Fines — Amount — Determination thereof— Raising of the 
general level of fines — Whether permissible — Condition — Duty to state rea­
sons — None 
(Council Regulation No 17, Art. 15(2); Commission Communication 98/C 9/03) 
14.Competition — Fines — Amount — Determination — Criteria — Fine for abuse 
of a dominant position — Assessment of the seriousness of the infringement — 
Account to be taken of the nature and object of the abusive practices and not their 
specific effects 
(Council Regulation No 17, Art. 15(2) 
15.Competition — Fines — More than one infringement — Imposition of a single 
fine — Permissible — Duty of the Commission to state specifically each individual 
abusive component — None 
(Council Regulation No 17, Art. 15(2)) 
16.Competition — Fines — Amount — Determination thereof — Criteria — 
Duration of infringement — Duration, taken into account as such, irrespective of its 
consequences on the harm caused — Permissible 
(Council Regulation No 17, Art. 15(2)) 
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SUMMARY — CASE T-203/01 
17. Competition — Fines — Amount — Determination thereof — Criteria — Seriousness 
of the infringements — Aggravating circumstances — Recidivism — Concept 
(Commission Communication 98/C 9/03) 
18.Competition—Fines — Amount — Determination thereof— Criteria—Seriousness 
of the infringements — Aggravating circumstances — Recidivism — Similar 
infringements successively committed by two subsidiaries of the same parent company 
19. Competition—Fines — Amount — Determination thereof— Criteria — Seriousness 
of the infringements — Aggravating circumstances — Increase in the uplifts pre­
viously applied for recidivism — Diminution of the reductions previously applied for 
certain mitigating circumstances — Permissible 
(Council Regulation No 17, Art. 15(2); Commission Communication 98/C 9/03) 
1. An 'abuse' is an objective concept 
referring to the behaviour of an under­
taking in a dominant position which is 
such as to influence the structure of a 
market where, as a result of the very 
presence of the undertaking in ques­
tion, the degree of competition is 
already weakened and which, through 
recourse to methods different from 
those governing normal competition 
in products or services on the basis of 
the transactions of commercial oper­
ators, has the effect of hindering the 
maintenance of the degree of com­
petition still existing in the market or 
the growth of that competition. It 
follows that not all competition on 
price can be regarded as legitimate and 
that an undertaking in a dominant 
position cannot have recourse to means 
other than those within the scope of 
competition on the merits. 
Therefore, whilst the finding that a 
dominant position exists does not in 
itself imply any reproach to the under­
taking concerned, it has a special 
responsibility, irrespective of the causes 
of that position, not to allow its con­
duct to impair genuine undistorted 
competition on the common market. 
Similarly, whilst the fact that an under­
taking is in a dominant position cannot 
deprive it of its entitlement to protect 
its own commercial interests when they 
are attacked, and whilst such an under­
taking must be allowed the right to 
take such reasonable steps as it deems 
appropriate to protect those interests, 
such behaviour cannot be allowed if its 
purpose is to strengthen that dominant 
position and thereby abuse it. 
(see paras 54-55, 97) 
II - 4074 
MICHELIN v COMMISSION 
2. A rebate system which has a fore­
closure effect on the market will be 
regarded as contrary to Article 82 EC if 
it is applied by an undertaking in a 
dominant position. 
That is the case with a loyalty rebate, 
which is granted by an undertaking in a 
dominant position to its customers in 
return for an undertaking to obtain 
their stock exclusively or almost 
exclusively from that undertaking. 
Even in cases where it is not discrimi­
natory, such a rebate is designed, 
through the grant of financial advan­
tages, to prevent customers from 
obtaining their supplies from the domi­
nant undertaking's competitors. 
(see paras 56-57, 65) 
3. Quantity rebate systems applied by an 
undertaking in a dominant position, 
linked solely to the volume of pur­
chases made from that undertaking, do 
not generally have a foreclosure effect 
on the market prohibited by Article 82 
EC. If increasing the quantity supplied 
by that undertaking results in it incurr­
ing lower costs, it is entitled to pass on 
that reduction to its customer s in the 
form of a more favourable tariff. 
It follows that a quantity rebate system 
in which the rate of the discount 
increases according to the volume pur­
chased from the dominant undertaking 
will not infringe Article 82 EC unless 
the criteria and rules for granting the 
rebate reveal that the system is not 
based on an economically justified 
countervailing advantage but tends, 
following the example of a loyalty 
and target rebate, to prevent customers 
from obtaining their supplies from 
competitors. 
In determining whether a quantity 
rebate system is abusive, it is therefore 
necessary to consider all the circum­
stances, particularly the criteria and 
rules governing the grant of the rebate, 
and to investigate whether, in provid­
ing an advantage not based on any 
economic service justifying it, the 
rebates tend to remove or restrict the 
buyer's freedom to choose his sources 
of supply, to bar competitors from 
access to the market, to apply dissimi­
lar conditions to equivalent trans­
actions with other trading parties or 
to strengthen the dominant position by 
distorting competition. 
