Judgment — ECLI:EU:C:2008:643
Date: 2008-11-20
Language of the case: English
Court formation: Third Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Competition
Concepts: Restriction of competition
Procedure: Reference for a preliminary ruling
Origin: Ireland

summary. However, it cannot be inferred from this that the notion of restriction of competition by object is limited to such obvious cases. 27 – See also Aicher, J., and Schuhmacher, F., in: Grabitz/Hilf, Das Recht der Europäischen Union, Vol. 2, Munich, Supplement 34, January 2008, Article 81, paragraph 1; Bellamy & Child, loc. cit. (footnote 15), footnote 402 at paragraph 2.097, where it is rightly pointed out that other agreements can also have as their object the restriction of competition. Also in Wish, R., loc. cit. (footnote 15), p. 106, it is pointed out that the list is illustrative. 28 – See Wish, R., loc. cit. (footnote 15), pp. 112 to 114. Although a very restrictive interpretation of the notion of restriction of competition by object is adopted there (it is doubtful whether there is a category of restrictions of competition per se under Article 81(1) EC (ibid., pp. 116 and 117)), it is made clear that the list of such agreements is not definitive. The relationship between Article 81(1) EC and Article 81(3) EC also suggests that the notion is not limited to these kinds of restrictions of competition. In Article 81(1) EC it is merely examined whether the object or effect is the restriction of competition. The finding that an agreement has as its object or its effect the restriction of competition is not therefore the last word on the agreement’s compatibility with the common market. Rather, an agreement may be compatible with the common market under Article 81(3) EC. Agreements which are aimed at price-fixing, market-sharing or the control of outlets are particularly harmful, however. As a general rule they are not therefore compatible with the common market. However, anyone who limits the notion of restriction of competition by object to these particularly harmful kinds fails to recognise that restrictions of competition by object may also be compatible with the common market under Article 81(3) EC. In my view, such an approach is not compatible with the structure of Article 81 EC. See also Bellamy & Child, loc. cit. (footnote 15), footnote 291 at paragraph 2.069. 29 – See point 43 of this Opinion. 30 – See in particular Case C‑235/92 P Montecatini v Commission [1999] ECR I‑4539, paragraphs 114 to 128. 31 – These categories are not so clearly defined that each individual case can be assigned precisely to just one of the three categories. However, for the purposes of the present proceedings, it is sufficient to examine whether an agreement can be classified in at least one of the three categories. 32 – European Night Services and Others v Commission (cited in footnote 26): potential competition not proven. 33 – GlaxoSmithKline Services v Commission (cited in footnote 6, paragraphs 114 to 147): doubts regarding the effects on price competition, because prices charged to final consumers are largely removed from the play of supply and demand by virtue of statutory provisions. I will be considering that judgment more closely in points 74 and 75 of this Opinion. 34 – LTM (cited in footnote 9, p. 250): exclusive right of sale for market penetration, Case 258/78 Nungesser and Eisele v Commission [1982] ECR 2015, paragraphs 44 to 58: grant of an open licence for the distribution of a new technology, MetroSB-Großmärkte v Commission (cited in footnote 16 paragraphs 20 to 22): channels of distribution which are adapted to high-quality and technically advanced products. 35 – Example of ancillary arrangements are no-competition clauses without which a transfer of a business would not be possible (Case 42/84 Remia and Others v Commission [1985] ECR 2545, paragraphs 19 and 20), prohibitions on participation or restrictions on activities, in so far as these are necessary to ensure the functioning of a company with a purpose which is unobjectionable in terms of competition (Case C‑250/92 DLG [1994] ECR I‑5641, paragraphs 30 to 45), and restrictions on activities which are necessary for determining professional ethics (Case C‑309/99 Wouters and Others [2002] ECR I‑1577, paragraph 97), or eliminating doping in sport (Case C‑519/04 P Meca-Medina and Majcen v Commission [2006] ECR I‑6991, paragraphs 42 to 44). 36 – Relevant comments in Bellamy & Child, loc. cit. (footnote 15), paragraph 2.112. 37 – There is no need to decide for the purposes of the present proceedings whether the concept of ancillary arrangement also applies in such cases (see Bellamy & Child, loc. cit.) or only Article 81(3) EC. 38 – Case T‑14/89 Montedipe v Commission [1992] ECR II‑1155, paragraph 265; Case T‑148/89 Tréfilunion v Commission [1995] ECR II‑1063, paragraph 109; and Case T‑112/99 M6 and Others v Commission [2001] ECR II‑2459, paragraphs 72 to 74. 39 – Leupold, H., and Weidenbach, G., loc. cit. (footnote 16), p. 1008, footnote 28 with further references. 40 – This function of competition can be affected in particular by agreements on pricing, on limitation of output or production (Article 81(1)(a) EC) and on market-sharing (Article 81(1)(c) EC). 41 – This function of competition can be affected in particular by agreements by which investment is restricted (Article 81(1)(a) EC). 42 – Leupold, H., and Weidenbach, G., loc. cit. (footnote 16), p. 1008 and 1009, who describe these functions as allocative and dynamic efficiencies; Odudu, O., ‘Article 81(3), Discretion and Direct Effect’, European Competition Law Review2002, p. 20. 