Judgment — ECLI:EU:C:2006:531
Date: 2006-09-07
Language of the case: Danish
Court formation: Third Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Agreements, decisions and concerted practices;Exclusive agreements
Concepts: Networks in the motor vehicle sector
Procedure: Reference for a preliminary ruling
Origin: Denmark

Summary of the Judgment 1. Competition – Agreements, decisions and concerted practices – Not allowed – Block exemption – Agreements in the automotive sector – Regulation No 1475/95 (Commission Regulation No 1475/95, Art. 5(3), first indent) 2. Competition – Agreements, decisions and concerted practices – Not allowed – Block exemption – Agreements in the automotive sector – Regulation No 1475/95 (Commission Regulation No 1475/95, Art. 5(3), first indent) 3. Competition – Agreements, decisions and concerted practices – Not allowed – Block exemption – Agreements in the automotive sector – Regulation No 1475/95 (Commission Regulation No 1475/95, Art. 5(3), first indent) 4. Competition – Agreements, decisions and concerted practices – Not allowed – Block exemption – Agreements in the automotive sector – Regulations Nos 1475/95 and 1400/2002 (Commission Regulations Nos 1475/95 and 1400/2002) 5. Competition – Agreements, decisions and concerted practices – Not allowed – Block exemption – Agreements in the automotive sector – Entry into force of Regulation No 1400/2002 (Commission Regulations No 1475/95, Art. 5(3), first indent, and No 1400/2002) 1. The first indent of Article 5(3) of Regulation No 1475/95 on the application of Article [81](3) [EC] to certain categories of motor vehicle distribution and servicing agreements, which entitles the supplier to terminate the agreement subject to at least one year’s notice where there is ‘a need to reorganise all or a substantial part of the network’ is to be interpreted as meaning that that need requires there to be a significant change, both substantively and geographically, to the distribution structures of the supplier concerned, which must be convincingly justified on grounds of economic effectiveness based on objective circumstances internal or external to the supplier’s undertaking which, failing a swift reorganisation of the distribution network, would be liable, having regard to the competitive environment in which the supplier carries on business, to prejudice the effectiveness of the existing structures of the network. Any adverse economic consequences which would be liable to affect a supplier in the event that it were to terminate the distribution agreement with a two years’ notice period are relevant in that regard. It is for the national courts and arbitrators to determine, having regard to all the evidence in the case before them, whether those conditions are satisfied. (see para. 40, operative part) 2. The first indent of Article 5(3) of Regulation No 1475/95 on the application of Article [81](3) [EC] to certain categories of motor vehicle distribution and servicing agreements is to be interpreted as meaning that, where the validity of a termination with one year’s notice is challenged by a distributor before the national courts or arbitrators, it is for the supplier to prove that the conditions laid down under that provision for the exercise of the right to terminate on one year’s notice are satisfied. The procedure for establishing such proof is a matter for national law. (see para. 44, operative part) 3. The first indent of Article 5(3) of Regulation No 1475/95 on the application of Article [81](3) [EC] to certain categories of motor vehicle distribution and servicing agreements is to be interpreted as meaning that it does not require a supplier which terminates a distribution agreement pursuant to that provision to provide a formal statement of the reasons for the decision to terminate nor does it require the supplier to draw up a reorganisation plan prior to taking such a decision. Inasmuch as that provision indicates that the conditions for exemption laid down under that regulation ‘shall not affect’ the right of the supplier to terminate an agreement subject to at least one year’s notice where it is necessary to reorganise the whole or a substantial part of the network, it simply introduces into that regulation a possibility which, subject to compliance with the conditions for application set out in that provision, does not restrict the contractual freedom of the parties, as exercised under the applicable national law. It does not impose any specific obligation on a supplier to provide formal reasoning for the termination and as regards the form or the substance of the reorganisation and there is no other provision in the regulation which lays down obligations of that kind. That being so, the question whether the termination of an agreement with one year’s notice pursuant to that provision must contain a formal statement of reasons or whether the supplier must have drawn up a reorganisation plan prior to serving notice of termination is a matter for national law alone. (see paras 47-49, 51, operative part) 4. Regulation No 1475/95 on the application of Article [81](3) [EC] to certain categories of motor vehicle distribution and servicing agreements and Regulation No 1400/2002 on the application of Article 81(3) EC to categories of vertical agreements and concerted practices in the motor vehicle sector, as regulations implementing Article 81(3) EC, merely give economic operators in the sector concerned a number of opportunities of avoiding the prohibition laid down under Article 81(1) EC, notwithstanding the presence of certain types of clauses restricting competition in their agreements in that field. Those regulations do not, however, require economic operators to make use of those opportunities by laying down binding obligations which directly affect the validity or content of contractual provisions or requiring the contracting parties to amend the content of their contract. (see para. 56) 5. The entry into force of Regulation No 1400/2002 on the application of Article 81(3) EC to categories of vertical agreements and concerted practices in the motor vehicle sector did not, of itself, require the reorganisation of the distribution network of a supplier within the meaning of the first indent of Article 5(3) of Regulation No 1475/95 on the application of Article [81](3) [EC] to certain categories of motor vehicle distribution and servicing agreements. While the substantial amendments to the scheme for exemption introduced by Regulation No 1400/2002 may have led certain suppliers to make changes to their distribution agreements, in order to be certain that they would continue to benefit from the block exemption, such changes could be introduced simply by adapting the agreements in force without such an adaptation automatically entailing the need, under the applicable national law, for those agreements to be terminated or, in any event, for the whole or a substantial part of the distribution network to be reorganised. However, that entry into force may, in the light of the particular nature of the distribution network of each supplier, have required changes that were so significant that they must be truly considered as representing a reorganisation within the meaning of the first indent of Article 5(3) of Regulation No 1475/95. Thus, such a reorganisation might in particular be needed where, in order to continue to benefit from the block exemption, a supplier which by combining, prior to the entry into force of Regulation No 1400/2002, exclusive distribution and selective distribution, elected to organise its distribution network on the basis only of a system of selective distribution or decided to retain a system of exclusive distribution only for sales services, while introducing a selective distribution system for after-sales services by authorised repairers. It is for the national courts or arbitrators to determine, in the light of all the evidence in the case before them, and, in particular, the evidence provided for that purpose by the supplier, whether the changes made by the latter constitute such a reorganisation of its distribution network and whether that reorganisation was made necessary by the entry into force of Regulation No 1400/2002. (see paras 58-59, 61-65, operative part)