(see paras 58-60, 62) 
4. The statement of objections must be 
couched in terms that, albeit succinct, 
II - 4075 
SUMMARY — CASE T-203/01 
are sufficiently clear to enable the 
parties concerned properly to identify 
the conduct to which the Commission 
objects. It is only on that basis that the 
statement of objections can fulfil its 
function under the Community regu­
lations of giving undertakings and 
associations of undertakings all the 
information necessary to enable them 
properly to defend themselves, before 
the Commission adopts a final 
decision. 
(see para. 77) 
5. A quantity rebate system applied by a 
supplier to its customers, in which 
there is a significant variation in the 
discount rates between the lower and 
higher steps, which has a reference 
period of one year and in which the 
discount is fixed on the basis of total 
turnover achieved during the reference 
period, has the characteristics of a 
loyalty-inducing discount system in 
that it constitutes a strong incentive to 
obtain supplies from that supplier. 
(see para. 95) 
6. In the context of proceedings seeking to 
establish that a dominant position has 
been abused, the Commission must 
take account of the risk that the under­
taking concerned might adopt retali­
atory measures against its customers 
who collaborated in the investigation. 
In the light of that risk, the Commis­
sion is entitled to refrain from com­
municating the identity of those under­
takings to the dominant undertaking, 
and to send it only a table reproducing, 
without mentioning names, the 
answers provided to requests for infor­
mation which it had sent to them. 
Therefore, by preparing a non-con­
fidential version of those answers in 
the context of the administrative pro­
cedure, the Commission complies both 
with the requirement to protect con­
fidential information and, on the other 
hand, the right of the addressee of the 
statement of objections to have access 
to the whole of the file. 
(see paras 124-125) 
7. Documents which the Commission 
used against the undertaking concerned 
without the latter having received them 
during the administrative procedure 
must be excluded as evidence of an 
infringement of the competition rules. 
Such exclusion leads to annulment of 
the decision finding the infringement in 
II - 4076 
MICHELIN v COMMISSION 
so far as it refers to a complaint which 
can be proved only by reference to 
those documents. 
(see para. 129) 
8. The granting of a discount by an 
undertaking in a dominant position 
does not have be regarded as abusive 
within the meaning of Article 82 EC if 
it is based on an objective economic 
justification. It follows that a discount 
system which is applied by an under­
taking in a dominant position and 
which leaves that undertaking a con­
siderable margin of discretion as to 
whether its customers may obtain the 
discount must be considered unfair and 
constitutes an abuse within the mean­
ing of Article 82 EC. Because of the 
subjective assessment of the criteria 
giving entitlement to the discount, 
customers are left in a situation of 
uncertainty by not being able to predict 
with any confidence the rate of dis­
count which they are able to receive. 
(see paras 140-141) 
9. Where a tyre manufacturer in a domin­
ant market position remunerates 
retailers of its products for undertak­
ing, systematically, to have the car­
casses of the dominant undertaking's 
tyres retreaded by that undertaking, it 
commits an abuse within the meaning 
of Article 82 EC. By that remuneration, 
the dominant undertaking uses its 
financial weight in the tyre market in 
general, and the new tyre market in 
particular, as a lever to ensure its being 
chosen as retreader by the retailers. It 
thereby imposes a condition with a tied 
sales effect, prohibited under Article 82 
EC. 
In that regard, it is irrelevant that such 
a condition complies with the relevant 
national law, given the primacy of 
Community law on the matter and 
the direct effectiveness of Article 82 
EC. 
(see paras 163, 166) 
10. Where an undertaking in a dominant 
position undertakes to participate in 
the financial effort of the retailers of its 
products, demanding in return that 
those undertakings promote its brand, 
do not divert spontaneous demand for 
its products and carry sufficient stocks 
to meet that spontaneous demand 
immediately, it abuses its position 
II - 4077 
SUMMARY — CASE T-203/01 
within the meaning of Article 82 EC. 
Those conditions together are aimed at 
eliminating competition from other 
manufacturers by consolidating the 
undertaking's dominant position on 
the market. 
(see paras 208, 210) 
11. The obligations which an undertaking 
in a dominant position imposes on the 
retailers of its products, in return for 
participation in their financial effort, to 
provide it with certain information, 
such as balance-sheets, statistics on 
turnover and services provided, and 
information about shareholders, and to 
allow it to carry out an audit of sales 
outlets in order to ensure that areas for 
progress agreed with those retailers are 
being complied with, constitute an 
abuse if they are not objectively justi­
fied. 
In particular, those obligations must be 
regarded as abusive if they reflect the 
dominant undertaking's desire to 
supervise distribution of its products 
in detail, to obtain information about 
the market which is not public and 
which is of value for the carrying out of 
its own marketing strategy, and to 
increase the retailers' dependence on 
the dominant undertaking. 
Such obligations to provide infor­
mation go far beyond those which 
may be imposed in the context of a 
franchise agreement under Regulation 
No 4087/88, and in particular 
Article 3(2) thereof, which, in any 
event, falls within the scope of 
Article 81(1) EC, and is therefore irrel­
evant when assessing the obligations to 
provide information imposed by a 
dominant undertaking on its own cus­
tomers from the point of view of 
Article 82 EC. 