43 – Leupold, H., and Weidenbach, G., loc. cit. (footnote 16), pp. 1008 and 1009, describe these as productive efficiencies; Odudu, O., ‘Article 81(3), Discretion and Direct Effect’, loc. cit. (footnote 42), p. 20. 44 – Odudu, O., ‘Article 81(3), Discretion and Direct Effect’, loc. cit. (footnote 42), p. 20. 45 – See the second sentence of Article 2 of Regulation No 1/2003. 46 – Montedipe v Commission (cited in footnote 38, paragraph 265); Tréfilunion v Commission (cited in footnote 38, paragraph 109); and M6 and Others v Commission (cited in footnote 38, paragraphs 72 to 74). 47 – The question referred seeks an interpretation of the notion of restriction of competition by object in Article 81(1) EC. However, agreements like the BIDS agreements can constitute a restriction of competition by object under Article 81(1) EC only where Article 81 EC is applicable to such agreements. The applicability of Article 81 EC in the present case follows from Article 1 of Council Regulation No 26 of 4 April 1962 applying certain rules of competition to production of and trade in agricultural products (OJ, English Special Edition, Series I, 1959-1962 p. 129) as amended by Regulation No 49 of the Council of 29 June 1962 amending the date on which certain instruments relating to the common agricultural policy are to enter into force (OJ, English Special Edition, Series I, 1959-1962 p. 201) and Article 2 of Regulation No 26 as amended by Regulation No 49. In this respect the legal situation did not change with the entry into force of Council Regulation No 1184/2006 of 24 July 2006. 48 – See points 42 and 59 of this Opinion. 49 – In this respect the BIDS agreements are to be distinguished from a scenario where undertakings decide unilaterally to leave the market. 50 – LTM (cited in footnote 9, p. 249). 51 – See points 42 and 59 of this Opinion. 52 – See Case T‑395/94 Atlantic Container Line and Others v Commission [2002] ECR II‑875, paragraph 56; see also Jürgens, R., Strukturkrisenkartelle im deutschen und europäischen Kartellrecht, Peter Lang, Frankfurt am Main, 2007, p. 95. 53 – With regard to the relationship between overcapacity, economies of scale and increased competition, see Schulz, N., Wettbewerbspolitik, Tübingen, 2003, pp. 84 to 86. 54 – See points 50 to 58 of this Opinion. 55 – The High Court took the view that overall production would not change substantially. 56 – With regard to the relationship between overcapacity, economies of scale and increased competition, see Schulz, N., loc. cit. (footnote 53), pp. 84 to 86. 57 – BIDS’ view can be reduced ad absurdum with an example: if, on a market with a duopoly, there is high overcapacity on the supply side and if one of the two suppliers ceases production, by agreement with the other supplier, without there being any limitation of overall production, such an agreement would not, in the view of BIDS, have as its object the restriction of competition. However, such a modification of the market structure would in fact largely rule out competition, as the remaining supplier, having a monopoly, would only be exposed to potential competition. 58 – See points 53 to 56 of this Opinion; Bellamy & Child, loc. cit. (footnote 15), paragraph 3.029; Odudu, O., ‘Article 81(3), Discretion and Direct Effect’, loc. cit. (footnote 42), p. 19; Leupold, H., and Weidenbach, G., loc. cit. (footnote 16), pp. 1008 and 1009. 59 – With regard to the negotiating power of the other side of the market, see paragraphs 114 to 128 of the judgment in Montecatini v Commission (cited in footnote 30). According to paragraph 116 of that judgment, the appellant had claimed in particular that the Court of Justice had failed to take into consideration the superior contractual power of the party on the other side of the market. In paragraph 127 of the judgment, the Court held that such circumstances may be relevant only where the economic context excluded any possibility of effective competition. 60 – Cited in footnote 6. 61 – Ibid., paragraphs 114 to 134. 62 – In such a case it must be examined precisely whether the function of competition of supplying consumers optimally with a product at the lowest possible price (see point 52 of this Opinion) is affected. 63 – Schulz, N., loc. cit. (footnote 53), pp. 84 to 86. 64 – See also Jürgens, R., loc. cit. (footnote 52), p. 95. 65 – See point 64 of this Opinion. 66 – Commission v Anic Partecipazioni (cited in footnote 16, paragraphs 116 and 117). 67 – See also Jürgens, R., loc. cit. (footnote 52), p. 95. 68 – Case C-180/98 Pavlov and Others [2000] ECR I‑6451, paragraphs 90 to 97. 69 – The High Court had made this finding. 70 – See points 70 to 75 of this Opinion. 71 – See points 67 to 77 of this Opinion. 72 – The High Court had made this finding. 73 – Case C‑234/89 Delimitis [1991] ECR I‑935, paragraph 21. 74 – The High Court had pointed out that Exel Meats Limited had entered the market. 75 – The High Court had made this finding. 76 – See points 70 to 75 of this Opinion. 77 – In principle, such a circumstance is to be examined only if the undertaking in question relies on it; see Montecatini v Commission (cited in footnote 30, paragraph 128). 78 – Joined Cases T‑217/03 and T‑245/03 FNCBV v Commission [2006] ECR II‑4987, paragraph 90, and 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 [1999] ECR II‑931, paragraph 740. 79 – IAZ International Belgium and Others v Commission (cited in footnote 20, paragraphs 22 to 25). 80 – See points 52 to 55 of this Opinion. 81 – See points 67 to 77 of this Opinion. 82 – See points 55 to 57 of this Opinion. 83 – See paragraph 56 in Atlantic Container Line and Others v Commission (cited in footnote 52).