(see paras 21, 215-217, 219) 
12. For the purposes of establishing an 
infringement of Article 82 EC, it is 
sufficient to show that the abusive 
conduct of the undertaking in a domin­
ant position tends to restrict compe­
tition or, in other words, that the 
conduct is capable of having that 
effect. It follows that, for the purposes 
of applying that article, establishing the 
anti-competitive object and the anti­
competitive effect of abusive conduct 
are one and the same thing. If it is 
shown that the object pursued by the 
conduct of an undertaking in a domin­
ant position is to limit competition, 
that conduct will also be liable to have 
such an effect. Therefore, when an 
undertaking actually implements prac-
II - 4078 
MICHELIN v COMMISSION 
tices with the aim of restricting com­
petition, the fact that the result sought 
is not achieved is not enough to avoid 
the application of Article 82 EC. 
(see paras 239, 241, 245) 
13. The fact that the Commission has in 
the past imposed fines of a certain level 
and applied a certain uplift to them by 
reference to the duration of the 
infringement does not mean that it is 
estopped from raising that level, or that 
uplift, within the limits set out in 
Regulation No 17 and in the Commis­
sion's 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, 
if that is necessary in order to ensure 
the implementation of Community 
competition policy. In particular, it is 
permissible for the Commission to raise 
the level of fines in order to reinforce 
their deterrent effect. 
The Commission's previous decision­
making practice therefore does not in 
itself serve as a legal framework for the 
fines imposed in competition matters, 
since that framework is defined solely 
in Regulation No 17 and in those 
Guidelines. 
In those circumstances, the Commis­
sion is likewise not required to state in 
a decision imposing a fine for breach of 
the competition rules the reasons why 
the starting amount chosen for calcu­
lating the fine was not the same as that 
set in an earlier decision finding the 
same infringement by another under­
taking. 
(see paras 254-255, 277) 
14. For the purposes of setting the amount 
of the fine imposed for abuse of a 
dominant position, the Commission is 
entitled to establish the seriousness of 
that infringement solely by reference to 
its nature and object, without taking 
account of the specific effects of the 
abusive practices, the former being 
potentially more significant in that 
regard than the latter. In particular, 
the Commission is not required to 
examine the development of the rel­
evant undertaking's market shares and 
selling prices. 
(see paras 258-259) 
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SUMMARY — CASE T-203/01 
15. In a decision finding several infringe­
ments of the competition rules by the 
same undertaking, the Commission is 
entitled to impose a single fine for a 
multiplicity of infringements, that fine 
dealing globally with all of the infringe­
ments over a certain period. In that 
regard, the Commission does not have 
to state specifically in the grounds of 
the decision how it took into account 
each of the abusive components com­
plained of for the purposes of setting 
the fine. 
(see paras 265, 267) 
16. The Commission's increasing a fine for 
breach of the competition rules by 
reference to the duration of the 
infringement is not limited to a situ­
ation in which there is a direct relation 
between the duration and serious harm 
caused to the Community objectives 
referred to in those rules. 
(see para. 278) 
17. The concept of recidivism, which fea­
tures in the 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 as an 
aggravating factor, must be understood 
as referring to cases where an under­
taking has committed fresh infringe­
ments after having been penalised for 
similar infringements. 
(see para. 284) 
18. Since Community competition law 
recognises that different companies 
belonging to the same group form an 
economic unit and therefore an under­
taking within the meaning of 
Articles 81 EC and 82 EC if the 
companies concerned do not indepen­
dently determine their own conduct on 
the market, with the result that the 
Commission may impose a fine on the 
parent company for the practices of 
group companies, the Commission is 
entitled to find recidivism where one 
group company commits an infringe­
ment of the same type as that for which 
another was previously punished. 
(see para. 290) 
19. The fact that the Commission has 
applied a certain uplift to fines in the 
II - 4080 
MICHELIN v COMMISSION 
past, when dealing with aggravating 
factors like recidivism, cannot prevent 
it from increasing that uplift, within 
the limits set out in Regulation No 17 
and in the Commission's 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, if that is necessary in order to 
ensure the implementation of Commu­
nity competition policy. The Commis­
sion's previous decision-making prac­
tice does not in itself serve as a legal 
framework for the fines imposed in 
competition matters, since that frame­
work is defined solely in Regulation 
No 17 and in those Guidelines, and the 
Commission must, for the purpose of 
determining the amount of the fine, 
ensure that its action has the necessary 
deterrent effect. In particular, recidi­
vism is a circumstance which justifies a 
significant increase in the basic amount 
of the fine, since it constitutes proof 
that the sanction previously imposed 
was not sufficiently deterrent. 
Similarly, the fact that the Commission 
has considered in previous decisions 
that certain conduct constituted miti­
gating circumstances, as a result of 
which the fine was significantly 
reduced or the procedure closed, does 
not mean that it is obliged always to 
make the same assessment of such 
conduct. 
(see paras 292-293, 298) 
II - 4081